The following press releases and news reports about China companies were carried on August 17. To view a full article or story, click on the link next to the headline.
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Apple (Nasdaq: AAPL) to Open First Independent Asia Pacific R&D Center in China (Chinese article)
Former Huawei Honor Brand President Named as Coolpad (HKEx: 2369) CEO (Chinese article)
Bottom line: LeEco’s rescue plan for Coolpad will fail due to stiff competition in China’s smartphone markets and overly ambitious targets for its own new line of smartphones.
LeEco ousts Coolpad CEO
Less than 2 months after becoming the largest stakeholder of Coolpad (HKEx: 2369), online video sensation LeEco (Shenzhen: 300104) is wasting no time in making major changes at the struggling smartphone maker. The most symbolic of those has LeEco’s dynamic founder Jia Yueting ousting Coolpad’s chairman and CEO and taking over the chairman’s position for himself. More substantially, LeEco is indicating it will become Coolpad’s largest customer going forward as part of its own plans to build an entertainment ecosystem around devices like Internet-connected smartphones, TVs and cars. Read Full Post…
The following press releases and news reports about China companies were carried on August 9. To view a full article or story, click on the link next to the headline.
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Apple (Nasdaq: AAPL) Cleanup Sees More Than 10,000 Apps Removed From China Store (Chinese article)
LeEco (Shenzhen: 300104) Founder Jia Yueting Named Chairman of Coolpad (HKEx: 2369) (Chinese article)
Alipay Enters Europe with Service for Overseas Chinese Shoppers (Chinese article)
China Media Corp Invests in US Virtual Reality Company NextVR (Chinese article)
Midea (Shenzhen: 000333) to Control 94.55 Pct of Kuka Shares as Offer Period Ends (Chinese article)
Bottom line: LeEco is likely to buy a controlling 30-40 percent of struggling low-cost Taiwanese TV maker AmTRAN in a deal to be announced next week, as part of its bigger plan to build an ecosystem of entertainment products and services.
LeEco to invest in Vizio?
Media have been buzzing these last few days about rumors of a potential acquisition by online video superstar LeEco (Shenzhen: 300104) of the struggling low-cost TV brand Vizio, owned by Taiwan’s AmTRANTechnology (Taipei: 2489). In usual fashion, LeEco has denied such a takeover, and even took the unusual step of issuing a formal statement saying it has no such plans. But that wouldn’t rule out a major strategic investment in money-losing AmTRAN, or an acquisition of the company by a non-listed unit of LeEco, formerly known as LeTV. Read Full Post…
Bottom line: Zhou Hongyi should be commended for completing his privatization of Qihoo in the face of numerous obstacles, though his plans to re-list his company in China might take at least 1-2 years.
Qihoo completes de-listing
I haven’t always been a fan of security software specialist Qihoo 360 (NYSE: QIHU) over the years due to some of the overly aggressive and often ethically questionable business practices of chief Zhou Hongyi. But I have to admire the outspoken Zhou today, following word that he has reportedly just completed the biggest buyout of a US-listed Chinese company in history despite facing numerous obstacles that seems unsurmountable at times.
Far smaller US-listed Chinese companies have abandoned their plans to privatize due to choppy markets and the difficulty of completing such deals. But Zhou remained steadfast throughout in his desire to privatize his company, with the result that Qihoo’s shares will officially de-list with the start of trade on Monday, July 18, according to new Chinese media reports. (Chinese article) Read Full Post…
Bottom line: Coolpad’s latest loss forecast shows it is struggling due to intense competition, and will need to sell more of itself to LeEco in the next 6 months to keep funding its operations.
Coolpad falls sharply into the red
The woes continue to mount for former smartphone high-flyer Coolpad (HKEx: 2369), which has just announced a profit warning that will see it drop sharply into the red in the first half of this year. The move was almost inevitable due to the overheated state of China’s smartphone market, as Coolpad finally ran out of tricks to hide its mounting losses. The company did admit its sales were plunging in its last earnings report for the year 2015, even as its profit quadrupled that year. But this latest profit warning for the first half of 2016 shows the company is now squarely in the loss column. Read Full Post…
The following press releases and news reports about China companies were carried on July 9-11. To view a full article or story, click on the link next to the headline.
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Installment Plan E-tailer Qufenqi Raises 3 Bln Yuan in Pre-IPO Funding (English article)
Telefonica Raises $364 Mln from China Unicom (HKEx: 762) Share Sale: Sources (English article)
Striking Wal-Mart (NYSE: WMT) Workers in China Return to Work – For Now (English article)
China Logistics Said Poised to Price $433 Mln IPO at Top End (English article)
Bottom line: LeEco will try to buy out Coolpad later this year in its new position as the company’s largest stakeholder, while its plans for a massive Silicon Valley campus stand a less than 50 percent chance of getting completed.
LeEco boosts Coolpad stake
The phenomenal but problematic entertainment superstar LeEco (Shenzhen: 300104) is in a couple of big headlines as the new week begins, led by word that a new transaction has made it the largest stakeholder in struggling smartphone maker Coolpad (HKEx: 2369). Rumors were flying thick and fast last week that LeEco, formerly known as LeTV, was on the cusp of an outright takeover of Coolpad, and this latest move certainly looks like a possible prelude to such an bid. Meantime, separate media reports are confirming news from earlier this year saying LeEco has purchased a piece of prime Silicon Valley land that it hopes to develop as a campus for its future US headquarters.Read Full Post…
Bottom line: Rumors that LeEco is in talks to take over Coolpad are probably true, with a deal likely in the next few months that would see the former buy a controlling stake or even purchase the latter outright.
Coolpad to be acquired by LeEco?
I don’t usually write about rumors, but I just couldn’t resist opining on new market talk saying that struggling smartphone maker Coolpad (HKEx: 2369) may become the first major player to get swallowed up in a looming industry shakeup. In this case Coolpad is denying the rumors, which say it will be acquired by online video superstar LeEco (Shenzhen: 300104), which is already a major stakeholder and now pays Coolpad to manufacture its recently launched line of smartphones. Read Full Post…
The following press releases and news reports about China companies were carried on May 24. To view a full article or story, click on the link next to the headline.
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SF Express Eyes Backdoor Listing Using Dingtai Rare Earth (Shenzhen: 002352) (Chinese article)
Tencent-Backed China Music Corp Launches Process for NY IPO (Chinese article)
Coolpad (HKEx: 2369) Denies Report of Plan to be Acquired by LeEco (Shenzhen: 300104) (Chinese article)
Wal-Mart (NYSE: WMT) China Sales Rise 5.1 Pct Y/Y in Q1 (English article)
Bottom line: Coolpad’s sliding revenue and profits last year reflect intense competition in China’s smartphone market, and the company could become one of the first major victims of an upcoming shake-out for the sector.
Coolpad logs tough year in 2015
Fading smartphone maker Coolpad (HKEx: 2369) has just released financial results that show just how bloody China’s market was last year, with operating profits and revenue both tumbling by nearly half. The outlook certainly doesn’t look too promising for Coolpad, which was once an up-and-comer in the market but more recently has been overwhelmed by the non-stop competition. It also didn’t help that Coolpad lost an important backer last year, following a high-profile dispute with joint venture partner Qihoo 360 (NYSE: QIHU).
The year 2015 wasn’t a pretty one for Coolpad. The company benefited from its relatively early arrival to China’s smartphone market to become a leading local player, but by the end of last year had fallen out of the nation’s top 5 brands. It tried to bolster its position by signing up strategic partners that could ensure its future. But that plan backfired when one of those partners, Qihoo, became enraged after Coolpad formed another separate alliance with online video giant LeEco (Shenzhen: 300104), formerly known as LeTV. Read Full Post…
