Bottom line: Beijing should eliminate barriers that are slowing the flow of private money into lending services, in a move to offset a slowdown in lending from traditional banks that are dealing with a growing bad-loan crisis.
Obstacles hinder private lending growth
A flurry of headlines last week highlighted the recent move by private companies into China’s financial services market, led by reports that Apple(Nasdaq: AAPL) could become the first major foreign company to offer electronic payments in the country. At the same time, a chilly reception for a Hong Kong IPO by regional lender Qingdao Bank (HKEx: 3866) highlighted the difficulties many traditional Chinese banks now face due to concerns about a looming bad debt crisis.
Beijing regulators should be commended for their recent efforts to open up the financial services market to more private investment, but should consider accelerating the campaign by streamlining bureaucracy for big and well-financed domestic and foreign names like Apple and Tencent(HKEx: 700). It should also consider a similar streamlining of bureaucracy for foreign banks, many of which have left China off their global roadmaps due to stiff restrictions that make doing business difficult. Read Full Post…
Bottom line: Canadian Solar is likely to target at least $100 million in an IPO for its power plant-building unit before year end, which could be an attractive investment alternative for buyers of traditional utility stocks.
Canadian Solar IPO spotlights plant construction
Just days after announcing big new financing for its unit focused on solar power plant construction, Canadian Solar (Nasdaq: CSIQ) is taking a big new step by disclosing it is preparing an IPO to separately list that unit. The move marks the latest wrinkle in the evolving story for Chinese solar panel manufacturers, which are quickly becoming their own best customers by selling their products to solar plants that they build themselves.
Canadian Solar and some of its peers have actually engaged in this kind of plant construction for a while, though the pace has picked up in the last couple of years. But the latest trend marks a divergence from the past, since Canadian Solar and others are now becoming long-term owners of the plants they build and putting them into wholly-owned units that look like a solar equivalent of traditional power utilities. In the past, Canadian Solar and the others would simply build solar plants, and then sell them to independent long-term owners upon completion. Read Full Post…
Bottom line: New financing deals for Canadian Solar and Trina reflect the growing role of solar panel makers as power plant builders, and could provide some stability to the sector by providing a more reliable stream of new projects.
Trina, Canadian Solar get new financing
Two big new financing deals are shining a spotlight on a major shift taking place in the solar panel sector, with manufacturers increasingly moving into the field of solar farm development. The shift is seeing solar panel makers become their own best customers, buying up panels for use in solar farms that they build themselves. The latest headlines have Canadian Solar (Nasdaq: CSIQ) and Trina (NYSE: TSL) securing major new financing for such construction, in 2 deals that are both quite large but also very different in nature.
Solar panel makers have been building their own plants for several years now, though the trend has accelerated in the last year. The traditional model was for them to build solar farms using their own panels, and then sell those plants to longer-term buyers. But in an interesting twist to that story, solar panel makers may be looking to hold those farms themselves and put them into separate units, my sources say. Those units could then be spun off later into separate publicly listed companies, in a play that would look like a new energy version of traditional power utilities. Read Full Post…
The following press releases and media reports about Chinese companies were carried on October 30. To view a full article or story, click on the link next to the headline.
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Bottom line: A plan by Alibaba’s chairman and vice chairman to borrow $2 billion using their company stock as collateral is a simple diversification move, and doesn’t represent any change in the company’s fundamentals or outlook.
Alibaba chairman, vice chairman eye $2 bln loan
Shares of e-commerce leader Alibaba (NYSE: BABA) have been buzzing these last few days since media reported that Chairman Jack Ma and one of the company’s other co-founders are preparing to diversify their company holdings that are worth billions of dollars. Neither Ma nor Vice Chairman Joe Tsai is planning an actual share sale, which would almost certainly undermine the company’s shaky stock. Instead, the pair are in talks to take out a $2 billion loan using their huge stash of Alibaba shares as collateral.
Alibaba’s shareholders didn’t seem to like the plan too much, and made their voices heard by trimming nearly 4 percent from the company’s share price after reports of the move surfaced late last week. The latest close means Alibaba stock now trades at a record low of $63.91, or about 6 percent below the $68 price for its record-breaking $25 billion IPO that will celebrate its one-year anniversary later this month. Read Full Post…
Bottom line: Baozun’s IPO is likely to price in the middle of its range and debut flat despite its strong credentials, as waning sentiment towards Chinese Internet companies may prompt other recently listed names like Jumei to launch privatization bids.
Baozun IPO gets lukewarm response
Sentiment towards China-listed US firms continues to show signs of weakening, with word that e-commerce website designer Baozun has had to scale back its IPO in New York as its shares move closer to their trading debut. Meantime, shares have jumped over the last week for e-commerce firm Jumei International (NYSE: JMEI), amid talk that it may be considering a privatization bid to re-list back back in China.
Both stories reflect a recent trend that has seen a growing number of second-tier Chinese Internet companies abandon New York listings due to lack of investor interest. Many are believed to be eying re-listings in China, where their names are better known and companies of all types have achieved lofty valuations these days during a stock market surge that has seen shares double since a rally dating back to last summer. Read Full Post…
Bottom line: Baozun’s IPO should achieve its $200 million fund-raising target and the stock could perform relatively well for the rest of the year if it can show that it will become profitable for all 2015.
Baozun files for $200 mln IPO
The first serious Internet IPO of the year could finally be in the pipeline, with word that e-commerce services provider Baozun has filed for a New York listing that would be a first-of-its-kind for this type of company. Media are calling Baozun an e-commerce firm, but the reality is that the company helps others design and operate e-commerce sites, meaning it doesn’t have to compete itself in the fiercely competitive space.
The company’s largest shareholder is actually e-commerce leader Alibaba (NYSE: BABA), which holds 23 percent of Baozun. That relationship underscores Baozun’s unique market position as a service provider rather than actual website operator, and the company cited third-party data saying it currently controls about 20 percent of its market. The Alibaba relationship also provides important ties with many major retailers that already do business on Alibaba’s hugely popular Tmall. Read Full Post…
Bottom line: Mobile SNS firm Momo is likely to raise far less than the $300 million it has targeted for its IPO, as it kicks of a mini-surge of loss-making Chinese tech firms racing to list in New York by year end.
Momo kicks off year-end IPO rush
A record year of fund raising for Chinese firms on Wall Street could still have some life left, with word of another major offering plan by Momo, operator of mobile-based social networking (SNS) service. The company’s plan to raise up to $300 million would have looked ambitious at this time last year, when New York IPOs by Chinese firms were just starting to gain momentum after a nearly 3 year deep freeze. But that kind of target has become the norm in the current climate, and I expect we could see a flurry of similar-sized offerings over the next 5 or 6 weeks before the final curtain comes down on a banner year for Chinese tech IPOs in 2014. Read Full Post…
The ongoing cleanup of neglected Chinese firms from US stock exchanges continues, with word that online game developer Giant Interactive (NYSE: GA) has finalized its plan to go private. A report on the bid says that several other Chinese online game firms are also planning privatizations, as former industry leader Shanda Games (Nasdaq: GAME) is also in the midst of its own such bid. It’s not hard to see why these companies are going private, as their shares have gone nowhere for years due to anemic growth. But what’s interesting here is the prospect that some of the private equity firms funding this wave of buy-outs could finally force a few of these companies to merge and create a more vibrant major new player with real growth potential. Read Full Post…
All my previous predictions that e-commerce leader Alibaba would ultimately make its mega IPO in Hong Kong were wrong, with word that the company is now firmly fixed on New York for its highly anticipated share sale. In my defense, I should say that a huge surge in positive sentiment over the last 5 months towards China Internet stocks on Wall Street undoubtedly helped to change Alibaba’s mind. The company had previously stated on numerous occasions that Hong Kong was the preferred venue for its blockbuster IPO, which reports are now saying could raise up to $15 billion, making it the world’s biggest Internet offering since Facebook (Nasdaq; FB) raised $16 billion in 2012. Read Full Post…
Leading web portal Sina (Nasdaq: SINA) is rushing ahead with plans to separately list its Weibo microblogging unit, with word that it’s taken the first major step towards a New York IPO by formally hiring investment banks for the deal. I’ve previously said Sina was likely to accelerate its listing plan, amid growing signs that Weibo’s growth was slowing and users were abandoning the service in favor of Tencent’s (HKEx: 700) more mobile-friendly WeChat. The latest quarterly earnings report just out from Sina adds further reason for pessimism about the upcoming IPO, showing Weibo remains highly dependent on advertising for most of its revenue. Read Full Post…
