Bottom line: Alibaba’s new cloud tie-up shows that Korea is a primary market for its global expansion, while the new $4.5 billion funding for its Ant Financial affiliate could be followed by an IPO within the next 12 months.
Alibaba in Korea cloud initiative
E-commerce giant Alibaba (NYSE: BABA) is in a couple of major headlines today, led by word that its Ant Financial affiliate has just raised a whopping $4.5 billion in only its second-ever funding round. That particular story has been rippling through the headlines for a few weeks now, and is most notable because the deal is finally done and is triple the company’s original fund-raising target.
The other headline has Alibaba itself in a new deal to launch cloud computing services in South Korea, working in a partnership with a unit of local telecoms giant SK Telecom (Seoul: 017670). This particular deal is interesting because it represents Alibaba’s recent search for global growth stories, in a bid to satisfy investors worried about a slowdown in its home China market. Read Full Post…
Bottom line: Ant Financial could raise more than $22 billion in a 2017 IPO if China’s Internet bubble remains intact for the next year, though there’s a 50-50 chance that bubble will burst and the company’s value will stagnate or even come down.
Ant Financial targets massive dual listing
Just a week after reports emerged that it was nearing one the biggest fundings of all time by a private Chinese company, a new report is saying that Alibaba-affiliated (NYSE: BABA) Ant Financial is on the cusp of formally closing a massive capital raising of more than $3.5 billion. Flush with all that cash from only its second funding round, the company is looking quite confident and saying it hopes to make the biggest IPO of all time on a Chinese domestic stock exchange.
Specifically, the latest report in the influential China Business Network says Ant hopes to eclipse the current record held by the 2010 IPO from Agricultural Bank of China (HKEx: 1288; Shanghai: 601288), one of China’s big 4 state-run lenders. Ant’s offering could come as soon as next year in a dual listing in China and Hong Kong, following the surprise disclosure that Ant would meet the strict profitability requirements for such a listing . Read Full Post…
The following press releases and news reports about China companies were carried on April 19. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Alipay Owner Ant Financial to Start Shanghai IPO Process as Soon as 2016 (English article)
Tencent (HKEx: 700) CEO Ma to Donate 100 Mln Company Shares Towards Charity (company announcement)
Chinese Group Wants to Seal AC Milan Takeover by June (English article)
Siliconware Precision (Taipei: 2325) Says $1.7 Billion Tsinghua Deal Is on Hold (English article)
The following press releases and news reports about China companies were carried on April 16-18. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Tencent (HKEx: 700) Said in Talks for Syndicated Loan Up to $2 Bln (English article)
Alipay, Huawei Join in Fingerprint Verification Mobile Payments (Chinese article)
JD.com (Nasdaq: JD) in $200 Mln Merger With Take-Out Dining Platform Dada (English article)
Bottom line: Massive new fund raising by Ant Financial and Didi Kuaidi show there’s still lots of money looking to invest in emerging Chinese industries, though current valuations are overblown and likely to stagnate as China’s economy slows.
Ant Financial raises $3.5 bln
Every time I write that new funding seems to be cooling for Chinese tech companies, new reports emerge of yet another mega-funding. Two such new fund-raisings are in the headlines as the new week begins, led by a massive $3.5 billion new round for Alibaba-affiliated (NYSE: BABA) Ant Financial. The other mega-deal has homegrown car services provider Didi Kuaidi poised to raise $1.5 billion or more in new funding, as it vows to outspend an equally aggressive Uber for supremacy in the China market.
These 2 fundings show there’s still plenty of money chasing hot deals in China’s emerging industries, many in the tech and financial sectors. Two of my younger friends here have left more traditional media jobs over the last year to join the crowded field of private equity firms that are funding many of these deals, allowing hot companies like Didi Kuaidi and Ant to easily meet their targets and achieve very high valuations in the process. Read Full Post…
Bottom line: Domestic buyers are likely to comprise most of the investors in Ant Financial’s latest fund raising, though the use of foreign advisers indicates some overseas participation may also be allowed.
Ant Financial raises new funds
Ant Financial, the financial services arm of e-commerce giant Alibaba (NYSE: BABA), is going back to investors for a new mega fund-raising, just a year after taking money from private investors for the first time. But any foreigners hoping to buy into Ant will probably be disappointed, since it appears this new funding round will be mostly open to Chinese institutional buyers. Likewise, Ant’s IPO that could come as soon as next year is likely to happen on one of China’s domestic stock markets, again locking out foreign investors.
Perhaps it’s only fair that foreign investors stand on the sidelines in Ant’s high-growth story, since such investors already have easy access to some of China’s top private companies that are listed overseas. By comparison, domestic Chinese investors have little or no access to shares of Alibaba, Baidu (Nasdaq: BIDU) or Tencent (HKEx: 700), even though that trio of corporate giants derive nearly all their money from China’s booming Internet market. Read Full Post…
Bottom line: A strong reception for Apple Pay from consumers, banks and merchants bodes well for the service, which should attract a major audience among iPhone users but won’t pose a major threat to rival services from Alipay and WeChat.
Apple Pay launches in China
The launch of Apple Pay in China is buzzing through the local headlines a day after the roll-out, in a move that looks certain to shake up a stodgy industry dominated by homegrown names like Alipay. The most revealing headlines report on the rush by everyone, from consumers to banks and merchants to jump onto the Apple Pay bandwagon. That reflects the buzz that any major move by Apple (Nasdaq: AAPL) can create in the world’s largest smartphone market.
Local consumers are undoubtedly pleased that Apple chose China for the Asia launch of Apple Pay, selecting their market over more traditional candidates like Japan and South Korea. China is only the fifth global market for Apple Pay, following launches in the US, Canada, Britain and Australia. The pride element at being first in Asia, combined with Apple’s existing premium image here, will draw a big majority of Chinese iPhone and iPad users to try out Apple Pay on their devices. Read Full Post…
Bottom line: Apple Pay’s upcoming China launch and WeChat’s roll-out of fees for its cash-providing service reflect growing competition in the e-payments market, which will result in a long and costly battle among major players for market share.
Apple, WeChat in new e-payments moves
The rapidly heating China market for electronic payments is in a couple of top headlines today, led by highly anticipated news that Apple (Nasdaq: AAPL) will launch its Apple Pay service in China later this week. At the same time, separate media reports say that Internet giant Tencent (HKEx: 700) is taking a major step towards monetizing the e-payments service attached to its wildly popular WeChat instant messaging service.
The pair of headlines underscore just how much potential both domestic and foreign companies see in the China electronic payments market, which is growing rapidly as consumers and companies do more of their buying online. Some new data nicely summarizes the market, with leading e-payments firm UnionPay reporting that transactions processed over its network soared 30 percent to 312 billion yuan ($48 billion) over the week-long Lunar New Year holiday last week. Read Full Post…
Bottom line: Results from Chinese New Year promotions show that WeChat will continue to dominate over Alipay in gift-giving and other friend-to-friend transactions over the mobile Internet due to its original design as a SNS service.
WeChat trounces Alipay in online hongbao promotions
Most of China has been on holiday these last few days, but leading Internet companies Tencent (HKEx: 700) and Alibaba (NYSE: BABA) have been working overtime trying to put the best possible face on dizzying numbers from their red envelope gift-giving promotions over the holiday.
Tencent is focusing on the headline figure of 8 billion money-filled virtual red envelopes, known in Chinese as hongbao, that changed hands on its wildly popular WeChat messaging service through the second day of the Lunar New Year. Alibaba, meanwhile, is focusing on its own headline figure that shows its Alipay electronic payments service received a whopping 21 billion hits per minute at the height of a New Year’s promotion it held with leading TV broadcaster CCTV. Read Full Post…
Bottom line: Apple’s accelerated China store openings and February roll-out of its Apple Pay service represent efforts to boost its local profile, as the broader China smartphone market shows signs of saturation and is likely to contract this year.
Apple Pay coming to China in February
Global smartphone leader Apple (Nasdaq: AAPL) is kicking off the New Year by accelerating its efforts in China on two fronts, opening more of its trademark Apple Stores as it also prepares a February launch for a local version of its Apple Pay electronic payments service. Both campaigns have been in the headlines in recent days, extending a broader campaign by CEO Tim Cook to pay more attention to a market that could soon surpass the US to become Apple’s biggest.
At the same time, these latest campaigns come amid a growing chorus of predictions that sales of Apple’s iPhones could soon start to slow sharply. A primary factor behind that slowdown could be China, where the smartphone market has become saturated and is expected to contract in 2016 after 3 years of explosive growth. Read Full Post…
Bottom line: UnionPay’s launch of a new mobile payments service is a long-overdue answer to challenges by Alibaba and Tencent, and is somewhat late but also vital to maintaining its eroding position in China’s electronic payments market.
UnionPay rolls out mobile wallet card
After coming under growing assault over the last 2 years from the private sector, state-run behemoth UnionPay is finally fighting back by launching a mobile-based payment service to counter rival products from Internet giants Alibaba (NYSE: BABA) and Tencent(HKEx: 700). There’s no mention of either of China’s top 2 Internet companies in an announcement of the new service from UnionPay, even though Alibaba’s Alipay Wallet and Tencent’s WeChat Pay are clearly present in the subtext.
UnionPay is just the latest big state-run company to feel the heat of private sector competition, which is shaking up China’s entire financial sector that was previously dominated by big state-run companies. But UnionPay’s case is even more extreme, since the company operated a state-granted monopoly financial transactions settlement network for the first decade of its existence, similar to global systems run by credit card giants MasterCard (NYSE: MA) and Visa (NYSE: V). Read Full Post…
