Homegrown smartphone sensation Xiaomi is looking more and more like a Chinese version of global tech giant Apple (Nasdaq: AAPL) these days, following the latest reports that the company is preparing to launch an Internet TV product. I’m sure that Xiaomi’s marketing-savvy founder Lei Jun loves the comparisons his company is getting to the world’s biggest tech company, which of course would include the inevitable comparisons to Apple co-founder Steve Jobs. Perhaps Lei will even change his company’s English name to “Little Rice”, which is what Xiaomi means in Chinese, to play on Apple’s own food-related associations.
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E-Commerce: Jingdong, Suning, Alibaba 电商：京东商城、苏宁易购、阿里巴巴
After a brief quiet spell, e-commerce is suddenly splashing back into the headlines on several fronts, with big news coming from the sector’s top 3 players, Alibaba, Jingdong Mall and Suning.com (Shenzhen: 002024), as each chases new business. Alibaba leads off the headlines with word that it’s preparing to launch a major new promotion on its popular TMall platform; while Jingdong is getting ready to launch a major overseas foray; and last but perhaps most interesting is Suning.com, which is chasing a new acquisition.
Jingdong’s Courrier Wars: More E-Commerce Chaos 申通封杀京东商城
I’ve been trying to ignore a noisy war of words developing between e-commerce giant Jingdong Mall and one of its key couriers, but I’m finally surrendering and writing about it because it’s a relatively slow news day and also I haven’t written for a while about China’s chaotic e-commerce space. This particular issue is part of what looks like a broader growing discord between Jingdong, which also goes by the name 360Buy, and many of the courier companies that deliver the millions of goods that consumers buy online. Such discord is just as much a sign of the chaos that now plagues China’s e-commerce space as it is of the rampant competition that has pushed most major players deeply into the red.
Shanghai Street View: Cleaning Slippery Scalpels 沪经动向：清理医疗腐败
Shanghai is known for its ability to tackle tough financial issues, and so I initially wasn’t surprised to read a recent report on its apparent success at fighting corruption in hospitals. This problem is one that few foreigners ever experience and many may be completely unaware of, even as the newspapers with reports of corrupt government officials who accept cash-filled red envelopes and other lavish gifts for greasing the wheels of China’s huge bureaucracy. It turns out the issue at hospitals in Shanghai and around China is similar, only it’s scalpels that are being greased and people’s lives that are at stake if their doctors don’t have sufficient “incentive” to do a good job.
4G: More Positive Signals 中国正在加快脚步迈向4G网络
More positive signals are emerging on China’s long march to 4G, with both the telecoms regulator and embattled networking equipment provider ZTE (HKEx: 763; Shenzhen: 000063) providing the latest signs that China could award 4G licenses much sooner than many previously thought. These new signals seem to be the latest in an accelerating trend, as China’s slow-moving telecoms regulator finally responds to pressure from industry heavyweight China Mobile (HKEx: 941; NYSE: CHL) to award 4G licenses sooner rather than later. Perhaps more importantly, the regulator could finally be realizing that its constant lateness in awarding new technology licenses is putting China’s 3 telcos at a distinct disadvantage to their global rivals, forcing the trio of China Mobile, China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA) to constantly play catch-up to their more aggressive peers around the world.
IPOs: New Signs of Life in China, NY 上市：纽约、中国上市新迹象
News of 2 interesting new IPOs for Chinese companies, one in Shanghai and the other in New York, is an encouraging sign that spring may finally coming for a market still suffering through a long winter that has dragged on for more than a year. From the New York end, a social media website called YY has filed with the US securities regulator for an offering of up to $100 million, in what would become only the second major US listing for a Chinese company this year. (English article; Chinese article) Meantime, Southern Publishing has also filed with the Chinese securities regulator for an IPO, providing an interesting choice for media investors looking to tap into the company’s ties with one of China’s most ground-breaking media groups. (English article; Chinese article)
ZTE Slammed, New Oriental Exonerated 中兴通讯噩耗不断 新东方洗脱嫌疑
There’s bad news and good news coming from 2 Chinese sector leaders, with embattled telecoms equipment maker ZTE (HKEx: 763; Shenzhen: 000063) leading the downbeat headlines while education services specialist New Oriental (NYSE: EDU) brings some much needed relief to beaten-down US-listed Chinese stocks. The bad news for ZTE never seems to end, and now we’re starting to see the impact of all the negative developments on this former high-flyer which has just announced it will post a massive loss in the third quarter. Meantime, New Oriental has quietly issued its own announcement implying an investigation by the US securities regulator into some of its accounting practices has cleared it of any wrongdoing, in what would be welcome news for a sector of US-listed Chinese firms that has been dogged by an accounting credibility crisis for more than a year.
Solyndra Lawsuit: War of the Solar Dead Solyndra发难 光伏业者拼个你死我活
The fight for survival among the world’s embattled solar panel makers is starting to look more like a battle of the dead, with word that bankrupt US player Solyndra is suing 3 of its biggest Chinese rivals over allegations of running an illegal cartel. (English article) Some of you might be saying: “Wait a minute, doesn’t Solyndra have better things to do than to be filing lawsuits against rivals who are also flirting with bankruptcy?” If that’s the question, then the answer appears to be “no”. Perhaps the failed Solyndra is still seeking some final respect, and also perhaps some money through a quick settlement of this lawsuit to repay a long list of creditors that includes the US government.
Canada Delays CNOOC-Nexen Decision 加拿大推延中海油收购尼克森决议
An increasingly xenophobic West will face an important test in the next 30 days as Canada weighs whether to approve the $15 billion purchase of local oil exploration giant Nexen (Toronto: NXY) by Chinese rival CNOOC (HKEx: 883; NYSE: CEO). The deal could well become an important indicator of the West’s willingness to accept China as an equal partner in the global economy, and its approval would send a positive signal after a more controversial decision last week that saw two of China’s leading technology firms locked out of the US telecoms equipment market due to security concerns.
News Digest: October 13-15 报摘： 2012年10月13-15日
The following press releases and media reports about Chinese companies were carried on October 13-15. To view a full article or story, click on the link next to the headline.
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- Canada’s Harper Says Must Weigh National Security in China Ties (English article)
- ZTE (HKEx: 763) Announces Preliminary Results for 9 Months Ending Sept 30 (HKEx announcement)
- China’s Top Two Shippers Join Forces in Domestic Container Trade (English article)
- China Lodging Group (Nasdaq: HTHT) Announces Preliminary Q3 Operating Results (Globe Newswire)
- Bankrupt Solyndra Sues Suntech (NYSE: STP) Over Antitrust Claims (English article)
- Latest calendar for Q3 earnings reports (Earnings calendar)
China’s Slow Bank Privatization Continues 中国继续缓慢推进四大行私有化
I’ve often suggested the controversial idea that Beijing should consider re-privatizing its big-four state-owned banks, as all of them still act largely like socialist-era policy lenders rather than the commercial-focused banks they were supposed to become after making IPOs starting in the mid-2000s. So it doesn’t come as much of a surprise to me to learn that the central government, which is already the dominant shareholder for each of the banks, has been quietly buying back their shares on the open market to support their stocks as they come under pressure due to a looming bad-loan crisis.
