We’re seeing some interesting new signs coming from troubled telecoms equipment giants ZTE (HKEx: 763; NYSE: 000063) and Huawei in the US, with the former reaffirming its commitment to the difficult market even as the latter reportedly scales back its presence there. These latest signals reflect not only the many obstacles that both companies have faced in the US lately, but also challenges they are seeing in many western markets where governments worry that the pair are simply spying arms of Beijing.
Search Results for: ant
Jingdong Mall, LaShou: Turmoil in Cyberspace 京东商城、拉手网：互联网领域混乱
The latest signs of trouble in China’s overheated Internet sector are bubbling into the headlines again, with word that group discount leader LaShou has scrapped its troubled IPO while another high level executive has resigned from e-commerce giant Jingdong Mall, also known as 360Buy. Both developments have some company-specific issues behind them, but more broadly speaking they also reflect an overheated China Internet that has seen internal turbulence grow at many companies as they struggle for dominance and simply survival.
Japan: Land of the Rising Solar 日本：太阳能行业上升
China’s battered solar sector is finally getting a rare piece of good news from next door, with word that new incentives from Japan could provide a much-needed boost for this field of money-losing companies. (English article) The news that Japan will provide some of the strongest incentives to date for makers of solar cells is having a decidedly mixed effect on solar shares, with only Suntech (NYSE: STP) receiving a big boost in Monday trade, perhaps indicating that the biggest names are most likely to benefit from this new development.
AsiaInfo Gets More Private Equity Interest 多家私募基金有意收购亚信联创
After several months with no news following an unsolicited buyout offer for AsiaInfo-Linkage (Nasdaq: ASIA), the telecoms software maker has burst back into the headlines with reports that it has attracted several more new potential buyers as it seeks to pump up its valuation amid a broader weak market for US-listed China stocks. This new signs of interest, which includes some major global private equity firms, could be a good sign for the broader sector of battered New York-traded Chinese stocks, as it means there is clearly some strong institutional investor interest in better-run companies despite weak broader market sentiment, which means we could see some other interesting buy-out offers in the months ahead.
Burger King Build-Up: Strange Partner Choice 汉堡王在华组建合资公司：奇怪的合作方
China’s lucrative but increasingly crowded fast food market is about to heat up a notch, following a new announcement by Burger King that it will significantly ramp up its China business under a new joint venture. (company announcement) The size and rapidity of this build-up certainly caught my attention at first; but a closer look at the announcement reveals a strange choice of partners for this new initiative that raises doubts for me about whether this venture will really succeed, especially with the fierce competition in the market from much better run operations by sector leaders KFC (NYSE: YUM), McDonalds (NYSE: MCD) and a growing number of mid-tier players. (previous post)
Read Full Post…
More Turmoil at Tencent Soso 腾讯搜搜内部更加混乱
A major restructuring at Tencent (HKEx: 700) is moving forward with the latest rumors that the top executive at the Internet giant’s Soso search business has left, in what looks like the latest sign of turmoil at this particular unit. Tencent has previously declined to comment on reports that anything is amiss at its search business, following reports last month that it had considered closing the unit but later decided simply to reduce Soso’s workforce by about half. (previous post)
China’s TravelSky Joins Global Travel 信天游与美国同业Sabre结盟Rush
I don’t usually like to commend myself, but I have to say that it appears I was correct with my recent prediction that something was happening in the normally low-profile travel sector, as we’ve seen a nonstop stream of new initiatives from the sector since then, nearly all involving new international tie-ups. (previous post) Barely a day seems to go by now without the announcement of a new tie-up between a Chinese company with a foreign counterpart in the travel space, including the latest announcement from US air and hotel ticketing giant Sabre Holdings that it is forming a new alliance with China’s TravelSky. (company announcement) The tie-up looks quite interesting, as it will instantly make the 30,000 Chinese hotels on TravelSky’s network available for booking by users of Sabre’s system, while making Sabre’s 100,000 properties available to TravelSky users. This kind of a tie-up is clearly designed to cater to both the growing number of Chinese traveling to the West, as well as the big numbers of western tourists who travel to China. The alliance also appears more aimed at bookings made by travel agencies, rather than do-it-yourself travel booking sites that cater mostly to individual consumers. As such, it won’t compete very directly with more consumer-oriented online travel booking sites like Ctrip (Nasdaq: CTRP), eLong (Nasdaq: LONG) and Qunar, which tend to focus on individual travelers in the domestic market. But if TravelSky does eventually get into the consumer market, it could instantly have a very attractive product with this new Sabre tie-up, allowing it to quickly gain share on Ctrip and the other major domestic players. The move also seems to be part of a broader one that has Chinese airlines and hotel booking firms trying to become more international. I previously wrote that this new globalization drive, which seems to have gained recent momentum, is probably being driven by Beijing, which wants all of its sectors to become more globally competitive rather than simply relying on their protected home market. Regardless of the reason for this sudden surge in global tie-ups, the recent momentum means we will probably see many more similar announcements in the months ahead, shaking up the relatively small, protected field of players, most of whom have largely relied up to now on their home China market. The looming shake-up and industry shift was apparent in another form overnight on Wall Street, where Ctrip itself announced a $300 million share repurchase program to bolster its sagging stock. (company announcement) Ctrip shares rallied about 4 percent after the announcement, but they are still at just about a third of their levels from just a year ago, amid a broader depressed market for US-listed Chinese shares following a series of accounting scandals last year. I’ve always been quite positive on Ctrip due to its industry-leading position and strong ability to focus on its core travel services business. But the company may need to follow the recent trend and look for more expansion opportunities outside China — including possible tie-ups with foreign partners — or risk losing both share and relevance to more aggressive rivals.
Bottom line: A new tie-up between a top China hotel booking service and a US counterpart is part of a growing globalization trend for Chinese providers of travel services.
Related postings 相关文章:
◙ Airlines on Global Flight, New Tie-Ups Ahead? 航空公司环球飞行，未来有新合作？
◙ China Eastern’s Budget Play: Turbulence Ahead 东方航空成立廉价航空公司：将面临动荡
Cars: Nissan Drives, Saab Gets Reprieve 汽车：尼桑设新厂，萨博暂时获救
I’ll wrap up this week with a couple of items from the car world, one of which has Japan’s Nissan (Tokyo: 7201) adding fuel to China’s looming auto glut while the other has yet another Chinese buyer helping forestall the long and tortured death of Sweden’s bankrupt Saab. My personal favorite among these 2 stories is Saab, as it’s quite a colorful saga; but Nissan is clearly the bigger of the items, so I’ll start with a look at the news that the Japanese automaker is planning to build a $785 million new plant in the northeastern port city of Dalian. (English article) The new plant is part of a broader plan to invest 30 billion yuan in China by 2015 previously announced by Nissan, China’s second biggest car brand and the most aggressive of Japan’s 3 major automakers in China. The new plant, being built together with Nissan’s China partner Dongfeng Motor (HKEx: 489), will initially have capacity to build 25,000 cars per year when it opens in 2015, but will expand rapidly to a a hefty 240,000 vehicles by 2017, according to a foreign media report, citing an unnamed source. This kind of rapid expansion, despite a recent cool-down in China’s auto market, is being seen throughout China’s auto industry, with most of the big foreign automakers including Ford (NYSE: F), BMW (Frankfurt: BMWG) and General Motors (NYSE: GM), all announcing major new initiatives over the last couple of years. I have no doubt that market growth will eventually accelerate again, and recent signs from Beijing indicate that could happen soon as it considers new incentives to boost sales. But the addition of new capacity for another 1 million or more vehicles looks a bit big to me for a market unlikely to sell more than 10 million vehicles this year; that means we could see lots of idle capacity in the next few years, forcing some weaker players, especially the domestic brands, to leave the market. Meantime, Saab, which is now in bankruptcy and hasn’t produced any cars since last year, is being sold to a Sino-Japanese partnership that plans to turn the brand into an electric car specialist. (English article) I’ve never heard of either the Chinese company, a Hong Kong-based firm called National Modern Energy Holdings, or the Japanese partner, Sun Investment. But I expect this pair are looking to buy the Saab name and perhaps some of its technology if the deal actually gets completed, and then they would probably shut down Saab’s money-losing Swedish operations completely. A more likely scenario would see this latest agreement collapse, just like an earlier rescue package that saw 2 other Chinese firms try and fail to buy the company. (previous post) Regardless of the final outcome, it does seem like the Saab brand may be destined to live on in China — an ironic development since the name is virtually unknown in the market.
Bottom line: Nissan’s latest plan for a massive new plant in northeast China marks the latest sign of a supply glut building for China’s auto sector.
Related postings 相关文章:
◙ Dwindling Demand Fuels Car Inventory Build-Up 中国汽车库存增加或引发价格战
Silcon Valley Bank Forges Into China 美国矽谷银行与浦发成立合资银行
I’ve previously written about a low-key second wave of financial service companies quietly coming into China after a pull-back of earlier arriving big names like Goldman Sachs (NYSE: GS) and Citigroup (NYSE: C), with US tech-focused lender Silicon Valley Bank the latest name to join this trend. What’s equally interesting in this latest news is the rapid speed with which the government has approved the joint venture between Silicon Valley Bank and Shanghai-based Pudong Development Bank (Shanghai: 600000), indicating Beijing may be keen to bring in more foreign expertise from these smaller names as it looks to build up a viable private sector banking industry that operates outside the traditional realm of big state-owned lenders. Let’s look at the latest reports, which have an executive from California-based Silicon Valley Bank saying he was surprised at the rapid speed with which his bank’s joint venture was approved following its announcement last October, and that new joint venture bank will aims to open by September. (English article) Silicon Valley Bank’s pairing comes just months after Citibank sold a 3 percent stake it had held in Pudong Development Bank for several years, mirroring a recent trend that has seen many major western banks sell off investments they made nearly a decade ago in Chinese lenders. (previous post) While the western lenders made many of those sales to raise cash to bolster their shaky balance sheets, observers also noted that many were disappointed that their investments never led to strategic partnerships to help them tap the fast-growing China market for financial services. This new tie-up between Silicon Valley Bank and Pudong Development Bank looks like a clearly focused initiative to help service the growing semiconductor chip sector, anchored by leading chip maker SMIC (HKEx: 981; NYSE: SMI), and a growing field of LCD and LED makers emerging in the Yangtze River delta area. Whereas many of the earlier tie-ups between the big western banks and their Chinese counterparts contained lofty dreams that were never really realized, this more recent round of new initiatives by smaller players looks much more targeted and modest in its ambitions, seeing foreign companies pair with smaller local players in highly-focused moves with specific aims. As such, I would give them a much better chance for success than the previous tie-ups. Other recent lower-profile tie-ups in the financial services sector have included moves by money transferring specialist MoneyGram (NYSE: MGI), which recently expanded its tie-up with Bank of China (HKEx: 3988; Shanghai: 601988); and American Express, which has invested in an electronic payments firm called Lianlain. (previous post) Beijing is probably quietly encouraging these kinds of tie-ups to more rapidly propel its financial services sector to world-class status, especially as it faces its own internal banking crisis that is largely the result of older practices still seen at many banks that behave more like policy-based institutions than true market-oriented lenders. Accordingly, look for a growing number of these kinds of new tie-ups involving mid-tier western players in the months ahead.
Bottom line: The rapid approval of Silicon Valley’s new joint venture bank indicates Beijing wants to bring in more niche-oriented foreign firms to bolster its financial services sector.
Related postings 相关文章:
◙ AmEx Chases E-Payments With Lianlian Link 美国运通联手中国连连集团
◙ MoneyGram In Latest Financial Services Move 速汇金携手中行 提供汇款服务
◙ Goldman Flees ICBC as Bank Crisis Looms 中国银行业危机隐现 高盛迅速转让工行股票
Telecoms: More of the Same for Huawei, ZTE 美国对华为和中兴展开新的调查
There are a few interesting telecoms tidbits out today, led by what seems to be an increasingly redundant refrain of the latest woes being faced by quickly fading telecoms equipment superstars Huawei and ZTE (HKEx: 763; Shenzhen: 000063), who are now the subject of a new security probe by US politicians. ZTE is also in the headlines for its own announcement of an interesting new tie-up in the teleconferencing space, which is part of its ongoing drive to diversify into less controversial products beyond its core networking equipment business. And last but not least, Apple (Nasdaq: AAPL) is flexing its muscles in China by getting local Internet search leader Baidu (Nasdaq: BIDU) to agree to an unusual revenue-sharing agreement in exchange for inclusion of Baidu’s search engine in a new China-friendly iPhone. Let’s start with the Huawei and ZTE news, which has the US House of Representatives questioning the pair about how they do business in a bid to determine what, if any, security risk their network equipment might pose to unsuspecting buyers. (English article) I almost didn’t even notice this report as it looks so similar to a steady stream of similar ones that have come out in recent weeks, all about Western governments probing Huawei and ZTE for not only for security risks, but also for unfair subsidies from Beijing. Adding to the woes, a couple of employees from both companies were found guilty earlier this week of bribery in an Algerian court, casting further doubt on their business practices. (previous post) In response to all the scrutiny, both companies have been trying to diversify from their traditional networking equipment into smartphones and other less controversial products, which leads to my second news bit, which has ZTE pairing with US company Vidtel to offer videoconferencing services in North America. (company announcement) The tie-up will pair equipment from ZTE with services offered by Vidtel, in what looks like an interesting effort to provide a lower-cost alternative to products and services now offered by companies like networking equipment giant Cisco (Nasdaq: CSCO) and videoconferencing equipment makers Tandberg and Polycom (Nasdaq: PLCM). This move looks smart for ZTE, which has been particularly aggressive in developing its smartphone business in the last 2 years, though at a big cost to its profit margins. If this new tie-up can provide a reliable product, then this tie-up could provide some serious competition for existing players not only in North America, but perhaps in other western markets as well. Lastly there’s Apple, whose tie-up with Baidu was initially reported last week and is part of a broader drive that will see the US tech giant load more China-friendly features into a new iPhone for the China market. (previous post) What’s new in this latest news bit is the revenue sharing agreement. Hardware makers rarely have the clout to demand such agreements with service providers, but Apple’s iPhones are so popular that it can often demand such concessions in exchange for giving access to its phones. Look for more such revenue sharing agreements by Chinese firms looking for space on the new China-friendly iPhone, helping Apple but making such tie-ups less profitable for its China service partners.
Bottom line: A new US security probe against Huawei and ZTE shows the pair’s telecoms equipment may never gain broad acceptance in the west, and they should focus on other products instead.
Related postings 相关文章:
◙ Huawei, ZTE Suffer New Image Setback 华为和中兴改善形象的努力受挫
News Digest: June 15, 2012 报摘： 2012年6月15日
The following press releases and media reports about Chinese companies were carried on June 15. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
◙ Baidu (Nasdaq: BIDU) to Share Revenue With Apple (Nasdaq: AAPL) on iPhone Deal (English article)
◙ US Lawmakers Probe China Telecoms Firms Huawei, ZTE For Ties, Contracts (English article)
◙ Nissan Plans $785 Mln North China Plant, to Challenge VW, Toyota: Source (English article)
◙ Jack Ma to Step Back from Alibaba Daily Management – Source (English article)
◙ Silicon Valley Bank Gears Up China Venture (English article)
