Bottom line: Phoenix Satellite TV’s latest results show a traditional broadcaster that failed to make the transition to new media, and could auger a decline that sees the company close or get acquired in the next 5 years.
Phoenix reports sinking revenue
As second-quarter earnings season winds down, I thought I’d take a look at the newly released interim results from Phoenix Satellite TV (HKEx: 2008), a former Chinese media pioneer that’s in a clear state of decline with no sign of turnaround. I used to be a big fan of Phoenix and saw a big future for the company, after it became one of the first independent TV news providers in China in the early 2000s. But the company’s colorful founder Liu Changle hasn’t been very skillful at parlaying his early success into the new media realm, with the result that the company’s outlook is fading rapidly. Read Full Post…
That was my first reaction on reading a thinly sourced report on news portal Sina that Shanghai’s somewhat cerebral Oriental Morning Post was planning to cease publication on January 1 next year. I made some of enquiries of my own, and it seems the Sina report may have been a bit premature. But it does appear that plans are indeed in the works to shutter this venerable institution of Shanghai’s media scene. Read Full Post…
The following press releases and news reports about China companies were carried on September 3-5. To view a full article or story, click on the link next to the headline.
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China Opens Antitrust Investigation Into Uber’s Deal with Didi (English article)
Yum (NYSE: YUM) to Sell Stake in China Unit to Ant, Primavera Ahead of Spinoff (English article)
Bottom line: New Teavana-branded drinks at Chinese Starbucks will get a relatively strong reception, prompting the opening of experimental stand-alone Teavana stores in Beijing or Shanghai within a year.
Starbucks launches Teavana drinks in China
Not content with its phenomenal success in China already, trendy coffee chain Starbucks (NYSE: SBUX) is hoping to extend its winning streak in the market with the roll-out of new tea beverages from its sister Teavana chain. This particular move was actually announced back in March, but the two new Teavana-branded drinks just hit Starbucks stores this week, in line with the previously announced schedule for a September launch. Read Full Post…
Bottom line: UnionPay’s announcement that its cards are usable at nearly all US ATMs shows it is targeting local US customers, while stiff competition will limit the success of new Xiaomi and Huawei e-payment services.
UnionPay makes big gains in US
It’s been a busy week for Chinese companies in the electronic payments headlines, with 3 major names making big moves in the space. Leading the pack is industry stalwart UnionPay, China’s equivalent of MasterCard (NYSE: MA) and Visa (NYSE: V), which is saying its own credit cards are now accepted by an impressive 80 percent of US merchants. The other headlines are coming from smartphone makers Huawei and Xiaomi, which have announced roll-outs for China-based electronic payment services that will compete with other similar products from Apple (Nasdaq: AAPL) and Samsung (Seoul: 005930). Read Full Post…
The following press releases and news reports about China companies were carried on September 2. To view a full article or story, click on the link next to the headline.
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Starbucks (Nasdaq: SBUX) Launches Teavana Brand in China (English article)
China Approves NXP (Nasdaq: NXP) Sale of Standard Products Unit to Chinese Group (GlobeNewswire)
Over 80 Pct of Merchants in the US Accept UnionPay Credit Cards (Press release)
58.com (Nasdaq: WUBA) Rolls Out Long Work Day, Overtime Plan, Workers Quit (Chinese article)
JPMorgan (NYSE: JPM) Gets Wholly-Owned Asset Management License in China (English article)
Bottom line: Sina’s award of Weibo shares as a dividend reflects recent strong momentum in Weibo’s business, while Phoenix New Media’s firing of 3 top employees for disciplinary reasons will undermine its news division’s credibility.
Sina gives Weibo shares as dividend
Two of China’s leading news portals are in the headlines today, led by word that industry stalwart Sina (Nasdaq: SINA) is giving stock in its Twitter-like Weibo (Nasdaq: WB) unit to shareholders as a dividend. That particular news comes as shares of both Sina and Weibo have soared over the last 2 months, as Weibo finally starts to realize its profit potential.
Meantime, Phoenix New Media (NYSE: FENG) is in more dubious headlines, with word that 3 high-level employees from its news division have been fired for “serious violations of discipline.” There’s no mention of criminal charges in the reports, which cite an internal memo to employees. But it’s a bit noteworthy that the wording is identical to the frequently used phrase for high Communist Party officials being probed for corruption. Read Full Post…
Bottom line: Microsoft’s spin off of its MSN China portal to a management-led group looks similar to the sale of its cellphone patent portfolio to Xiaomi, and is aimed at handing off underperforming assets to strategic partners.
Microsoft spins off MSN China
Microsoft (Nasdaq: MSFT) chief executive Satya Nadella is making one of his biggest strategic moves in China two years after taking over as head of the company, with word that the software giant is spinning off its local MSN web portal to a management-led group. This particular development actually first surfaced back in May, when reports emerged that Microsoft planned to closed down the Chinese version of its MSN portal that is a central part of its global Internet strategy. Apparently those reports were premature, and the company instead will continue to operate this meager part of its China Internet presence through a third-party partner. Read Full Post…
Bottom line: New quarterly earnings data show that China’s travel industry is on the cusp of a slowdown likely to last for at least the next 2 years, while a major new fund set up by Ctrip shows the sector still has strong longer-term growth potential.
Ctrip-backed Ocean Link launches $400 mln travel fund
A couple of items from the travel space are casting a spotlight on the risks and rewards of China’s travel sector, which has huge potential but is also susceptible to economic cycles. Highlighting the big potential is word of a new $400 million fund being launched by leading online travel agent Ctrip (Nasdaq: CTRP) and US private equity firm General Atlantic to invest in Chinese travel-related projects. Meantime, the downside was showing up in the newest results of BTG Hotels (Shanghai: 600258), whose first-half profit plunged after its recent buyout of budget hotel specialist Homeinns. Read Full Post…
Bottom line: New reports detailing big amounts of idle wind and solar plants, and Beijing’s plans for a new EV incentive scheme, reflect wasteful spending under earlier development plans, the result of China’s rush to quickly develop the new energy sectors.
Huge volumes of China solar, wind plants sit idle
Two new reports are shining a spotlight on the failure of China’s efforts to promote new energy through the construction of wind and solar power plants, and to put more hybrid and electric vehicles (EVs) on the road. Neither report will come as a huge surprise, since the failure of both efforts has been widely reported this year. But they both highlight how cutting-edge industries promoted by Beijing often attract participants more interested in getting generous government subsidies than actually building anything of value. Read Full Post…
Bottom line: Wanda’s recent steam of announcements for multibillion dollar deals, including the latest for a $10 billion entertainment complex in Shandong, are mostly hype, and many will never get completed.
Wanda announces new multibillion-dollar project in Shandong
It used to be that I would get quite excited on seeing the word “billion” when used in connection with new investments, since such major sums are relatively rare. But these days the word is becoming almost a cliche in China, and one of the most egregious abusers of the figure is real estate and aspiring entertainment giant Wanda Group. True to that tendency, Wanda and its increasingly chatty chief Wang Jianlin have just announced yet another multibillion-dollar investment, this time for an entertainment complex in the industrial city of Jinan in eastern China’s Shandong province. Read Full Post…
