Bottom line: Qunar looks like the latest Chinese buyout candidate to become involved in a contested bidding war, while Autohome is unlikely to succeed in efforts to stop the sale of a stake in the company by its largest shareholder.
Qunar gets surprise buyout offer
A flurry of headlines from the wave of privatizations by US-listed Chinese companies are in the news as the week winds down, led by word that online travel site Qunar (Nasdaq: QUNR) has become the latest to get a buyout offer. Qunar wasn’t the only one lining up to leave New York, as game specialist Sky-mobi (Nasdaq: MOBI) also announced its own plan to go private. Meantime, a hotly contested privatization by online car specialist Autohome (NYSE: ATHM) has taken a few new twists, and wind power equipment maker Ming Yang (NYSE: MY) says it has just completed its own previously announced privatization. Read Full Post…
Bottom line: A Beijing court’s finding that Apple’s iPhone 6 infringed on a small company’s designs looks flawed, and the judge should be commended for allowing sales to continue pending an appeal of the case.
Beijing court rules against Apple in product design case
Apple (Nasdaq: AAPL) is suffering what looks like yet another setback in China, with word that a Beijing court has found the iPhone maker guilty of stealing product designs from an obscure smartphone maker in south China. But a closer look at the reports shows that perhaps even the Beijing judge that made the ruling realizes how ridiculous the case is, and has allowed Apple to continue selling its iPhone 6 phones in China pending an appeal. Such an appeal is likely to take months or perhaps even a year, by which time iPhone 6 sales will probably be insignificant anyhow. Read Full Post…
Bottom line: Alibaba’s victory in a shareholder lawsuit is partly justified due to its pre-IPO disclosure that piracy is a major risk for the company, but it still should have disclosed a recent government report sharply criticizing it on the matter.
Alibaba triumphs in shareholder lawsuit
E-commerce giant Alibaba (NYSE: BABA) is a master at influencing public opinion through its own hype, but is far less successful with government officials who often view its aggressive ways with more skepticism. With that background in mind, the company’s new courtroom victory in a shareholder lawsuit looks like a refreshing nod of approval from a government source, setting it apart from the usual cheers from fans of the company’s stock. I would probably agree with that view, even though in this case I’m not sure I completely agree with the judge’s decision. Read Full Post…
Bottom line: Baidu’s new move into economic indexes looks like a smart use of big data but is also risky due to potential interference from Beijing, and stands a 30-40 percent chance of becoming a significant revenue source.
Baidu gets into index business
When it comes to economic indexes in China, Beijing holds a strong lock over the market due to its unique ability to collect the necessary data needed to compile broad national snapshots. But there’s also a political element to the story due to the sensitivity of economic growth and issues like unemployment. That makes leading search engine Baidu’s (Nasdaq: BIDU) decision to enter the business look both savvy and also slightly risky. But if Beijing doesn’t interfere, the plan looks like a potential new revenue source that would also raise Baidu’s profile by taking advantage of its mountains of big data. Read Full Post…
Bottom line: Lenovo’s investment in the smart car business looks like a necessary step for an important new growth area, but its choice of LeEco as partner looks more dubious.
Lenovo invests in LeEco’s car business
I’ve been quite bearish on stumbling PC giant Lenovo (HKEx: 992) these days, but at least I have to commend the company for trying something new to jump-start its fading fortunes. That’s my initial assessment, on reading reports that Lenovo has invested in the smart car business of online video superstar LeEco (Shenzhen: 300104), formerly known as LeTV. But that said, even if the reports are true, Lenovo seems to be coming to the smart car story slightly late, and I also have serious doubts about the suitability of LeEco as its choice of partner. Read Full Post…
Bottom line: Tencent’s Supercell purchase looks like a relatively smart use of its big cash pile, and will give it access to leading-edge games and let it focus on the more important task of developing an ecosystem of products and services around WeChat and QQ.
Tencent gets $8.6 bln charge from Supercell
Internet giant Tencent(HKEx: 700) has been a victim of its own success, accumulating one of China’s largest cash pots even as it remained quite conservative as an acquirer. But now the company has taken some pressure off of itself to invest that cash, with the announcement of its purchase of a controlling stake in Finnish game maker Supercell for a hefty $8.6 billion. I haven’t done any detailed research on the purchase, but this does appear to be the largest acquisition of all time by a Chinese Internet company, and is probably worth as much as or even more than all of Tencent’s other acquisitions to date combined. Read Full Post…
Bottom line: The new Shanghai Disneyland may ultimately need to lower prices and control admittance to avoid negative publicity that could hurt its image, forcing analysts to lower some earlier bullish forecasts for the resort.
Shanghai Disney opens with fanfare
I do feel like I’ve written just a tad too much about the new Disney (NYSE: DIS) Resort here in Shanghai, which has just held its carefully scripted grand opening with surprisingly few glitches or negative publicity. But then again, the $5.5 billion investment is likely to be the largest for China this year, and Disney has averaged less than one new park per decade since opening its first Disneyland in Los Angeles in 1955. And based on previous experience, the new Shanghai Disney resort may also land at the center of at least a few minor scandals before it finally finds a more stable long-term footing, which could include a tempering of initial bullish profit forecasts. Read Full Post…
Bottom line: JD.com will quietly close Yihaodian after acquiring the online store from Walmart, and Amazon is the most likely next large player to withdraw from China’s e-commerce market in the next few years.
JD.com takes over Walmart’s Yihaodian
In what can only be described as a major surrender, Walmart (NYSE: WMT) is selling its struggling online flagship Yihaodian in exchange for about $1.5 billion worth of shares in JD.com (Nasdaq: JD), China’s second largest e-commerce player. The development isn’t a complete surprise, since Yihaodian has struggled to compete with JD and industry titan Alibaba (NYSE: BABA) since Walmart purchased the company 4 years ago. The withdrawal also shines a spotlight on the very real fact that foreign companies often can’t compete on China’s Internet, and raises the question of whether Amazon (Nasdaq: AMZN) might be the next to abandon the complex market. Read Full Post…
Bottom line: China Telecom could become less aggressive in 4G this year under its new leadership, while China Mobile remains the investor best bet among China’s 3 carriers due to early entry to 4G.
China Telecom zooms in 4G
It’s been a long time since I’ve looked at the bigger China telecoms landscape for total subscribers and 4G service, so the release of the latest monthly data from the nation’s 3 major carriers seems like a good opportunity to assess the situation. Not surprisingly, all 3 have posted anemic overall subscriber growth since the start of the year due to an increasingly saturated market. But a look at 4G shows a more diverse picture, with China Telecom (HKEx: 728; NYSE: CHA) acting far more aggressively than rival China Unicom (HKEx: 762; NYSE: CHU) in the quest for new subscribers. Read Full Post…
The headlines last week were littered with signs of growing unrest and chaos among the dozens of US-listed Chinese companies trying to privatize from New York and return to China in search of higher valuations. One of the biggest items saw signs of a new bidding war break out for private clinic operator iKang (Nasdaq: KANG), while another saw data center operator 21Vianet (Nasdaq: VNET) mount what increasingly looks like a stealth privatization campaign. A third saw social media website operator YY (Nasdaq: YY) become the first to abandon its privatization bid altogether, casting doubt on many of the other similar pending offers that have gone for months without any progress. Read Full Post…
Bottom line: LeEco will try to buy out Coolpad later this year in its new position as the company’s largest stakeholder, while its plans for a massive Silicon Valley campus stand a less than 50 percent chance of getting completed.
LeEco boosts Coolpad stake
The phenomenal but problematic entertainment superstar LeEco (Shenzhen: 300104) is in a couple of big headlines as the new week begins, led by word that a new transaction has made it the largest stakeholder in struggling smartphone maker Coolpad (HKEx: 2369). Rumors were flying thick and fast last week that LeEco, formerly known as LeTV, was on the cusp of an outright takeover of Coolpad, and this latest move certainly looks like a possible prelude to such an bid. Meantime, separate media reports are confirming news from earlier this year saying LeEco has purchased a piece of prime Silicon Valley land that it hopes to develop as a campus for its future US headquarters.Read Full Post…
