Having been locked out of the US and worried about the potential for similar problems in Western Europe, struggling telecoms equipment maker ZTE (HKEx: 763; Shenzhen: 000063) is fighting back by doing what it knows best: taking free money from Beijing. I don’t want to sound too negative here, but this latest deal between ZTE and China Development Bank is exactly what ZTE should NOT be doing, at least if it ever wants to convince the world that it’s a serious commercial company. But perhaps the company simply doesn’t care anymore what others think, and there’s also the very real possibility that ZTE is simply fighting for its very survival at this point.
Tag Archives: Huawei
Xiaomi Ties With Kingsoft in Cloud 小米斥资百万美元购买金山云股权
High profile smartphone maker Xioami is making headlines with word that it has purchased a stake in a unit of software maker Kingsoft (HKEx: 3888), in what could be the first in a new wave of tie-ups for this fast-rising company that aspires to be like global tech giant Apple (Nasdaq: AAPL). I have to admit that I’m not exactly sure what Xiaomi hopes to do with this new tie-up, which has it purchasing around 10 percent of Kingsoft Cloud Group, which is Kingsoft’s cloud computing unit. (Chinese article) The purchase price is quite modest, with Xioami paying just $1.82 million for its 10 percent stake. There’s not much other information in the report, though it does point out that Xioami’s charismatic co-founder Lei Jun is a major stakeholder in Kingsoft.
China Tries New Resource M&A Approach 中国转变全球资源并购策略
New reports from Down Under are saying that China’s leading power distributor State Grid Corp has made a major purchase in Australia, a move that initially looks controversial but could actually mark the start of a smarter approach by Chinese firms to global M&A in the sensitive resource and energy sectors. State Grid, which has been on a global buying spree over the last year, has announced it is acquiring 41 percent of ElectraNet, a grid operator in the Australian state of Queensland, from a local government entity. (English article) No value of the purchase was given, but Australian media had previously reported that State Grid would pay A$500 million for the stake, equal to about $523 million.
China, US Shuffle Security Card 中美互打安全牌
New noises are coming from both China and the US on the dangers to national security posed by commercial activities in the high-tech space, as fallout continues to linger from the recent Washington decision to ban Huawei and ZTE (HKEx: 763; Shenzhen: 000063) from selling their equipment in the US. Some might say this new flare up in trade relations is just an extension of other recent similar tensions between Washington and Beijing, whose complaints of unfair trade against each other have accelerated over the last year. But this latest trade war looks a bit more worrisome, since it’s leveled at the high-tech sector whose products are considerably more valuable than the usual lower tech products usually involved in many of these disputes.
China Eastern: Beijing’s Latest Policy Tool 中国东方航空：中国政府的最新政治工具
China Eastern’s (HKEx: 670; Shanghai: 600115; NYSE: CEA) announcement of a massive new order for Airbus (Paris: EAD) planes last week looked suspiciously political, coming just after China and the EU resolved an aviation-related dispute. If politics were indeed a factor, which seems likely, Beijing set another unhelpful precedent by tying what should have been a purely commercial decision to non-commercial factors. By continuing to act this way, Beijing will show the world that it calls the shots for what should otherwise be big commercial decisions by Chinese companies rather than leaving those decisions to market forces. That will only give China’s opponents further fuel in their steady accusations of unfair trade by Beijing.
Chinese Smartphones on the Rise 中国智能手机崛起
Chinese smartphone makers have surged in their home market over the last year, coming from out of the blue to challenge big global names like Apple and Samsung. But their rise could be short-lived if they fail to innovate, paralleling a similar rapid rise and fall a decade ago for names like TCL (HKEx: 2618) and Ningbo Bird that are now just footnotes in the history of China’s large but highly competitive mobile market. The rapid rise of Chinese brands over the last year has been nothing short of remarkable, as China gets set to overtake the United States as the world’s largest smartphone market. At the end of last year, the market was still dominated by foreign names, with Samsung (Seoul: 005930), Nokia (Helsinki: NOK1V) and Apple (Nasdaq: AAPL) occupying three of the top four slots to control more than half of the market collectively.
Telecoms: 4G and IPTV in, Cisco Out 中国电信行业：4G与IPTV推进 思科受阻
The headlines are buzzing with news bits from each of the country’s 3 major telcos, with high-speed services taking big steps forward even as US telecoms equipment powerhouse Cisco (Nasdaq: CSCO) could be bracing for a Chinese winter. In the former group of headlines, media are reporting that China Mobile (HKEx: 941; NYSE: CHL) has made a significant step into 4G with plans to expand its trial TD-LTE network into China’s interior, while China Telecom (HKEx: 728; NYSE CHA) has just won an important new license to offer TV and other video and data services over its fixed-line broadband network. Meantime, China Unicom (HKEx: 762; NYSE: CHU) is also making headlines with reports that the company is replacing Cisco-supplied equipment from some of its key network due to security concerns.
News Digest: October 25 报摘： 2012年10月25日
The following press releases and media reports about Chinese companies were carried on October 25. To view a full article or story, click on the link next to the headline.
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- Huawei Says US ‘Distorted’ Concern, Offers Australia Codes (English article)
- Apple (Nasdaq: AAPL) Launches iPad Mini, China Launch Unknown (English article)
- CNOOC (HKEx: 883) Announces Q3 Results (HKEx announcement)
- Investors Seek to Sell 24Quan to Gaopeng – Source (Chinese article)
- Lenovo (HKEx: 992) to Sell Smartphones in Developing Markets (Chinese article)
- Latest calendar for Q3 earnings reports (Earnings calendar)
US Security Takes Wind Out of Sany 美国考虑安全否决三一重工风电项目
The national security excuse has become the flavor of the day in Washington, with a wind farm funded by an affiliate of heavy machinery giant Sany (Shanghai: 600031) making headlines as the latest US-based Chinese project to be vetoed on grounds it could compromise US security. (English article) Meantime, the bigger news story involving a Congressional report that says telecoms equipment from Huawei and ZTE (HKEx: 763; Shenzhen: 000063) poses a risk to US security continues to bubble into the headlines, this time with the White House denying that its own investigation into that matter appeared to exonerate Huawei. (English article)
News Digest: October 19 报摘： 2012年10月19日
The following press releases and media reports about Chinese companies were carried on October 19. To view a full article or story, click on the link next to the headline.
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- Haier’s (HKEx: 1169) Increased Offer Wins Fisher & Paykel (NZ: FPA) Board Approval (English article)
- White House Denies Huawei Investigation Report (English article)
- Toyota (Tokyo: 7203) May Trim 2012 Output Plan on China Row: Paper (English article)
- WTO Hands Obama Victory in US-China Steel Case (English article)
- 360Buy to Launch International Site This Week (English article)
- Latest calendar for Q3 earnings reports (Earnings calendar)
Huawei’s Hollow Victory, ZTE’s Slashes 华为空欢喜 中兴难脱困
It wouldn’t be proper if I went for more than a day or 2 without examining the latest news bits from the embattled telecoms equipment duo of Huawei and ZTE (HKEx: 763; Shenzhen: 000063), which have suffered a non-stop stream of setbacks in the last few months. Of course most readers will know that the pair received their biggest blow just a couple of weeks ago when a US Congressional panel ruled that their networking equipment posed a national security threat and thus should be blocked from sale in the country. (previous post) More bad news came earlier this week for ZTE, which announced it would post a massive loss in the third quarter, marking its first-ever quarterly loss since going public and wiping out all of its profits for the year. (previous post)
