It seems investors aren’t the only ones getting jittery about Chinese accounting standards in the current crisis of confidence surrounding US-listed China stocks. Domestic media are reporting that up-and-coming group buying site 55tuan, which just two months ago raised $200 million from a group including Goldman Sachs (previous post) is now having to abort its plans for an IPO. But this time, 55tuan is abandoning the plan for a US listing not due to weak market sentiment, but because it was rejected by some of the biggest investment banks, including Credit Suisse, Merrill Lynch and Goldman Sachs itself, according to a Chinese report, citing informed sources. (Chinese article) It seems the banks are all concerned about 55tuan’s rapid growth in the last couple of years, which came on the back of a big buying spree that saw it acquire lots of smaller local group buying sites. According to the Chinese report, the investment banks are worried about lax accounting at many of the acquired companies, which could throw much of 55tuan’s own books into question. Clearly the big banks don’t want to be caught with any potential liability from shareholder lawsuits of have to answer to the SEC if they help a company list that later turns out to have crooked books. One of my sources previously told me that similar acquisitions were at the heart of the crisis that hit Longtop Financial, whose own accounting was called into question due to doubts about the books at one or more of its acquired companies. If that’s the case, companies that have grown by acquisition could be especially vulnerable as the current confidence crisis plays out.
Bottom line: Companies like 55tuan, which grew through questionable acquisitions, will find themselves under growing scrutiny in the crisis surrounding US-listed China stocks.
对於中国赴美企业正在经历的信任危机，投资者似乎并不是唯一担心其会计准则的人。国内媒体报导称，团购网“窝窝团”赴美IPO(首次公开募股)计划受阻。该网站两个月前刚从包括高盛那里募集到2亿美元。但据中国媒体引述消息人士的话报导，“窝窝团”此次赴美上市计划受阻并非因市场情绪低迷，而是因遭到瑞士信贷、美林、甚至包括高盛等多家国际大投行拒绝。看似各大投行对“窝窝团”过去一两年的飞速发展都有所顾虑。“窝窝团”依靠收购众多当地小型团购网站而迅速发展起来。根据该篇中国媒体的报导，各大投行担心“窝窝团”收购的很多公司可能存在会计问题，而这将会使“窝窝团”的会计问题遭到质疑。如果各投行帮助其上市，最终却发现公司存在会计问题，其必将面临股东诉讼，并需遭受美国证券交易委员会的质询，各投行显然不想面临这种局面。之前曾有消息人士对我说，中国赴美企业会计丑闻中的东南融通就因类似收购而导致其财务状况遭质疑，因其所收购的一个或多个公司存在会计问题。若果真如此，在当前信任危机闹得沸沸扬扬之时，那些靠并购发展的企业可能尤其易受伤。
一句话：那些像“窝窝团”一样通过并购发展的企业会发现自己在此次中国赴美企业会计丑闻中面临着更严格的审查。
Related postings 相关文章:
◙ Sharks Come Out in China Stock Crisis 信任危机冲击在美上市中资股
◙ Wall Street Clean-Up Underway Amid Accounting Crisis 会计危机中华尔街展开清理行动
◙ China Confidence Crisis Separates Wheat from Chaff 中国企业信任危机 对不同公司各有利弊
China seems destined for a big glut in its car-building capacity, with Nissan Motor (Tokyo: 7201) becoming the latest global auto maker to announce a major expansion in the market, with plans to spend $7.8 billion to nearly double its capacity over the next four years. (
from that part of China, which has also seen neighboring cities like Xian and Chongqing grow quickly as China offers strong incentives for companies to set up shop in its relatively underdeveloped western interior. As a longtime tech writer, I’ve been particularly impressed with Chengdu, which seems to have a strong ability to attract some of the world’s top-tier technology names to the city with its abundance of college graduates, good transport networks and of course its tasty Sichuan food. Intel (Nasdaq: INTC) was one of the earliest players in the city when it set up a chip manufacturing plant there seven years ago, and Texas Instruments (NYSE: TXN) opened up shop in the city last year when it took over a plant from SMIC (HKEx: 981; NYSE: SMI). Most major PC players have also opened plants there in the last 2-3 years, including both Hewlett Packard (NYSE: HPQ) and Dell (Nasdaq: DELL), (
The accounting confidence crisis continues to take its toll on New York-listed China firms, with some mixed signs coming from the struggling solar sector and a very “shark-like” announcement from a US law firm looking to take advantage of the situation. The China Daily reports the crisis has already claimed Longtop Financial, ShengdaTech and China MediaExpress as victims, all of which have been delisted (
crash that has seen its Hong Kong-listed shares lose about two-thirds of their value from a 52-week high, the company is continuing to focus on its dreams of becoming the world’s first company to make serious money from electric vehicles, as evidenced by its latest announcement that it is providing the world’s biggest EV fleet to its hometown of Shenzhen. (
What a difference a couple of years makes. Apple (Nasdaq: AAPL), a tiny player in China as little as two years ago, has suddenly become a new dominant force in both China’s computing and cellphone scene, taking on traditional market leaders Lenovo (HKEx: 992) and Nokia (Helsinki: NOK1V.HE) in their respective spaces. The US maker of wildly popular iPhone cellphones and iPad tablet PCs officially surpassed Lenovo in terms of total China sales in the quarter through June (
more focused on sales and marketing, setting them apart from previous efforts that were mostly focused on using China as a base for cheap manufacturing. Both are aimed at capitalizing on an expected spending bonanza that will see China spend billions of dollars each year to provide basic healthcare to its less affluent majority under an ongoing reform plan. One interesting difference here is that Merck has found its partner in a smaller New York-listed company with market cap of about $600 million, whereas Pfizer’s partner is listed in Shanghai with a larger market cap of around $3.2 billion. I tend to like the smaller, overseas-listed companies like Simcere as they are often more entrepreneurial and adaptable to market conditions. Bigger, Shanghai-listed firms like Hisun tend to have better connections, which are obviously important in this major government-led overhaul of China’s health care system. But they also tend to move more slowly, and their decisions are often based as much or even more on non-economic considerations as they are on what’s best for business. Still, both of these partnerships look good to me in light of China’s health care reform, and investors clearly like the Simcere deal, bidding its stock up nearly 5 percent in Friday trading.
Software (Nasdaq: CDCS), both issued the same generic statements, each saying it was notified of being out of compliance with Nasdaq rules for failing to file its annual report by the required deadline. (
After saying on several occasions earlier this year that 4G licenses won’t be issued for at least the next 2-3 years, China’s telecoms regulator is subtly shifting its message, no doubt under heavy pressure from China Mobile (HKEx: 941; NYSE: CHL), which would like to see such licenses issued sooner rather than later. Chinese media are now quoting an official from the regulator at an event this week saying that 4G licenses will be awarded when the technology is “mature.” (
Yesterday I wrote that video- and music-sharing site Xunlei’s New York listing plan was fast shrinking, and today it looks like it’s disappeared completely, the victim of a perfect storm of market- and company-related factors. In a tersely worded statement, Xunlei said simply that it had delayed the offering “due to market conditions”. (
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