Bottom line: A sudden spate of new mega-fundings by Meituan-Dianping, Lufax and JD Finance show there is still big interest in China’s private tech and finance sectors, despite the nation’s rapidly slowing economy.
Investors throw billions at Meituan-Dianping, Lufax, JD Finance
It seems I may have been a bit premature with my recent prediction that the mega-fundings that crested in China a year ago were finished. That’s my assessment after reading about 3 new mega-deals in the tech sector this week, all worth more than $1 billion. Leading the pack was recently merged group buying giant Meituan-Dianping, whose whopping $3.3 billion in new funding values the company at $18 billion.
That latest news came just a day after media reported another deal that saw peer-to-peer (P2P) lending giant Lufax just raise its own new funding of $1.2 billion, valuing the firm at $18.5 billion. Last but not least was announcement at the start of the week that the finance unit of e-commerce giant JD.com (Nasdaq: JD) had just raised 6.65 billion yuan, or just over $1 billion, valuing the firm at 46.7 billion yuan ($7 billion). Read Full Post…
Bottom line: Xiaomi’s hiring of a new CFO and entry to Brazil are its latest steps in a gradual transformation to a more western-style global company, in preparation for an IPO that is at least 2 years away.
Xiaomi to launch next week in Brazil
Stumbling smartphone sensation Xiaomi is back to doing what it knows best, namely making headlines with the latest moves in its global expansion and by hiring executives from other high-profile companies. In this case the smartphone high-flyer has just announced its formal plan to enter Brazil, putting it squarely in 3 of the 5 BRICS countries after India and China. The other move looks a bit scripted, and will see a top China executive from Russian high-tech investor Digital Sky Technologies (DST) join Xiaomi as CFO.
The latter piece of news looks slightly strange because DST is one of Xiaomi’s investors, and it would be unusual to do something hostile like stealing a top executive from one of your big backers. Instead, this looks more like a planned move that is relatively common in this kind of situation, which sees big investors supply executives to the companies they back in preparation for eventual IPOs. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 2. To view a full article or story, click on the link next to the headline.
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Didi Kuaidi Gets Set to Enter US, Challenge Uber – Source (Chinese article)
Former DST China Partner Shou Zi Chew Joins Xiaomi as CFO (English article)
China’s Gamers Aren’t Buying Many Consoles (English article)
TCL (Shenzhen: 000100) Prepares 795 Mln Yuan Share Buy-Back Program (Chinese article)
Bottom line: Twitter’s growing pursuit of business from Chinese advertisers shows it is watching the market for a potential future entry, while a new equity tie-up could see Didi Kuaidi’s hired car services launch on Weibo later this year.
Twitter chases China advertisers
Social networking (SNS) pioneer Twitter (NYSE: TWTR) and its Chinese clone WeiboCorp (Nasdaq: WB) are both in the China headlines today, each taking gambles on different parts of the market. After previously saying that China isn’t a market where it can do business, the original Twitter has quietly begun to court local advertisers, even as its actual service remains blocked in the country. Meantime, Weibo, which rose to prominence after Twitter was first blocked in China in 2009, has announced a relatively large new investment in local hired car services leader Didi Kuaidi. Read Full Post…
Bottom line: Many of Alibaba’s older stakeholders are likely to sell some or all of their shares after their lock-up period ends, driving the stock down to or even below its IPO level over the coming months.
Alibaba lock-up period ends
Top managers at China’s Alibaba (NYSE: BABA) are almost certainly watching their company’s stock with acute angst this week, even as business continues as usual with word of the e-commerce leader’s latest overseas expansion into Korea. The angst is the direct result of an end to the lock-up period for Alibaba’s stock, which could technically flood the market with up to 340 million shares that were forbidden from trading for the first 6 months after its record-breaking $25 billion IPO.
Put differently, all of those shares would be worth about $29 billion at Alibaba’s current price, accounting for more than one-tenth of its total market capitalization of about $210 billion. The shares officially become eligible for trading when the lock-up period ends on Wednesday, March 18, which is exactly 6 months after the shares made their trading debut on the New York Stock Exchange. (Chinese article) Read Full Post…
Bottom line: Ant Financial is likely to get a low valuation from its new private placement due to the exclusion of foreign investors, but could see the figure reach up to $70 billion by the time of its 2017 IPO if it can rapidly build up its new services.
SOEs squeeze Ant Financial’s valuation
Yet another report has come out about an ongoing private placement by Ant Financial, saying the financial services affiliate of e-commerce giant Alibaba (NYSE: BABA) is now planning a domestic IPO in 2017. That’s a little later than was indicated in previous reports, which were probably a little too optimistic about a company whose various businesses are mostly less than 2 years old.
But the more interesting element in this recent flurry of reports has been what valuation the new private placement will bring for Ant, which is financially separate from the New York-listed Alibaba. Some of the earlier reports indicated Ant could be valued at up to $50 billion, which admittedly looks quite optimistic for a firm at its stage of development. But now the latest reports are bringing the number down sharply, saying the new funding will value Ant at between $35 billion and $40 billion. Read Full Post…
Bottom line: Xiaomi’s success story is likely to continue into 2015 with big growth for its core smartphones, but it could face headwinds with other smart devices that are based on less mature technologies.
Xiaomi: China’s tech company of the year
I’ll end this year by naming Xiaomi as my “Top Company Of 2014”, following a flurry of year-end headlines that show just how quickly this marketing-savvy firm has shot to fame on its trendy, low-cost smartphones. Leading the headlines is word that Xiaomi has raised $1.1 billion in its latest funding round, valuing the company at a hefty $45 billion. (Chinese article) Xiaomi is also in a flurry of other headlines that I’ll recap shortly, leading me to declare this hyperactive company has officially unseated former champion Alibaba (NYSE: BABA) as China’s most publicity savvy high-tech name. Read Full Post…
Bottom line: Xiaomi’s new $1.5 billion funding is smaller than expected but gives it a strong valuation, as its small investments in Youku Tudou and iQiyi look like a smart way to quickly build up its product ecosystem.
Xiaomi gets rich valuation from new funding
There’s no shortage of news this week on hyperactive smartphone sensation Xiaomi, which is showing up at least 3 major headlines as it lands major new funding and explores potential tie-ups with China’s top 2 online video sites as well as faded smartphone pioneer BlackBerry (Toronto: BB). I almost have to catch my breath after writing all of that, as any one of these 3 stories would normally qualify as major news. The fact that all 3 are coming at the same time testifies to Xiaomi’s ability to do big deals, and its charismatic CEO Lei Jun may soon take the title for China’s most hyperactive tech leader from the current holder of that title, Alibaba (NYSE: BABA) founder Jack Ma. Read Full Post…
Two of China’s most dynamic e-commerce firms are in the headlines today with new strategic moves, including JD.com’s purchase of a Russian rival and Vipshop’s (NYSE: VIPS) plans to open a small loan operation. Both of these moves look well conceived, taking their respective companies into new but related areas with big growth potential. The 2 moves come as JD prepares to launch a $1 billion-plus IPO in New York as soon as this week, and as Vipshop looks for acquisitions following a big fund raising exercise earlier this year. Read Full Post…
Froth in company valuations seems to be building once again in China’s high-tech realm, with word that up-and-coming smartphone maker Xiaomi’s latest fund raising values the company at more than $10 billion. The last time I wrote about such a rapidly rising valuation was about 2 years ago when an investor in high flying e-commerce site Jingdong proclaimed that company was also worth more than $10 billion. Jingdong’s value later came down considerably, and I wouldn’t be surprised if Xiaomi’s latest valuation is also just a bit too high on too much investor enthusiasm about this company that is growing fast but also playing in a very competitive market. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 24. To view a full article or story, click on the link next to the headline.
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Tencent (HKEx: 700) Invests in Xiaomi via Russia’s Digital Sky – Sources (English article)
US Citizen Detained As China Pharma Probe Spreads (English article)
