Bottom line: This year is likely to see at least a half dozen privately owned financial services companies make public listings in the U.S., Hong Kong and China, with Lakala and Lufax likely to be among the first.
Lakala files for ChiNext IPO
We’re already three months into the new year, and still awaiting the first of what looks set to be a bumper crop of IPOs by a new generation of privately owned financial services firms that are far more dynamic than their state-run peers. Two more of those are in the headlines today, led by China Rapid Finance, a peer-to-peer (P2P) lender that says it’s eyeing a $100 million IPO in New York. At the same time, the popular Lakala electronic payments service has filed to make a listing on the Nasdaq-style ChiNext board in Shenzhen.
That pair are joining a few other notable names that are reportedly aiming to list in the not-too-distant future. That group includes Lufax, which bills itself as China’s largest P2P lender and is aiming to list in Hong Kong. Then there’s Qudian, a microlender that is looking to raise hundreds of millions of dollars with a New York listing. And of course, the granddaddy of them all is Ant Financial, which could raise more than $1 billion with a listing in Hong Kong or dual listing in Hong Kong and China. Read Full Post…
Bottom line: NetEase’s new global expansion could stand a good chance of success due to its strong record with self-developed titles, which could help it pass Baidu in market value over the next 1-2 years.
NetEase holds developer forum in San Francisco
The company that made its name from a series of games based on the famous Chinese novel Journey to the West is trying to turn that story into reality, as NetEase (Nasdaq: NTES) eyes expansion outside its home market. The West contained in NetEase’s latest announcement is quite different from the West in the classic novel, the former referring to North America and Europe while the latter refers to India.
But other similarities between the novel and this new global expansion do abound in NetEase’s new announcement that it has just held its first-ever developer’s forum in the West. In both cases, the main character is traveling into unfamiliar terrain in pursuit of major rewards. And in both cases, each faces big challenges before attaining those goals. Read Full Post…
Bottom line: iQiyi’s issue of convertible notes to raise its latest $1.5 billion shows it continues to post big losses, and investors are increasingly skeptical that it can become profitable in the next 2 years.
iQiyi lures investors with convertible notes
It seems no one is quite ready to believe that China’s cash-burning online video sites are ready for the profit column just yet. That seems to be the message coming from Baidu-backed (Nasdaq: BIDU) iQiyi, one of the leading players, which has just raised a fresh $1.5 billion via a convertible note issue. That would indicate that investors are hoping they can convert their notes into iQiyi stock when they come due, but can also simply collect back their money with interest instead. Read Full Post…
Bottom line: China’s VNO program appears to be gaining momentum heading into its third year, and could reach the 200 million subscriber mark by the end of 2017.
Virtual network operators gain momentum
It’s been more than a year since I last wrote about China’s fledgling attempt to breathe new life into its telecoms services sector by creating virtual network operators (VNO), mostly because the program seemed to be sputtering in its first couple of years. But new data from the telecoms regulator seems to suggest the industry may finally be finding its legs, and could be starting to take some meaningful market share from the nation’s monopoly of 3 big state-run telcos.
The headline figure underpinning my assertion is 43 million, which appears to be the number of VNO subscribers in China at the end of last year. (Chinese article) I need to give a quick disclaimer here, as nowhere in the article is the term VNO or variant MVNO used to describe this sector, which is called the “mobile resale business”. But that term, combined with a description of the program, does seem to indicate that these are VNO subscribers. Read Full Post…
Bottom line: Alibaba could buy the RT-Mart supermarket chain this year to boost its grocery business, while JD.com’s more online-focused effort and push into smaller cities looks like a better approach to the sector.
Alibaba grocer drives into Sun Art, JD goes to small cities
The online supermarket wars that began last year between e-commerce rivals Alibaba(NYSE: BABA) and JD.com (Nasdaq: JD) are heating up in the Year of the Rooster, though the pair seem to be taking slightly different tacks, at least based on the latest headlines. Leading those are reports that Alibaba is in talks for a tie-up of some sort with Sun Art (HKEx: 6808), operator of the popular RT-Mart supermarket chain. Meantime, JD is making its own headlines in the space, with an executive detailing the company’s plans to achieve 100 billion yuan ($14.5 billion) in sales from its operation this year. Read Full Post…
Bottom line: Wanda will continue to operate its ffan e-commerce site for another year, following the departure of its CEO, but could quietly end the initiative afterwards due to lack of synergies with its brick-and-mortar shopping malls.
Success evades Wanda in e-commerce
The headlines have been buzzing this week about the departure of the chief executive of the e-commerce unit Wanda Group, the real estate-turned-entertainment giant with a voracious appetite for global acquisitions. The big theme from the chatter is that the departure of Li Jinling, the unit’s third CEO in 3 years, marks a setback and possibly even presages a death knell for the Wanda initiative into the online shopping realm.
Wanda is speaking out on the subject, saying it never intended to launch a website that would compete directly with the likes of sector leaders Alibaba (NYSE: BABA) and JD.com(Nasdaq: JD). Perhaps that’s true, though that didn’t stop Wanda and its ultra-confident chief Wang Jianlin from boasting of lofty ambitions when it signed up Internet titans Baidu(Nasdaq: BIDU) and Tencent (HKEx: 700) as partners to its ffan e-commerce site in 2014. Read Full Post…
Bottom line: Alibaba’s Koubei is unlikely to gain major traction despite its $1.1 billion in new funding, due to its late arrival to a crowded O2O take-out dining space already dominated by Baidu, Ele.me and Meituan-Dianping.
Koubei raises $1.1 billion
The longer I stay in China, the more the latest stories coming from the Internet sector look like I’ve seen them before. That’s certainly the case with Koubei, the Alibaba (NYSE: BABA) online-to-offline (O2O) take-out dining delivery service, which is close to landing a fresh $1.1 billion in new funding. In this case, Alibaba’s extremely late arrival to the space looks a lot like its vain attempt to play catch-up to Tencent’s (HKEx: 700) WeChat with a service called Laiwang back in 2013. Read Full Post…
Bottom line: Meitu’s new disclosure of rapid growth in its internet services revenue looks encouraging, as it takes advantage of its early arrival status in a beauty products sector with big profit potential.
Meitu makes over image with internet revenue growth
A month after its lackluster IPO, beauty app operator Meitu (HKEx: 1357) is trying to shore up its sagging stock by releasing some financial data that proves it’s more than just a place for people to doll up selfies to share with friends. The particular data shows that Meitu actually earned some relatively sizable Internet revenue from online sales and advertising in the month of December, proving it can make money more directly linked to its core beauty app.
Before that, the lion’s share of the company’s revenue had come from sales of smartphones optimized for its app. Critics had argued such a business model wasn’t really sustainable, since many such purchases are one-time items that might not be repeated. By comparison, online advertising and sales of products linked to its core app seem more sustainable. Read Full Post…
Bottom line: Alibaba will closely watch the performance of the newly minted Altaba over the next 1-2 years, and could make a privatization bid with Softbank if it feels the company is undermining its own stock.
Yahoo to morph into Altaba
Yahoo (Nasdaq: YHOO) co-founder Jerry Yang never would have dreamed a decade ago that the ground-breaking search engine he co-founded might someday morph into a Chinese e-commerce company called Alibaba (NYSE: BABA). But that’s pretty much what has just happened, with official word from Yang’s former baby that it will change its name to Altaba following the pending sale of its core Internet business. Read Full Post…
Bottom line: A meeting between Jack Ma and Donald Trump is a major coup for Alibaba and bodes well for its US relations, while a privatization plan for its partly owned Intime Retail reflects its spottier record for strategic investments.
Jack Ma scores Donald Trump meeting
E-commerce giant Alibaba (NYSE: BABA) is wasting no time making big headlines in the New Year, starting with a major coup that has seen founder Jack Ma become the first big Chinese business leader to score a meeting with incoming US president Donald Trump. At the same time, the company is also suffering a much smaller defeat back at home, with word that Alibaba will help to privatize Intime Retail (HKEx: 1833), after becoming a major shareholder in the brick-and-mortar retailer nearly 3 years ago. Read Full Post…
Bottom line: Tencent’s new investment in Nokia’s former mapping unit Here reflects the Chinese herd mentality to pile into new technologies, but also looks like a relatively savvy way to enter the space by pairing with experienced partners.
Tencent ties with mapping giant Here
Internet giant Tencent (HKEx: 700) doesn’t want to be left behind in the race with rivals Baidu (Nasdaq: BIDU) and Alibaba (NYSE: BABA) into self-driving new energy cars that may someday dominate the streets of both China and the world. That appears to be the message from the latest headlines, which have Tencent involved in a somewhat complicated deal that will give it a small stake in a high-powered mapping company that counts car giants BMW, Daimler and Audi as its main investors. Read Full Post…
