The following press releases and media reports about Chinese companies were carried on January 9. To view a full article or story, click on the link next to the headline.
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Alibaba’s (NYSE: BABA) Ant Financial Approved for Internet Bank in South Korea (Chinese article)
Gaming Firm Perfect World Returns to China A-shares via TV Studio Affiliate (English article)
Ctrip (Nasdaq: CTRP) Announces $180 Mln Investment in Indian Peer MakeMyTrip (PRNewswire)
ZTE (HKEx: 763) Chairman Hou Weigui to Step Down at Next Board Meeting in March (Chinese article)
LeTV Sports in Partnership to Live Stream Major League Baseball Games in China (Businesswire)
Bottom line: Alibaba’s shares and Ant Financial’s new fund-raising plans will come under pressure if China’s stock markets enter a new correction, a possibility that looks high in the current environment.
China sell-off pressures Alibaba shares
E-commerce giant Alibaba (NYSE: BABA) is facing several new challenges as we head into 2016, led by a big drop in its stock on the first trading day of the year after China’s domestic stock markets plunged 7 percent. The 5.6 percent drop in Alibaba’s stock in New York on Monday wiped out around $10 billion in market value, as investors worried that US-listed Chinese stocks could get infected by a potential a new correction on China’s stock markets.
In separate headlines, Alibaba-affiliated Ant Financial is reportedly back in the market to raise at least $1.5 billion, in the run-up to a potential IPO as soon as later this year. That figure looks quite large, and I’ve previously said we’re unlikely to see many private fund-raising rounds of that size this year. But the figure is actually down quite a bit from Ant’s only other fund raising last July, reflecting growing caution from investors worried about China’s slowing economy. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 5. To view a full article or story, click on the link next to the headline.
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Alibaba’s (NYSE: BABA) Ant Financial Finance Arm Said to Seek at Least $1.5 Bln (English article)
New World (HKEx: 17) to Prepare Buyout Offer for $7 Billion China Unit – Source (English article)
Qunar (Nasdaq: QUNR) Names New CEO, CFO, COO (GlobeNewswire)
Smartphone Maker Meizu Cuts 5 Pct of Headcount to Boost Competitiveness (Chinese article)
Xiaomi Co-Founder Li Wanqiang Returns to Head Xiaomi Pictures Division (Chinese article)
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…
Bottom line: Upcoming IPOs by China Postal Bank in Hong Kong and Canadian Solar’s solar plant-building unit in New York should get strong receptions, though both may have to wait until after the Christmas holidays to launch.
Conservative Postal Bank draws big investors
An upcoming mega IPO in Hong Kong by the stodgy Postal Savings Bank of China is shaping up as one of this year’s hottest new offerings, with word that it’s added domestic heavyweights including China Life (HKEx: 2628; Shanghai: 601628; NYSE: LFC) and Tencent (HKEx: 700) to its impressive list of early investors. In other IPO news across the Pacific, solar panel maker Canadian Solar (Nasdaq: CSIQ) is also drumming up hype for a new offering by its solar plant-building unit, which has landed some modest new financing from big-name western commercial lenders.
Each of these IPO stories has a different subplot, but a common theme is that both could be relatively hot despite distinctly cool sentiment these last few months towards new offshore Chinese listings. It’s not yet clear if either offering will make it to market by the end of next week, which is probably the latest they could occur before the traditional Christmas break. But even if they have to wait until next year, both could do reasonably well. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 9. To view a full article or story, click on the link next to the headline.
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China Resources Challenges ON Semiconductor with Fairchild (Nasdaq: FCS) Bid (English article)
Postal Savings Bank Signs China Life, Ant Financial, Tencent as Investors for HK IPO (Chinese article)
Google (Nasdaq: GOOG) Registers Company in Shanghai Free Trade Zone (Chinese article)
ZTE (HKEx: 763), Shanghai Oriental Pearl in Strategic Cooperation (HKEx announcement)
Uber Releases China ICP Permit Number in Response to WeChat Blockage (Chinese article)
The following press releases and media reports about Chinese companies were carried on December 1. To view a full article or story, click on the link next to the headline.
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Bank of Jinzhou (HKEx: 416) Said to Be Poised to Raise $794 Mln in IPO (English article)
Ant Financial-Backed Korean Internet Bank Wins Approval (Chinese article)
Bottom line: Apple could become the first big foreign company to offer domestic electronic payment services in China, representing a major accomplishment for CEO Tim Cook in his recent campaign to improve relations with Beijing.
Apple Pay eyes February China launch
Big names like Visa (NYSE: V), MasterCard (NYSE: MA) and PayPal have been waiting for years to offer electronic payment services in China, but now it appears that tech titan Apple(Nasdaq: AAPL) may be the first to break into the lucrative market. That’s the signal coming from the latest headlines, which say that Apple is aiming to formally launch its Apple Pay electronic payments service in its second largest global market in the next few months.
If Apple succeeds, the move would represent a major victory for the company and vindication of CEO Tim Cook’s recent campaign to cultivate better relations with Beijing. Apple Pay would be entering the market less than 2 years after the product’s formal launch, which is extremely fast for bureaucratic China. By comparison, Visa, MasterCard and PayPal have all been waiting more than a decade for China to open the market, and the 2 credit card giants even led a campaign that resulted in a complaint at the WTO. Read Full Post…
Bottom line: CICC and Jiuxian are benefiting from a growing number of domestic listing options for private Chinese companies, but both will still need to show they can be profitable industry leaders for investors to take them seriously.
Jiuxian finally debuts on China OTC
A couple of new IPOs are highlighting the growing allure of China’s increasingly diverse stock markets for domestic companies that used to flock to New York. Leading the headlines is a very respectable performance in the long-awaited Hong Kong trading debut for CICC (HKEx: 3908), China’s oldest investment bank. The strong debut came even after CICC had to scale back the offering due to weak demand, and market watchers are attributing the performance to separate news that China will resume domestic IPOs by year-end after a pause of several months.
In the other headline, online wine seller Jiuxian has become the latest Chinese Internet firm to list on the country’s 2-year-old over the counter (OTC) market. The loss-making Jiuxian had initially aimed to list in New York, but abandoned that plan for a simpler offering at home. It joined other money-losing startups making similar listings over the last week, including online classified ad site Baixing and Alibaba-backed (NYSE: BABA) soccer club Evergrande Taobao. (previous post) Read Full Post…
Bottom line: China should expand its plans for a new enterprise board in Shanghai to include a place for the Chinese units of big multinationals like Yum and Uber, allowing domestic investors to buy into these big foreign names.
Calls grow for KFC parent to spin off China unit
Global fast food giant Yum Brands (NYSE: YUM) became the latest major multinational to contemplate a spin-off for its China business last week, following in the tracks of Uber and IMAX (NYSE: IMAX), two leaders in their respective areas of hired car services and big-screen theater technology. The trend acknowledges that China will soon become the world’s largest consumer market, and its unique qualities and complexities often justify creation of separate companies for these big global names to effectively develop the market.
China should seize on this trend and modify its current plans for a new Nasdaq-style enterprise board based in Shanghai to also include a place for these larger, newly created companies with foreign roots. Reports earlier this year indicated the regulator was aiming to roll out the new strategic industries board as soon as next year, though its plans could be delayed due to the recent turmoil on China’s stock markets. Read Full Post…
Bottom line: Beijing should wean big state-run banks off government hand-outs to force them to lend more responsibly, and should even consider allowing one or two failures to make its point.
3 banks seek public, private money
Three mid-sized Chinese banks were in the fund-raising headlines last week, reflecting the difficult times many now face as they struggle with growing volumes of bad debt due to China’s slowing economy. The trio, Postal Savings Bank of China, Everbright Bank (HKEx: 6818) and Huishang Bank, were aiming to raise a massive $10 billion collectively to bolster their balance sheets, each by taking in new investors.
But their target investors were quite different. Postal Savings Bank and Huishang both chose to court the private sector through share offerings to big institutional buyers. By comparison, Everbright chose to seek funds from its state-run parent. Read Full Post…
