Tag Archives: 中国公司股票新闻， China company stock news

ZTE Faces More Profit Erosion With Latest Low-Cost Moves 中兴通讯以低价机抢占市场恐损及获利

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ZTE’s (HKEx: 763; Shenzhen: 000063) latest strategy of flooding the world with low-cost cellphones appears to be working, as the first phase of the its risky bid to become a global brand yields results. According to the latest information from IT data tracking firm IDC, ZTE zoomed past Apple (Nasdaq: AAPL) to become the world’s fourth biggest cellphone seller in the third quarter of the year, shipping more than 19 million handsets to take nearly 5 percent of the global market. (English article) ZTE has previously stated its aim of becoming one of the world’s top 3 cellphone brands, relying in part on a strategy of grabbing market share by selling low-end smarphones powered by Google’s (Nasdaq: GOOG) Android system for $100 or less for little or no profit. That strategy has showed up in ZTE’s results in the last 2 quarters, with profit dropping steadily even as cellphone revenue has soared. The strategy is a very risky one, as it’s often very difficult to raise your prices and corporate image after establishing yourself as a maker of low-cost products. Taiwan’s Acer (Taipei: 2353) learned this lesson about a decade ago, and is now learning it again. But for at least the next year or two, look for ZTE to steadily increase its global cellphone market share, even as its profits continue to erode. In a separate development along similar lines, Brazilian media are reporting that ZTE is preparing another major new initiative in contract manufacturing, opening a new factory in that country that has landed Apple itself as one of its first customers. (Chinese article) The reports are quite brief, but say that ZTE will assemble both iPads and iPhones for Apple in the city of Hortolandia, putting it in direct competition with Taiwanese OEM giant Foxconn (HKEx: 2038), which has also opened a plant in the same city. To this development I say: congratulations to ZTE for winning this prestigious business from Apple, if the reports are true. But at the same time, I suspect ZTE will be assembling the Apple products for little or no profit and most likely at a loss, meaning we could see its bottom line erode even more quickly.

Bottom line: ZTE’s latest aggressive moves to generate new business will erode its profits for the next 2 years at least, with only a 50-50 chance for long-term success.

Related postings 相关文章:

◙ Baidu, ZTE Earnings: More of the Same 百度和中兴财报：看上去没变化

◙ Ericsson, ZTE Spat May be Near Resolution 爱立信与中兴的官司尘埃落定？

◙ Low-Cost Apple iPhone to Bite ZTE, Lenovo 苹果推低端iPhone 冲击中兴和联想

Liu Steps Down at Lenovo — Again 柳传志再度卸任联想董事会主席

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China’s business world is fast becoming the land of deja vu, at least from my perspective. Just a day after Apple (Nasdaq: AAPL) snubbed China for a second time by excluding the country from its international launch list for its  latest hot product (previous post), PC powerhouse Lenovo (HKEx: 992) has announced that co-founder Liu Chuanzhi is stepping down as chairman for a second time. (company announcement) But the deja vu doesn’t end there. Not only is Liu stepping down a second time, but his heir apparent is Yang Yuanqing, who also took over the chairmanship the first time Liu stepped down shortly after his company’s historic purchase of IBM’s (NYSE: IBM) PC assets in 2005. My question is: if Yang couldn’t succeed the first time, which prompted Liu to return to the chairmanship in 2009, then why does Liu suddenly think he will succeed now? In all fairness, things are a little different this time around. The last time Yang was named chairman, an American, Bill Amelio, was also brought in as CEO to help Lenovo digest its then newly-purchased IBM business. That combination proved too difficult for Lenovo, which incurred losses and underwent a major restructuring that prompted Liu to return as chairman in 2009. This time around, Lenovo has also just posted very nice earnings that saw its profit surge 88 percent in its latest quarter (English article), partly due to recent acquisitions in Germany and Japan, as it zoomed past Dell (Nasdaq: DELL) to become the world’s second biggest PC seller, behind only Hewlett-Packard (NYSE: HPQ). But those new acquisitions also look very much like the IBM purchase, in that both are in mature Western markets, which have been a difficult area for Lenovo in the past. I would like to think that Yang could succeed this time and Liu, now in his 70s, can permanently retire. But I sense that Yang’s return will signal more rocky times ahead, with earnings likely to take a hit as Lenovo stumbles in trying to integrate its Western acquisitions and grab more global market share.

Bottom line: Liu Chuanzhi’s departure as chairman of Lenovo for a second time signals a rocky period ahead for the company.

Related postings 相关文章:

◙ Lenovo Takes Backward Step With Compal JV 联想和仁宝合资建厂为倒退举动

◙ Acer Trips, Lenovo Next? 联想应避免重蹈宏基覆辙

◙ Huawei, Lenovo Look to Foreign Advisors in Westward Drive

Tidbits: Alibaba, Anhui Conch, Sinopec, China Mobile

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There are quite a few too good stories out there today, so here are some quick takes on a few that didn’t make the headlines but look interesting nonetheless.

— The chief executive of Alibaba’s Etao has held a high-profile media briefing to announce his company, operator of a search engine specializing in e-commerce, will invest 1 billion yuan in its business. (English article) This event is a clear signal to the market that Alibaba intends to stand by this investment despite recent moves by a number of major e-commerce sites, including 360Buy, Dangdang (NYSE: DANG) and Suning (Shenzhen: 002024), to block their pages from inclusion in Etao’s search results.

— Sinopec (HKEx: 386; NYSE: SNP) is reportedly in talks to buy a stake in Galp’s Brazilian Unit, for what’s sure to be an overinflated price. (English article) This latest potential mega-acquisition by a Chinese oil major just shows how China’s policy of buying global assets at any cost to feed its growing economy continues to be in effect, even as oil prices show every sign of coming down for an extended period.

— The China Daily is reporting that Anhui Conch (Shanghai: 600585; HKEx: 914), one of the country’s leading cement makers, aims to go global by purchasing distressed international assets for bargain prices, as most of the world’s construction industry suffers during the global downturn. I would look for this company to carry through with this plan with a major announcement or two over the next year, but have serious doubts about its ability to manage such global assets.

— Chinese media are reporting that China Mobile‘s (HKEx: 941) long-running talks with Apple (Nasdaq: AAPL) to make a TD-SCDMA iPhone have finally broken down, confirming what I had already suspected several weeks back. (Chinese article) If true, which seems likely, this would be a relatively major setback for China Mobile, which was counting on the iPhone to breathe some life into its anemic 3G business.

News Digest: November 3, 2011

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The following press releases and media reports about Chinese companies were carried on November 3. To view a full article or story, click on the link next to the headline.

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◙ ZTE (HKEx: 763) Ranks Fourth in Q3 2011 Global Handset Shipments (English article)

◙ Lenovo (HKEx: 992) Q2 Profit Up 88 Percent, Beats Forecast (English article)

◙ China Telecom (HKEx: 728) Names Yang Jie as New CEO of Listed Company (Chinese article)

◙ China Mobile (HKEx: 941) Ends Talks With Apple (Nasdaq: AAPL) For TD-SCDMA iPhone (Chinese article)

◙ China Power in $784 million JV with China Coal (English article)

Apple Overlooks China — Again 苹果再次撇开中国内地市场

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In what is becoming an increasingly common refrain, Apple (Nasdaq: AAPL) has once again overlooked China in the global launch for its latest smartphone, the iPhone 4S, in what looks like an expression of growing frustration with its difficult Chinese partners. The company, whose China sales have exploded on the popularity of its smartphones, tablet PCs and desktop computers, has announced a second wave of launch markets for the newest iPhone starting next week following the initial launch in the US and several other major markets last month. (company announcement) The second wave includes Hong Kong and South Korea in Asia but contains no mention of China, with Chinese media reporting a launch for the domestic market won’t occur until year-end at the earliest. (Chinese article) This latest China snub looks similar to Apple’s global launch for its iPad2 in May, when China was also absent from the original list. In that case, however, Apple quickly reconsidered and launched the iPad 2 in China just a week after the global launch. (previous post) In this case, in my view, the absence of China from the latest global iPhone launch probably reflects Apple’s growing frustration with China’s 3 telcos, most notably China Unicom (HKEx: 762; NYSE: CHU), the country’s only official iPhone supplier to date. Unicom has recently shown a tendency to botch even the simplest product launches, and is fast squandering its chances to pick up share on dominant carrier China Mobile (HKEx: 941; NYSE: CHL). For their part, China Mobile and China Telecom (HKEx: 728; NYSE: CHA), China’s third telco, have also proven difficult partners for Apple, with each repeatedly hinting they were on the verge of signing iPhone deals only to fail to announce anything. It’s still possible we could see an iPhone 4S deal in China before year-end if Unicom can reach an agreement. But based on past experience, I wouldn’t bet on seeing any official iPhone 4S tie-ups in China anytime soon.

Bottom line: Apple’s failure to include China in its latest iPhone 4S launch list reflects its difficult relationship with China’s mobile carriers, especially China Unicom.

Related postings 相关文章:

◙ China Mobile: Where’s the 3G iPhone? 中移动4G网络稳步推进 3G版iPhone或遇阻

◙ Apple Takes A Second Look at China for iPad 2 苹果重新考虑中国市场

◙ China Telecom Set for Boost With Imminent iPhone Deal 中国电信借力iPhone

Report Takes Wind Out of Inflated Qihoo 奇虎遭遇Citron釜底抽薪

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A report from a small research house appears to have finally awakened the world to the reality behind the Chinese Internet comedy known as Qihoo (NYSE: QIHU), which has steadily lured in investors — achieving a ridiculously high valuation — since its IPO in March. The research report by Citron sparked a sell-off in Qihoo shares, which tumbled 10 percent on Tuesday during a turbulent session that saw the broader indexes also fall by more than 2 percent. So, what exactly did Citron say that got everyone so spooked and prompted Qihoo to issue a “clarifying” press release? (Qihoo announcement) I haven’t seen the actual report so can’t comment in too much detail. But based on other media reports and Qihoo’s own announcement, the Citron report essentially called into question many of Qihoo’s claims about the size of its user base and the company’s scale as a major Chinese Internet player. Citron further commented that Qihoo’s stock price should be around $5 per share, or about a quarter of its value of $20 per share at the beginning of the Tuesday New York trading day. (Chinese article) Bloomberg data lists Qihoo’s forward price-to-earnings ratio at a massive 900 times, which seems overstated although I’ve read that its PE is the largest of all China Internet companies. All of this doesn’t surprise me, as I’ve repeatedly questioned Qihoo’s credibility, as the company has been the subject of a number of high profile lawsuits, most of which it has lost, though with little financial consequences. (previous post) I honestly don’t know why investors have been so excited about the stock, and wouldn’t be surprised if this unethical company has engaged in some manipulative activity to get its valuation so high even compared with leaders like Baidu (Nasdaq: BIDU) and Tencent (HKEx: 700). All that said, this new report looks like it may finally awaken investors to all the questions surrounding this company, and could well mark the beginning of a broader decline to Citron’s $5-per-share target or even lower.

Bottom line: A report by a small research house has finally awakened investors to the many questions surrounding Internet firm Qihoo, whose stock could drop steadily for the rest of the year as a result.

Related postings 相关文章:

◙ Qihoo Goes to War With Mobile Browsers 奇虎360加强移动互联网布局

◙ Qihoo Loses Yet Another Lawsuit, But No One Cares 奇虎败诉不足为戒

◙ China Legal System Takes Bite Out of Tencent’s Qihoo Lawsuit 中国法律体系让奇虎在与腾讯的官司中免受重大损失

Baidu Video Tries Blockbuster Licensing

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Baidu’s (Nasdaq: BIDU) online video joint venture Qiyi seems to have learned a lesson from its pirating parent, announcing a new exclusive licensing deal for the China online video rights for the popular latest installment in Paramount’s (NYSE: VIAb) “Transformers” movie franchise. (English announcement) Baidu itself has found big success in allowing the exchange of pirated material, mostly music, over its web site in recent years and continues to offer such services despite ongoing government pressure on Chinese web firms to get out of the pirating business. But in a nod to that pressure, in July it formally launched a service for legally obtained music, and announced a series of high-profile licensing deals to offer music on it from several major Hollywood record labels, though added it had no intention of closing its piracy-plagued older music site. (previous post) This new strategy from Qiyi, which already appears to offer legal copies of popular US TV series, looks relatively smart to me, drawing on exclusive rights for individual big-name movies to draw in viewers. Still, it will have to compete with the likes of online video leader Youku (NYSE: YOKU) and the video site operated by Sohu (Nasdaq: SOHU), which have also signed similar though much bigger deals with major Hollywood studios in the last few months. Its unclear if Qiyi, founded less than 2 years ago, will be able to pay the big bucks that these older, more established companies are paying for exclusive rights to big-name films, which may explain its approach of buying of single blockbuster title rather than signing broader licensing deals which are much more expensive. The company also has the advantage of tapping a huge potential audience of users from Baidu, China’s dominant search engine with nearly 80 percent of the market. That tie-up, combined with this early approach to exclusive licensing for single blockbusters, could create a potent formula for success as Qiyi looks to establish its name in the online video space.

Bottom line: Online video site Qiyi’s signing of an exclusive deal for a single Hollywood blockbuster looks like an interesting approach, which, combined with support from parent Baidu, could boost its chances for success.

Related postings 相关文章:

◙ Baidu Comes Under Government Fire 政府“修理”百度

◙ Baidu Seeks Diversification in Tudou Talks 百度求购土豆，寻求多元化

◙ After Years, Baidu Does the Right Thing 百度多年来的一个正确之举

Sputtering Unicom’s Latest Excuse: Lack of Leadership

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China Unicom (HKEx: 762; NYSE: CHU) is reportedly conducting a massive search for top-level managers in many provinces, once again underscoring how the company is badly in need of strong new leadership as it increasingly appears to be squandering its golden opportunity to gain market share over dominant carrier China Mobile (HKEx: 941; NYSE: CHL). According to Chinese media reports, Unicom is looking for people to head its operations in a large number of provinces, continuing a search that dates back as far as February last year. (Chinese article). It’s been nearly 3 years now since Unicom merged with rival China Netcom in a major industry restructuring, and certainly the company can be forgiven for not filling key positions for the first year or so after such a big change. But 3 years is quite a long time, and if it’s taking them this long to fill these key positions it’s no surprise that the company is making little or no progress at bolstering its position in China’s mobile market. Most will recall that Unicom was given a golden opportunity to gain share over China Mobile, which controls over two-thirds of China’s mobile market, nearly 3 years ago when it was awarded a 3G license based on the world’s best technological standard. By comparison, China Mobile received a big handicap by having to develop its 3G service using a homegrown standard with lots of problems. Despite that, Unicom’s share of the 3G market has remained stagnant since the beginning of the year, at around 30 percent. Meantime, China Mobile’s 3G share has eroded from 45 percent in April to 42 percent in September, with the country’s third-largest carrier, China Telecom (HKEx: 728; NYSE: CHA) picking up all of those loses. Unicom, which also has the enviable advantage as China’s only official seller of Apple’s (Nasdaq: AAPL) iPhones, previously blamed a lack of 3G handsets for its failure to pick up share despite its obvious technological advantages. Now it looks like it’s blaming lack of strong management at the provincial level. Either way, Unicom seems to be better at making excuses than doing good business, and I’m fast losing confidence in its ability to bolster its position under current management.

Bottom line: Unicom’s latest problems in filling top management jobs at the provincial level reflect a poorly run company that is fast squandering its golden opportunity to pick up market share from rivals.

Related postings 相关文章:

◙ Unicom’s Sputtering 3G: Blame It On the Handsets 联通幡然醒悟 借低价手机扩张3G市场

◙ China Mobile Shuffle: Sea Change Coming? 中移动高层变动或引发重大变化？

◙ China Telecom Set for Boost With Imminent iPhone Deal 中国电信借力iPhone

New Regulatory, Competitive Waves Hit E-Commerce 监管和竞争冲击电子商务领域

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Turbulence continues to pelt China’s e-commerce sector, with new reports showing how rampant competition is pushing up costs as an industry regulator gets looks into anti-monopoly claims against top online mall operator Taobao Mall. A new foreign media report cites the top executive at luxury e-commerce site Xiu.com saying that rents for the massive warehouses required by most online merchants have soared in the last year, as players like 360Buy and Wal-Mart-invested (NYSE: WMT) Yihaodian all vie for facilities near major cities where they can store and then ship their goods. (English article) Global e-commerce leader Amazon (Nasdaq: AMZN) has joined the fray, announcing last week that its China operation was opening a 120,000 square meter facility in the city of Kunshan, not far from Shanghai, quadrupling its warehouse space in the affluent Yangtze River Delta region. (previous post) The soaring warehouse rents are just the latest headache for the overheated e-commerce sector, where most major players are already hemorrhaging money as the industry heads for a much needed consolidation that is likely to come by the middle of next year. Meantime, domestic media report the Commerce Ministry is entering the e-commerce fray by launching an anti-monopoly investigation into Taobao Mall, Alibaba’s B2C operation, in response to merchant complaints that the online mall operator used its dominant position to unilaterally force a massive fee hike on its merchants, leading many small- and mid-sized sellers to rebel. (English article) I personally think this latest Commerce Ministry investigation is a bit misguided, as there’s plenty of competition in the e-commerce space though less so in the online mall sector. If the ministry really wants to chase someone for anti-monopoly violations, it should focus on online search leader Baidu (Nasdaq: BIDU), which controls nearly 80 percent of the market.

Bottom line: Soaring warehouse rents are the latest sign of overheating in China’s e-commerce space, which is also facing the threat of increasingly heavy-handed regulation by Beijing.

Related postings 相关文章:

◙ Amazon Name Shift Signals China Ramp-Up 亚马逊改名背后折射中国野心

◙ Albaba Faces New Assaults From Merchants, 360Buy 阿里巴巴受到中小商户和京东商城的双重夹攻

◙ China Regulors Threaten E-Commerce, Group Buying 官方监管威胁到电子商务与团购业务

News Digest: November 1, 2011

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The following press releases and media reports about Chinese companies were carried on November 1. To view a full article or story, click on the link next to the headline.

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◙ Sohu.com (Nasdaq: SOHU) Reports Q3 Unaudited Financial Results (PRNewswire)

◙ China Online Sales Seen Tripling Driving Warehouse Surge: Retail (English article)

◙ Tencent (HKEx: 700) Confirms Strategic Investment in Kaixin (Chinese article)

◙ Baofeng Selects Underwriters for 2012 US IPO (English article)

◙ Sina Corp (Nasdaq: SINA) to Report Q3 2011 Results on November 8 (PRNewswire)

Alibaba’s Etao Faces New Merchant Revolt

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E-commerce leader Alibaba Group looks set to soon get its long-awaited wish for separation from major stakeholder Yahoo (Nasdaq: YHOO), but it won’t have much time to celebrate as new fires seem to be popping up everywhere for nearly all of its major businesses. The latest crisis for the increasingly embattled company has cropped up at its Etao search site, which Alibaba is trying to build up as a specialist in e-commerce searches that can eventually rival online search titan Baidu (Nasdaq: BIDU). Chinese media are reporting that Etao has confirmed that it is no longer indexing search information from sites for a number of major online retailers, including general merchandiser Dangdang (NYSE: DANG) and electronics giant Suning (Shenzhen: 002024) (Chinese article). The confirmation comes just a week after another leading e-commerce site, 360Buy, hinted it may block its pages from Etao searches (previous post), and indeed 360Buy was among the new list of confirmed companies whose pages will no longer be indexed by Etao. With all these major online retailers blocking their material from Etao searches, and the list likely to grow, Alibaba must certainly be worried about the future viability of Etao as a true e-commerce search engine. This latest crisis follows an uprising earlier this month by independent merchants on Alibaba’s B2C platform, Taobao Mall, after the site sharply hiked its fees. That same group of merchants, which has been wreaking havoc on the Taobao Mall site, later moved its rabble-rousing campaign to Alibaba’s electronic payments site, Alipay, as well. (previous post) While all of these crises rage, Alibaba got a rare piece of good news as domestic media reported that Yahoo is looking to sell its 40 percent stake in Alibaba, as the US web giant tries to dispell broader talk that the entire company itself is for sale. Alibaba has long clamored for Yahoo to sell the stake amid friction between the two companies, so clearly it should be happy about this news. But with all the crises now happening in its own businesses, Alibaba won’t have much time to celebrate and indeed might wish it had an ally to help it in this time of trouble.

Bottom line: Alibaba may soon get its official independence from major stakeholder Yahoo, but it won’t have time to celebrate as it faces an escalating crisis at its Etao search site.

Related postings 相关文章:

◙ Albaba Faces New Assaults From Merchants, 360Buy 阿里巴巴受到中小商户和京东商城的双重夹攻

◙ Taobao Mall’s IPO March Collides With Merchant Uprising 淘宝商城IPO或因商户“起义”被推迟

◙ Alibaba Sharpens Focus in Yahoo Buy-Out, Taobao Mall 阿里巴巴回购雅虎所持股权有望