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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 York IPO by drug maker MediTech and Hong Kong listing by BOC Aviation will both meet with tepid reception and weak debuts, the former due to its small size and latter due to lack of big growth potential.
Drug maker China MediTech registers for NY IPO
A couple of IPOs are in the headlines as we head into the new week, led by a relatively sizable listing plan by drug maker China MediTech that could be the first significant new offering in New York this year by a Chinese firm. Meantime, Bank of China (HKEx: 3988; Shanghai: 601398) is also announcing plans to spin off and list its airline leasing unit, marking its latest asset sale as China’s banks scramble to raise cash to cushion their rapidly crumbling balance sheets.
Each of these listing stories is a bit different, reflecting the big differences between MediTech, a private company controlled by Hong Kong billionaire Li Ka-shing, and Bank of China, one of China’s big 4 state-run banks. MediTech’s choice of New York over Hong Kong probably reflects Li Ka-shing’s recent bearish stance on China, and also highlights the relative stability that New York offers over Hong Kong and China. Bank of China’s choice of Hong Kong reflects the preference by big state-run companies to make overseas listings in the former British colony, and Bank of China is itself also listed there. Read Full Post…
The following press releases and news reports about Chinese companies were carried on March 5-7. To view a full article or story, click on the link next to the headline.
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Wanda’s AMC (NYSE: AMC) Theater Chain to Buy Carmike for $1.1 Bln (English article)
Tencent (HKEx: 700) to Invest $1 Bln in Sohu (Nasdaq: SOHU) Video Unit – Source (Chinese article)
Adidas (Frankfurt: ADS) to Boost China Outlets by a Third With 3,000 Stores (English article)
HutchisonChina MediTech Announces Launch of Potential US IPO of ADSs (Businesswire)
Bank of China (HKEx: 3988) to Spin Off, Separately List BOC Aviation Unit (HKEx announcement)
Latest calendar for Q4 earnings reports (Earnings calendar)
Bottom line: Foreign investors will give China bank IPOs a cold shoulder for the rest of this year due to concerns of a bad debt crisis, potentially driving valuations even lower than their already depressed levels.
Zheshang Bank delays IPO plan
A couple of banking stories are spotlighting the rapidly fading attraction of Chinese lenders to foreign investors, who fear the banks are standing on the cusp of a bad loan crisis fueled by China’s cooling economy. The first item has Citigroup (NYSE: C) selling its 20 percent stake in China Guangfa Bank for $3 billion, after original plans to list the bank collapsed due to lack of investor interest. The second item has China Zheshang Bank also delaying plans for a $1 billion Hong Kong IPO for similar reasons.
Both developments come as Chinese banks listed in Hong Kong now trade at extremely low multiples due to concerns about their individual health and China’s broader economic slowdown. Leading lender ICBC (HKEx: 1398; Shanghai: 601398) now trades at a paltry price-to-earnings (PE) multiple of just 5, while Bank of China (HKEx: 3988; Shanghai: 601398) trades at an even lower 3.8. Read Full Post…
Bottom line: A sudden spate of new mega-fundings by Meituan-Dianping, Lufax and JD Finance show there is still big interest in China’s private tech and finance sectors, despite the nation’s rapidly slowing economy.
Investors throw billions at Meituan-Dianping, Lufax, JD Finance
It seems I may have been a bit premature with my recent prediction that the mega-fundings that crested in China a year ago were finished. That’s my assessment after reading about 3 new mega-deals in the tech sector this week, all worth more than $1 billion. Leading the pack was recently merged group buying giant Meituan-Dianping, whose whopping $3.3 billion in new funding values the company at $18 billion.
That latest news came just a day after media reported another deal that saw peer-to-peer (P2P) lending giant Lufax just raise its own new funding of $1.2 billion, valuing the firm at $18.5 billion. Last but not least was announcement at the start of the week that the finance unit of e-commerce giant JD.com (Nasdaq: JD) had just raised 6.65 billion yuan, or just over $1 billion, valuing the firm at 46.7 billion yuan ($7 billion). Read Full Post…
Bottom line: Muted interest in Great Wall Motor’s fund-raising plan and Bank of China’s sale of a major asset reflect weakening investor interest in such deals due to the slowing Chinese economy.
Weak sentiment pressures, BOC, Great Wall Motor deals
Funding for Chinese Internet companies is showing no signs of slowing just yet, but reports of weak demand for 2 other deals reflects fading investor interest in more traditional sectors as China’s economy slows. The first of those has car maker Great Wall Motor (HKEx: 2333; Shanghai: 601633) sharply reducing plans for a new issue of A-shares on China’s domestic stock markets. The second has Bank of China (HKEx: 3988; Shanghai: 601398) attracting scant interest for the sale of a major asset in Hong Kong.
Neither of these developments comes as a huge surprise due to growing worries over China’s rapidly slowing economy. Great Wall was never one of China’s top auto makers to start with, and the big reduction in its 16.8 billion yuan ($2.6 billion) fund-raising plan comes as the domestic auto market slows and investors pile out of China’s crumbling stock markets. Meantime, Bank of China has been trying to sell its Hong Kong-based Nanyang Commercial Bank for a while now, and the latest reports say only 1 interested party has emerged. Read Full Post…
The following press releases and media reports about Chinese companies were carried on August 29-31. To view a full article or story, click on the link next to the headline.
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Investor Group Considers Cutting $9 Bln Offer for Qihoo (NYSE: QIHU) (English article)
Take-Out Dining Platform Ele.me Completes $630 Mln Series F (English article)
The following press releases and media reports about Chinese companies were carried on August 28. To view a full article or story, click on the link next to the headline.
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Chinese Banking Giants: Zero Profit Growth as Bad Loans Pile Up (English article)
Motorola to Lead Lenovo (HKEx: 992) Mobile Unit in New Overhaul (Chinese article)
Cinda (HKEx: 1359) Only Bidder for BOC (HKEx: 3988) Bank Unit with $8.8 Bln Price (English article)
Dalian Wanda Buys Ironman Triathlon Owner for $650 Mln (English article)
Uber China Unit Wins $1 Bln in New Funding – Source (Chinese article)
Bottom line: Citic Securities’ new tie-up with China’s Social Security Fund should bring it major new business, while CCB’s Indonesian tie-up talks reflect its approach of moving slowly into emerging markets for its nascent global expansion.
Citic Securities ties with Social Security Fund
Two big finance stories are casting a spotlight on different trends in China’s rapidly transforming financial services sector as Beijing tries to create an industry that can compete with the big global players. The larger news is domestically focused, with leading stock brokerage Citic Securities (HKEx: 6030; Shanghai: 600030) in a major new tie-up with China’s Social Security Fund that will see the pair cooperate in a wide array of financial services areas. The other news is outward looking, and has China Construction Bank (HKEx: 939; Shanghai: 601939) in talks to form a relatively modest new tie-up with a local bank in Indonesia. Read Full Post…
Bottom line: Bank of China’s plan to create a Southeast Asian unit around its Hong Kong-based BOCHK looks like a smart move that will give investors a chance to buy shares of its more commercially-focused global operations.
Bank of China to create separate SE Asia unit
Chinese banks have always been a difficult investment option for westerners due to their heavy reliance on China, where they take orders from Beijing leaders that use them as an economic policy tool rather than letting them act like real commercial lenders. The banks’ international operations are more interesting from an investor’s perspective, as they tend to behave more commercially because they have to competite in markets where they don’t enjoy any special government-granted advantages.
The problem is that international operations are usually just a tiny business for most of the big Chinese banks, even as industry leaders ICBC (HKEx: 1398; Shanghai: 601398) and Bank of China (HKEx: 3988; Shanghai: 601988) spend billions of dollars on offshore acquisitions and other overseas expansion. That’s why a new plan by Bank of China looks particularly exciting, as it will finally give stock buyers an option to invest exclusively in the company’s offshore operations, in this case in Hong Kong and Southeast Asia. Read Full Post…
The following press releases and media reports about Chinese companies were carried on May 22. To view a full article or story, click on the link next to the headline.
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Tsinghua Unigroup To Buy 51 Pct of HP’s (NYSE: HPQ) H3C For $2.5 Bln or More (Chinese article)
Bank Of China (HKEx: 3988) Weighs Overhaul For BOCHK (HKEx: 2388) Unit (HKEx announcement)
Lenovo (HKEx: 992) Reports Results For Quarter Ended March 31 (HKEx announcement)
Bottom line: ICBC’s $4.3 billion lending program for Pakistani power projects is being driven by Beijing policy directives, while Bank of China’s US expansion is a commercially driven move to tap Chinese demand for US real estate.
ICBC in Pakistani power projects
New stories involving 2 of China’s “Big 4” lenders are casting a spotlight on the love-hate relationship that many investors have with these mammoth banks that sometimes act commercially but more often make decisions based on directives from Beijing. The larger item has ICBC (HKEx: 1398; Shanghai: 601398), China’s biggest bank, committing to a massive new $4.3 billion lending program to help develop Pakistan’s energy sector. The other has Bank of China (HKEx: 3988; Shanghai: 601398) planning a modest expansion in the US, as it looks to tap a growing appetite for American real estate by Chinese investors. Read Full Post…
