Bottom line: A new IPO from Postal Savings Bank will price and debut strongly thanks to its conservative stance, while another offering from Orient Securities could also do moderately well due to its small size.
Postal Bank set for mega-IPO in HK
Two financial institutions are lining up to launch IPOs in Hong Kong this week, led by what’s likely to be the biggest offering this year by China’s stodgy Postal Savings Bank, whose listing could raise up to $8 billion. In a far smaller deal, brokerage Orient Securities is also set to announce a HK$1.15 billion ($174 million) IPO deal as soon as today, in what looks like a slightly desperate bid for cash following its much larger Shanghai listing last year at the height of China’s stock market boom. Read Full Post…
Shanghai’s past and future are center stage in this week’s Street View, the former represented by an exhibit on one of our city’s most famous historic families and the latter by this week’s opening of our new Disneyland theme park in Pudong.
I attended “The Soong Sisters: Special Memories” exhibition shortly after it opened last month, hoping to learn more about 3 of Shanghai’s most famous figures in the early 20th century. Separately, I visited the new Shanghai Disneyland (NYSE: DIS) a few days before its official opening this past Thursday, in a different quest to understand what is likely to become one of China’s top tourist attractions of the 21st century. Read Full Post…
Bottom line: Midea’s investment in Kuka is likely to move ahead and could be successful, but will be far more costly than a Chinese joint venture between the 2 sides that would have achieved most of Midea’s objectives.
Berlin OKs Midea’s Kuka investment
After showing growing signs of collapse, a deal that would see Chinese appliance giant Midea (Shenzhen: 000333) buy a large stake in German industrial robotics firm Kuka (Frankfurt: KU2) is suddenly springing back to life, with word the deal has received the official nod from Berlin. But Berlin is only giving its approval with a number of major conditions, including reassurances that Midea won’t try to buy a majority of Kuka and also that Kuka’s German-based jobs will be protected. Such a compromise looks promising and could ultimately help to seal the deal. But it also raises the question of why exactly Midea needs to make this particular form of investment. Read Full Post…
Bottom line: A new China Life bid for iKang could trump Yunfeng, while 21Vianet could be mounting a stealth privatization bid that would see it slowly sell most of its shares to big buyers before mounting a formal de-listing attempt.
China Life eyeing bid for iKang?
A few strange twists are taking place in the story that has seen some 40 US-listed Chinese companies launch privatization bids since the start of last year, led by the surprise re-heating of a bidding war for private clinic operator iKang (iKang). In a separate headline, data center operator 21Vianet (Nasdaq: VNET) gave a new signal that it will abandon a previous buyout offer and may launch a stealth de-listing bid instead. And in the strangest development, the board of web portal operator Sohu (Nasdaq: SOHU) has rejected an investment plan by the company’s founder that looked like a prelude to a possible buyout offer at the time. Read Full Post…
Bottom line: Shares of Alibaba and JD.com will remain under pressure for the next few months from opportunistic short selling, but should rebound late this year due to strong growth prospects for their core e-commerce business.
Short sellers pressure Alibaba, JD shares
Separate reports are spotlighting a recent short-selling spree targeting China’s 2 leading e-commerce companies, Alibaba (NYSE: BABA) and JD.com (Nasdaq: JD), wiping out billions of dollars in market value over the last few weeks. But the negative sentiment also raises the question of whether there’s something systemically wrong with these companies and China’s e-commerce market in general, or whether this is a short-term phenomenon created by people looking to make some quick profits. Read Full Post…
Bottom line: YY’s abandonment of its privatization plan and concurrent share buyback look like savvy moves to build confidence and attract attention from investors, and could soon be followed by similar withdrawals by other big buyout candidates.
YY abandons privatization
Following a steady stream of signals hinting at new obstacles for US-listed Chinese stocks trying to privatize, social networking site YY (Nasdaq: YY) has become the first to formally abandon its plans to abandon New York. I’ve been predicting that up to half or more of the 40-odd privatization plans announced since the start of last year could ultimately collapse, and have to commend YY for being brave enough to be the first to openly discuss the abandonment of its buyout offer. The original buyout group led by YY’s chairman and CEO could have easily just remained quiet on the subject until everyone assumed the offer was dead. But in this case they’ve taken the more responsible route of admitting to failure. Read Full Post…
Bottom line: Reuters decision to put its Chinese-language website on hold is partly a surrender to Beijing, but also acknowledges that new approaches are needed to succeed in the nation’s restrictive media space.
Reuters revamps China consumer strategy
No one else is writing about the latest strategic shift at Reuters’ (NYSE: TRI) Chinese language news site in Beijing, probably because the actual number of headcount reductions is quite small, at less than 10. But the move has huge symbolic significance, since it looks like an admission of defeat to Beijing censors who blocked the site in China more than a year ago. At the same time, the move also represents a certain realism, and the fact that Chinese consumers increasingly get their news via other channels anyhow, most notably social media. Read Full Post…
Bottom line: A Chinese group’s plan to buy the low-end chip business of Dutch firm NXP could be part of a newer Beijing strategy for buying western chip-related assets focused on older, less sensitive technologies and smaller companies.
China buys NXP assets
Even as its bid to take over a leading German robotics firm shows signs of crumbling, China is attempting yet another high-tech purchase in Europe with a newly announced plan to buy a major part of the business of microchip maker NXP Semiconductor (Nasdaq: NXPI). China tech watchers will know the earlier crumbling bid I’m referring to is coming from Chinese home appliance maker Midea (Shenzhen: 000333), which is trying to buy a major stake in Germany’s Kuka (Frankfurt: KU2). Now this newest bid has a couple of Chinese investment companies offering to pay $2.75 billion for NXP’s standard products business, which makes diodes, transistors and other basic parts for cars and consumer devices. Read Full Post…
Bottom line: Okmetic’s sale to a Chinese buyer was uncontested because of the company’s small size and youth, but the case could be closely watched to see how China might handle future takeovers of larger western chip makers.
Okmetic shareholders approve China takeover
China’s sudden appetite for overseas high-tech chip makers is attracting growing resistance from wary western governments, but one deal that seems to be avoiding such tensions is the purchase of Finnish company Okmetic (Helsinki: OKM1V). Just 2 months after announcing its plans to be acquired by China’s National Silicon Industry Group (NSIG), Okmetic has moved steadily forward with the plan and has just announced that holders of an overwhelming 93 percent of its shares have agreed to accept the offer. (company announcement) Read Full Post…
Bottom line: McDonald’s is likely to reach a final deal to sell its China-owned stores by the end of summer, while Cheesecake Factory is likely to enjoy modest success as it launches its first China stores.
Cheesecake Factory comes to Shanghai
A couple of restaurant stories are in the headlines today, one featuring fast-food veteran McDonald’s (NYSE: MCD) as it seeks a new China partner, and the other starring the popular US Cheesecake Factory (Nasdaq: CAKE) chain as it prepares to open its first China restaurant. The McDonald’s story is clearly the larger of the stories, and focuses on a drive to shed direct ownership of its China stores and move to a franchise-based model that has underpinned its success in the west. Meantime, I have to admit that one of my main reasons for writing about Cheesecake Factory is that I used to be a big fan of the chain, though the remote location of its first China restaurant means I probably won’t dine there. Read Full Post…
Bottom line: Reluctance to transfer its technology killed CRI’s breakthrough deal to build the first US high-speed rail line, showing that emerging Chinese tech leaders must be more open to such transfers if they hope to succeed globally.
CRI’s high-speed train to US derails
The story that has seen China’s rapid modernization using western technology took an unusual twist last week, when a US firm aiming to build America’s first high-speed rail line abruptly canceled its tie-up with a Chinese partner over technology transfer issues. The US builder of the line connecting Los Angeles and Las Vegas was quite direct, blaming its decision on Washington’s condition requiring that rail cars for the project be locally manufactured. Read Full Post…
