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Tag Archives: Bank of China
Get the latest report of Bank of China : latest Business & Financial news from Doug Young, an Expert on Chinese Market, (former Chief editor at Reuters)
Bottom line: A new $3.5 billion bank loan to help pay for game developer Supercell and an investment in shared bike service Mobike extend Tencent’s savvy strategy of targeted backing for companies that can quickly contribute to its core businesses.
Tencent nears mega loan for Supercell buy
Leading Internet company Tencent (HKEx: 700) is in a couple of major investment headlines as the new week begins, one in the virtual realm and the other grounded on the streets of major cities like Beijing and Shanghai. The larger of the items comes with word that Tencent is on the cusp of securing a $3.5 billion loan to help pay for its pending purchase of a controlling stake in Finnish game maker Supercell. The other item has the company leading a recent funding round for Mobike, operator of a shared bicycle service that is helping to revive China’s biking tradition. Read Full Post…
Bottom line: The collapse of a cross-investment between China’s Citic Bank and Taiwan’s CTBC Financial reflects growing cross-strait tensions, and could signal a chill in major new cross-strait investments over the next 4 years.
Citic Bank scraps Taiwan investment
In a troubling sign for companies doing business across the Taiwan Strait, an equity swap between China’s Citic Bank (Shanghai: 601988) and Taiwanese peer CTBC Financial (HKEx: 2891) has collapsed due to regulatory issues. In this case it appears that Taiwan scuttled the deal for reasons I’ll explain shortly, though a Citic spokesman emphasized no politics were involved. But regardless of the stated reasons, this particular development seems to reflect growing tensions between Taiwan and China under a new Taiwanese administration that’s far more wary of Beijing than its predecessor. Read Full Post…
Bottom line: Beijing and local governments need to let struggling companies fail and stop ordering banks to continue lending to them, or risk exacerbating the country’s growing bad debt crisis.
Banks ordered to lend to sinking companies
A couple of news stories last week cast a spotlight on how local governments are preventing banks from effectively managing their growing volume of bad loans, creating obstacles that could cause the problem to worsen and even spiral out of control. Neither story was actual “news”, but instead detailed practices increasingly used by local officials to support struggling state-owned companies, often to the detriment of local banks.
In one case officials ordered banks to lend to a failing local ship builder, even though the company was almost certain to default. The other case detailed how local officials had compiled lists of struggling companies for their own records, but then withheld the information from banks due to worries that disclosure might cause those companies to lose access to new loans. Read Full Post…
The following press releases and news reports about China companies were carried on July 1. To view a full article or story, click on the link next to the headline.
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China’s Postal Savings Bank Files for Potential $10 Bln IPO (English article)
21Vianet (Nasdaq: VNET) Announces Withdrawal of Going Private Proposal (GlobeNewswire)
Bank of China (HKEx: 3988) to Sell Assets to HK Unit for $887 Mln (English article)
Shenzhen Businessman Buys Australian Soccer Club Newcastle United Jets (Chinese article)
Billionaire Wang’s Bid for Global Theater Behemoth Falters (English article)
Bottom line: BOC Aviation’s stock will debut with a 5-10 percent gain when trading starts on Wednesday, while Lufax’s delay of its IPO plan looks prudent until China’s P2P lending sector settles down.
BOC Aviation set for strong debut
After running into some early minor turbulence, Asia’s second biggest IPO of the year is set to take off later this week in Hong Kong when aircraft leasing company BOC Aviation begins trading in what should be a relatively buoyant debut. But the ride to market is looking a bit rockier for Lufax, with reports that what could become the first IPO for a P2P lender is being delayed until next year. Lufax had earlier signaled it planned to make its listing this year, most likely in Hong Kong or Shanghai. But its plan is being delayed as Beijing moves to clean up the nation’s unruly P2P lending market. Read Full Post…
The following press releases and news reports about China companies were carried on May 20. To view a full article or story, click on the link next to the headline.
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Temasek, CIC-KKR Advance to 2nd Round of Yum (NYSE: YUM) China Stake Sale (English article)
BT (London: BT) Applies for Telecoms Value Added Service License In Shanghai FTZ (Chinese aticle)
Bottom line: A strong field of cornerstone investors indicates BOC Aviation’s IPO could post moderate gains in its trading debut, while Didi’s IPO plan shows that New York remains an attractive option for Chinese firms that are leaders in their sectors.
Fosun, Boeing buy into BOC Aviation
A couple of major IPOs are in the headlines today, led by some encouraging signs for an upcoming listing from BOC Aviation, the aircraft leasing arm of Bank of China (HKEx: 3988; Shanghai: 601398) that’s in the process of making a $1.1 billion offering in Hong Kong. Meantime, we’re getting some of the first concrete signals of the IPO plans for Didi Chuxing, the homegrown Chinese equivalent of Uber, which is reportedly eyeing a US listing in 2018.
Let’s jump right in with BOC Aviation, which looks like an attractive IPO to me since it should benefit from China’s booming demand for air travel. Yet despite that potential, the offer has stumbled somewhat since Bank of China first announced its plans to make a separate listing for the unit back in March. BOC Aviation was initially hoping to raise up to $1.5 billion, but pared the amount back to the current $1.1 billion after meeting with lukewarm demand due to recent market volatility. Read Full Post…
Bottom line: BOC Aviation and 51Talk are likely to post moderate performances in their upcoming IPOs in Hong Kong and New York, as investors welcome their growth stories but also show concerns about China’s broader slowing economy.
BOC Aviation IPO gets lukewarm reception
Privatizations and de-listings have been making headlines among overseas listed Chinese firms these days, but a couple of upcoming new IPOs shows that New York and Hong Kong remain attractive options for at least some companies. In the bigger of the 2 plans in the headlines today, Bank of China’s (HKEx: 3988; Shanghai: 601398) BOC Aviation unit has filed updated plans for its IPO first announced in March, which includes a final pricing. The other deal has English language instruction specialist 51Talk filing to make a New York IPO to raise up to $100 million.
This latest pair of deals in some ways reflect the constant state of uncertainty in China’s own stock markets, which is where many of these Chinese companies would prefer to list due to higher valuations. IPOs in China are always tough because of a huge waiting line that means new applicants can wait 2 or 3 years or even more. The problem is worsened by political conservatism that often sees the regulator slow or freeze all new offerings when markets become volatile like they are now. Read Full Post…
The following press releases and news reports about China companies were carried on April 27. To view a full article or story, click on the link next to the headline.
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Bottom line: New IPOs from metals trading specialist Yintech in New York and aircraft leaser BOC Aviation will meet with lukewarm reception that sees them price in the middle of their range and post flat trading debuts.
Yintech banks on precious metals trading
A couple of IPO stories are in the headlines, including the first major offering of a Chinese company in New York this year set to take place by metals exchange operator Yintech. Meantime in Hong Kong, the airline leasing unit connected to Bank of China (HKEx: 3988; Shanghai: 601398) is also sniffing for interest in its plan for an offering to raise up to $1.5 billion.
Each of these IPO stories is quite different, in terms of size, industry and stage of development. But a common theme is that both come from relatively traditional older industries in China, rather than the high-growth tech and media sectors that more typically like to list offshore. To the contrary, this year has seen many of those high-growth companies like Qihoo (NYSE: QIHU) and E-House (NYSE: EJ) de-list from New York after failing to attract enough interest from US investors. Read Full Post…
Bottom line: Weak debuts for 2 China bank IPOs in Hong Kong and anemic profit growth for ICBC and Bank of China reflect the industry’s building bad loan problem, which could erupt into a full-blown crisis by the end of this year.
The headlines are littered with negative stories about Chinese banks as we reach the climax of the latest earnings season, reflecting the dismal outlook for this group of lenders staring at a major bad loan crisis. Often I like to be contrarian in this kind of situation and say it could represent a good buying opportunity, since Chinese bank stocks now trade at very low price to earnings (PE) multiples. But in this case I really do think far worse is still to come before the building crisis subsides, meaning there’s still plenty of downside for these stocks.
The bleak outlook was reflected by new Hong Kong IPOs for 2 local commercial lenders, whose shares both priced near the bottom of their range and ended flat on their first trading day. At the same time, 2 of China’s top 4 banks, ICBC (HKEx; 1398; Shanghai: 601398) and Bank of China (HKEx: 3988; Shanghai: 601398), both posted their latest quarterly results that continued to show their profits were sapped by growing bad debt. Read Full Post…
