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Google: Getting Mapped Out of China? 谷歌地图：会退出中国市场吗？

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When you’re the world’s biggest Internet company even the smallest hiccups can make headlines, which is what Google (Nasdaq: GOOG) seems to be learning amid a flurry of chatter about the future of its online mapping service in China. The current saga actually began last year, when China required all mapping service providers to get new licenses, and it wasn’t clear whether Google would apply, leading some to predict another high-profile pull-out could be coming after the company moved its China search site to Hong Kong in 2010. (previous post) Google didn’t say much throughout the saga, perhaps due to the sensitivity of the matter, but eventually word got out that it had set up a joint venture as required by Beijing and indeed applied for a license. What has the world buzzing now is that a February 1 deadline has now passed for all mapping service providers to get their licenses, but Google still has yet to receive one. Reports have sprung up in the Chinese media like weeds in the last 2 days, most simply quoting the regulator saying Google has yet to receive its license without any further explanation. (Chinese article; English article) Of course, the lack of a reason has everyone guessing what is happening, with the implication that Google and Beijing are once again at an impasse similar to the one that saw it withdraw from the China search market. The only problem with all these theories is they make no sense, as there’s clearly no censorship issues, which were the major point of contention in the search dispute, involved with the mapping business. One of the more rational reports out is saying the delay is being caused by a technical issue, namely that some people at Google’s mapping venture are still waiting to get necessary clearances for the license to be issued. Clearly Beijing and Google have very little to gain from another high-profile spat, which is probably the reason both are trying to keep a low profile until the license is finally granted, which I fully expect in the next month or 2. In the meantime, look for the noisy Chinese media to keep printing conspiracy stories about what would be an insignificant story if it was about anyone else besides Google. At the end of the day, Google is still firmly committed to China, and, as I said at one point last year, I wouldn’t be surprised if it ultimately returned its search engine business to the country over the medium- to longer-term. (previous post)

Bottom line: Google’s failure to get a China mapping license before a February 1 deadline is most likely due to administrative issues, and it is likely to get the license in the next 1-2 months.

Related postings 相关文章:

◙ Latest Google Move: Gearing Up For China Return? 谷歌最新动向：打回中国市场？

◙ Google Map Impasse Resolved With New JV 谷歌地图风波解决

◙ Google Falling Off The China Map 谷歌地图：谈判也没用

55tuan Restarts IPO Race With LaShou 窝窝团和拉手网重启IPO争先赛

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An IPO race pitting 2 of China’s top group buying sites, LaShou and 55tuan, is showing signs of restarting in the Year of the Dragon, though I’m still a bit dubious of whether either of these 2 companies will ever really make it to market. New reports in the Chinese media say 55tuan is denying rumors that it has scrapped plans for a New York IPO, saying it is moving forward with a timetable for an offering in the second quarter. (Chinese article) The denial marks the latest twist in a race that started to take form last summer, when both 55tuan and LaShou appeared to be moving ahead with plans for offerings to raise much-needed cash. Both companies had trouble finding underwriters for their offerings, with names like Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) resigning from LaShou’s plan (previous post), while Credit Suisse (NYSE: CS) and Merrill Lynch reportedly declined to bid for the 55tuan deal. (previous post) All the big banks were reportedly concerned about the accounting used by both companies for some of their many acquisitions, amid a broader series of accounting scandals that hammered US-listed Chinese stocks last year. LaShou ended up hiring several second tier-players, including domestic heavyweight CICC and Japan’s Nomura; but one of my sources tells me that even Nomura ended up dropping the deal and was replaced by Britain’s Barclays Capital. LaShou appeared to have the edge in the race when it made its first public IPO filing last fall, but then saw that plan derail after the US securities regulator grew suspicious and asked for more information. (previous post) That happened in November and we haven’t heard anything since then, leading me to believe that the plan could be delayed indefinitely while LaShou does some major reworking of its books to satisfy both regulators and its own underwriters. In the meantime, I’m also skeptical that 55tuan will really make a second-quarter IPO, as it is having its own problems in the highly competitive group buying space that saw it make mass layoffs last year. Turmoil in the space appeared to claim its latest victim earlier this week when Groupon.cn, which has no relation to US giant Groupon, reportedly put most of its employees on extended holiday after the Chinese New Year break. (previous post) At the end of the day, one or both of these companies could finally make it to market, but both would be well advised to wait until the end of the year when they can generate more excitement — if they have the financial resources to survive that long.

Bottom line: A second-quarter IPO timetable for group buying site 55tuan looks overly ambitious, and an offering closer to the end of the year looks both more prudent and realistic.

Related postings 相关文章:

◙ Groupon.cn Becomes 2012 First Group Buy Victim 团宝网员工被放假 中国团购业料将加速整合

◙ LaShou IPO Derails

◙ 55tuan: A Company in Denial 窝窝团拒不接受现实

Citron Keeps Up Qihoo Assault 香橼继续攻击奇虎

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The year of the Dragon is off to a noisy start for controversial Internet security software firm Qihoo 360 (NYSE: QIHU), which is coming under yet another assault from a small western research house named Citron over the credibility of some of its user figures. Chinese media are reporting that Citron founder Andrew Left has taken his attack to China, where he did an interview with Shanghai’s influential China Business News telling the paper he will continue his campaign to debunk user numbers from Qihoo that he says are vastly inflated. (Chinese article) Citron began its assault back in November last year (previous post), saying at the time that Qihoo’s stock was probably worth about $5 per share rather than the $20 where it was trading. At the time Qihoo put out a strongly worded statement denying the allegations. But now the company’s controversial and usually combative founder Zhou Hongwei is keeping uncharacteristically quiet, saying he won’t engage in war of words over the issue which has clearly become quite sensitive. Qihoo’s shares initially fell to as low as $14 after Citron’s report first came out, but have bounced back since then and now trade at around $18. I’ll be quite frank and say I’m 1,000 percent confident that Citron has probably taken a big short position in Qihoo, and is starting to worry that it could lose big money on its bet, hence its reluctance to end its assault. At the same time, Zhou, who often uses ethically questionable business tactics, is actually taking a smart approach this time by staying quiet and letting his company’s performance speak for itself. All that said, I don’t think this story is over just yet, as I really do believe that Qihoo overstates its user numbers, though the magnitude of those overstatements is still unclear. By the time this story plays out, I’d look for Qihoo shares to trade a bit lower than where they are now, perhaps as low as $10, though I doubt they will hit the $5 mark unless a major scandal emerges. On a broader basis, what this prolonged war shows is that this kind of attack on US-listed Chinese companies, which became a common theme last year, will continue into the first half of 2012, as short sellers take advantage of the deep suspicions that still remain over Chinese accounting practices.

Bottom line: The protracted battle by a short seller against Qihoo 360 shows that such attacks will continue into 2012 and last at least through the first half of the year.

Related postings 相关文章:

◙ Report Takes Wind Out of Inflated Qihoo 奇虎遭遇Citron釜底抽薪

◙ Short Sellers Target China in Year End Assault 做空抛盘年底将矛头对准在美上市中国企业

◙ Xunlei, Muddy Waters Sound Upbeat Notes 迅雷和Muddy Waters保持谨慎乐观

China Telecom 3G Drive Set For Boost With iPhone 4S 中国电信3G推出电信版iPhone 4S

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It’s not exactly news at this point, but Chinese media are reporting that China Telecom (HKEx: 728; NYSE: CHA), the most aggressive of China’s 3 mobile carriers in the 3G space, has finally reached a deal to begin selling Apple’s (Nasdaq: AAPL) iPhone 4S on its network, with sales likely to begin sometime in the first quarter, possibly as soon as February. (English article; Chinese article) Talks for this deal have been going on for months and reported frequently in the media, and the debut would be at least a month behind the official iPhone 4S launch in China by one of the nation’s other carriers, China Unicom (HKEx: 762; NYSE: CHU) earlier this month. Still, the latest news was apparently enough to spook investors, with Unicom stock shedding 5 percent in Monday in Hong Kong trade and falling even more in overnight trade in New York. Apple’s iPhones are extremely popular in China, and security concerns over long lines at one Beijing Apple store actually led it to cancel its plans to sell the phone there earlier this month, resulting in some mild skirmishes. (previous post) That fact, combined with China Telecom’s generally aggressive approach to 3G, clearly has investors excited that China’s smallest mobile carrier will be able to further boost its momentum in the 3G space to take even more market share from Unicom and China Mobile (HKEx: 941; NYSE: CHL), the nation’s largest mobile carrier. China Telecom saw its share of China’s 3G market zoom to 28 percent by the end of 2011 from just 19 percent when the year began, as it took advantage of inferior technology at China Mobile and management missteps at Unicom to steal share from both of its rivals. The gains have brought China Telecom to within spitting distance of Unicom, whose 3G market share now stands at about 30 percent. If the iPhone deal finally does happen, which looks likely, and a launch occurs in February or March, I wouldn’t be at all surprised to see  China Telecom’s 3G share pass Unicom’s by the middle of the year, making China Telecom the company to watch in 2012.

Bottom line: China Telecom’s imminent launch of the iPhone 4S on its 3G network could help to propel it past Unicom to become China’s second biggest 3G carrier by the middle of this year.

Related postings 相关文章:

◙ Google, Apple OS Rivalry Intensifies 苹果与谷歌在华智能手机战白热化

◙ China Telcos In New Drives at Home, Abroad 中国三大电信运营商海内外发力

◙ 2011: China Unicom’s Lost Year 中国联通失落的一年

Groupon.cn Becomes 2012 First Group Buy Victim 团宝网员工被放假 中国团购业料将加速整合

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While recently listed Groupon (Nasdaq: GRPN) struggles with a tough group buying market in its US home base, one of its Chinese copycats, Groupon.cn, may be facing an even grimmer future as a much-needed cleanup of the ultra-competitive China market continues. Chinese media are reporting that Groupon.cn, which has no relationship with the US Groupon, has told most or all of its staff to stay on extended vacation following the end of the weeklong Chinese Lunar New Year holiday that ended on Sunday. (Chinese article) It also says a group of Groupon.cn’s partners are preparing to sue the company, presumably because it failed to pay them for their products that it offered for sale on its group buying site. Groupon.cn has denied the reports through a Weibo microblog posting, saying all of its activities have returned to normal since the end of the Lunar New Year holiday. Of course it’s possible the Chinese media reports are exaggerated, but I’m inclined to believe there’s at least an element of truth to them considering the disarray and rampant competition in the China’s group buying space. Gaopeng, the group buying  joint venture between the real Groupon and Chinese Internet giant Tencent (HKEx: 700), struggled during most of its first year of business last year, laying off hundreds of employees in the process. (previous post) Meantime, LaShou, China’s largest group buying site, is in the midst of trying to make a New York IPO that is showing few if any signs of moving forward after the securities regulator asked for more information, reportedly over concerns about some of its accounting. (previous post) Other signs of turmoil also emerged in the second half of last year, including layoffs at another top player 55tuan, giving this latest report about problems at Groupon.cn even more credibility. I would look for more headlines on this company once the situation becomes clearer, as it won’t be able to hide massive layoffs for too long if they really are happening. Perhaps the company will even sell itself to a rival, though such deals are relatively rare in China due to the big egos of bosses who hate to give up control of their businesses. Meantime, this development looks like the latest sign of distress for an overheated industry that is set for a major clean-up in 2012.

Bottom line: Reports of woes at Groupon.cn mark the latest phase in a cleanup for China’s overheated group buying space, which will see a major acceleration this year.

Related postings 相关文章:

◙ LaShou IPO Derails

◙ Latest Group Buying Turmoil Shows Up at 24quan, Meituan

◙ Lashou Files For IPO, Launching Race With 55tuan 拉手网与窝窝团打响IPO竞争战

Sany and Yingli Take Different German Tacks 三一重工和英利的德国交易或前景迥异

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I’ll start off today with a couple of news bits from Germany, one from the industrial equipment sector where Sany Heavy Industry (Shanghai: 600031) has made a major acquisition, and the other from the solar sector where Yingli (NYSE: YGE) has made a major sale. These 2 deals don’t really have much in common beyond the fact that both are in Germany, but for me the former illustrates a dubious approach for Chinese firms that want to enter Europe’s largest market, while the latter looks much more prudent. The first deal will see Sany acquire Putzmeister Holding, a concrete pump maker, in a purchase both companies say is the largest ever for a Chinese firm in Germany. (English article) The fact that they don’t give a price leads me to believe Sany didn’t give much cash for this deal, but rather is going to assume a big debt load for a company that may be marginally profitable or is more likely losing money. That would follow a pattern by other Chinese companies in Western Europe, including TCL’s (Shenzhen: 000100) purchase of the TV assets of France’s Thomson and the purchase of Siemens’ cellphone business by Taiwan’s BenQ, both of which ended in complete disasters and nearly drove their acquirers to financial ruin. In this case Sany looks equally unprepared for such a purchase, especially dealing with Germany’s tough labor laws and unions, and I see bad things ahead for both companies. In the other deal, Yingli has signed a deal to sell up to 200 megawatts worth of solar modules to a German company, IBC Solar AG, including 180 megawatts in 2012 alone. (company announcement) This kind of deal is of course much more traditional, involving a simple sale of products that has much less risk involved than the M&A approach being used by Sany. It also comes as Germany prepares to cut back many of its government incentives for installation of new solar projects, and looks like Yingli and IBC are racing to take advantage of some of those incentives while they can. (previous post) My final comment on these deals would be: Nice job on a big sale for Yingli, and, Look for stormy weather ahead, Sany.

Bottom line: Sany’s purchase of a German firm will see numerous problems in the next 2 years, while Yingli’s latest German sale looks like a major deal before government incentives are reduced.

Related postings 相关文章:

◙ LDK’s German Buy: Two Losers Combine 赛维LDK收购Sunways将使前者境况雪上加霜

◙ More Turbulence For Alternate Energy

◙ Year End Brings Problematic New IPO Wave 中国新一波IPO潮或无法达预期效果

Baidu’s Silence: Shortfall Ahead? 百度低调发财报：或开始下坡路？

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I certainly don’t think of myself as a believer in conspiracy theories, but I have to say I was a bit surprised to read several reports over the weekend saying that leading search site Baidu (Nasdaq: BIDU) was going to report its fourth quarter results on Monday US time and can’t help but wonder if there’s a bigger story here. (English article; Chinese article) Let’s backtrack a bit and review what exactly happened, or in this case what didn’t happen. Most importantly, Baidu has made no public announcement of its plan to release its latest earnings, even though numerous websites have clearly learned of its intent based on all the reports. The company usually puts out an announcement via PRNewswire around 3 weeks ahead of its earnings date, which is notably absent this time on both the PRNewswire site and Baidu’s own investor relations site. What’s more, the date isn’t even marked on Baidu’s own investor relations calendar, even though quarterly reports are clearly one of the most important events for publicly listed companies, especially ones like Baidu whose revenue and profits  keep growing by very attractive rates even as companies in other sectors stumble. This time is no different, with analysts looking for Baidu’s top and bottom lines to grow by more than 80 percent. The timing of this announcement also looks a little odd, as it comes on the first day of the new work week after most of China took off the previous week for the Lunar New Year holiday. The last time someone tried to do something like that was last fall, when B2B e-commerce leader Alibaba.com (HKEx: 1688), which is listed in Hong Kong, quietly announced its less-than-stellar results on the US Thanksgiving Day holiday when many people had just started a 4-day vacation. (previous post) Of course I should also point out that Baidu released its fourth-quarter results at just about the same time last year, and the odd timing could just owe to the fact that the Lunar New Year fell quite early this year. It’s also possible that Baidu simply just forgot to send out a notice about its latest reporting date, and also forgot to include it on its investor relations calendar. In fact, one research house said it talked recently to Baidu management, which was confident of meeting expectations for its results. Still, I can’t help but wonder if we’ll perhaps see the beginning of the slowdown for this company that I predicted around the middle of last year (previous post) and seems all but inevitable, if not now then later this year.

Bottom line: Baidu’s low-profile approach to its latest earnings due out on Monday US time could signal a downside surprise, as its booming ad sales finally start to slow.

Related postings 相关文章:

◙ Advertising Squeeze Continues, Slowdown Looms 广告支出初显放缓迹象

◙ Baidu, ZTE Earnings: More of the Same 百度和中兴财报：看上去没变化

◙ Search Wars Heat Up With Latest Anti-Baidu Moves 中国网络搜索战升温

 

Twitter Eyeing China? Twitter想进中国？

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The world was buzzing over the weekend with news from the world’s 2 biggest social networking sites, Facebook and Twitter, with implications not only for themselves but also the China market in different ways. Twitter’s move was the more interesting in that regard, as it announced a new policy that could let posts on its site be seen in some markets but not others — a move that could clearly make it more viable in places like China where many sensitive topics are officially banned for online discussion. (Chinese article) Meantime, the markets were also buzzing with word that Facebook could file for its highly anticipated IPO this week, news that got investors excited about China SNS sites, with shares of both Renren (NYSE: RENN) and Sina (Nasdaq: SINA), operator of the wildly popular Weibo service, both posting nice gains on Friday. But let’s return for a moment to Twitter, as that’s the news that has the biggest potential to shake-up China’s microblogging sphere now dominated by Weibo. Anyone who lives in China knows that both Twitter and Facebook have been blocked in the market since the spring of 2009, presumably because they operate offshore and thus aren’t subject to China’s strict self-censorship laws for all of its websites. Facebook has signaled a number of times it still intends to make a play for China (previous post), with founder Mark Zuckerberg visiting China about a year ago and saying he wants to visit again as clearly the market is a critical piece of any global Internet strategy. Twitter has been much quieter on the subject, without ever really saying what its future plans are for the market now dominated by Weibo, which has around 250 million users. This latest adjustment at Twitter looks clearly aimed at the China market, as it would ease Chinese regulators’ concerns about the service’s ability to keep unwanted posts from outside markets off the site. Still, I’m not totally convinced Twitter has its eye on China just yet, mostly because Weibo itself has struggled to make any money in the market, despite its incredible popularity. Furthermore, anyone who plays in China SNS will now have to deal with Beijing’s recently announced real-name registration system, which will not only put a big burden on the SNS services themselves but is likely to deter many web surfers who like to remain anonymous. On the whole, I suspect this move by Twitter may be designed to test the China waters and will be followed by a visit to Beijing to see what regulators think. If the reaction is positive, I wouldn’t be surprised to see Twitter taking some kind of modest initiative in China by the end of this year, though it will face a difficult road catching up to Weibo.

Bottom line: Twitter’s latest policy shift allowing market-specific content controls could signal it is considering a move into China, which could come by the end of this year.

Related postings 相关文章:

◙ Despite China Rebuff, Facebook Going Back for More Facebook明知山有虎，偏向虎山行

◙ Cleanup Resumes, Facebook Sniffs Out China Investors 在美上市的中国企业将继续面临“大清洗”

◙ Weibo Gets Confidence Vote From Digital Sky DST投资消息或提振新浪短期前景

More Turbulence For Alternate Energy

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The Year of the Dragon is off to a dubious start for China’s alternate energy sector, with solar panel makers facing stiff resistance in both the US and Germany, 2 of the world’s biggest markets, and now wind power equipment makers coming under similar fire. The solar story in the US is actually an old one by now, following the launch of an investigation into unfair subsidies by Beijing for its solar panel makers last summer. (previous post) But what’s new on that front is that the US body that rules on such matters is likely to make its final decision soon, which will likely result in punitive tariffs that will send a chill through the solar energy market. A US group that helped to bring the original complaint has just put out a new analysis saying Chinese companies have been rushing to import their panels to the US in anticipation of a ruling against them, with imports up more than 100 percent since last July when the probe first began. (English announcement) Usually I’m a little skeptical about this kind of industry announcement, but in this case I wouldn’t be surprised if the numbers are actually relatively accurate, as Chinese producers like Suntech (NYSE: STP), Trina (NYSE: TSL) and Yingli (NYSE: YGE) certainly have reason to stockpile panels in the US to weather a coming storm that could see punitive tariffs remain for a year or more until the US and China settle their differences. Meantime, the solar panel makers are also facing new uncertainty in Germany, one of their other major markets, as that country said it plans to phase out many incentives to boost the installation of new solar capacity by 2017 and is already starting to make changes. (English article) The loss of 2 such major markets won’t be good for the industry in the short term, though it should hasten the introduction of new technologies that could boost efficiency and help the industry finally achieve its real goal of making a product that can survive on its own based on real economics rather than government subsidies. Meantime, the wind industry could soon be coming under similar pressure, as the US is also launching an investigation into unfair subsidies for Chinese wind tower makers. (English article) This action could hit another promising group of companies, though it should be less damaging as it focuses on makers of lower-tech towers as opposed to the more critical wind turbines that actually produce electricity. Still, this kind of trade war won’t help the industry’s development as a whole, and all parties would be much better served finding a less combative way to address the issue of state subsidies.

Bottom line: Looming US punitive tariffs and a winding down of German subsidies bode poorly for the battered solar industry in 2012, with at least 2 more years of pain likely.

Related postings 相关文章:

◙ Solar Matures With Foxconn Entry

◙ India Turns Up Heat on Solar With New Probe

◙ Beijing Boosts Solar In Latest Mixed Signal　中国扩张太阳能行业发展 解决与美争端立场混乱

Sina Tests Weibo Demand With Paid Offering 新浪试水微博增值收费服务

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A half year after spinning off its Weibo unit with an aim to earning profits from the wildly popular microblogging service, Sina (Nasdaq: SINA) is taking the first step to generating significant new revenues from the business by rolling out a new premium paid service. The strategy is certainly necessary if Sina ever wants to earn a profit from Weibo, and I even like the fact that it’s charging a very modest fee for the service, at least initially, which should help attract customers. But I’m still quite skeptical that the strategy will actually work, as it’s always hard to get people to pay for something they’ve grown accustomed to getting for free. Let’s backtrack a moment and look at the details of this latest development, which has Sina rolling out a service that will allow Weibo users to get the new premium service for the modest fee of 5 yuan a month or 50 yuan a year, translating to less than $1 per month. (English article) The new service will allow users to get SMS notifications for some of their incoming posts — an offering that doesn’t sound that interesting since many users already access Weibo over their mobile phones. In theory the new service could be a major revenue generator, since the company could generate more than 1 billion yuan in annual revenue if even just 10 percent of Weibo’s 250 million users signed up for the service. But as I said already, the bigger issue will be getting people to pay for a service that they’re used to getting for free. E-commerce leader Alibaba Group has found out that such a switch can indeed be difficult, as reflected by the lackluster performance of its Taobao online auctions service. That service made headlines 7 years ago when it ultimately drove global leader eBay (Nasdaq: EBAY) out of the China market by offering its services for free; but since then, Alibaba has had a difficult time making significant profits from the business, due in large part to the fact that users don’t want to pay for something they’ve always received for free. I suspect that Weibo will learn a similar lesson with this latest premium offering, and would advise Sina to look at other options in its drive to make the platform profitable, including developing entirely new services that can leverage Weibo’s large user base.

Bottom line: Weibo’s new premium service is likely to fail due to lack of interest from users who are accustomed to getting the service for free.

Related postings 相关文章:

◙ Sina’s Weibo Suffers New Setback With Lawsuit 吉林市驻京办可能起诉新浪微博

◙ Microblog Clampdown: Only Chapter 1? 实名制向网络行业吹去冷风

◙ Watch Out Weibo, Weixin Is Growing 新浪微博要小心腾讯微信要崛起

Fading Results Tarnish Education’s Luster

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New Oriental (NYSE: EDU) and TAL Education (NYSE: XRS), two of China’s biggest names in the education services sector, have just posted new quarterly results that are less than inspirational, showing the formerly red-hot education sector may rapidly be losing its luster. Disappointment at the latest results is reflected in the companies’ stocks, with TAL shares dropping about 2 percent after its latest quarterly report showed its profit slipped nearly 40 percent even as revenues rose 70 percent. (company announcement) Shares of New Oriental have fared even worse, tumbling 11 percent after its reported an operating loss earlier this week even as its revenue grew by a healthy 38 percent. (results announcement) It seems that both companies are getting hit by the same phenomenon in a sector that has seen explosive growth over the last few years from Chinese looking to improve themselves and their children through outside classes that these companies offer. On the one hand, competition in the space is getting more intense, with a growing number of foreign companies such as Pearson (London: PSON) and Disney (NYSE: DIS) entering the space in the last few years to capitalize on demand. (previous post) At the same time, these companies are all facing the same problem, namely the lack of scalability for this industry. Whereas Internet and tech companies can significantly lower their costs as their number of customers grows due to the nature of their business, the same isn’t really true for education services since, at the end of the day, each student requires a relatively fixed amount of costs in the form of classroom space and salaries for teachers to instruct the classes. That potent combination means that even though revenues may continue to grow at a healthy pace for the next few years, especially as these companies tap demand in mid-sized and smaller cities, the cost of those revenues is likely to stay constant at best, and could even rise due to the stiff competition, meaning profits won’t grow and could even shrink more. If that’s the case, look for this sector to go through a bit of growing pain over the next 2 years, with sustained profit growth unlikely to return until competition eases with some needed consolidation.

Bottom line: The latest results from 2 top education companies reflect stiff competition and lack of scalability that will lead to eroding profits for the next 2 years.

Related postings 相关文章:

◙ Education Getting Lesson in Competition

◙ New Oriental Results: Slowing Education Growth Story 新东方发表最新财报 中国教育服务增长减速？

◙ Parade of China Money-Losers Report to Wall Street 多家中国企业亏损凸显市场竞争激烈