Bottom line: Smaller foreign tech companies could follow Trend Micro’s lead and withdraw from China over the next few years, as they suffer sharp business downturns due to restrictions under the country’s new national security law.
Trend Micro sells China unit
This summer has been unusually quiet for big multinationals in China, following campaigns in the last 2 years targeting foreign companies for monopolistic practices and corruption, among other things. But the real turbulence this year has been happening behind the scenes, as foreign technology companies face a major business downturn following China’s recent roll-out of a strict new law designed to protect national security.
Many foreign tech firms have complained the new law is too broad and intrusive, and now security software specialist Trend Micro may have become the first major victim. That’s my interpretation, following an announcement that appears to show Trend Micro is withdrawing from the market. This particular move will see Trend Micro sell all of its China operations to AsiaInfo, a Chinese owned maker of telecoms software. Read Full Post…
The following press releases and media reports about Chinese companies were carried on September 2. To view a full article or story, click on the link next to the headline.
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NetEase’s (Nasdaq: NTES) Board Approves $500 Mln Share Repurchase Program (PRNewswire)
Phoenix New Media (NYSE: FENG) to Cut Staff, Retrench – Memo (Chinese article)
Alibaba (NYSE: BABA) Launches “Tmall Vineyard Direct” With Robert Mondavi Wines (Businesswire)
AsiaInfo to Acquire Trend Micro Chinese Subsidiary (Businesswire)
Many smaller Chinese companies may be getting little or no respect from Wall Street these days, but private equity seems a bit more interested in these undervalued firms. That’s my latest assessment following word that a bidding war has broken out for Chindex (Nasdaq: CNDX), an operator of clinics in China. Chindex said it received a sweetened buyout offer from a managed-led group that first bid for the company in February, after a rival bidder stepped in. This kind of bidding war has been relatively rare in the recent flurry of privatizations by Chinese firms, though this particular case hints that we could see 1 or 2 more similar wars occur as the trend plays out. Read Full Post…
The growing field of big Chinese global investors has gained a new member, with word that a unit of Citic Group, one of the nation’s oldest conglomerates, is taking a stake in a major new fund being set up in New York. Word of that deal comes as Citic Capital wraps up another major deal, as it finally closes its long and difficult plan to buy out New York-listed telecoms software maker AsiaInfo-Linkage (Nasdaq: ASIA). Both deals underscore not only Citic’s own aspirations as a global investor, but also the broader rise of Chinese private equity firms on the world stage as they aim to compete with big western names like KKR and Carlyle. Read Full Post…
The end of life as a public company is fast approaching for telecoms software maker AsiaInfo-Linkage (Nasdaq: ASIA), marking the end of a long chapter for one of China’s first technology firms to list overseas. A newly announced special meeting will see AsiaInfo shareholders vote on a plan to privatize the company, whose shares have been ignored for years now by western investors. More broadly speaking, AsiaInfo’s looming buyout represents the challenges that smaller China tech firms face as they struggle to be noticed by western investors.Read Full Post…
Despite reporting solid profit growth, telecoms software maker AsiaInfo’s (Nasdaq: ASIA) latest quarterly earnings report was more significant for what it did NOT contain, namely any mention of an ongoing plan to sell the company. Does this mean the deal is dead? In my view, the lack of any news on what once looked like a lively bidding war could indeed mean that buyers are no longer interested in AsiaInfo, perhaps because the company’s financials weren’t as attractive as many thought they might be or because the company wanted too big a premium for its shares.
After several months with no news following an unsolicited buyout offer for AsiaInfo-Linkage (Nasdaq: ASIA), the telecoms software maker has burst back into the headlines with reports that it has attracted several more new potential buyers as it seeks to pump up its valuation amid a broader weak market for US-listed China stocks. This new signs of interest, which includes some major global private equity firms, could be a good sign for the broader sector of battered New York-traded Chinese stocks, as it means there is clearly some strong institutional investor interest in better-run companies despite weak broader market sentiment, which means we could see some other interesting buy-out offers in the months ahead.
The following press releases and media reports about Chinese companies were carried on June 16-18. To view a full article or story, click on the link next to the headline.
The following press releases and media reports about Chinese companies were carried on February 22. To view a full article or story, click on the link next to the headline.
