The following press releases and news reports about China companies were carried on April 27. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Bottom line: New IPOs from metals trading specialist Yintech in New York and aircraft leaser BOC Aviation will meet with lukewarm reception that sees them price in the middle of their range and post flat trading debuts.
Yintech banks on precious metals trading
A couple of IPO stories are in the headlines, including the first major offering of a Chinese company in New York this year set to take place by metals exchange operator Yintech. Meantime in Hong Kong, the airline leasing unit connected to Bank of China (HKEx: 3988; Shanghai: 601398) is also sniffing for interest in its plan for an offering to raise up to $1.5 billion.
Each of these IPO stories is quite different, in terms of size, industry and stage of development. But a common theme is that both come from relatively traditional older industries in China, rather than the high-growth tech and media sectors that more typically like to list offshore. To the contrary, this year has seen many of those high-growth companies like Qihoo (NYSE: QIHU) and E-House (NYSE: EJ) de-list from New York after failing to attract enough interest from US investors. Read Full Post…
Bottom line: Lenovo’s new emphasis on its year-old Zuk smartphone brand and TCL’s plunging sales reflect ongoing cutthroat competition in China, though neither company is likely to give up the domestic market anytime soon.
Lenovo launches new Zuk phone
New headlines surrounding 2 of China’s bigger stumbling smartphone makers reflect the market’s current state of chaos, as more than a dozen well-funded brands battle for surpremacy. Leading the headlines is PC titan Lenovo (HKEx: 992), which has decided to bring its young Zuk smartphone brand back into the parent company after initially letting it operate independently.
At the same time, faded giant TCL (HKEx: 2618) has just reported worrisome quarterly results that show its China smartphone sales plunged by more than half due to the market’s fierce competition. Both Lenovo and TCL are rapidly becoming victims in China’s bloody smartphone wars, though each is unlikely to withdraw from the market anytime soon due to strong backing from a cash-rich parent. Read Full Post…
Bottom line: Beijing should take more aggressive steps to ensure true competition between China’s 3 telcos, to prevent collusion like their current resistance to ending domestic roaming fees.
China telcos resist end to roaming fees
The latest sign of collusion in China’s telecoms sector was in the headlines last week, as the nation’s big 3 carriers appeared to band together to counter new calls for an end to domestic roaming charges. A number of arguments were put forth for maintaining such fees, but the bottom line is that carrier costs of providing such service are negligible and the fees themselves remain an important revenue source.
The US market, which is most similar to China, eliminated such fees more than a decade ago due to competition between 4 major carriers that emerged in the 1990s. But China’s carriers, while competitive in some areas, appear to be acting together in anti-competitive fashion to resist the change, a common occurrence due to close ties between the companies. Read Full Post…
It seems that all the goodwill in China garnered by Apple (Nasdaq: AAPL) CEO Tim Cook wasn’t enough to prevent the company from hitting a major new roadblock, with word that its book and movie services have been blocked in the country. The move nicely illustrates 2 faces of Beijing that sometimes seem contradictory. On the one hand, Chinese leaders crave the attention they get when global leaders like Cook visit China and pay due respect to the market. But on the other, they have little tolerance for anyone who violates the country’s strict censorship rules.
Buzz is now centering on whether Apple will be able to somehow bring its book and movie services into compliance with new Chinese rules rolled out last month, allowing the services to resume. If this were Google(Nasdaq: GOOG) running into similar problems, I would say the answer would be “no”, since the company has little goodwill with Beijing. But Apple has invested heavily to win the favor of Beijing leaders, meaning it’s likely to get a more sympathetic ear, probably after personal intervention by Cook himself. Read Full Post…
Bottom line: Overheating complaints surrounding its new Mi 5 smartphone are the latest technical snafu for Xiaomi, whose image as a cool and cutting-edge company will suffer further as a result of the problem.
Users complain of Mi 5 overheating
Xiaomi is hot once again, but not in a way the former smartphone superstar would probably like. That’s because the latest heat around Xiaomi comes from reports saying a growing tide of users are complaining about overheating batteries in the company’s latest smartphone, the Mi 5.
It’s a bit unclear how widespread this problem really is, and I’ll admit that reports in the Chinese and western media still aren’t that numerous. But there definitely appears to be a problem. That comes as the latest setback for a company that used to grab headlines with its slick marketing gimmicks, but lately has become a media whipping boy for its steady stream of snafus and missteps. Read Full Post…
China’s love affair with paper money looks set for a major shake-up soon, with a new plan to eliminate 1 yuan notes and replace them with coins. But anyone who lives here in Shanghai knows that change took place a while ago in our city, and no one seems to miss the ratty, green 1 yuan notes too much, myself included.
Money is an integral part of any nation’s identity, and the paper-versus-coin argument seems to be a broader subset of that dialogue. The issue has a historical twist here, since China was the actual birthplace of paper money back in the Tang Dynasty more than 1,000 year ago. Read Full Post…
Bottom line: Ctrip’s new alliance with China Eastern continues its strategy of using equity tie-ups to further cement its position as China’s dominant provider of travel products and services.
Ctrip ties with China Eastern
In what looks like a first for private sector Chinese companies, leading online travel agent Ctrip (Nasdaq: CTRP) has just announced it will invest 3 billion yuan ($460 million) in China Eastern (HKEx: 670; Shanghai: 600115; NYSE: CEA) as part of a new strategic tie up with one of the nation’s top 3 airlines. The deal comes less than a year after US giant Delta Air Lines (NYSE: DAL) invested a similar amount in the Chinese carrier, and provides an important ally for Ctrip with one of its major suppliers.
This deal also comes as Ctrip’s former foe and new ally Qunar (Nasdaq: QUNR) remains locked in its own battle with China’s major airlines in a separate dispute tied to unruly third-party travel agents on its open platform. (previous post) Unlike Ctrip, which sells most of its plane tickets directly to travelers, Qunar’s open platform is home to hundreds of third-party travel agents who are harder to control and sometimes engage in deceptive practices when selling their products and services. As a result, many airlines have recently stopped allowing the sale of their tickets on Qunar’s website. Read Full Post…
Bottom line: Twitter’s naming of its first China managing director indicates the company is re-thinking its China strategy, and may mark the start of a campaign to get permission to launch a Chinese version of its service.
Twitter names first China chief
Nearly a year after the departure of its former CEO, social networking high-flyer Twitter (NYSE: TWTR) has just made a baby peep that indicates it may finally be contemplating a serious move into the heavily censored China market. The move comes in the form of a low-key executive appointment, which had company co-founder and current CEO Jack Dorsey announcing Twitter’s first managing director for China.
Before I predict an imminent arrival of Twitter to China with this appointment, I should stop and say that Twitter’s new path looks similar to one forged by 2 other Internet giants, Facebook (Nasdaq: FB) and Google (Nasdaq: GOOG). All 3 of these companies are currently blocked in China due to information that China considers sensitive on their online services. But Facebook has indicated it wants to launch a version of its social networking site in China, and Google reportedly is taking steps to launch a Chinese version of its Google Play app store. Read Full Post…
The following press releases and news reports about China companies were carried on April 22. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Wanda (HKEx: 3699) Privatization Pitch Comes With Wang’s 12 Pct Return Guarantee (English article)
Ctrip (Nasdaq: CTRP) to Invest 3 Bln Yuan in China Eastern in Strategic Tie-Up (PRNewswire)
Huawei Founder Ren Zhengfei’s Net Worth Revealed, Passes Robin Li, Pony Ma (Chinese article)
Xinhua Website IPO Approved by Regulator, May Come Within 2 Months (Chinese article)
Bottom line: China Mobile’s latest results show that its business is starting to pick up after years of stagnation, which could provide some upside for its stock over the next 1-2 years as it steals share from its two smaller rivals.
China Mobile posts solid results
Profit growth of 0.5 percent may not sound like anything to boast about, but at least it’s growth and not contraction. That’s the message that telecoms giant China Mobile (HKEx: 941; NYSE: CHL) hopes to send with its latest results, which show the company returned to profit growth in the first quarter of this year after a sharp drop in last year’s fourth quarter.
China Mobile’s return to profit gains was fueled by strong revenue growth, as the company took advantage of its early entry to 4G and aggressive promotions to build up its customer base and steal market share from its 2 smaller rivals, China Unicom (HKEx: 763; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: 728). The trend certainly looks positive for China’s largest telco, since its profit growth is likely to accelerate now that the most aggressive spending on its new 4G network is in the past. Read Full Post…
