Bottom line: Car Inc’s hired car services unit’s $5.5 billion valuation on China’s New Third Board is hugely overinflated, while Yidao’s new clash with Tencent shows the regulator needs to become more active in oversight of WeChat.
Two of China’s second-tier hired car services providers are in the headlines heading into the weekend, as these smaller companies fight an uphill drive to attract attention away from industry giants Didi Chuxing and Uber. The larger of the 2 stories has the hired car services unit of car rental leader Car Inc (HKEx: 699) receiving approval for a listing on China’s over-the-counter (OTC) New Third Board, valuing the company at a hefty 37 billion yuan ($5.5 billion). The second story has Yidao getting in a tussle that has seen promotion of its services blocked on Tencent’s (HKEx: 700) wildly popular WeChat platform . Read Full Post…
The following press releases and news reports about China companies were carried on July 15. To view a full article or story, click on the link next to the headline.
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Xiaomi in Major New Campaign to Go Upscale (Chinese article)
Car Inc’s (HKEx: 699) Hired Car Services Unit Approved to List on New Third Board (Chinese article)
Qihoo 360 (NYSE: QIHU) to De-List Before July 18 Market Opening (Chinese article)
Tencent (HKEx: 700) Buys Controlling Stake in Online Music Firm China Music Corp (English article)
Just a day after fast-growing car services firm UCar confirmed a major new tie-up with e-commerce giant Alibaba (NYSE: BABA), we’re getting more details about the new alliance that appears to auger an end to Alibaba’s previous relationship with homegrown Uber rival Didi Kuaidi. At the same time, Alibaba has just announced its largest overseas purchase ever by paying $1 billion for a controlling stake of Southeast Asian e-commerce specialist Lazada.
These 2 news items continue a recent acceleration in M&A activity for the hyperactive Alibaba, which is quite in line with the hyperactive nature of its founder and chief pilot Jack Ma. This kind of cyclical hyperactivity has become the norm for Alibaba in recent years. It typically sees the company’s high-profile activity go into overdrive for a year or so, only to come to a sudden halt when things become overheated and problems emerge. Read Full Post…
Bottom line: Alibaba’s new tie-up with Car Inc hints at a looming divorce with Didi Kuaidi, while a major new funding for its Koubei unit foreshadows a major new push that will further heat up intense competition in take-out delivery services.
Koubei seeks big new funding
Just days after reports emerged of a massive new funding for its Ant Financial unit, e-commerce leader Alibaba (NYSE: BABA) is back in the fund-raising headlines with big plans for its Koubei take-out dining unit. At the same time, an intriguing new story about a strategic Alibaba alliance with an aggressive new player in the hired car services space hints that the company may also be contemplating a divorce with national leader Didi Kuaidi.
Both of these stories reflect the catch-up game that Alibaba is playing in two important growth areas of the Internet. Alibaba previously had a presence in both through investments in hired car service provider Kuaidi and group buying site Meituan. But both of those partners entered mega-mergers over the last 6 months with their major rivals. As a result, Alibaba has divorced itself from the current Meituan Dianping, and is looking to build up its own rival Koubei take-out dining service. (previous post) Read Full Post…
The following press releases and news reports about China companies were carried on April 12. To view a full article or story, click on the link next to the headline.
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Car Inc (HKEx: 699) Hired Car Services Unit in Strategic Tie-Up with Alibaba (NYSE: BABA) (Chinese article)
Alibaba’s (NYSE: BABA) Koubei Soliciting Up to $2 Bln Funding – Report (English article)
Flight Data Company Feichangzhun Raises 933 Mln Yuan in Third Funding Round (Chinese article)
China’s HNA to Buy Airline Caterer Gategroup for $1.5 Bln (English article)
The following press releases and news reports about China companies were carried on April 1. To view a full article or story, click on the link next to the headline.
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Bottom line: Hertz’s sale of its Car Inc stake reflects the Chinese company’s new focus on hired car services, and could see Car Inc fall into the red as its UCar affiliate vies with Uber and Didi Kuaidi in the fiercely competitive market.
Hertz dumps Car Inc
A complex transaction involving Car Inc (HKEx: 699) is making the headlines as the new week begins, reflecting a transformation from its roots as a rental car specialist into a hired car services company competing with Uber and Didi Kuaidi. The deal will see former strategic stakeholder Hertz (NYSE: HTZ) sell most of its stake in the company to UCar, Car Inc’s hired car services affiliate. At the same time, Car Inc’s chairman and one of its largest shareholders will also sell his stake in the company to UCar, which will become one of Car Inc’s biggest shareholders.
There’s no explanation for the shuffle in the announcement, but it does seem to show that Car Inc’s Chairman Charles Lu wants to move his company more quickly into the hired car services sector, which is growing faster but is also fiercely competitive. That would explain Hertz’s decision to sell its stake, since Hertz is a global rental car company that probably has little interest in China’s ultra competitive hired car services market. Read Full Post…
Bottom line: LeTV’s latest hired car services investment and high-profile poaching of top talent from a rival look similar to the recent rapid rise and sputtering of Xiaomi, and the company could follow a similar trajectory by this time next year.
LeTV steals top talent from Youku Tudou
After watching the meteoric rise of online video sensation LeTV (Shenzhen: 300104) over the past year, I’m quickly tiring of this company and its hyperactive diversification strategy. The latest move in that drive is taking LeTV onto the road, with word the company is investing a hefty $700 million for a controlling stake of struggling private car services firm Yidao Yongche.
At the same time, other media are reporting that LeTV has just stolen a top executive from chief rival Youku Tudou (NYSE: YOKU), which announced last week it has received a buyout offer from e-commerce giant Alibaba (NYSE: BABA). Anyone feeling a sense of deja vu from these latest 2 LeTV headlines, and from LeTV’s meteoric rise in general, would be correct. Read Full Post…
Bottom line: Guahao’s new mega-funding spotlights big growth possibilities for private medical service providers, while Hertz could continue to sell down its stake in Car Inc as China’s auto market slows.
Guahao finds riches in medical booking app
IPOs may have ground to a halt due to China’s recent market volatility, but that hasn’t stopped a steady flow of buying and selling into high-growth companies by big investors looking for the next hot trend. One such operator of a medical services app looks like the latest flavor of the day, with reports that a company called Guahao has just landed nearly $400 million in new funding. Meantime, leading rental car operator Car Inc (HKEx: 699) moved in the opposite direction, losing some momentum after early strategic investor Hertz (NYSE: HTZ) sold down more of its stake in the company.
Both of these deals are part of the natural ebb and flow of funds into and out of Chinese companies, and are often a good pointer of where the next trends might emerge. App developers have become a hot investment area, and private medical service providers are also gaining momentum under China’s overhaul of its healthcare system. Meantime, the car market is moving in the other direction due to China’s slowing economy, which is probably making big global names like Hertz less bullish on the market. Read Full Post…
The following press releases and media reports about Chinese companies were carried on August 4. To view a full article or story, click on the link next to the headline.
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China E-Commerce Transactions Topped 1.6 Trillion Yuan Last Year – Stats Ministry (Chinese article)
India’s Snapdeal Said to Draw $500 Mln From Alibaba (NYSE: BABA), Foxconn (English article)
China’s Airbnb Valued at More Than $1 Bln After Funding (English article)
Car Inc (HKEx: 699) Announces Plan to Issue US Dollar Denominated Notes (HKEx announcement)
JinkoSolar (NYSE: JKS) Receives $70 Mln in China Ex-Im Loans for Factory (English article)
Bottom line: BYD’s latest fund raising will test investor patience as its EV business struggles, while Warburg Pincus will continue to cash out of Car Inc to take advantage of its soaring stock.
Warburg sells down Car Inc stake
A couple of cash-raising stores are in the headlines for 2 car-related companies, led by the news that Warren Buffett-backed new energy car maker BYD (HKEx: 1211; Shenzhen: 002594) is planning a new share sale as it gets weighed down by a big debt and slow sales for its electric vehicles (EVs). Meantime, Warburg Pincus is selling down its stake in car rental specialist Car Inc (HKEx: 0699), following the end of a lock-up period after its IPO last year.
The BYD saga is easily the more interesting of the 2 stories, showing the company’s dreams for making big profits from the emerging market for EVs are moving ahead far more slowly than it had originally hoped. That reality has forced BYD to look to various measures to raise billions of dollars in cash over the last year to keep its operations going. In the process, Warren Buffett’s stake has slowly crept down from an original 10 percent to a current 9 percent. Everyone is watching closely to see if the billionaire investor may ultimately dump his stake completely. Read Full Post…
