Bottom line: Shanda’s purchase of a major stake in Legg Mason marks the start of a global investment spree that is likely to see 2-3 similar sized deals in the Chinese and global financial services sectors by the end of this year.
Chen Tianqiao kicks off Shanda global buying with Legg Mason stake
With its former online entertainment empire now firmly in the past, Shanda Group looks set to embark on the next chapter of its development as a private equity investor in the financial services sector. The first major step in that campaign is in the headlines today, with US asset manager Legg Mason (NYSE: LM) announcing that Shanda has just purchased 10 percent of the company.
The purchase looks like a small first step for Shanda onto the global stage in its new carnation. The company was formerly a Shanghai-based group founded by the financially savvy Chen Tianqiao, who was an early pioneer in China’s online game industry. But poor management and a series of unlucky developments led Shanda to lose its early lead in the space, and Chen has spent much of the last 3 years selling off his various entertainment assets. Read Full Post…
The following press releases and news reports about China companies were carried on April 12. To view a full article or story, click on the link next to the headline.
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Car Inc (HKEx: 699) Hired Car Services Unit in Strategic Tie-Up with Alibaba (NYSE: BABA) (Chinese article)
Alibaba’s (NYSE: BABA) Koubei Soliciting Up to $2 Bln Funding – Report (English article)
Flight Data Company Feichangzhun Raises 933 Mln Yuan in Third Funding Round (Chinese article)
China’s HNA to Buy Airline Caterer Gategroup for $1.5 Bln (English article)
Bottom line: LeEco’s new alliance with 6 car makers and rapid expansion of its sports programming unit look like shrewd moves to position itself as a major player in 2 big new growth areas.
LeEco in new car tie-up, fund raising
Following a relatively quiet period for one of China’s more talkative companies, online video leader LeEco (Shenzhen: 300104), formerly known as LeTV, is back in the headlines with 2 relatively large deals in the auto and sports sectors. The first has LeEco signing an alliance with some of China’s leading car makers, who have agreed to use its entertainment system in their vehicles. The second has LeEco’s sports unit raising 7 billion yuan ($1.1 billion) in its latest fund-raising round.
The pair of stories highlight 2 focus areas for LeEco, one of China’s oldest online video companies and the only one that has remained independent as others all got purchased by bigger Chinese Internet companies. LeEco is trying to move aggressively beyond its original area as an online video specialist by obtaining more exclusive content, and also by offering its products and services over the growing number of channels that consumers use to access entertainment and information. Read Full Post…
The following press releases and news reports about China companies were carried on March 17. To view a full article or story, click on the link next to the headline.
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ZTE (HKEx: 763) Said to Appeal US Export Ban After Lobby Efforts Fail (English article)
Ctrip (Nasdaq: CTRP) Reports Q4 and Full Year Results (PRNewswire)
BAIC, BYD, Dongfeng Motor to Use LeEco (Shenzhen: 300104) Car Internet System (Chinese article)
Terra Firma Rejects HNA Bids for Jet Leasing Group AWAS – Sources (English article)
ReneSola (NYSE: SOL) Announces Convertible Note and Share Repurchases (PRNewswire)
Bottom line: Starbucks and Uber are likely to scale back their latest aggressive China expansion plans as the nation’s economy slows and consumers rein in their spending on non-essential items and services.
Starbucks accelerates China expansion
China’s economy may be heading for a new era of slower growth, but you would never know that by looking at the latest moves by Uber and Starbucks (Nasdaq: SBUX), 2 global leaders in their categories of hired car services and retailing. The first instance has Uber completing a major fund-raising for its China unit and forming a new tie-up in travel services. Meantime, Starbucks is steaming ahead with plans to nearly double its China store count by 2019.
As a neutral observer of both companies, I have to say that both Starbucks and Uber are being just slightly naive in ignoring all the signs of a major Chinese economic slowdown that could ultimately lead to woes now confronting countries like Greece and Spain. In that kind of environment, it’s far from clear that consumers will still enthusiastically shell out $5 for a cup of coffee at Starbucks when they could buy a cup of tea for far less, or that they will pay similar amounts for a hired car instead of taking the bus or subway. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 12. To view a full article or story, click on the link next to the headline.
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China Media Capital Invests in ‘Star Wars’ Special Effects House Base FX (Chinese article)
Apple, Samsung supplier Biel Crystal plans $2 Bln HK IPO in 2016 – IFR (English article)
Uber Drives Into China Tourism Industry With HNA Group Tie-Up (English article)
Women’s Shopping Services Mogujie, Meilishuo Merge to Create $3 Bln Company (Chinese article)
‘Star Wars: Force Awakens’ Breaks Records With $53 Mln China Debut (English article)
The following press releases and media reports about Chinese companies were carried on November 25. To view a full article or story, click on the link next to the headline.
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Apple (Nasdaq: AAPL) Seeks to Launch Apple Pay in China by February – Sources (English article)
Unicom (HKEx: 763) Drafts Proposal to Share 4G Network with China Telecom – Reports (English article)
China’s HNA Agrees to Buy 24 Pct of Brazilian Airline Azul (English article)
LeTV (Shenzhen: 300104) Drops Listing Plan for Filmed Entertainment Unit (Chinese 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…
The following press releases and media reports about Chinese companies were carried on November 24. To view a full article or story, click on the link next to the headline.
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Tuniu (Nasdaq: TOUR) Announces $500 Mln Investment from HNA Tourism (GlobeNewswire)
Alibaba (NYSE: BABA) to Invest $1.5 Bln in Takeout Delivery Platform Ele.me (English article)
Alibaba’s Jack Ma Said to Be in Discussions to Buy SCMP (HKEx: 583) Stake (English article)
Trina Solar (NYSE: TSL) Announces Q3 Results (PRNewswire)
Bank of Jinzhou Starts $943 Mln Hong Kong Initial Offering (English article)
Bottom line: A Chinese buyer could have a strong chance of winning the bidding for US hotel operator Starwood, with CIC most likely to emerge as Beijing’s preferred candidate among a trio of interested local buyers.
Chinese buyers eye Starwood Hotels
Just a day after China’s 2 leading travel sites put aside their bitter rivalry and formed a major new alliance, we’re getting word of yet another major deal in the hot tourism sector. This time media are saying 3 Chinese buyers are eyeing Starwood (NYSE: HOT), one of the world’s top hotel operators. The 3 potential bidders include 2 of China’s leading private equity investors, China Investment Corp (CIC) and HNA Group. The third is one of China’s top hotel operators, Jin Jiang (HKEx: 2006; Shanghai: 600574), which has been on a buying spree recently both at home and abroad.
If one of the 3 succeeds, the deal would mark the largest purchase ever of an offshore asset by a Chinese buyer, based on Starwood’s latest market value of $15 billion. Word of the deal comes just a day after leading domestic online travel agents Ctrip (Nasdaq: CTRP) and Qunar (Nasdaq: QUNR) buried the hatchet in their bloody battle for share in China’s fast-growing travel market. A Starwood deal would also come less than a week after US-British cruise operator Carnival (NYSE: CCL) formed a new joint venture with 2 Chinese partners. (Chinese article) 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…
