A couple of major overseas moves are in the headlines today, spotlighting the fact that Chinese firms are becoming increasingly adept at relatively simple resource deals, even as they still lack sophistication to do M&A in other, more complex sectors. In the former category, oil major PetroChina (HKEx: 857; Shanghai: 601857; NYSE: PTR) has reached a deal to co-develop a $3 billion oil pipeline in Canada with a local partner, in the largest project of its kind by a Chinese firm to date. In the latter, a white-knight rescue bid by a relatively obscure Chinese firm for bankrupt plane maker Hawker Beechcraft has collapsed, leaving the US company no choice but to work out a reorganization plan with its creditors.
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SAIC’s Weak Overseas Stomach 上汽对海外投资风险承受能力弱
Domestic auto giant SAIC (Shanghai: 600104) may be the king of China’s car market, but it clearly has a sensitive stomach for overseas activity as reflected by its recent decision to largely abandon its wobbly India joint venture with longtime partner General Motors (NYSE: GM). I have to admit that I’m a bit mixed on my feelings about this latest news, which has seen Shanghai-based SAIC sell most of its stake in the 50-50 India venture back to GM just 3 years after the venture’s formation.
Tencent’s GroupNet: A Group Buying Consolidator 网罗天下：团购行业的整合者
The long awaited clean-up of China’s cluttered group buying sector appears to be accelerating, with new reports that a potential cash-rich consolidator has emerged in the form of GroupNet, which is itself the product of the merger earlier this year between former mid-sized players FTuan and Gaopeng. The new reports say that GroupNet has raised $40 million in new funds, which it will use to acquire other companies in the money-losing space where many players are now on life-support after burning through hundreds of millions of dollars in investor dollars over the last 2 years. (English article)
Xunlei: Preparing For New IPO Try? 迅雷：准备尝试新的上市？
The year 2012 will easily go down as the worst for New York IPOs by Chinese firms since the global financial crisis, though there’s still some hope we could see one or 2 offerings in the next couple of months by cash-starved Chinese firms. A social media website named YY surprised many when it made a preliminary New York IPO filing earlier this month (previous post), and now video and music sharing site Xunlei is also emitting signals that indicate a filing could be near for its own stalled public offering.
Telecoms: 4G and IPTV in, Cisco Out 中国电信行业：4G与IPTV推进 思科受阻
The headlines are buzzing with news bits from each of the country’s 3 major telcos, with high-speed services taking big steps forward even as US telecoms equipment powerhouse Cisco (Nasdaq: CSCO) could be bracing for a Chinese winter. In the former group of headlines, media are reporting that China Mobile (HKEx: 941; NYSE: CHL) has made a significant step into 4G with plans to expand its trial TD-LTE network into China’s interior, while China Telecom (HKEx: 728; NYSE CHA) has just won an important new license to offer TV and other video and data services over its fixed-line broadband network. Meantime, China Unicom (HKEx: 762; NYSE: CHU) is also making headlines with reports that the company is replacing Cisco-supplied equipment from some of its key network due to security concerns.
CITIC Securities Solidifies Global Push 中信证券巩固全球化战略
China’s biggest brokerage CITIC Securities (HKEx: 6030; Shanghai: 600030) could be a company to watch over the next 2-3 years as it attempts to become the country’s first truly global player using its newly acquired CLSA unit as a stepping stone. If I were making bets, I would say the company has the resources it needs to become one of the top second-tier global players in the next 4 or 5 years, competing successfully with the likes of names like Japan’s Nomura and Britain’s Barclays Capital. If it can do that, I would even give the company a chance of eventually entering the echelons of a global elite that includes names like Morgan Stanley (NYSE: MS) and Goldman Sachs (NYSE: GS), though that will take at least a decade or possibly longer.
Smartphones: ZTE Sputters, Lenovo Looks Out 智能手机：中兴缩减，联想进军海外
When ZTE (HKEx: 763; Shenzhen: 000063) warned 2 weeks ago that it would post a massive third-quarter loss, everyone assumed that its smartphone business was partly to blame as the company sacrificed margins in exchange for fast growth. Now it seems that even its smartphone plans were overly ambitious, with ZTE’s newly released official results showing it is likely to miss its smartphone target for the year by a big gap. Meantime, Lenovo (HKEx: 992), still basking in the glory of recently becoming the world’s biggest PC seller, is also making its own smartphone moves with news that it will start to sell its models outside China. I’ll admit I have my doubts about this new smartphone push by Lenovo, as the company has enjoyed far less success with this product in its home China market than with its core PC business.
Geely’s UK Investment Fails, Volvo Next? 吉利持股的英国锰铜申请破产保护 沃尔沃或遭遇相同命运
A week after I commended home appliance maker Haier (HKEx: 1169) for a job well done with its recent purchase of a New Zealand company, I’m sorry to say I can’t give the same positive assessment for more problematic overseas investments by the parent of Hong Kong-listed Geely (HKEx: 175). The latest news has seen one of Geely’s biggest overseas investments, UK taxi maker Manganese Bronze, file for bankruptcy, even as Geely’s bigger Volvo car unit appears to be heading down a similar road.
iPad Mini: Another China Snub; iPad Mini首发再次不含中国大陆
I’m probably beginning to sound a bit redundant by writing about Apple’s (Nasdaq: APPL) latest China snub, but it does seem worth noting that yet another major new product from the world’s biggest tech company won’t be coming to Chinese consumers anytime soon. Meantime, Chinese media are noting that Microsoft (Nasdaq: MSFT) is seeking to exploit this latest Apple snub by selecting China as one of the launch markets for its new tablet PC. Unfortunately for Microsoft, I don’t think Chinese consumers will really care very much.
Shanghai Street View: Tuning Up Traffic 沪经动向：调整改善交通
This edition of Shanghai Street View takes a real turn onto the streets of Shanghai, where the local government is on a drive to clean up the unruly traffic in China’s biggest city. Talk to any foreigner living in Shanghai, and he will gush excitedly about the rich history, cultural life and abundance of entertainment options that the city has to offer. But when the subject turns to the city’s darker sides, traffic inevitably comes up as one of the biggest complaints for most Shanghai expatriates. Nearly everyone has tales to tell of how they were nearly run over by a bus charging through a red light, or of being stuck for an hour in a traffic jam on one of the city’s elevated expressways.
HNA Spreads Wings to France 海航收购法国蓝鹰航空48%股权
