The following press releases and media reports about Chinese companies were carried on October 18. To view a full article or story, click on the link next to the headline.
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- White House Review Finds No Evidence of Spying By Huawei – Sources (English article)
- ZTE (HKEx: 763) Executives to Take 50 Pct Pay Cut (English article)
- Suning.com (Shenzhen: 002024) in Final Talks to Buy Masa Maso – Source (English article)
- Baidu (Nasdaq: BIDU) Establishes Location Based Services (LBS) Division (English article)
- Xiaomi Testing TV Set-Top Box – Sources (Chinese article)
- Latest calendar for Q3 earnings reports (Earnings calendar)
More positive signals are emerging on China’s long march to 4G, with both the telecoms regulator and embattled networking equipment provider ZTE (HKEx: 763; Shenzhen: 000063) providing the latest signs that China could award 4G licenses much sooner than many previously thought. These new signals seem to be the latest in an accelerating trend, as China’s slow-moving telecoms regulator finally responds to pressure from industry heavyweight China Mobile (HKEx: 941; NYSE: CHL) to award 4G licenses sooner rather than later. Perhaps more importantly, the regulator could finally be realizing that its constant lateness in awarding new technology licenses is putting China’s 3 telcos at a distinct disadvantage to their global rivals, forcing the trio of China Mobile, China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA) to constantly play catch-up to their more aggressive peers around the world.
There’s bad news and good news coming from 2 Chinese sector leaders, with embattled telecoms equipment maker ZTE (HKEx: 763; Shenzhen: 000063) leading the downbeat headlines while education services specialist New Oriental (NYSE: EDU) brings some much needed relief to beaten-down US-listed Chinese stocks. The bad news for ZTE never seems to end, and now we’re starting to see the impact of all the negative developments on this former high-flyer which has just announced it will post a massive loss in the third quarter. Meantime, New Oriental has quietly issued its own announcement implying an investigation by the US securities regulator into some of its accounting practices has cleared it of any wrongdoing, in what would be welcome news for a sector of US-listed Chinese firms that has been dogged by an accounting credibility crisis for more than a year.
An increasingly xenophobic West will face an important test in the next 30 days as Canada weighs whether to approve the $15 billion purchase of local oil exploration giant Nexen (Toronto: NXY) by Chinese rival CNOOC (HKEx: 883; NYSE: CEO). The deal could well become an important indicator of the West’s willingness to accept China as an equal partner in the global economy, and its approval would send a positive signal after a more controversial decision last week that saw two of China’s leading technology firms locked out of the US telecoms equipment market due to security concerns.
A wide range of buzz is coming from the telecoms space, led by more reverberations from Washington’s controversial decision to lock out Huawei and ZTE (HKEx: 763; Shenzhen: 000063) from the US telecoms equipment market. China’s 3 major telcos are also making the headlines for other reasons, as they continue to jostle for position in both the 3G wireless and also the fixed-line broadband spaces.
I don’t usually like to write about the same company or issue twice in the same week, but it’s hard to ignore a new report that has just come out of Washington saying US telcos shouldn’t do business with China’s top 2 telecoms equipment makers due to security concerns. Of course people who follow the industry will know that I’m referring to a new Congressional report taking aim at Huawei and ZTE (HKEx: 763; Shenzhen: 000063), 2 of the world’s leading telecoms equipment makers and also 2 of China’s high-tech exporting superstars. The report comes just a day after reports emerged that Huawei was considering an offshore IPO in an attempt to diffuse concerns that its equipment can be used for spying by Beijing (
Telecoms equipment giant Huawei Technologies is reportedly considering an overseas public listing in a bid to become more transparent and quiet western critics who suspect it’s a spying arm of Beijing. The move would be the latest in a series by Huawei and crosstown rival ZTE (HKEx: 763; Shanghai: 000063) in their ongoing campaigns to win more business in lucrative western markets where they have met with strong political resistance. But while an IPO may excite investors, such a move is unlikely to sway Huawei’s more politically-focused critics who can point to numerous similar cases of major Chinese companies whose publicly listed status hardly means independence from Beijing.
A couple of items from the consumer electronics space are worth looking at today, including one that shows Huawei’s consumer unit forecasting surprisingly slow growth while electronics giant Hisense (Shanghai: 600060) is cementing an interesting TV tie-up with Google (Nasdaq: GOOG). Both of these news bits highlight China’s growing prowess as a consumer electronics maker, as the country rapidly rises to challenge traditional powerhouses like Japan, South Korea and Taiwan with products that can compete globally not only in price but also in quality.
