The Internet world is buzzing today with word that Alibaba and Tencent (HKEx: 700), China’s 2 dominant Internet firms, are among the first group of 10 companies to receive banking licenses as Beijing opens the sector to private competition. From a macro-economic perspective, the move is certainly a welcome one for China and should provide some much-needed competition for the nation’s stodgy state-run lenders that now control the sector.
But from an individual company perspective, I really can’t see how traditional banking fits into either Tencent’s or Alibaba’s core Internet business, and worry a bit that this new initiative could ultimately distract these companies from their main focuses. I do expect that Tencent may ultimately follow its recent strategy of spinning off businesses and move its bank into a separate company, which looks like the right move. Alibaba would be well advised to do the same, though founder Jack Ma has shown a tendency for wanting to keep all his companies under one roof. Read Full Post…
Chinese investors marked an important milestone last week when they rejected a bond offer by Jin Jiang (HKEx: 2006; Shanghai: 600754), one of the nation’s leading hotel operators, reflecting their growing understanding of risk in China’s young financial markets. Chinese investors too often blindly pile into nearly any product offered by the latest hot company, bank, fund manager or even Internet firm, falsely believing they are guaranteed big returns on their money. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 12. To view a full article or story, click on the link next to the headline.
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Alibaba To Acquire ChinaVision Media (HKEx: 1060) For HK$6.24 Bln (Chinese article)
Hershey’s (NYSE: HSY) Kisses Brand Hits $100 Mln In China (Businesswire)
After an unsuccessful earlier listing for one of its units, online real estate giant E-House (NYSE: EJ) is preparing to try again with plans for a New York IPO for its Leju division. The company has been quite cagey in this latest listing plan, giving little details about Leju’s background and why the unit deserves its own separate listing. Perhaps that’s because a little checking reveals that this “new” offering is really just a recycled listing for a previous company jointly-owned by E-House and leading web portal Sina (Nasdaq: SINA). Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 8-10. To view a full article or story, click on the link next to the headline.
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If I was a shareholder in e-commerce firm Dangdang (NYSE: DANG), I would definitely sell my stock after hearing about the company’s latest announcement of a tie-up with Walmart-backed (NYSE: WMT) Yhd.com. I personally wasn’t surprised by the nature of the tie-up, which will see the pair cross-promote each others’ services, even though I was a bit disappointed that there was no equity exchange. Dangdang had previously confirmed it would announce a tie-up after rumors of an alliance first appeared a few weeks ago. This kind of hype followed by disappointment is quite typical of Dangdang’s co-founder and CEO Li Guoqing, whose fierce independence could ultimately lead to the marginalization or even death of his company. Read Full Post…
The worrisome “vampire” moniker heaped on Alibaba’sYu’ebao has died a quiet and appropriate death, with word that China’s top banker has no plans to kill the wildly popular investment product. The pronouncement from central bank Governor Zhou Xiaochuan caps a brief period of turbulence for Yu’ebao, beginning when an influential financial commentator branded the product a “vampire” nearly 2 weeks ago. That comment triggered a heated debate about new competition that private companies are suddenly posing for stodgier state-run banks, which until recently were the only low-risk option for most consumers to deposit their savings. But Zhou didn’t completely let Yu’ebao off the hook, adding that the fast-rising private banking sector needs to be more tightly regulated. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 5. To view a full article or story, click on the link next to the headline.
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Two of China’s older Internet names, e-commerce firm Dangdang (NYSE: DANG) and leading video sharing site Youku Tudou (NYSE: YOKU), are showing just how important profits have become for their investors, with shares of each posting big gains after reporting moves into the black after years of losses. In the case of Youku Tudou, the company didn’t actually report a net profit, but said it moved into the profit column on an operating basis in last year’s fourth quarter. Dangdang was more definitive, posting its first net profit since sinking into the red 2 years ago when competition in China’s e-commerce sector first began heating up. Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 28. To view a full article or story, click on the link next to the headline.
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Search leader Baidu (Nasdaq: BIDU) may be rapidly yielding market share to 2 up-and-coming rivals, even as its latest results show it’s still king of the hill when it comes to getting revenue from online advertisers. But the company is still searching for new innovation, with word that charismatic Xiaomi co-founder Lei Jun came to speak at an internal event this week as Baidu seeks to rekindle its own “wolf spirit”. Baidu’s quest to become more diversified and has moved into high gear with a spree of major acquisitions over the last year in a wide range of areas. Still, its latest results, while impressive, show just how heavily dependent the company remains on online advertisers. Read Full Post…
