Tag Archives: Hony

IPOs: BOC Aviation Draws Big Names, Didi Eyes 2018 Listing in US

Bottom line: A strong field of cornerstone investors indicates BOC Aviation’s IPO could post moderate gains in its trading debut, while Didi’s IPO plan shows that New York remains an attractive option for Chinese firms that are leaders in their sectors.

Fosun, Boeing buy into BOC Aviation

A couple of major IPOs are in the headlines today, led by some encouraging signs for an upcoming listing from BOC Aviation, the aircraft leasing arm of Bank of China (HKEx: 3988; Shanghai: 601398) that’s in the process of making a $1.1 billion offering in Hong Kong. Meantime, we’re getting some of the first concrete signals of the IPO plans for Didi Chuxing, the homegrown Chinese equivalent of Uber, which is reportedly eyeing a US listing in 2018.

Let’s jump right in with BOC Aviation, which looks like an attractive IPO to me since it should benefit from China’s booming demand for air travel. Yet despite that potential, the offer has stumbled somewhat since Bank of China first announced its plans to make a separate listing for the unit back in March. BOC Aviation was initially hoping to raise up to $1.5 billion, but pared the amount back to the current $1.1 billion after meeting with lukewarm demand due to recent market volatility. Read Full Post…

News Digest: December 16, 2014

The following press releases and media reports about Chinese companies were carried on December 16. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════

  • Qihoo (NYSE: QIHU) Set To Buy Smartphone Maker For 5 Bln Yuan – Source (Chinese article)
  • Xiaomi Makes 1.266 Bln Yuan Investment In Midea (Shenzhen: 000333) (Chinese article)
  • Tuniu (Nasdaq: TOUR) Wins $148 Mln From Hony, JD.com, Ctrip (Chinese article)
  • China Unicom (HKEx: 762) Drops to Eight-Month Low As Manager Probed (English article)
  • Childcare E-commerce Site ‘Miyabaobei’ Secures $60 Mln Series C Funding (English article)

Red Bull, Hony In China Food Deals

Red Bull brings coconut drink maker to China

Two new deals in the food and beverage space are casting a spotlight on China’s growing hunger and thirst for foreign products, and also its desire to import better practices to combat a nonstop stream of domestic food safety scandals. The bigger of the deals will see Hony Capital, one of China’s largest and oldest private equity firms, pay $1.6 billion for British fast-food chain PizzaExpress, which is in the process of expanding in China. The other deal will see the owner of the Red Bull brand of energy drinks for China buy a stake in the parent of Vita Coco, and bring the US company’s flagship coconut flavored drinks to China. Read Full Post…

Enterpreneurs Team Up In New Private Equity Firm

Rich entrepreneurs launch new private equity firm

An interesting new player may soon be coming to China’s crowded and highly fragmented private equity scene, with word that a major company has been set up by a group of leading entrepreneurs in Beijing and Shanghai. The company has a hefty 50 billion yuan in investment, equating to $8 billion. The player would be an important addition to China’s fast emerging field of major private equity firms, most of which are headed by entrepreneurial chiefs who are increasingly looking abroad for good investments. Read Full Post…

PPTV Finally Finds Buyer In Suning

PPTV links up with Suning, Hony

After shopping around for an investor for much of this year, money-losing video sharing site PPTV has finally found a new patron in retailing giant Suning (Shenzhen: 002024). I’m quite happy to see this latest development in China’s rapidly consolidating online video space, as it means I can finally stop writing about all the latest rumors that have popped up for the last 6 months surrounding PPTV. Rumors of this particular tie-up first emerged about a month ago (previous post), and I’ll admit that this deal doesn’t look particularly attractive to me. Read Full Post…

Advice to SMIC: Stay Away From Elpida 中芯国际应远离尔必达

I’ll admit that I secretly am cheering for a successful turnaround at SMIC (HKEx: 981; NYSE: SMI), a perennial underdog to its better-run Taiwanese rivals, which is why I’m a bit disappointed at the latest reports that say that China’s top chipmaker is considering a bid to buy some operations from bankrupt Japanese DRAM maker Elpida. Of course there’s a chance that the news, which was reported in Japanese media, isn’t true, which would be a relief as this purchase makes little or no sense in my view. But I suspect there may be some truth to the news, which would be a big mistake for SMIC if it succeeded in such a purchase. Let’s take a look at the actual news, which says that Hony Capital, a major Chinese high-tech private equity firm, wants to buy the bankrupt Elpida, and then would sell one of Elpida’s DRAM plants in Hisroshima to SMIC. (English article; Chinese article) The report also says one other plan being discussed would have SMIC come in and simply operate the plant, while Hony would presumably remain the owner. This latest report follows another one last month, when Japanese media first broke the news that Hony and US private equity firm TPG were teaming up to make a bid for Elpida, which declared bankruptcy earlier this year following years of losses in the ultra competitive global memory chip market. (previous post) What’s new in this latest report is the inclusion of SMIC in this potential buyout plan. For those who don’t follow SMIC that closely, the company was launched more than a decade ago with big hopes for challenging Taiwanese leaders TSMC (Taipei: 2330; NYSE: TSM) and UMC (Taipei: 2303; NYSE: UMC) for a share of the lucrative global market for made-to-order microchips that power everything from LCD televisions to cellphones. Those hopes were never quite realized, largely due to poor management that led SMIC to report a steady stream of losses for most of its life as a publicly traded company. Things finally appeared to be improving after a change in top management nearly 2 years ago, but then the company stumbled again following an internal power struggle last summer. (previous post) That struggle was finally resolved and the company again seemed to be making progress on a turnaround, which, in my view, could now seriously be jeopardized if SMIC buys or tries to operate some of Elpida’s assets. Such assets would be a huge distraction for SMIC, which has no experience operating outside its home China market. Furthermore, the DRAM sector is already super competitive, which is what drove Elpida into bankruptcy in the first place, and I have little confidence that SMIC could succeed in turning around this company, which probably suffered from high costs due to its location in Japan. Obviously no deal has been reached yet, but I still fear that SMIC may be pursuing such a purchase as new CEO Tzu-Yin Chiu, who assumed his position last August, tries to chart a new course for the company. But an Elpida purchase is not the correct route back to profits, and in fact could actually prolong SMIC’s turnaround, leaving it in the red for many years to come.

Bottom line: SMIC should stay away from Elpida, or risk prolonging its losses for years to come if it actually buys or takes over some operations from the bankrupt Japanese firm.

Related postings 相关文章:

SMIC: Still Tethered to the State 中芯国际:仍然依赖国家

SMIC Puts Turmoil Behind It — Again 中芯国际又走出内讧

Chip Merger Near, More Consolidation Ahead? 华虹NEC和宏力半导体合并预示未来或有更多整合

Lenovo Sister Firm Looks to Japan, Taobao Quits “围城”日本:弘毅想冲进去 淘宝想撤出来

Japan’s foreign minister was in China yesterday on an official visit, so I thought I’d start the week with 2 items on Chinese companies in the notoriously difficult Japanese market, including an interesting move into the chip sector by a sister company of PC giant Lenovo (HKEx: 992) and a hasty retreat by e-commerce giant Alibaba. Let’s start with the more intriguing of the items, which is seeing Hony Capital, the high-profile technology investment arm of Lenovo parent Legend Group, pairing with US private equity giant TPG Capital to make a planned bid for bankrupt memory chipmaker Elpida (Tokyo: 6665), according to a Japanese media report. (English article) If they made a bid, the pair would join 2 other suitors, Korea’s Hynix Semiconductor (Seoul: 000660) and US-based Micron (NYSE: MU) in pursuing the Japanese company that controls 12 percent of the global DRAM market. Frankly speaking, Hynix and Micron look like much better suitors for Elpida, as both are competitors that could consolidate the Japanese company into their own operations for an industry that has been in desperate need of consolidation for the last 5 or 6 years. But the Hony-TPG pairing does include one interesting element, namely the Lenovo connection. Lenovo itself has been trying to break into Japan for years now, following its 2005 purchase of IBM’s PC assets that included sales and distribution networks in Japan. More recently Lenovo has taken over the PC assets of NEC (Tokyo: 6701), and has discussed setting up a manufacturing base in Japan. (previous post) A successful bid for Elpida could theoretically provide Lenovo with a strong DRAM supply for its Japan-based business. Still, I would be wary of such a purchase since Lenovo has little or no experience in running a DRAM operation, and it’s unclear what kind of savings it could achieve by combining its Japanese PC business with Elpida’s money-losing memory business. Moving on, the other Japanese news bit has seen Alibaba’s Taobao service officially shutter its Japanese shopping channel that was operating on a platform run by Yahoo Japan (Tokyo: 4689). (Chinese article) Alibaba made a relatively low-key move into Japan several years ago, seeking to take advantage of ties to one of its earliest investors, Japan’s Softbank (Japan: 9984), which is also the main investor in Yahoo Japan along with Yahoo (Nasdaq: YHOO) itself. Clearly the market hasn’t proven as easy to penetrate as Alibaba had hoped, and the media report even says that sales on the Taobao Japan channel were below the company’s targets. This withdrawal doesn’t surprise me at all, as Chinese firms of all types have had a difficult time in the Japanese market, which has become famous for its impenetrability by foreign firms. The other big Chinese web firm trying to crack the market is search leader Baidu (Nasdaq: BIDU), which has spent millions of dollars over the last 3 years on a Japanese search portal with little results to show for that investment. This Taobao withdrawal from the market was completely predictable, and I wouldn’t be surprised at all to see a similar retreat by Baidu within the next 12 months.

Bottom line: A bid by a Lenovo sister company for bankrupt Japanese chipmaker Elpida is likely to fail, while Baidu is likely to follow a recent Alibaba retreat from Japan in the next 12 months.

Related postings 相关文章:

Lenovo Considers Japan Production 联想向日本转移制造业务为明智公关手段

NEC China Cellphones: New Lenovo Tie-Up? NEC计划重回中国手机市场 或与联想联姻

Baidu Dreams of Brazil 百度试水巴西

News Digest: April 7-9, 2012 报摘: 2012年4月7-9日

The following press releases and media reports about Chinese companies were carried on April 7-9. To view a full article or story, click on the link next to the headline.

══════════════════════════════════════════════════════

TPG Capital, China’s Hony Said to Plan Bid for Japanese Chipmaker Elpida (English article)

China Lodging Group (Nasdaq: HTHT) Announces Preliminary Q1 Hotel Operating Results (PRNewswire)

Taobao Japan Shopping Channel Shuts Down Due to Low Usage (Chinese article)

◙ Commerce Ministry: Australia’s Ban on Huawei Bid Unfair (Chinese article)

CNPC (HKEx: 857) in Talks With Foreign Firms About Shale Oil Exploration (English article)