Bottom line: Unicom’s choice of 14 partners for a mixed-ownership reform plan involving its Shanghai-listed unit is far too many, and is ultimately likely to fail when those partners become frustrated and sell their shares.
Unicom puts 14 new partners into its mix
What I feared might happen has come to pass in a mixed-ownership reform plan being crafted by China Unicom(HKEx: 762; NYSE: CHU), one of the nation’s three telcos that is experimenting with selling some of itself to private investors. That’s a reference to reports in early August that the company might be planning to take on as many as 20 partners in the plan to sell a significant stake in its Shanghai-listed unit, China United Network Communications (Shanghai: 600050), to strategic private investors.
My worry was that taking on so many partners would effectively dilute the plan, since none of the partners would receive a very big stake and Unicom’s attention would be too fragmented. As it turns out, the number 20 was a bit too high, but not far off the mark. That’s the latest word, as Unicom has finally announced its mixed-ownership reform plan that will see it partner with 14 private companies in a bid to become more dynamic. Read Full Post…
Bottom line: China Life’s $2 billion investment in a US hotel portfolio could mark the height of a bubble of Chinese offshore hotel buying, and high asset values could start to deflate by the end of next year.
China Life buys into US hotel portfolio
Move over, Anbang. China’s largest insurer China Life (HKEx: 2628; Shanghai: 601628; NYSE: LFC) is joining a recent love affair between Chinese investors and overseas hotels, with the announcement that it’s leading a group investing in $2 billion worth of properties in the US. People following the trend will know that unlisted insurer Anbang has been leading this overseas charge, with its recent purchase of a US hotel portfolio for $6.5 billion and its failed bid earlier this year for hotel operator Starwood (NYSE: HOT). Read Full Post…
The following press releases and news reports about China companies were carried on October 19. To view a full article or story, click on the link next to the headline.
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China’s Wanda Courts Hollywood With Film Subsidy (English article)
China Life (HKEx: 2628) Invests $2 Bln In Starwood Capital Hotel Portfolio (PRNewswire)
China Unicom (HKEx: 762) Says Profit in First 3 Quarters Down 80.6 Pct (HKEx announcement)
UCar to Raise 10 Bln Yuan in Bet on Car E-commerce (Chinese article)
Honda (Tokyo: 7267) planning new China car factory for 2019 start: sources
Bottom line: Wanda may need to raise its offer price again to buy Carmike, while a plan to privatize its property unit stands a good chance of winning shareholder approval.
Wanda ups Carmike bid
Conglomerate Wanda Group is in a couple of a major headlines, one involving its traditional real estate business and the other for the newer entertainment unit it’s building up as part of a diversification drive. The real estate headline centers on Hong Kong-listed property developer Dalian Wanda (HKEx: 3699), which has just received an endorsement from a major shareholder in its bid to go private. The second item centers on Wanda’s fast-growing cinema business, and has the company boosting its offer for US theater operator Carmike (Nasdaq: CKEC) after minority stakeholders complained a previous bid was too low. Read Full Post…
The headlines last week were littered with signs of growing unrest and chaos among the dozens of US-listed Chinese companies trying to privatize from New York and return to China in search of higher valuations. One of the biggest items saw signs of a new bidding war break out for private clinic operator iKang (Nasdaq: KANG), while another saw data center operator 21Vianet (Nasdaq: VNET) mount what increasingly looks like a stealth privatization campaign. A third saw social media website operator YY (Nasdaq: YY) become the first to abandon its privatization bid altogether, casting doubt on many of the other similar pending offers that have gone for months without any progress. Read Full Post…
Bottom line: A new IPO from Postal Savings Bank will price and debut strongly thanks to its conservative stance, while another offering from Orient Securities could also do moderately well due to its small size.
Postal Bank set for mega-IPO in HK
Two financial institutions are lining up to launch IPOs in Hong Kong this week, led by what’s likely to be the biggest offering this year by China’s stodgy Postal Savings Bank, whose listing could raise up to $8 billion. In a far smaller deal, brokerage Orient Securities is also set to announce a HK$1.15 billion ($174 million) IPO deal as soon as today, in what looks like a slightly desperate bid for cash following its much larger Shanghai listing last year at the height of China’s stock market boom. Read Full Post…
The following press releases and news reports about China companies were carried on June 17. To view a full article or story, click on the link next to the headline.
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Sohu (Nasdaq: SOHU) Rejects Investment Proposal From CEO, Seeks Other Options (PRNewswire)
The following press releases and news reports about China companies were carried on June 14. To view a full article or story, click on the link next to the headline.
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Baidu (Nasdaq: BIDU) Announces Lowered Revenue Guidance for Q2 (PRNewswire)
Nokia (Helsinki: NOK1V) Signs $1.5 Bln Framework Deal with China Mobile (HKEx: 941) (English article)
Okmetic (Helsinki: OKM1V) Says 93 Pct of Shares Tendered for Offer by China’s NSIG (GlobeNewswire)
After Apple,Didi Chuxing Gets $600 Mln Investment from China Life (HKEx: 2628)
Cheesecake Factory (Nasdaq: CAKE) Opens First China Store at Shanghai Disney (Businesswire)
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: Upcoming IPOs by China Postal Bank in Hong Kong and Canadian Solar’s solar plant-building unit in New York should get strong receptions, though both may have to wait until after the Christmas holidays to launch.
Conservative Postal Bank draws big investors
An upcoming mega IPO in Hong Kong by the stodgy Postal Savings Bank of China is shaping up as one of this year’s hottest new offerings, with word that it’s added domestic heavyweights including China Life (HKEx: 2628; Shanghai: 601628; NYSE: LFC) and Tencent (HKEx: 700) to its impressive list of early investors. In other IPO news across the Pacific, solar panel maker Canadian Solar (Nasdaq: CSIQ) is also drumming up hype for a new offering by its solar plant-building unit, which has landed some modest new financing from big-name western commercial lenders.
Each of these IPO stories has a different subplot, but a common theme is that both could be relatively hot despite distinctly cool sentiment these last few months towards new offshore Chinese listings. It’s not yet clear if either offering will make it to market by the end of next week, which is probably the latest they could occur before the traditional Christmas break. But even if they have to wait until next year, both could do reasonably well. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 9. To view a full article or story, click on the link next to the headline.
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China Resources Challenges ON Semiconductor with Fairchild (Nasdaq: FCS) Bid (English article)
Postal Savings Bank Signs China Life, Ant Financial, Tencent as Investors for HK IPO (Chinese article)
Google (Nasdaq: GOOG) Registers Company in Shanghai Free Trade Zone (Chinese article)
ZTE (HKEx: 763), Shanghai Oriental Pearl in Strategic Cooperation (HKEx announcement)
Uber Releases China ICP Permit Number in Response to WeChat Blockage (Chinese article)
