Bottom line: Meitu’s Hong Kong IPO plan is likely to get a positive reception due to strong sentiment for Chinese tech companies, while a plan to list US-focused Media.net in China via a backdoor IPO is likely to fail due to numerous obstacles.
Meitu eyes HK listing by year end
A couple of IPO stories are in the headlines, including what could become the largest listing for a Chinese tech firm this year by Meitu, operator of an app that helps users make self-enhanced selfies. The other deal looks quite unusual, and has a Chinese investor group buying US advertising services startup Media.net, with plans to list the company in China through a backdoor-style process. In all my years covering China this is the first time I’ve seen this kind of deal, which looks both interesting but also quite speculative.
Each of these deals is quite different, and both have one or two notable points. Meitu looks most notable not only for its size, which could be up to $1 billion, but also for its location. IPOs for this kind of high-tech company have traditionally come in New York, and more recently on China’s Nasdaq-style ChiNext board, but are seldom seen in Hong Kong. Read Full Post…
Bottom line: Lufax’s reiteration of plans for an IPO by year-end indicate China’s regulator may increase new listing approvals as the market stabilizes, while progress in Yunda’s backdoor listing also may reflect a relaxing attitude by the regulator.
Lufax sticks to plan for IPO by year-end
After an anemic flow of domestic IPOs so far this year, building pressure and a stabilizing stock market may finally be prompting the regulator to step up the pace as we head into fall. That appears to be the thinking at Lufax, China’s leading P2P lender, which says it is still targeting an IPO by the end of this year, after previously indicating China would be its first choice for such a listing. Meantime, an easing of the IPO climate won’t come soon enough for parcel delivery firm Yunda, which has joined many of its peers in moving ahead with a backdoor listing plan in Shenzhen. Read Full Post…
Bottom line: Apple’s announcement of its first China R&D center looks like a hastily crafted initiative aimed at generating positive publicity, but is unlikely to halt its recent slide in the market.
Apple announces first China R&D center
Just a day after new data showed just how badly Apple(Nasdaq: AAPL) is stumbling in China, the iPhone maker has finally taken a step it should have made long ago with the announcement that it will build an R&D center in the country. Apple’s hesitation over such a move has been quite embarrassing, especially since China has surged to become its second largest market in the last 3 years. The lack of such investment is also embarrassing for China because India, a much smaller market for Apple, became the first Asian recipient of an R&D center from the US tech giant earlier this year. Read Full Post…
Bottom line: Lei Jun’s resignation as YY chairman to focus on his struggling Xiaomi reflects his own fading star power, while Huawei is unlikely to reach its goal of taking 10 percent of the India smartphone market by the end of next year.
Lei Jun steps down as YY chairman
A couple of smartphone stories are in the headlines on this final day of the work week, capping a flurry of industry news that reflects the turmoil in China’s overheated market. Both items are relatively second-tier news, led by the resignation of Lei Jun from his position as chairman of social networking site YY (Nasdaq: YY) to focus on reviving his ailing Xiaomi smartphone empire. The other item has market leader Huawei hyping India, where it is getting set to launch a manufacturing facility and has ambitious plans for taking 10 percent of the market. Read Full Post…
Bottom line: The scrapping of a buyout offer for Momo could reflect growing obstacles to re-listing in China, and could presage the abandoning of more similar buyout bids for US-listed Chinese companies.
Momo abandons privatization bid
In a relatively surprising development in the wave of privatization bids for US-listed Chinese companies, social networking app operator Momo (Nasdaq: MOMO) has just announced a group proposing to buy out the company has withdrawn its offer. No reason was given for the reversal, and instead Momo used the official announcement to focus on its latest financial results and outlook. The move came as a surprise because the buyout deal had very strong financial backing from a group that included e-commerce giant Alibaba (NYSE: BABA) and venture capital giant Sequoia Capital. Read Full Post…
Bottom line: Rumors of a LeEco purchase of Smartisan are probably true as the company seeks a wealthy backer to continue funding its operations, and a deal could be announced in the next 2 months.
Smartisan in rumored sale talks to LeEco
Rumors surrounding a possible sale of the uppity Smartisan smartphone brand are rippling through the headlines today, providing some lively entertainment in the overheated sector. This particular story is drawing attention mostly due to Smartisan’s founder, the slightly pretentious Luo Yonghao, who was trying to parlay his success as China’s best-known English teacher into a smartphone brand. But Luo’s plan hasn’t materialized quite the way he imagined, and Smartisan is often rumored to be doing quite poorly and losing big money. Read Full Post…
Bottom line: LeEco and Coolpad could see a brief surge in smartphone sales due to strong promotional efforts, but will rapidly fade when consumers realize its models are the same as many other products on the market.
Coolpad gets new CEO
Just a day after the release of new data showing the surging Oppo was close to stealing China’s smartphone crown from a stumbling Huawei, sector newcomer and online video superstar LeEco (Shenzhen: 300104) is talking up new sales targets that imply it believes it can win the title as soon as next year. That’s quite big talk for a company that only entered the smartphone business last year and has never finished among the top 5 vendors for China. But LeEco CEO Jia Yueting has never been afraid of making such bold predictions, following a Chinese tradition that has seen similar big talk come from most of the nation’s other major smartphone makers. Read Full Post…
Bottom line: Yihaodian could regain momentum in China’s online grocery market under an aggressive 1 billion yuan promotion by new owner JD.com and strong support from former owner Walmart.
Yihaodian launches 1 bln yuan promotion
One major obstacle for foreign companies in China is their reluctance to engage in the kind of cut-throat price wars that are all too common in many of the nation’s huge but extremely competitive emerging markets. Such reluctance was a big factor behind the disappointing progress for Walmart’s (NYSE: WMT) local e-commerce venture Yihaodian, and prompted the US retailer to sell the company in June in exchange for shares of local e-commerce powerhouse JD.com (Nasdaq: JD). Now we’re getting word that JD is preparing to position Yihaodian as its flagship online grocery store, and is getting set to launch a massive price war in its bid to achieve that target. Read Full Post…
Bottom line: The latest quarterly smartphone data show Oppo could soon take China’s smartphone crown from Huawei, whose rapidly slowing sales could cause it to badly miss its 2016 target.
Oppo closes in on China smartphone crown
Recent trends in China’s fiercely competitive smartphone market are accelerating in the latest quarterly data, led by a plunge in sales and market share for Apple (Nasdaq: AAPL) and sharply slowing growth for local leader Huawei. At the same time, the surging Oppo continues its meteoric rise to cement its position as China’s second largest smartphone maker, as it closes in on Huawei.
All that said, the smartphone crown for China, the world’s biggest market, is shaping up to be quite a hot potato that changes hands often. Just 3 years ago that title belonged to Samsung (Seoul: 005930), which was later supplanted by Xiaomi, a former superstar that barely made the top 5 in the newly released second-quarter rankings from IDC. (press release) Apple has also briefly held the title, only to be overtaken last year by current leader Huawei. Read Full Post…
Following signs earlier this year that they were resisting a call to end to domestic roaming fees, China’s big 3 wireless carriers are finally reversing course and bowing to pressure from the telecoms regulator to follow a practice already common in much of the world. But leading telco China Mobile (HKEx: 941; NYSE: CHL) is taking its time making the transition, saying it will gradually phase out such fees over the next 2 years. Smaller rival China Telecom (HKEx: 728; NYSE: CHA) appears to be moving more quickly, while the perpetually befuddled China Unicom (HKEx: 762; NYSE: CHU) has yet to state its policy on the issue. Read Full Post…
Bottom line: A blossoming price war between Alibaba and JD.com in the online grocery space could stretch out for the next year, costing each hundreds of millions of dollars on promotions as they battle for market share.
Alibaba to spend billions on Tmall Supermarket
Just days after e-commerce partners JD.com (Nasdaq: JD) and Walmart (NYSE: WMT) revealed a major promotion for their online grocery business, sector leader Alibaba (NYSE: BABA) is firing back that it will outspend its smaller rivals in the hotly contested space. This sudden price war in online groceries space looks remarkably similar to another battle that broke out nearly a year ago, when Alibaba launched another major promotion against online grocer Yihaodian, Walmart’s main China e-commerce site at the time. Walmart appeared to later concede defeat in that battle just two months ago when it sold Yihaodian in exchange for shares in JD.com, Alibaba’s chief rival. Read Full Post…
