Bottom line: New fund-raising signals indicate car services giant Uber could spin off its China unit within a year, and that Ping An-backed P2P lending platform Lufax could make a major IPO in the same time frame.
Uber, Lufax send new fund-raising signals
Two big new fund-raising stories are in the headlines, led by a modest new funding commitment that hints at a spin-off soon for the China unit of hired car services leader Uber. Meantime, the rush to see which of China’s fast-growing peer-to-peer (P2P) lending sites will be first to market has officially begun, with separate reports saying an IPO is in the planning stages for Lufax, a Shanghai based company that is backed by one of China’s top traditional financial services firms.
Both of these deals are in the mid-range in terms of size, probably worth the $100-$500 million, contrasting with a spate of deals earlier this year that were worth much more when China’s stock market was booming. It’s still possible we could see one or two more mega-fundings worth $1 billion or more by the end of the year, though such large deals could quickly disappear if China’s stock markets and economy remain in the doldrums. Read Full Post…
The following press releases and media reports about Chinese companies were carried on August 22-24. To view a full article or story, click on the link next to the headline.
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China Said Nearing Overhaul of Big 3 Telecom Leadership (English article)
Citic Fund Unit Said to Plan $100 Mln Uber Investment (English article)
Ping An (HKEx: 2318) Says Plans IPO for Lufax Online Lender (English article)
Huawei Prepares to Launch Honor Brand Smartphones in US (Chinese article)
Group Buying Site Meituan Losing 600 Mln Yuan Per Month – Source (Chinese article)
The following press releases and media reports about Chinese companies were carried on July 10. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Says Entertainment Unit Executive Taken Into Custody (English article)
Bottom line: Shanda’s participation in a bid for a US financial firm marks the start of the company’s move into finance, and reflects the broader rise of a new group of major private equity investors in Shanghai.
Shanda joins bid for US investment firm
Following its failed bid to become a major online entertainment company, the Shanghai-based Shanda is trying its hand at deal-making, with word that it’s part of a group making a bid for major US financial firm Russell Investments. Shanda’s entry to the private equity realm marks a growing trend that is seeing Shanghai-based companies emerge as some of China’s most aggressive homegrown private equity investors.
That trend is being led by Fosun International (HKEx: 656), which has been one of China’s biggest international buyers these last 2 years with a number of high-profile investments in Europe and North America. More recently Fosun has been joined by the aggressive China Media Group, which is connected to Shanghai’s leading media company SMG, and whose name is also showing up on a growing number of high profile investments. And then there’s the recently formed China Minsheng Investment Corp, an offshoot of the entrepreneurial China Minsheng Bank (HKEx: 1988; Shanghai: 600016), which is also being quite aggressive. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 11. To view a full article or story, click on the link next to the headline.
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Towers Watson, Shanda, Citic Vying for Russell Investments – Sources (English article)
Hunan TV’s Mango TV Raises 500 Mln Yuan, Valued At More Than 7 Bln Yuan (Chinese article)
Bottom line: Citic Capital and Fosun are expanding their tastes beyond the traditional Chinese preference for distressed assets, reflecting growing sophistication and diverging strategies of China’s emerging private equity buyers.
Citic Capital in group buying OmniVision
Chinese private equity is in a few major headlines this week, picking up assets in the technology, insurance and retail sectors in the US and Japan. The wide range of deals and geographies reflects the diverging strategies of some of China’s emerging private equity giants, which are rapidly developing their own individual personalities on the global stage. Citic Capital is behind 2 of the latest deals, picking up a retail asset in Japan and a US company that specializes in imaging technology. Meantime, Fosun International (HKEx: 656) has made a major new purchase in the US, offering to buy the remaining stake in an insurer that it first invested in last year. Read Full Post…
Bottom line: A new e-commerce joint venture by Japan’s Itochu and Thailand’s CP Group marks the latest major advance for China’s fledgling free trade zone program, whose policies should eventually expanded to the entire country.
Itochu forms new venture in Shanghai FTZ
China’s fledgling Free Trade Zone (FTZ) program got a new boost last week when a group of corporate giants from Japan, Thailand and China announced a major new retailing joint venture in the original zone in Shanghai. That news came just a week after a major expansion of the Shanghai zone, and the announcement of a plan for 3 additional FTZs in other parts of China.
This sudden expansion of the FTZ program is a welcome development for the many private companies whose growth plans have been stymied for years by China’s huge bureaucracy. That group includes not only big multinationals like Amazon (Nasdaq: AMZN) and HSBC (HKEx: 5; London: HSBA), but also a growing number of homegrown private giants like JD.com (Nasdaq: JD) and Alibaba (NYSE: BABA), which also harbor global aspirations. Read Full Post…
Bottom line: New mega fund-raising by Citic and Galaxy Securities could presage a flurry of global buying in the year ahead as non-banking financial firms look to expand abroad.
Citic raises $10 billion
Massive new fund raising by 2 major Chinese financial firms is showing that these companies remain an attractive option for international investors, even as traditional banks have become a pariah due to their huge volumes of bad debt. The deals by financial conglomerate Citic Ltd (HKEx: 267) and Galaxy Securities (HKEx: 6881) will raise a collective $12.3 billion, and could also presage a new wave of global buying by fast-growing Chinese financial firms outside the nation’s traditional banks. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 21. To view a full article or story, click on the link next to the headline.
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Itochu, Charoen (Tokyo: 8001) Pay $10.4 Bln for Stake in Citic (HKEx: 267) (English article)
China Telecom Incremental Increases Outpace China Mobile, Unicom in 2014 (Chinese article)
Spring Airlines (Shanghai: 601021) To Make Trading Debut In Shanghai (Chinese article)
New Oriental (NYSE: EDU) Announces Second Fiscal Quarter Results (PRNewswire)
Bottom line: BBVA’s cut-back in its alliance with Citic represents the latest divorce between western banks and Chinese partners, with little new foreign investment likely in the sector for the next 2-3 years.
BBVA sells stake in Citic unit
A trend that’s been quiet for more than a year has popped back into the headlines, with word that Spain’s second largest bank has dumped its stake in a holding company tied to Chinese financial services conglomerate Citic Group. This particular deal is being driven by a number of factors, including a need for cash by Spain’s Banco Bilbao Vizcaya Argentaria SA (BBVA). But the bottom line is that BBVA and other major foreign banks have ended most of their similar alliances with Chinese partners over the last 3 years after such tie-ups failed to produce any strategic benefits. Read Full Post…
The following press releases and media reports about Chinese companies were carried on November 13. To view a full article or story, click on the link next to the headline.
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KKR, Citic (HKEx: 267) In $1.5 Bln Bid For United Envirotech (Singapore: UNIT) (English article)
