Bottom line: China’s sudden worries over Apple’s new love affair with India are probably overblown, but do reflect Apple’s need to find new growth engines to offset its rapidly cooling China sales.
China frets over Apple’s new dance with India
Apple(Nasdaq: AAPL) CEO Tim Cook’s surprise first trip to India 2 weeks ago may be firmly in the history books, but it’s still front page news in the Chinese headlines, revealing an unexpected angst in the world’s biggest smartphone market. China has grown accustomed to being at the center of Apple’s universe, as Cook has made numerous trips to the country over the last 3 years in a bid to curry favor with Beijing and Chinese consumers. So the sudden trip to India, a rival with China in many ways, appears to be causing some unexpected sweating by Chinese who worry they may soon lose their spot as the leading object of Apple’s affections. Read Full Post…
The volume continues to grow in a war of words between China and the west over a series of antitrust probes against multinationals, including the latest reports that Beijing is targeting Japanese car giant Toyota (Tokyo: 7203) with yet another such investigation. Toyota’s Lexus division is just the latest company to fall under Beijing’s microscope for its pricing policies, following similar investigations into most of the world’s top luxury car makers. Leading US smartphone chip maker Qualcomm (Nasdaq: QCOMO) is also being investigated, and so is leading global software maker Microsoft (Nasdaq: MSFT). Read Full Post…
Leading budget hotel operator Home Inns (Nasdaq: HMIN) has just released its latest results that show continuing weakness at the China lodge, as operators take a double hit from the nation’s slowing economy and a building boom that has led to overcapacity. Home Inns’ latest results continue a trend from last month, when China Lodging (Nasdaq: HTHT), operator of the Hanting chain of budget hotels, announced similar preliminary results that point to a period of pressure on the sector that is likely to last for the rest of this year and quite possibly linger into the first half of 2015. Read Full Post…
Three industry leaders have just announced their latest quarterly results, and the numbers look downbeat for online travel giant Ctrip (Nasdaq: CTRP) and Internet real estate services firm Soufun (NYSE: SFUN). Meantime, some limited results from solar panel maker Canadian Solar (Nasdaq: CSIQ) look more positive, showing that both sales and prices are picking up more quickly than expected amid a spotty sector recovery from a 2 year downturn. Read Full Post…
I don’t usually like to toot my own horn, but my prediction last month that we could soon see a major fund-raising exercise by high-flying e-commerce firm Vipshop (NYSE: VIPS) has come to pass, with word that the firm is preparing to sell stock and bonds worth more than $600 million. Investors weren’t extremely excited about the plan, with Vipshares falling slightly after the announcement came out. But considering that the company’s shares have risen about 8-fold over the last year alone, the reception wasn’t all that bad either. From the strategic perspective, this new massive fund raising hints that Vipshop wants to take advantage of the recent wave of M&A sweeping China’s e-commerce space, and I expect we could see some big deal announcements later this year. Read Full Post…
If I was a shareholder in e-commerce firm Dangdang (NYSE: DANG), I would definitely sell my stock after hearing about the company’s latest announcement of a tie-up with Walmart-backed (NYSE: WMT) Yhd.com. I personally wasn’t surprised by the nature of the tie-up, which will see the pair cross-promote each others’ services, even though I was a bit disappointed that there was no equity exchange. Dangdang had previously confirmed it would announce a tie-up after rumors of an alliance first appeared a few weeks ago. This kind of hype followed by disappointment is quite typical of Dangdang’s co-founder and CEO Li Guoqing, whose fierce independence could ultimately lead to the marginalization or even death of his company. Read Full Post…
I haven’t written about Facebook (Nasdaq: FB) in a while, mostly because the company hasn’t made any concrete moves into China lately despite previous assertions that it would like to enter the market. But the company’s newly announced plan to purchase the popular WhatsApp mobile messaging service for up to $19 billion looks like a good opportunity to revisit the topic, and what this deal might mean for Facebook in China. Facebook’s own site has been blocked in China since 2009, making it inaccessible to the vast majority of more than 600 million Chinese web surfers. But WhatsApp is widely available, even though it competes with the wildly popular rival WeChat service from local Internet giant Tencent. (HKEx: 700)
The year 2013 will go down as a major turning point for China’s solar panel makers, with some names emerging as new sector leaders after a prolonged downturn while others quietly disappeared. The latter category saw former leader Suntech (OTC: STPFQ) go bankrupt and LDK (NYSE: LDK) quietly sell off many of its assets, while the former category has seen Canadian Solar (Nasdaq: CSIQ) and Shunfeng (HKEx: 1165) emerge as names to watch in the future. Canadian Solar in particular has been coming back strong in the second half of this year with a steady stream of good news, including its latest mega-deal to sell panels in China. Read Full Post…
I was somewhat amused today to read an announcement from stodgy domestic smartphone maker ZTE (HKEx: 763; Shenzhen: 000063) trumpeting the success of a “cool” new online campaign for its high-end brand of nubia smartphones. But after giving the matter some thought, I do have to compliment ZTE for its new approach to create some buzz around its smartphones, which currently enjoy a reputation as dependable but also quite stodgy and low-end products. Most Chinese refer to phones from domestic names like ZTE, Huawei and Lenovo (HKEx: 992) as guochan, literally meaning “made in China,” which carriers distinctively negative overtones for inferior quality and lack of imagination. ZTE is clearly trying to cast off that image for its nubia line with this new China-based campaign. Read Full Post…
Two new stories in the consumer space are offering an interesting look at the difficulty of taking over Hong Kong-listed companies, providing headaches for potential acquirers but also interesting opportunities for minority investors. The 2 cases involve dairy giant Mengniu (HKEx: 2319) and Swedish paper products company SCA (Stockholm: SCAA), which have each bought a controlling stake of their Hong Kong-listed targets rather than the taking outright ownership that both probably would have preferred. In the former case, Mengniu was aiming to buy raw milk supplier Yashili (HKEx: 1230), while SCA was aiming to buy tissue products maker Vinda (HKEx: 3331) Read Full Post…
US electric car maker Tesla (Nasdaq: TSLA) has landed in the headlines with an escalating trademark dispute in China, casting a spotlight on Beijing’s ongoing efforts to bolster the country’s intellectual property (IP) protections. China has made great strides in its IP protection in the last 5 years, resulting in a healthier business environment where both domestic and foreign companies can feel more secure that their trademarks, copyrights and product designs won’t be illegally stolen and copied. Read Full Post…
