Bottom line: Yum’s plan to potentially list its China unit in Hong Kong, alongside a concurrent New York listing, looks like a smart move that would make the stock more accessible to Asian investors and give it a more local flavor.
Yum eyes HK listing for China unit
The struggling China unit of Yum Brands (NYSE: YUM), owner of the KFC and Pizza Hut chains, has just released a slew of new details on its prospects, including a long-awaited return to same-store sales growth after several years of declines. The announcement comes as Yum, under shareholder pressure, prepares to spin off its China operations into a separately listed company.
Apart from the new forecast for a return to same-store sales growth, one of the most interesting China-related details in the new announcement is the potential for a Hong Kong listing by Yum’s China unit as part of the spin-off. That move would make Yum China’s shares available to many mainland Chinese investors, and would also add a distinctly Asian flavor to a company that has now seen as a downscale purveyor of greasy western fast food. Read Full Post…
Bottom line: China should expand its plans for a new enterprise board in Shanghai to include a place for the Chinese units of big multinationals like Yum and Uber, allowing domestic investors to buy into these big foreign names.
Calls grow for KFC parent to spin off China unit
Global fast food giant Yum Brands (NYSE: YUM) became the latest major multinational to contemplate a spin-off for its China business last week, following in the tracks of Uber and IMAX (NYSE: IMAX), two leaders in their respective areas of hired car services and big-screen theater technology. The trend acknowledges that China will soon become the world’s largest consumer market, and its unique qualities and complexities often justify creation of separate companies for these big global names to effectively develop the market.
China should seize on this trend and modify its current plans for a new Nasdaq-style enterprise board based in Shanghai to also include a place for these larger, newly created companies with foreign roots. Reports earlier this year indicated the regulator was aiming to roll out the new strategic industries board as soon as next year, though its plans could be delayed due to the recent turmoil on China’s stock markets. Read Full Post…
Bottom line: More than $20 billion in new fund-raising deals by China companies outside the country reflects the huge amount of global money now chasing Chinese investments, lured by the nation’s soaring stock markets.
Billions flood into Chinese companies
I was so surprised by the number of major new China-related deals churning through the fund-raising system that I decided to do some math, which showed that 5 deals in the headlines today were worth a staggering total of $21 billion. Those deals involved a wide range of topics, led by a new $9 billion privatization bid for software security specialist Qihoo 360 (NYSE: QIHU), the largest such plan to date among a wave of Chinese firms de-listing from New York.
That deal was followed in size by another similar one from Focus Media, whose $7.4 billion plan to re-list in Shanghai following its own New York privatization has hit an unexpected hurdle with an investigation of the shell company that is hosting the backdoor listing. The there’s a hefty $3.5 billion fund-raising plan by leading brokerage Citic Securities (HKEx: 6030; Shanghai:006030), which has attracted 2 of Singapore’s leading investors as it prepares to issue new shares in Hong Kong. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 18. To view a full article or story, click on the link next to the headline.
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Citic Securities (HKEx: 6030) Seeks $4.7 Bln in Share Sale; Temasek Among Buyers (English article)
Qihoo 360 (NYSE: QIHU) Announces Receipt of Proposal to Acquire the Company (PRNewswire)
Alibaba (NYSE: BABA), Foxconn in Talks to Invest $500 Mln in India’s Snapdeal (English article)
Trina Solar (NYSE: TSL) Plans $500 Mln India Plant Amid Ban (English article)
Imax (NYSE: IMAX) Sets China Unit IPO Goal at $300 Mln (English article)
Bottom line: China’s securities regulator should reopen its plan for an international board amid the current stock market rally, which would make big international brands like Imax available to average local investors.
Imax China files for HK IPO
A premier global movie brand slipped away from China’s stock exchanges last week, when the Chinese unit of big-screen superstar Imax (NYSE: IMAX) disclosed it plans to make an initial public offering (IPO) in Hong Kong. The case brought back memories of a nearly forgotten plan by China for an international board for such listings in Shanghai, aimed at making big foreign names accessible to Chinese investors.
That plan was conceived more than 5 years ago, but later got put on hold as China focused on launching the Nasdaq-style ChiNext board in Shenzhen. It then got indefinitely shelved when China’s stock markets languished in the 4 years after that. Read Full Post…
The following press releases and media reports about Chinese companies were carried on May 30-June 2. To view a full article or story, click on the link next to the headline.
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IMAX China Files For HK IPO, Betting on Booming Film Demand (English article)
Ctrip (Nasdaq: CTRP) Says Outage Due to Staff Error, Not Hack (English article)
Solarworld (Frankfurt: SWVK) Gains EU Probes of Possible China Duty Evasion (English article)
Alibaba (NYSE: BABA), Yahoo Japan (Tokyo: 4689) To Open Tmall Japan Pavillion (Chinese article)
Vipshop (NYSE: VIPS) Comes Under New Short Seller Attack, Shares Drop 6 Pct (Chinese article)
Bottom line: Wanda Cinema and Spring Airlines represent a new generation of major private companies to list in China, and should enjoy strong share gains over the short to medium terms following their IPOs.
Spring Air leaps on first 2 trading days
There was plenty of spring in the stocks of 2 hot companies that listed in China this week, with budget carrier Spring Airlines (Shanghai: 601021) and theater operator Wanda Cinema Line (Shenzhen: 002739) jumping 44 percent in their trading debuts. The pair are part of a new generation of privately owned companies starting to list on China’s main stock markets, stealing the spotlight from an older group of state-run firms that still dominate the country’s 2 main stock exchanges in Shanghai and Shenzhen.
Obviously profits and broader performance will be the biggest determiner of whether these companies’ stocks continue to rise after the euphoria of their IPOs starts to fade. But from the perspective of a western buyer like myself, Wanda Cinema and Spring Air are 2 of the first Chinese-listed firms that I’ve seen whose stocks I would personally consider buying. Read Full Post…
I’ve stopped using the term “love affair” to describe the romance between Hollywood and China over the last 2 years, as it no longer seems sufficient to describe the flood of tie-ups that have emerged since China became the world’s second largest box office. The Long March of new deals has now gained 2 more members, with word that US film giant Warner Bros (NYSE: TWX) is in a major new movie financing deal with Shanghai Media Group (SMG), China’s leading regional maker of filmed entertainment. In a separate headline, other reports are saying that real estate giant Wanda Group is also deepening its own involvement in movie industry finance, by filing to make a domestic IPO for its movie theater business. Read Full Post…
Big-screen theater technology company Imax (NYSE: IMAX) is in the headlines today for a savvy move that will make it look more Chinese as it attempts to grab a major slice of the nation’s booming film market. The newly announced deal has Canada-based Imax selling 20 percent of its China unit to 2 local partners, including one with strong ties in China’s commercial capital of Shanghai. Equally interesting, Imax is saying it aims to list its China unit on one of China’s stock exchanges in the next 5 years, in what would become a rare instance of a domestic IPO by a majority foreign-owned company. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 9. To view a full article or story, click on the link next to the headline.
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Jack Ma, Shi Yuzhu Invest 6.5 Bln Yuan In Wasu Media (Shenzhen: 000156) (Chinese article)
China Approves InBev (NYSE: BUD) Purchase Of Siping Ginsber (Chinese article)
Imax (NYSE: IMAX) Sells 20 Pct Of China Business To 2 Partners (Chinese article)
China Mobile (HKEx: 941) VNO Partners Start To Apply For Licenses (Chinese article)
iKang Healthcare (Nasdaq: KANG) Prices IPO At $14, The High End Of Range (English article)
The list of major Chinese entertainment firms jumping on the Hollywood bandwagon has just gained an important new member with word that Huayi Bros (Shenzhen: 300027) is on the cusp of investing in a major new production house. I’ve been following the China media scene for more than a decade now, and can say that Huayi was one of the nation’s earliest major players to emerge in a space that was extremely difficult for years due to tough restrictions and extreme fragmentation. But Huayi has shown not only an ability to survive, but also to thrive in a market where the movie theater business is suddenly booming and online video has quickly become an important new revenue source. Read Full Post…
