The following press releases and media reports about Chinese companies were carried on November 28. To view a full article or story, click on the link next to the headline.
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- China Telecom (HKEx: 728), Unicom (HKEx: 762) In Race To Offer iPhone 5 First (Chinese article)
- Sina (Nasdaq: SINA) Weibo Microblog Launches Professional SNS Service (English article)
- Strategic Materials Advisory Council Opposes Chinese Acquisition of US Defense Supplier (Businesswire)
- Focus Media (Nasdaq: FMCN) Reports Q3 Results (PRNewswire)
- Belarus In Talks With China, India, Others On Potash Giant (English article)
Long-running talks about a new joint venture between domestic automaker Dongfeng Motor (HKEx 489) and France’s Renault (Paris: RENA) appear to be gaining new momentum, driven by urgency for the former to diversify following the recent territorial dispute between China and Japan. Regardless of what’s driving this new development, it does seem to mark an important move for Dongfeng, a top Chinese automaker that is going through a painful period right now due to its big dependence on joint ventures with Honda (Tokyo: 7267) and Nissan (Tokyo: 7201). Those automakers have all seen their sales plunge over the last 3 months as Chinese consumers boycotted the brands at the height of the territorial dispute between China and Japan. In related news, it does look like the peak of the boycott has finally passed, with new reports indicating that sales for the big Japanese brands are starting to pick up again after bottoming out in late October.
With its new energy sector tottering on the brink of collapse, China no longer seems to care if foreign government accuse it of unfairly supporting its sector with low cost loans and other state subsidies. That at least appears to be the message from a new plan by Ming Yang Wind Power (NYSE: MY), which has just announced a massive new tie-up with policy lender China Development Bank to provide financing for wind power projects in India. (
China Eastern’s (HKEx: 670; Shanghai: 600115; NYSE: CEA) announcement of a massive new order for Airbus (Paris: EAD) planes last week looked suspiciously political, coming just after China and the EU resolved an aviation-related dispute. If politics were indeed a factor, which seems likely, Beijing set another unhelpful precedent by tying what should have been a purely commercial decision to non-commercial factors. By continuing to act this way, Beijing will show the world that it calls the shots for what should otherwise be big commercial decisions by Chinese companies rather than leaving those decisions to market forces. That will only give China’s opponents further fuel in their steady accusations of unfair trade by Beijing.
New noises are coming from online video site Xunlei and e-commerce giant Jingdong Mall that indicate a US or Hong Kong IPO or other equity sale may be coming soon, as each looks for new cash to fund its money-losing operations. But that said, the latest signals from these 2 Internet companies indicate that neither will be able to tap a rare window in the offshore IPO market that appeared last week when commercially-focused social networking site YY (Nasdaq: YY) made the first successful public offering by a Chinese firm in New York in more than a year. (
An internal company memo penned by Robin Li, one of China’s richest men and founder of Baidu (Nasdaq: BIDU), has been buzzing through the domestic media, which are interpreting the message as the sign of a looming crisis at the nation’s leading search engine. The theme of the memo revolves around the concept of the “Wolf Spirit”, which Li says has been lost at his company that pioneered the online search market in China. (
China’s young insurance market has proven attractive to foreign players for its huge potential, but has also been an extremely difficult place for them to do business due to numerous obstacles and competition from local players. That reality appears to be a major factor behind an uneasy alliance that has just been announced between US insurance giant AIG (NYSE: AIG) and Chinese counterpart PICC Group, who have signaled their intent to form a life insurance joint venture just as PICC is raising up to $3.6 billion in a Hong Kong IPO.
I was surprised to see reports today that Alibaba and Sina (Nasdaq: SINA) have reached an impasse in their rumored negotiations for the former to buy a strategic stake in the latter, since both sides clearly want this deal to happen as it would greatly benefit both. But then I had a closer look at the reports, and my conclusion is simply that the 2 sides are still negotiating in an attempt to place a value on Sina, whose popular and increasingly influential Weibo microblogging service lies at the heart of their planned tie-up. Such disagreement is standard for this kind of negotiation, and I fully expect the 2 sides to reach a deal that should be one of the most significant tie-ups we’ve seen for China’s Internet space since the merger of leading online video sites Youku (NYSE: YOKU) and Tudou earlier this year.
A couple of items in the news today are shining a spotlight on the very real and unique risks of doing business in China from heavy-handed government oversight, with fast-rising smartphone maker Xiaomi and Internet giant Tencent (HKEx: 700) both sparring with Beijing in different own ways. Xiaomi’s situation looks the most serious with the “temporary” suspension of its newly launched Internet TV service, which probably reflects the company’s youth and inexperience at dealing with government bureaucrats. Tencent also appears to be playing a game of brinksmanship with Beijing by bringing its own unusual interpretation to a controversial “real name” registration requirement imposed on all social networking sites early this year.
No one is writing very much about China Unicom’s (HKEx: 762; NYSE: CHU) newly announced plan to buy fixed-line networking assets from its parent, perhaps because people have lost all interest in this laggard telco that has been mired in management disorder for much of the last 2 years. Despite my own negative feelings about the company’s recent performance, I’m going to go ahead and actually praise Unicom for the move, as it finally looks like the company is doing something that has a small hint of being driven by a broader corporate strategy — something we haven’t seen for quite a while.
If you can’t build it yourself, then go out and buy it. That looks like the message coming from leading search engine Baidu (Nasdaq: BIDU), which has just raised a tidy $1.5 billion in its first-ever bond offering that could be used in part for acquisitions as the company looks to diversify. Baidu surprised many, myself included, with this massive new bond offering, which comes as growth for its core search business shows signs of slowing sharply.
