Bottom line: A Baidu downgrade by Deutsche Bank and new developments in its takeout dining and driverless car businesses highlight its heavy reliance on its search business and costly diversification attempts with no immediate profit potential.
A trio of headlines are spotlighting the difficulties faced by Chinese Internet giant Baidu(Nasdaq: BIDU) as it tries desperately to diversify beyond its core online search business. At the center of this news flurry is a downgrade of Baidu’s stock by Deutsche Bank, which looks mostly related to the company’s big revenue decline after a scandal earlier this year. But the other 2 headlines, one about Baidu’s driverless car initiative and the other about its online take-out dining service, both nicely highlight the huge money that Baidu is spending on its new businesses, nearly all of them losing big money. Read Full Post…
The following press releases and news reports about China companies were carried on September 30. To view a full article or story, click on the link next to the headline.
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Starbucks (Nasdaq: SBUX) to Try Take-Out Dining, Partner May be Baidu (Nasdaq: BIDU) (Chinese article)
MSCI Still Monitoring China A Shares After ‘Positive’ Signs (English article)
China Sees Commercial 5G Telecoms Rollout in 2020, Speeds up to 20 GB/Second (Chinese article)
Baic Motor VP Joins Baidu’s (Nasdaq: BIDU) Driverless Car Division (English article)
Former Qualcomm Exec Joins LeEco (Shenzhen: 300104) to Develop US Market (Chinese article)
Bottom line: LeEco’s new alliance with 6 car makers and rapid expansion of its sports programming unit look like shrewd moves to position itself as a major player in 2 big new growth areas.
Following a relatively quiet period for one of China’s more talkative companies, online video leader LeEco (Shenzhen: 300104), formerly known as LeTV, is back in the headlines with 2 relatively large deals in the auto and sports sectors. The first has LeEco signing an alliance with some of China’s leading car makers, who have agreed to use its entertainment system in their vehicles. The second has LeEco’s sports unit raising 7 billion yuan ($1.1 billion) in its latest fund-raising round.
The pair of stories highlight 2 focus areas for LeEco, one of China’s oldest online video companies and the only one that has remained independent as others all got purchased by bigger Chinese Internet companies. LeEco is trying to move aggressively beyond its original area as an online video specialist by obtaining more exclusive content, and also by offering its products and services over the growing number of channels that consumers use to access entertainment and information. Read Full Post…
The following press releases and news reports about China companies were carried on March 17. To view a full article or story, click on the link next to the headline.
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ZTE (HKEx: 763) Said to Appeal US Export Ban After Lobby Efforts Fail (English article)
Ctrip (Nasdaq: CTRP) Reports Q4 and Full Year Results (PRNewswire)
BAIC, BYD, Dongfeng Motor to Use LeEco (Shenzhen: 300104) Car Internet System (Chinese article)
Terra Firma Rejects HNA Bids for Jet Leasing Group AWAS – Sources (English article)
ReneSola (NYSE: SOL) Announces Convertible Note and Share Repurchases (PRNewswire)
Bottom line: A new integrated car-ordering platform being rolled out by Lyft and Didi looks like a smart and low-cost move to expand their geographic reach, while LeEco’s electric car venture with Aston Martin is likely to sputter.
Two of China’s top Internet companies are in car-related headlines today, led by a rapidly cozying relationship between Didi Kuaidi and US counterpart Lyft that has the pair preparing to roll out a joint platform for their signature hired car services. The other news has online video giant LeEco (Shenzhen: 300104), formerly known as LeTV, rolling out a joint venture to make electric cars with super luxury brand Aston Martin.
Both of these deals are incremental, since the original Didi-Lyft partnership was formed last year when the former invested in the latter. Likewise, LeEco was rumored to be near a tie-up with Aston Martin as early as last April. From a broader perspective, both moves show a growing confluence between the Internet and cars, which has opened up a wide range of new services that often incorporate GPS technology. Read Full Post…
Bottom line: New smart car initiatives from Tencent, LeTV and Baidu are all likely to struggle, with Baidu most likely to be first to drop out of this race to copy Internet giant Google.
China is quickly living up to its copycat reputation in the smart car space, with the latest word that Tencent (HKEx: 700) will enter the business in a tie-up with Taiwanese contract manufacturing giant Foxconn (HKEx: 2038). That pair are following Google (Nasdaq: GOOG) into the area, but they certainly aren’t the first Chinese to mimic the world’s largest Internet company.
That distinction would probably go to Chinese Internet search leader Baidu (Nasdaq: BIDU), which last year announced its own smart car initiative that was also back in the headlines this week as CEO Robin Li discussed the plan. Yet another similar initiative is also in the headlines today, as online video sensation LeTV (Shenzhen: 300104) discussed its own plans to show off its first smart car at the Shanghai auto show next month. Read Full Post…
A seasonal year-end rush of IPOs by Chinese firms moved into high gear late last week, when media reported that top movie chain operator Wanda Cinema Line and social networking up-and-comer Momo Inc had taken major new steps in their listing plans. The pair would join nuclear plant builder CGN Power, Beijing-based automaker BAIC and real estate developer Dalian Wanda, which were also in the headlines last week, in a year-end fund-raising frenzy that could raise more than $10 billion. Read Full Post…
Bottom line: Upcoming Hong Kong IPOs for nuclear energy firm CGN Power and real estate developer are likely to do well, while a third listing for car maker BAIC could get a more lukewarm reception.
New York has posted a banner year for Chinese IPOs, culminating with the record-breaking $25 billion listing for Alibaba (NYSE: BABA) in September. But Hong Kong is showing it still has plenty to offer too, with a flurry of major new listings coming in the final month of 2015. At least 3 major new offerings are bubbling around the headlines as we head into December, led by one for China’s largest nuclear plant builder, CGN Power Co. Meantime, Beijing-based auto maker BAIC and property giant Dalian Wanda are also revving up for what could well be 2 of the biggest listings for the year. Read Full Post…
The following press releases and media reports about Chinese companies were carried on November 28. To view a full article or story, click on the link next to the headline.
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Dalian Wanda To Seek HK Approval For Up To $6 Bln IPO On Monday: IFR (English article)
Weibo (Nasdaq: WB) Freezes Out Users Who Promote WeChat Public Accounts (Chinese article)
China To Allow Private Companies To Sell Broadband Services (English article)
BAIC Approved For Hong Kong IPO, To List On December 18 (Chinese article)
Xiaomi’s Lei Jun Invests 100 Mln Yuan In You+ Youth Apartment Rental Service (Chinese article)
US electric car maker Tesla (Nasdaq: TSLA) is setting some tough goals for itself during its first year in China, aiming to take advantage of government incentives and its high-end brand image to quickly take a big share of the market. I did a little math based on the company’s latest remarks, and its ambitious target for this year would represent around three-quarters of all electric vehicles sold in China in 2012. If it really can meet the new target, I suspect the company’s biggest strength will be its position as a luxury brand, since most people who buy EVs in China will probably do so more for the snob factor than due to any incentives from Beijing or desire to save the environment. Read Full Post…
China’s restless car market is showing signs of new stress, with automakers revving up spending at the nation’s top advertising auction this year as competition heats up and growth slows. Meantime, German car maker Daimler-Benz (Frankfrut: DAIGn) has already moved into the slow lane in recent years due to poor execution, but hopes to turn things around with a new ground-breaking tie-up with its main China partner, Beijing-based BAIC Motor. Read Full Post…