Bottom line: Baidu’s bitcoin advertising ban represents a more proactive stance that major Chinese firms are starting to take towards controversial business, as they seek to boost their images and avoid scandals.
Baidu bans bitcoin ads
Online search giant Baidu(Nasdaq: BIDU) rippled through the headlines last week with the relatively small news that it would no longer take advertising business from services that hosted trading in bitcoin and other virtual currencies. While seemingly minor on the surface, the move had larger significance due to the controversial nature of virtual currencies and Baidu’s decision to take action without government prodding or the threat of a scandal. Read Full Post…
The following press releases and news reports about China companies were carried on August 30. To view a full article or story, click on the link next to the headline.
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Microsoft’s (Nasdaq: MSFT) MSN China Portal in Management-Led Buyout (Chinese article)
Russo Bros in Talks With Huayi Bros (Shenzhen: 300027) for Partnership (English article)
Baoneng (Shenzhen: 000690) Pays 882 Mln Yuan for 26.4 Pct of Dating Site Baihe (Chinese article)
Minsheng Bank (HKEx: 1988) Announces Interim Results (HKEx announcement)
Private-Equity Firm General Atlantic, Ctrip (Nasdaq: CTRP) in New $400 Mln Fund (English article)
Bottom line: The collapse of a cross-investment between China’s Citic Bank and Taiwan’s CTBC Financial reflects growing cross-strait tensions, and could signal a chill in major new cross-strait investments over the next 4 years.
Citic Bank scraps Taiwan investment
In a troubling sign for companies doing business across the Taiwan Strait, an equity swap between China’s Citic Bank (Shanghai: 601988) and Taiwanese peer CTBC Financial (HKEx: 2891) has collapsed due to regulatory issues. In this case it appears that Taiwan scuttled the deal for reasons I’ll explain shortly, though a Citic spokesman emphasized no politics were involved. But regardless of the stated reasons, this particular development seems to reflect growing tensions between Taiwan and China under a new Taiwanese administration that’s far more wary of Beijing than its predecessor. Read Full Post…
I had a sense of deja vu on reading about a plan to develop a scenic river town near our new Disney Resort into a bed and breakfast (B&B) district as a way to raise local living standards while providing some alternate housing options for park visitors. Then I remembered writing a few years ago about a similar plan to transform an aging but colorful area of Hongkou District near my home into a similar B&B hotspot.
These kinds of plans are great in theory, as they raise living standards by helping local residents to upgrade their aging homes into thriving businesses. Such plans also help to restore old architecture and can create unique communities with their own individual personalities, like the bustling Taizifang area. Read Full Post…
Bottom line: Weakening sentiment towards Postal Bank’s IPO reflects concerns about China’s economic slowdown, while Lufax’s choice of Hong Kong for its IPO should help to attract more international investors.
Lufax IPO bound for HK
What’s likely to be this year’s biggest IPO by Postal Savings Bank of China is limping ahead, with word the ultra-conservative lender is set to sign up $6 billion in commitments for its Hong Kong offering. But western investors are reportedly staying away from the deal, worried over high valuations and China’s sputtering economy.
Meantime, another financial IPO by leading P2P lender Lufax is back in the headlines, with word the listing probably won’t happen until next year and will occur in Hong Kong. That news marks a flip-flop from reports earlier this week, when media cited Lufax’s largest backer saying plans were still on track for an IPO this year, with Shanghai as the preferred listing location.Read Full Post…
Bottom line: Xiaomi could launch in the US within the next 12 months and benefit from its recent tie-up with Microsoft, but it will face a big uphill battle due to stiff competition, lack of name recognition and unexciting models.
Xiaomi eyes US — again
Following several recent false starts, fading Chinese smartphone sensation Xiaomiis saying it’s aiming to enter the tough US market soon. We’ve heard similar talk before, and at one time such a move would have been quite exciting and controversial when some were comparing Xiaomi to a China’s homegrown answer to Apple (Nasadq: AAPL). But Xiaomi’s star has faded considerably over the last year, partly due to intense competition in China but just as much due to a reputation for shoddy quality and unexciting phones. Read Full Post…
Bottom line: McDonald’s is likely to choose a buyer for its China stores in the next 2 months, while China Foods’ decision to sell its stakes in several Coca-Cola bottling plants is probably a simple business decision that reflects changing priorities.
McDonald’s near a sale of China stores
Two western consumer giants are in the headlines of China’s rapidly shifting corporate landscape, led by word that the list of bidders vying to buy McDonald’s (NYSE: MCD) 1,650 China restaurants has been narrowed to 2. The other headline has one of Coca-Cola’s (NYSE: KO) top China business partners, China Foods (HKEx: 506), announcing its intent to dump its stake in several local bottling joint ventures.
Each of these stories illustrates the vital role that local partners play in the operations of foreign companies doing business in China. McDonald’s has largely owned and operated its thousands of China stores independently since entering the market in the early 1990s. But it wants to find one or more local partners to take over those operations as it moves to a more franchise-style model. Coca-Cola also uses a franchise model for the companies that bottle its trademark drinks that include Coke, as well as Sprite and many others. Read Full Post…
Much of the conventional wisdom and press commentary about Uber’s recent decision to sell its China business to Chinese rival Didi portrayed the move not just as a defeat for Uber, but a broader setback for all American tech companies in China.
The New York Times described the development as “a stark signal of how difficult it is for American technology companies to thrive in China,” while the Financial Times wrote that Uber had become “the latest in a succession of US Internet companies that have tried to conquer the China market, and walked away with much less than they had hoped for.” Read Full Post…
The following press releases and news reports about China companies were carried on August 25. To view a full article or story, click on the link next to the headline.
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Sale of China McDonald’s (NYSE: MCD) Restaurants Down to 2 Bidders – Source (Chinese article)
China’s Postal Bank to Get $6 Bln in Investor Commitments for HK IPO: Sources (English article)
Yintech (Nasadaq: YIN) to Pay $193 Mln for Online Spot Commodity Trading Platform (GlobeNewswire)
Bottom line: Wanda Group is making an aggressive bid to be selected for a $1 billion strategic investment in Paramount, but the bid is likely to fail due to objections by the studio’s controlling shareholder.
Wanda’s Paramount bid likely to fail
New comments from China’s richest man indicate he is aggressively bidding for a stake in leading US film studio Paramount, which was put up for sale earlier this year as its parent sought to find a strategic investor. But separate reports last week show that such a deal could face difficulty due to objections by Sumner Redstone, who controls Paramount parent Viacom (Nasdaq: VIAB).
Redstone and Viacom’s current CEO Philippe Dauman have been locked in a battle for control of the company, but a resolution of that feud now appears to be close. Unfortunately for Wanda, that resolution would see a departure from Viacom by Dauman, the main proponent of the Paramount stake sale plan. That would leave Redstone, who was cool on such a plan, with the final rights to approve or veto a stake sale. Read Full Post…
Beijing may have APEC Blue, but Shanghai is quickly developing its own brand of welcome for the upcoming G20 Summit set to take place next month in nearby Hangzhou. But in this case, it’s an obsession with security that seems to be riveting our city, though perhaps we’ll also see some pollution and traffic-easing measures as the event approaches.
For anyone new to China, the term APEC Blue came into fashion 2 years ago when Beijing hosted the Asia-Pacific Economic Cooperation summit, a meeting of major world leaders that briefly put the city in the global spotlight. A similar light will shine on Hangzhou next month when leaders of the world’s largest economies gather in there for a similar meeting. Many visitors may arrive via Shanghai, which has much more international connections and therefore could also be on prominent display. Read Full Post…
