Bottom line: HNA’s bid for a major aircraft lessor and purchase of a top airline catering firm extend a buying spree that could top $10 billion and position it as a major global player for travel-related products and services.
HNA chases aircraft lessor, buys Swiss caterer
The recently acquisitive HNA Group is continuing its global buying spree, with reports that it’s a leading contender to buy one of the world’s leading aircraft lessors, and that it’s agreed to purchase a top global airline caterer. The first deal has HNA bidding for the aircraft leasing business of CIT Group (NYSE: CIT), which is valued at $3-$4 billion; while the second has HNA agreeing to buy Gategroup for $1.5 billion. These latest deals come just months after HNA has made major investments and purchases in the travel sector in Australia, South America and Europe. Read Full Post…
Bottom line: HNA’s potential bid for 2 South American airlines looks opportunistic and could succeed due to its likely willingness to overpay, while Jin Jiang’s latest attempt to boost its stake in Accor could presage a takeover bid this year or next.
HNA eyes South American airlines
Two major tourism deals are in the headlines as the new week begins, reflecting Chinese companies’ desire to capitalize on the growing number of local tourists traveling abroad. Leading the news is word that Hainan Airlines (Shanghai: 600221) parent HNA Group is in talks to purchase South American carrier Avianca, just a week after the company made another major investment in Australian carrier Virgin Australia (Sydney: VBA). (previous post) The other headline has hotel company Jin Jiang (HKEx: 2006; Shanghai: 600754) trying to slowly take control of French giant Accor (Paris: AC), with word it wants to further boost a stake that it started buying early this year. Read Full Post…
Bottom line: HNA’s Virgin Australia investment reflects its aspirations to build a global travel empire, while ICBC’s new European infrastructure fund reflects its attempts to be commercial while also supporting central government initiatives.
HNA invests in Virgin Australia
A couple of headlines are spotlighting the different approaches of 2 of China’s leading global investors, led by a big new investment in airline Virgin Australia (Sydney: VBA) by HNA Group. On the other side of the globe, ICBC (HKEx: 1398; Shanghai: 601398) is establishing a major new European infrastructure fund, in what looks like a far more politically-motivated move by China’s leading lender. Both investments reflect China’s growing role on the global investing stage, though each represents the rapidly diverging priorities between the state-run and private sectors. Read Full Post…
Bottom line: Major new hotel acquisitions by HNA Group and Jin Jiang reflect a recent wave of domestic consolidation and global hotel buying by Chinese companies, and could culminate with a Jin Jiang bid for France’s Accor.
Jin Jiang buys Vienna Hotels
Two of China’s biggest acquirers from the travel sector are in the headlines today, both with very European-sounding investments. The larger of those will see HNA Group, parent of Hainan Airlines (Shanghai: 600221), purchase the Belgium-based owner of the Radisson hotel brand. The other will see Shanghai-based hotel operator Jin Jiang (HKEx: 2006; Shanghai: 600754) buy 80 percent of Vienna Hotels Group, a European-sounding name that is actually just a Chinese operator based in the southern boomtown of Shenzhen.
Both deals reflect a recent Chinese appetite for global hotel companies, including property owners and management firms. That appetite was on prominent display last month, when insurance company Anbang got in a heated bidding war for US-based Starwood (NYSE: HOT), owner of the Sheraton and Westin brands. Anbang bid aggressively against US operator Marriott (NYSE: MAR) in that battle, but ultimately bowed out under pressure from China’s insurance regulator. (previous post) Read Full Post…
Bottom line: China Southern’s removal of its air tickets from Qunar represents the latest boycott by a major supplier, and will further deprive Qunar of a key revenue source, causing its losses to further widen.
China Southern dumps Qunar
The bumpy ride for China’s online travel services sector continues this week, with word that leading airline China Southern (HKEx: 1055; Shanghai: 600029) is withdrawing all of its tickets from Qunar (Nasdaq: QUNR) due to a high volume of customer complaints. China Southern is just the latest airline to make such a move on Qunar’s site, following in the path of rivals Air China (HKEx: 753; Shanghai: 601111) and Hainan Airlines (Shanghai: 600221).
This particular series of boycotts marks the latest flare-up in an increasingly tense relationship between online travel sites and the airlines and hotels that are their biggest suppliers. Just last month China Southern reportedly decided to withhold its cheapest tickets from all travel agents. And major hotel operators last year formed a group to counter the increasing clout of Qunar and Ctrip(Nasdaq: CTRP), the industry’s top 2 players that are now allies after forming a major equity tie-up last year. Read Full Post…
The following press releases and news reports about China companies were carried on March 15. To view a full article or story, click on the link next to the headline.
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Bottom line: Spring Airlines is richly valued at current levels, but could be a strong bet over the next decade as it builds an Asia-wide budget carrier run out of Shanghai.
Spring Air growth set to accelerate
I’m not usually a fan of airline stocks, though one notable exception is budget carriers that tend to be more nimble and cost conscious, and are often run by entrepreneurs rather faceless corporate types. As China’s oldest budget carrier, Spring Airlines (Shanghai: 601021) certainly fits that profile, which is why it’s one of my favorites among Chinese stocks listed both domestically and abroad.
Since making its long-delayed IPO in Shanghai last year, Spring’s stock has soared, more than doubling in price since it first started trading in January 2015. That’s quite remarkable when one considers that the benchmark Shanghai index is down 15 percent over the same period, as China’s stock markets undergo a major correction that dates back to last June. Read Full Post…
Bottom line: Qunar’s management overhaul marks the start of a new chapter as a partner of former arch-rival Ctrip, while its dispute with 2 major airlines reflects challenges it will face due to its open platform business model.
Qunar in management overhaul
Online travel giant Qunar (Nasdaq: QUNR) is experiencing a turbulent new year, announcing a major overhaul that will see 3 of its top managers depart. The shake-up is the first big fallout following a landmark tie-up with former arch-rival Ctrip (Nasdaq: CTRP) last year, and looks aimed at stripping Qunar of its independence as it gets set to work more closely with its former foe.
Meantime, Qunar is also feeling some turbulence due to a dispute with 2 of China’s largest airlines. That spat has China Southern (HKEx: 1055; Shanghai: 601766) and Hainan Airlines (Shanghai: 600221) both reportedly blocking their tickets from being sold on Qunar’s websites. The airlines’ noise is the latest in a growing chorus of discontent from companies whose travel products and services are sold by Qunar and its rivals. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 1-4. To view a full article or story, click on the link next to the headline.
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New Rumors of iQiyi Acquisition Plan by China Media Capital (CMC) (Chinese article)
Suning Invests 1.9 Bln Yuan in ZTE’s (HKEx: 763) Nubia Smartphone Unit (Chinese article)
China Southern, Hainan Air Suspend Sales Over Qunar (Nasdaq: QUNR) (Chinese article)
Movie Ticket Sales Jump 48 Pct in China, But Hollywood Has Reason to Worry (English article)
O2O Crowdsourced Delivery App Dada Lands $300 Mln Series D Funding – Source (English article)
Bottom line: Tuniu’s new tie-up with HNA looks like a smart move that could position it as a leading provider of resort vacation packages, and could also signal the rise of a meaningful rival to industry leader Ctrip.
Tuniu travels to Hainan with HNA
Leading online travel site Ctrip(Nasdaq: CTRP) has emerged as the loser in a recent bidding war for a stake in smaller rival Tuniu (Nasdaq: TOUR), which has just announced a new alliance that will see it receive a $500 million investment from one of China’s top traditional travel companies. This latest in a recent flurry of deals from the travel space will see HNA Tourism get about a quarter of Tuniu’s shares for its investment, making it Tuniu’s largest shareholder.
HNA Tourism is a unit of HNA Group, one of China’s more dynamic state-run investors that is also parent of Hainan Airlines (Shanghai: 600221), one of the country’s best-run airlines. Based in the tourism-friendly island of Hainan, HNA certainly looks like a logical and well-connected partner for Tuniu, even though media were reporting last week that the more entrepreneurial Ctrip was in talks for a similar deal. (previous post) Read Full Post…
Bottom line: HNA’s purchase of a stake in a small US hotel chain could presage a larger buyout bid for the company in partnership with a Chinese operator looking to expand abroad.
HNA checks in to Red Lion
We’ll take a break today from all the recent mega-deals involving Chinese firms, and focus our attention on a much smaller hotel purchase by private equity high flyer HNA Group. Frankly speaking, I find this new investment in US hotelier Red Lion Hotels (NYSE: RLH) a bit puzzling, as the actual size of the deal is very small and hardly worthwhile for a leading Chinese private equity investor like HNA. But that said, global real estate and hotels in particular have emerged as a hot commodity for big Chinese investors over the last year, meaning this particular deal could presage a larger purchase in the sector by HNA as it tests out the market. Read Full Post…
