Bottom line: New York has lost its appeal for listings by smaller Chinese Internet companies, but should remain attractive for sector leaders like Didi Kuaidi and Meituan-Dianping.
Chinese NY IPOs shrink sharply in 2015
China’s imminent resumption of IPOs after a 4-month pause seems like a good opportunity to review what’s shaping up as the year of the “reverse IPO” in New York by Chinese companies. Market watchers will know that I’m talking about this year’s record wave of privatization bids by US-listed Chinese firms, which saw around 3 dozen companies announce plans to de-list from New York during the year with an eye to re-listing back in China.
That’s not to say that no Chinese companies listed in New York this year, and I was able to track down at least 4 that made such offers. But those 4 collectively raised a paltry $200 million, or just a tiny fraction of the nearly $30 billion that Chinese companies raised in a record year for New York IPOs in 2014. Read Full Post…
Bottom line: Meituan is feeling increasing isolation as its 2 chief rivals strengthen partnerships with Baidu and Tencent, and is likely to be forced into a similar tie-up by the end of next year to maintain its industry-leading position.
Meituan feels growing isolation
Leading group buying site Meituan is finally responding to a flurry of reports involving its own finances and a new challenge coming from top search engine Baidu (Nasdaq: BIDU), releasing data that reflect its own strong growth and market dominance. At the same time, CEO Wang Xing is also shooting down rumors that his company is in the process raising $1 billion in new funds, and is repeating his previous position that his company isn’t in any hurry to make an IPO.
The sudden release of information by this low-profile company raises the bigger question of what’s the motivation behind this flurry of activity for the normally low-profile Meituan. I personally believe the company isn’t gearing up for an IPO, especially in the wake of all the market turbulence in China right now and the flood of US-listed Chinese companies that have announced plans to privatize and return home to re-list. Read Full Post…
Bottom line: Baozun’s IPO should achieve its $200 million fund-raising target and the stock could perform relatively well for the rest of the year if it can show that it will become profitable for all 2015.
Baozun files for $200 mln IPO
The first serious Internet IPO of the year could finally be in the pipeline, with word that e-commerce services provider Baozun has filed for a New York listing that would be a first-of-its-kind for this type of company. Media are calling Baozun an e-commerce firm, but the reality is that the company helps others design and operate e-commerce sites, meaning it doesn’t have to compete itself in the fiercely competitive space.
The company’s largest shareholder is actually e-commerce leader Alibaba (NYSE: BABA), which holds 23 percent of Baozun. That relationship underscores Baozun’s unique market position as a service provider rather than actual website operator, and the company cited third-party data saying it currently controls about 20 percent of its market. The Alibaba relationship also provides important ties with many major retailers that already do business on Alibaba’s hugely popular Tmall. Read Full Post…
Bottom line: 55Tuan’s stock is likely to move steadily downward following its long-delayed IPO, while the booming P2P online lending sector could be due for a bust next year similar to the recent one for group buying sites.
P2P lending site Jimu Box raises big funds
After writing far too much about the repeatedly-delayed IPO for group buying site 55Tuan (Nasdaq: WOWO), I’m happy to report the offering has finally happened and now I can stop following this company. The 2 main reasons for writing about this offering at all were its potential to become China’s first publicly listed group buying site, and also the first Chinese Internet firm to list in New York this year. The actual company and offering were both quite small and the debut went reasonably well, which I’ll detail shortly.
Meantime, another new fund-raising story has me a bit more excited, with peer-to-peer (P2P) lending site Jimu Box on the cusp of a major new funding that will reportedly total about $400 million. It does seem somewhat appropriate to group the 55Tuan and Jimu Box stories together, since P2P companies are now in the midst of a similar boom that group buying sites experienced when they first burst on the scene 5 years ago. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 9. To view a full article or story, click on the link next to the headline.
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Eying Developers, Intel (Nasdaq: INTC) Launches 120 Mln Yuan China Incubator (Chinese article)
Bottom line: Rallies for Renren and 500.com stock on positive news are likely to be short lived due to both companies’ limited prospects, while 55Tuan’s IPO is likely to see more delays and its shares are unlikely to debut next week
500.com prepares to go back online
As we head into the long weekend for the Easter and Tomb Sweeping holidays, a string of developments are providing a bit of cheer to shareholders of embattled social networking site Renren (NYSE: RENN) and online lottery ticket seller 500.com (NYSE: WBAI). Renren’s good news comes in a newly announced Dutch auction for its stock, a variation of traditional share buybacks. At 500.com, the good news comes in the form of chatter that Beijing will soon roll out new policies that pave the way for resumption of the online lottery ticket sales that are the company’s main business.
Bottom line: 55Tuan’s IPO plan has a less than 50 percent chance of succeeding as a deadline looms, while Jiayuan.com is likely to de-list later this year after its investors accept a so-so buyout offer.
Clock ticks down on 55Tuan IPO plan
Time is quickly running out for a planned IPO by group buying site 55Tuan, as a deadline approaches that will nullify the company’s application earlier this year for a New York listing. Meantime, time is also running out for another Chinese Internet company, Jiayuan.com (Nasdaq: DATE), as a private equity firm launches a bid to privatize the neglected online dating site.
Both 55Tuan and Jiayuan represent a group of decidedly second-tier Chinese Internet companies that probably would have been acquired long ago in a more mature western market. But in the less developed Chinese market, the pair have managed to stay independent. The second-tier status of such firms often leads investors to question their longer term viability, dampening enthusiasm for their stocks when they list overseas. Read Full Post…
Bottom line: Dianping’s bigger-than-expected fund-raising underscores its popularity among investors, and could pressure it to make an IPO worth $1 billion or more this year to capitalize on positive market sentiment.
Dianping closes $850 mln funding
China’s online group buying space could be closer to getting its first IPO, with word that Dianping, one of the industry’s 2 leaders, has just raised a whopping $850 million in its fifth funding round. The massive funding has actually been in the works since late last year, but kept growing as more investors clamored for a piece of this hot company. The move sends the latest signal that Dianping may be eying an IPO later this year that could raise up to $1 billion or more.
Word of the funding comes as a more advanced IPO plan has gone missing from smaller rival 55Tuan, which was hoping to become China’s first publicly listed group buying site. 55Tuan made a public filing for a New York IPO back in January, and a later filing indicated it planned to sell its shares and begin trading on February 25. But that date has come and gone with no listing, and there’s still no word on the reason for the delays more than 2 weeks later. Read Full Post…
Bottom line: A mega IPO by Postal Savings Bank next year is likely to attract little or no interest from private investors, while an upcoming IPO by 55Tuan could do slightly better but will still get only a lukewarm reception.
55Tun misses pricing target date
A couple of unattractive IPOs are in the headlines as China gets back to work after the Lunar New Year holiday, led by a massive plan by China’s Postal Savings Bank to raise up to $25 billion as soon as next year. While that plan may be a year or more away, a more advanced listing by group-buying site 55Tuan has failed to price its shares by a previously announced target date, leading some to speculate that the deal is running into trouble. Neither of these deals looks very exciting to me, and I suspect they won’t attract much interest from private investors either. Read Full Post…
Bottom line: China’s overall Internet growth will continue to slow as the market starts to become saturated, with messaging and other mobile services continuing to steal share from microblogging and video operators.
Microblogging decline bites Weibo
A newly released annual government report on China’s Internet is full of good news for the online business community, with most sectors posting double-digit growth as overall penetration neared the 50 percent mark. But a few sectors stood out as distinctive losers in the report from the China Internet Network Information Center (CNNIC), led by the microblogging space that saw a sharp decline in users.
That’s not too surprising due to departures or pull-backs in the space last year by big names like NetEase (Nasdaq: NTES) and Tencent (HKEx: 700), though it certainly doesn’t bode too well for sector giant Sina Weibo (Nasdaq: WB). Another relative loser was online video, which posted only tiny growth last year as the sector came under regulatory assault aimed at reining in companies like Youku Tudou (NYSE: YOKU) and Baidu’s (Nasdaq: BIDU) iQiyi. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 31 to February 2. To view a full article or story, click on the link next to the headline.
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SAIC, Alibaba (NYSE: BABA) Agree To Work Together To Fight Piracy (Chinese article)
Tencent (HKEx: 700) Inks Exclusive Online Partnership For NBA Games In China (English article)
55Tuan Makes New IPO Filing, Raising Fund Raising Target To $65 Mln (Chinese article)
Retail Investment Product Site Juzi Licai Wins $100 Mln Series B Funding (English article)
Wang Jianlin Recaptures Title Of China’s Richest Person (English article)
