Tag Archives: Cloudary

News Digest: February 25-27, 2012 报摘： 2012年2月25-27日

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The following press releases and media reports about Chinese companies were carried on February 25-27. To view a full article or story, click on the link next to the headline.

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◙ China Encourages Solar Companies to Expand Amid Supply Glut (English article)

◙ Apple’s (Nasdaq: AAPL) China Legal Battle Over iPad Spreads to US (English article)

◙ Shanda’s Cloudary Online Literature Unit Restarts US IPO to Raise Up to $200 Mln (Chinese article)

◙ Alibaba Executive Says Future IPO Must Be For Entire Group (Chinese article)

◙ ZTE (HKEx: 763) Achieves World’s-Fastest Sales Revenues Increase in Q1-Q3 2011 (Businesswire)

◙ Latest calendar for Q4 earnings reports (Earnings calendar)

Dangdang Discovers E-Books — Finally 当当推电子书仍有成功希望

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I’ll finish my postings on this Winter Solstice day with a few tidbits from the retail sector, which offer some interesting glimpses into the potential power of e-commerce to help Chinese firms expand both at home and abroad. The biggest of these news bits comes from Dangdang (NYSE: DANG), China’s only listed major e-commerce firm, which is launching an electronic book service to complement its industry-leading online book store. (company announcement) My initial reaction to this news is “What took them so long to do this?” After all, online retail pioneer Amazon (Nasdaq: AMZN) has been selling electronic books for years now and there’s absolutely no reason why Dangdang waited so long to get into this space, where it will have to compete with established players like Shanda’s (Nasdaq: SNDA) online literature unit, Cloudary, and new services from other big names like 360Buy. But that said, at least Dangdang is finally realizing the importance of e-books, and it still looks early enough for it to become a dominant player in the space if it offers a good books and e-readers. In another online retail news bit, sportswear clothing chain Li Ning (HKEx: 2331) is taking its first small step outside China by opening an online store for US customers. (Chinese article) I suppose I should commend Li Ning for looking beyond China, but I’m honestly not sure that the online store approach, which is certainly cheaper than opening traditional brick-and-mortar stores, is the right route for entering a major new market like the US, where competition is already fierce from big names like Adidas and Nike. I don’t think I would be taking a very big risk in predicting this initiative is very likely to fail, as it has all the markings of a company trying to expand internationally without properly funding the campaign. Last but not least, sportswear bearing the name of Bjorn Borg (Stockholm: BORG) will soon be coming to China, as the Swedish licensee of the legendary tennis star’s name seeks out a local partner with plans to open stores in China next year. (company announcement) This initiative also looks destined for failure, as Bjorn Borg isn’t very well known in China and this company doesn’t appear to have lots of money for the expansion. But considering the Chinese love of famous brands, perhaps it could still succeed if it finds a good Chinese partner to help fund and market the campaign.

Bottom line: Dangdang’s move to e-books looks late but still likely to do well, while a new overseas foray by Li Ning looks underfunded and set to fail.

Related postings 相关文章:

◙ Amazon Name Shift Signals China Ramp-Up 亚马逊改名背后折射中国野心

◙ Price Wars Beat Up Online Retailers 网上零售商引爆价格战

◙ Shanda Cloudary Returns to Market, Worth a Look

Baidu, Sohu Highlight China Shell Games 百度搜狐拆分业务让金融骗局再度受关注

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When was the last time you saw Google (Nasdaq: GOOG) or Amazon (Nasdaq: AMZN) spin off one of its units into a separately listed company or inject assets from its parent company into a listed unit? The answer of course is that they never engage in any of these common practices of big China state-run companies, but that hasn’t stopped the country’s booming private Internet sector from becoming increasing masters at such games. The latest machinations in these games have seen Sohu (Nasdaq: SOHU) sell its online game information site, 17173.com, to its separately listed online game unit, Changyou (Nasdaq: CYOU) for a nifty $162 million (English article; Chinese article), while search leader Baidu (Nasdaq: BIDU) is spinning off its struggling e-commerce site YouA into an independent company complete with its own venture funding. (English article) Of course, the granddaddy of this kind of shell game is Shanda Interactive (Nasdaq: SNDA), which listed on the Nasdaq many years ago, then spun off its core online game business into a separately listed company, Shanda Games (Nasdaq: GAME), and is now in the process of trying to spin off its  online literature unit into yet another public company, Cloudary, even as Shanda Interactive itself attempts to de-list as its share price languishes. (previous post) Leading web portal Sina (Nasdaq: SINA) has also engaged in this kind of financial shell game. This situation has evolved in part because many of China’s Internet companies often stray from their core business into completely unrelated areas — a practice seldom seen at major Western firms. But from an investor perspective, this kind of game results in a lack of transparency, as parent companies can often manipulate situations to make results of these spun-off companies appear on their own balance sheets if the results are positive, and then magically disappear if the business is performing poorly. Shares of Chinese web firms are currently mostly the playthings of speculative short-term investors; but if these companies ever want to be taken seriously by longer-term institutional buyers, this kind of game playing is one of the first things that needs to stop.

Bottom line: The latest spin-offs by Baidu and Sohu cast a spotlight on China web firms’ fondness for financial shell games, which will continue to scare off long-term institutional investors.

Related postings 相关文章:

◙ Shanda Moves Ahead With Privatization 投资者对盛大私有化仍持保留态度

◙ Shanda Plays Games With Big Dividend 盛大游戏寄望高额分红计划提振股价

◙ Sina’s Weibo: Growth Engine or Growing Burden? 新浪微博：动力or负担？

Shanda Moves Ahead With Privatization 投资者对盛大私有化仍持保留态度

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It seems I may have been wrong when I questioned the sincerity of Chen Tianqiao after he announced a potential bid to privatize his company, Shanda Interactive (Nasdaq: SNDA), as Chen has now gone ahead and actually launched the buyout. (company announcement; Chinese article) Chen put forth the plan last month to buy back his company’s shares for $41.35 each (previous post), and is now keeping his word with this latest offer. Interestingly, Shanda’s shares rose to only $40.28 in Tuesday trading after the announcement, representing a 2.6 percent discount to the offer price, indicating investors still aren’t totally convinced that this privatization will be completed. In fact, Chen has no real intention of keeping his company private for long, as he wants to list it on one of China’s domestic stock exchanges, according to Chinese media reports. I have to admit that this kind of a strategy does seem to make sense, as Shanda is quite well known in China, where it is considered a leader in online games. Furthermore, Shanda’s online game unit, Shanda Games (Nasdaq: GAME) is still listed on the Nasdaq, and the company is also planning a US listing for its online literature unit, Cloudary. (previous post) The only problem with his latest plan is that Chen may have to wait a long time to list his company at home, as China has shown a strong bias against privately-funded firms in choosing IPO candidates for its two main boards in Shanghai and Shenzhen, preferring to list companies with strong government ties, mostly former state-run enterprises. Chen could opt for the 2-year-old Nasdaq-style ChiNext board in Shenzhen targeting smaller, high-growth companies. But that board has turned out to be hugely speculative, with firms that trade there subject to huge swings in their share prices. All that said, if Chen really completes this privatization, it could be a while before we see Shanda Interactive shares publicly traded again. Perhaps in the meantime, Chen could focus on trying to better run his various businesses, including struggling Ku6 Media (Nasdaq: KUTV), and temporarily put aside the deal making that he seems to love so much.

Bottom line: Shanda Interactive appears intent to go through with a privatization bid, but will face a long wait before it can re-list in its home China market.

Related postings 相关文章:

◙ Grentech Follows Shanda in Privatization Ploy 国人通信赴盛大网络後尘宣布私有化

◙ Shanda’s Private Ploy: For Real or Market Manipulation? 盛大拟退市：是动真格还是虚晃一枪？

◙ Boring Games, Video Drain Drag Down Shanda

Shanda Cloudary Returns to Market, Worth a Look

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Shanda Interactive (Nasdaq: SNDA) Chairman Chen Tianqiao is either very persistent or very stupid, as he returns to market with an IPO for his online literature unit, Shanda Cloudary, just months after he shelved the offering due to poor market sentiment, even as current sentiment remains poor. I’ve heard the guy is quite intelligent, even if most of his business endeavors don’t yield very impressive results, so I’m willing to give this new offering a look. (English article) Based on the numbers, the story actually looks quite interesting. Cloudary’s two biggest income sources, revenue from online users and from its online wireless service, both rose by triple digit percentages in the first half of the year, with the latter up more than 200 percent to a relatively modest 73.7 million yuan, or about $12 million. The company posted a net loss for the first half of the year, but that loss narrowed to about 14 million yuan from 22 million yuan in 2010. With revenue of around $50 million in the first half of this year, Cloudary is clearly not a huge company yet and has lots of room to grow. I’ve previously yawned at this offering, calling it just another attempt by Chen to squeeze more money out of financial markets, but I have to admit the numbers do seem to tell an interesting story. What’s even more interesting for me, however, is the reality on the ground: walking around in Shanghai, it’s nearly impossible to go for more than a few minutes without seeing someone on the subway or waiting in line at a shop reading on their cellphone or tablet computer. Perhaps it’s news, or perhaps it’s literature or perhaps it’s both. But regardless, Cloudary does seem to be in a strong position to take advantage of this trend, which will undoubtedly grow stronger as mobile devices such as e-readers and smartphones become more common. That said, I’m going to tweak my previous prediction and say that despite a dismal debut by video sharing IPO Tudou (Nasdaq: TUDO) earlier this month (previous post), Cloudary could actually do well in its offering and bring back a little buzz to the sputtering China Internet.

Bottom line: Shanda’s Cloudary online literature unit could offer an intriguing play into the growing market for mobile content with its upcoming IPO.

Related postings 相关文章:

◙ Tudou IPO Set to Stumble Out of the Gate 土豆上市首日难有精彩表现

◙ Wall Street Clean-Up Underway Amid Accounting Crisis 会计危机中华尔街展开清理行动

◙  Dud Looms With Shanda Literature Offering 盛大文学上市令人不解

Investors Feast on Sun Art 高鑫零售首日挂牌表现抢眼

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After weeks of seeing one IPO scrapped after another as market sentiment toward China listings evaporated, especially in the Internet space, it’s nice to see there’s still healthy demand for a good, solid offer like hypermarket operator Sun Art Retail Group’s (HKEx: 6808) $1 billion IPO. After pricing at the top of their range, Sun Art’s Hong Kong listed shares soared as much as 43 percent on their first trading day, in one of the best debuts this year and in sharp contrast to the many flops for Chinese companies going public in Hong Kong and the United States. (English article) Sentiment has dropped so sharply that three companies, Internet firms Xunlei, Tudou and Shanda Cloudary, have all yanked their offerings in the last week due to terrible demand as investors fret over the quality of these firms’ accounting. (previous post) Such is clearly not the case for Sun Art, which operates in a much more straightforward business running supermarkets, which also has huge potential. As China’s mid-tier and smaller cities become wealthier, supermarket operators like Sun Art, whose stores carry the RT-Mart and Auchan names, should be able to go into these areas and easily attract consumers with their stores that offer more convenience and variety to traditional food stores that now dominate most of these towns. A growing number of suburban satellite cities of major metropolises like Shanghai and Beijing should also provide good fodder for growth. Already ranking first in the hypermarket sector, just ahead of Wal-Mart (NYSE: WMT), China Resources Enterprise (HKEx: 291) and Carrefour (Paris: CAR), Sun Art seems in prime position to capitalize on China’s growing hunger for mega-supermarkets.

Bottom line: Sun-Art looks like a strong bet for China’s fast-growing supermarket space, with plenty of room for upside for its newly listed shares.

随着市场对中国上市企业情绪转弱，数周来各公司纷纷取消IPO计划，尤其是在互联网领域。很高兴还能看到市场对像大卖场运营商高鑫零售有限公司<6808.HK>等好企业的股票需求强劲。高鑫零售IPO价格定在招股区间上限，规模为10亿美元。高鑫零售上市首日飙升43%。是今年上市首日表现最好的股票之一，与在香港和美国上市的其他中国企业股票的下跌形成鲜明对比。市场人气急转直下，以致迅雷、土豆和盛大文学三家企业均在上周搁置上市计划，因投资者担心各公司财务问题，认购情况不好。但高鑫零售很明显未受此影响。随着中国二线和较小城市日益富裕，高鑫零售等大卖场运营商应该能打入这些地区，并能轻易地吸引消费者。北京、上海等大城市周围日益增加的郊区卫星城市也将为其增长提供机遇。作为中国国内最大的大卖场运营商，高鑫零售似乎在中国超大型超市的发展中占得了先机。

一句话：在中国快速发展的超级市场行业，高鑫零售看似非常有潜力，其股票还有很大上升空间。

Related postings 相关文章:

◙ China’s Drive to the Suburbs: A Nice Supermarket Play 中国年轻人郊区购房 超市势将获益

◙ Wal-Mart Buys Into China E-Commerce 沃尔玛进军中国电子商务

◙ Belle, Baidu See Beauty in Online Shoe Store 百度和百丽投资优购网或为明智之举

Wall Street Clean-Up Underway Amid Accounting Crisis 会计危机中华尔街展开清理行动

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The first signs of a clean-up of some of the smaller US-listed Chinese firms is underway, with two announcing in the last week that they have fallen out of compliance with Nasdaq listing rules due to late filing of annual reports. The pair, AutoChina International (Nasdaq: AUTC) and CDC Software (Nasdaq: CDCS), both issued the same generic statements, each saying it was notified of being out of compliance with Nasdaq rules for failing to file its annual report by the required deadline. (AutoChina announcement; CDC Software announcement) These are two of the bigger US-listed China companies, which is why they’ve made these public announcements, but I’m certain that many smaller companies with market value of less than $1 million have also probably fallen out of compliance for the same reason, namely that no accountant wants to certify their results for fear they contain inaccurate and misleading information. I wouldn’t be surprised if either AutoChina or CDC is ultimately de-listed, and would expect many of the smaller companies to be de-listed as well by this time next year. Meantime, the confidence crisis has claimed yet another victim, this time Shanda’s (Nasdaq: SNDA) already dubious IPO for its Cloudary literature unit, according to Chinese media reports. (Chinese article) Suspension of the Cloudary plan follows the similar pulling of an IPO by video and audio sharing site Xunlei last week, after demand evaporated for the offering. (previous post) Xunlei may come back to market in the next 2-3 months, but don’t expect to see Cloudary, a much less interesting offering, coming back for a listing until next year at earliest.

Bottom line: A clean-up of smaller New York-listed Chinese firms has begun, with many likely to de-list by this time next year due to accounting issues.

华尔街清理一些较小型在美上市中资企业的信号开始浮现。上周两家企业宣布，因未能按时提交年度报告，被警告违反了纳斯达克上市规则。开元汽车(AUTC.O)与中华网软件(CDCS.O)双双发布声明称，因没有在截止日期前按时提交年度报告，被通知违反了纳斯达克规定。他们是在美上市的两家较大中资企业，这也是其发布公开声明的原因。但我肯定还有很多市值不到100万美元的小企业可能也因同样的原因违反规定，也就是说，因害怕报告中含有不准确、误导性信息，没有会计人员愿意为其审计报告结果。如果两家企业最後被摘牌，我也不会感到意外，而且我预计到明年这个时间很多小一些的企业将会被摘牌。同时，又有新企业因信任危机倒霉了。这次是盛大网络(SNDA.O)旗下子公司盛大文学海外，其纽交所IPO进程宣布暂停，而上周迅雷也决定推迟赴美IPO，因认购不足。迅雷未来两三个月内或许会重启IPO进程，但是盛大文学就未必了，最早可能也要等到明年了。

一句话：华尔街对较小中资企业的清理行动已经启动，到明年这个时间或许有很多企业会因会计问题被摘牌。

Related postings 相关文章:

◙ Xunlei’s Shrinking IPO Disappears 迅雷无限期推迟IPO时间

◙ Latest Solar Audit Resignation Hints at Major Issues Ahead 中国太阳能行业再现审计人员辞职：昭示问题还在前方

◙ China Confidence Crisis Separates Wheat from Chaff 中国企业信任危机 对不同公司各有利弊