Bottom line: A new plan allowing offshore listed Chinese firms like Alibaba and Tencent to make secondary listings at home appears to have momentum and could stand a better than 50 percent chance of success.
A mix of politics and business is in the air this week, as the annual National People’s Congress takes place in Beijing, including a concurrent gathering of business leaders who advise the nation’s legislature. Those leaders include most of the country’s leading high-tech CEOs, who are all getting peppered with questions about whether they would re-list at home if given the chance.
Most of those leaders are doing the politically correct thing and saying “of course,” including chiefs of Internet giants Baidu (Nasdaq: BIDU), Tencent (HKEx; 700) and Ctrip(Nasdaq: CTRP), just to name a few. (Chinese article) Such talk is really a bit cheap and would be quite impractical in the current market, since de-listing such massive firms from their current markets would require tens of billions of dollars in most cases, and even hundreds of billions in the case of a massive company like Tencent. Read Full Post…
Bottom line: Ctrip’s offline travel alliance campaign looks like a shrewd move with good chances of success, while Tongcheng’s move back into profits shows the sector is heading into a new stable period.
A couple of travel-related stories are in the headlines today, led by a blitz into the offline realm by leading online agent Ctrip (Nasdaq: CTRP). The other item has smaller rival Tongcheng reporting its first profit in four years, as it becomes the latest to emerge from a prolonged price war that bloodied the entire industry and sent most companies into the loss column.
Neither of these stories is huge, which partly reflects the fact that this industry is finally emerging from a brutal period to a new one of relative calm. But Ctrip is clearly looking for its next battle front, after consolidating its position by taking over most of its major rivals, including Qunar and eLong, to end the price wars. Read Full Post…
Bottom line: Baidu’s opening of a new artificial intelligence lab in Silicon Valley is the latest move in its AI obsession, which is likely to end in failure and a quiet pullback in around two years due to mediocre execution.
I’m officially dubbing Baidu (Nasdaq: BIDU) chief executive Robin Li the “two-year attention span man”, with word that the company is setting up a new Silicon Valley office in the rush to build up its artificial intelligence (AI) capabilities. If any one of China’s “big three” Internet chiefs deserves the title of “short attention span” man, it’s most definitely Robin Li. As far as I can remember, Li has been a “flavor of the moment” guy who fixates on the latest daily hot trend, most often to jettison the idea around 2 years later when it falls out of fashion. Read Full Post…
Bottom line: Ctrip’s profits could double or more this year following its successful digestion of Qunar, providing some upside to its stock.
As earnings season for US-listed Chinese stocks hits full throttle, I thought I’d take a look at the latest results from Ctrip (Nasdaq: CTRP), which are sending mixed but generally positive signals. That’s because Ctrip is in the process of digesting former archrival Qunar (Nasdaq: QUNR), which was the industry’s second largest player but is also losing quite a bit of money.
Ctrip pulled off the coup of the century a couple of years ago when it forged a deal that gave it a controlling stake of Qunar, acquiring the shares from former majority shareholder Baidu (Nasdaq: BIDU). I personally thought that deal should have received some regulatory scrutiny since it combined the top two players in the space. But the regulator apparently thought otherwise, or simply approved the deal if it was even asked. Read Full Post…
Bottom line: Ctrip’s latest results and its first major overseas purchase point to a company with the wind at its back as it heads into a new phase, which could see it become China’s first globally competitive Internet company.
High-flying online travel agent Ctrip (Nasdaq: CTRP) is taking its first major flight overseas, with announcement that it has just agreed to buy travel search specialist Skyscanner in a deal that values the British company at a hefty 1.4 billion pounds ($1.65 billion). At the same time, Ctrip has also reported earnings that show its bottom line is suffering some short-term pain as it swallows the profit-challenged Qunar (Nasdaq: QUNR), a former bitter rival that Ctrip now controls. Read Full Post…
Bottom line: Homestay specialist Tujia could make a play to merge with the China operations of Airbnb, following its major new tie-up with leading online travel sites Ctrip and Qunar.
Leading online travel agent Ctrip (Nasdaq: CTRP) is back to doing what it knows best, neutralizing competition through formation of savvy alliances with its rivals. In this case the company is taking aim at the market for short-term stays at private homes, with its announcement of a major new tie-up with homegrown industry leader Tujia. That alliance is seeing Ctrip merge its own homestay business with Tujia, in what looks like a clear shot at global leader and sector pioneer Airbnb. Read Full Post…
The following press releases and news reports about China companies were carried on October 21. To view a full article or story, click on the link next to the headline.
China Mobile (HKEx: 941) Announces Financial Results for First 3 Quarters (HKEx announcement)
Homestay Business of Ctrip (Nasdaq: CTRP) and Qunar Acquired by Tujia (PRNewswire)
China iOS App Store Passes US in Sales to Become World’s Largest – Report (Chinese article)
Walmart (NYSE: WMT) Opens Flagship Store on JD.com (Nasdaq: JD) (Chinese article)
Giant Interactive to Buy Online Game Maker Playtika for 30.5 Bln Yuan (Chinese article)
Bottom line: Tongcheng’s lack of hurry to make an IPO reflects confidence about its cash position due to new backing from Wanda, while ZTO’s high profitability looks unusual amid huge losses reported by most of its rivals.
A couple of IPO stories are in the headlines as the new week begins, led by word that online travel site Tongcheng is in no hurry to make a listing, following its link-up last week with the cash-rich Wanda Group. At the same time, delivery company ZTO Express, which is in a bigger hurry to list, is raising some doubts among observers who say the fat profits announced in its IPO prospectus are at huge contrast with peers in China’s highly competitive parcel delivery sector. Read Full Post…
Bottom line: Tongcheng’s merger with Wanda’s travel unit could create a strong new rival to counter Ctrip, and could become even stronger through a potential future tie-up or merger with HNA-backed Tuniu.
For more than a year Internet giant Ctrip(Nasdaq: CTRP) has seemed almost invincible, buying up most of its major rivals one by one to consolidate its position as the nation’s leading travel agent. But the company may finally be coming up against a major rival in its bid to dominate the lucrative sector, with word that real estate and entertainment giant Wanda has bought up Tongcheng, one of Ctrip’s last remaining major rivals.
This particular tie-up is slightly unusual, as Ctrip previously invested around $200 million for a stake that was reportedly as high as 30 percent in Tongcheng, according to media reports a couple of years ago. (previous post) That would have valued Tongcheng at about $650 million, which is a fraction of the valuation of more than 20 billion yuan ($3 billion) that Tongcheng was worth, based on the latest investment by Wanda. Read Full Post…
Bottom line: Ctrip’s massive new bond and share offer could raise up to $2.2 billion, and portends a major offshore acquisition in the next 6 months.
Online travel agent Ctrip(Nasdaq: CTRP) has just announced a complex plan to raise up to $2.2 billion in cash, in one of the biggest fund-raising exercises I’ve seen by a Chinese Internet company. The huge sum, combined with Ctrip’s existing large cash reserves, raises the obvious question of what this fast-growing company might be planning to do with all that money. One obvious answer is that Ctrip is planning a major offshore acquisition, reflecting its new global aspirations after quietly eliminating most of its local competition to dominate the lucrative China market. Read Full Post…
The following press releases and news reports about China companies were carried on September 8. To view a full article or story, click on the link next to the headline.
Oppo Becomes Major Southeast Asia Smartphone Player, Xiaomi Enters India Top 3 (Chinese article)
SocGen (Paris: SOGN ) in Talks to Sell 49 Pct of China Asset Manager to Warburg (English article)
China Mobile (HKEx: 941) Installs Phone Scam Warning System in Inner Mongolia (Chinese article)
Ctrip (Nasdaq: CTRP) Announces Pricing of Offering of ADSs (PRNewswire)