Japan Archives ~ Business China : news for investors in China

CONSUMER: Midea Goes Appliance Shopping with Toshiba

By newsdoug on March 23, 2016

Bottom line: Midea could buy another global brand following its purchase of Toshiba’s home appliance business, while hometown rival Gree will also feel pressure to make a small to mid-sized overseas acquisition in the next 1-2 years.

Midea in MOU for Toshiba’s appliance unit

Following several days of rumors, struggling Japanese tech giant Toshiba (Tokyo: 6502) has confirmed it will sell a controlling stake in its home appliance business to Midea (Shenzhen: 000333), extending a fledgling movement by Chinese buyers abroad. The move could pressure other Chinese rivals, most notably Gree (Shenzhen: 000651), to follow in the footsteps of Midea and Haier (HKEx: 1169), which is also in the process of buying General Electric’s (NYSE: GE) appliance business.

From a bigger perspective, this particular trend looks a bit like what happened several decades ago in the older industry for TV sets. That trend saw Asian buyers purchase big western brands in the fading TV industry, with storied names like Zenith and RCA ultimately get gobbled up. Fast forward to the present, when most of those older brands no longer exist or are insignificant, which could hint at what may lie ahead for these new purchases by the Chinese companies. Read Full Post…

RETAIL: Suning Expands In Japan, Wins Broadband Nod

By newsdoug on June 25, 2015

Bottom line: Suning’s Japanese expansion and receipt of a new license to build and operate a private broadband network are both positive developments, but also reflect a lack of quick progress in transforming its core China-based retail business.

Suning in Japanese expansion

A couple of new reports involving Suning (Shenzhen: 002024) made me realize it’s been quite a while since I’ve written about this company that is trying to transform from a traditional retailer to a major e-commerce player. Both reports are interesting and noteworthy, though neither is related to its e-commerce drive, which doesn’t appear to be going anywhere quickly.

One of the deals involves Suning’s purchase of a money-losing Japanese electronics seller 5 years ago, and will see it now plow several billion yuan into a major expansion of the Laox chain of home appliance stores. The second deal has Suning named as one of 4 companies to receive licenses to build broadband networks to offer services under a newly announced pilot program to open the sector to private money. Read Full Post…

INTERNET: Baidu Ends Search For Japan, Hangs Out Egyptian Shingle

By newsdoug on April 24, 2015

Bottom line: Baidu’s new go-slow global expansion strategy focused on emerging markets like Brazil and Egypt looks smart, but will provide limited contributions due to the small size of those markets.

Chinese online search leader Baidu (Nasdaq: BIDU) is making some major strategic adjustments in its global expansion, turning to developing markets and away from more lucrative but also extremely competitive western ones. That’s my main conclusion, following reports that Baidu has finally pulled the plug on its struggling Japan search service 8 years after choosing the market for its first foray abroad. At the same time, the company is making initial moves into Egypt with its first Arabic-language website, following earlier moves into Brazil and more recently into Thailand. Read Full Post…

Japan’s Line, Microsoft Xbox Move Into China

By newsdoug on May 5, 2014

After years of hovering at the edge of China’s gadget and app markets, Japanese mobile instant messaging giant Line and Microsoft’s (Nasdaq: MSFT) Xbox gaming console are both reportedly preparing to enter the market. Line’s plan looks the most exciting to me, as the product has quickly gained a major following in Asia and could find a receptive audience in China with its new partnership. Meantime, I’m less optimistic about Xbox, as its China entry comes after its consoles have been available on the local gray market for years, and it will face competition from a new group of homegrown products. Its choice of the struggling Shanghai Media Group (SMG) as its partner also doesn’t look too exciting to me. Read Full Post…

Lenovo Eyes IBM Servers, Jumps In Japan

By newsdoug on January 21, 2014

Lenovo still chasing IBM servers

After more than a half year of silence, Lenovo’s (HKEx: 992) dream to buy the low-end server business of IBM (NYSE: IBM) is suddenly back in the headlines, in a development that I predicted quite a while ago based on the fact that both sides really want to do this deal. The first time around saw the talks founder and ultimately stall due to disagreement on price. But such a deal makes so much sense for both sides that it’s almost inevitable that it will happen, which leads me to believe that we could see announcement of a preliminary agreement sometime in the first or second quarter. Meantime, Lenovo is also seeing a positive development on the Japan front, where its 3-year-old PC joint venture with local partner NEC (Tokyo: 6701) is doing better than expected. Read Full Post…

Haier Takes Strong SE Asia Step With Sanyo Buy 海尔购三洋白电业务

By newsdoug on July 31, 2011

Haier opens door to Southeast Asia with Sanyo buy Home appliance maker Haier (HKEx: 1169), a former rising star among Chinese exporters that has gone quiet in recent years, has re-entered the spotlight with its pending purchase of the Southeast Asian refrigerator and washing machine business of Japan’s Sanyo Electronics. (company announcement) This deal could provide a nice boost for Haier, which was already working with Sanyo in some of the markets included in this deal, but strong execution will be critical — something Haier may or may not be able of doing. Sanyo says it is selling the business to Haier as part of a broader reorganization to eliminate overlap with its parent, Panasonic (Tokyo: 6752), which purchased a majority stake in Sanyo in late 2009. I have no doubt that this is true, but it’s also true that Sanyo lost money in its last fiscal year, and I wouldn’t be surprised if its home appliance division contributed to those losses. Part of those losses no doubt come from any of Sanyo’s costs structures in expensive Japan that Haier would inherit as part of this deal. Haier would presumably move any such operations to cheaper locations to make the business profitable. Working to Haier’s advantage, the business it is buying is also relatively modest, with revenue of around $1 billion. Haier also brings a few strong points to this deal, including its previous joint ownership of the Sanyo Thailand refrigerator business. Overall, given the relatively small scale of the business Haier is acquiring, combined with Haier’s own experience working in developing markets like its own home China market, this purchase looks like a relatively safe one for Haier and should ultimately contribute to its bottom line if it can successfully integrate the business into its own global network.

Bottom line: Haier’s plan to purchase Sanyo’s Southeast Asia white goods business looks like a smart and manageable move for Haier in its quest to become a global brand.

中国家电制造商海尔集团<1169.HK>重新进入人们的视野，公司将购入日本三洋电机在东南亚的洗衣机和冰箱业务。这项交易可对海尔起到很好的提振作用，但关键是执行，海尔在这方面的能力还不是很好说。三洋电机称向海尔出售业务属整体重组的一部分，目的是砍掉与母公司松下<6752.T>重叠的业务。我认为这种说法不假，但还有一点也不假：三洋上财年亏损，如果家电业务对其亏损有一定“贡献”，我不感意外。毫无疑问，部分亏损源於三洋在日本的成本结构，其中部分可能也会转嫁到海尔身上。海尔估计会让此类业务转入成本较低的地点，以实现盈利。海尔所购业务规模不算大，营收大约10亿美元，这点对海尔有利。总体而言，由於海尔所购业务规模不大，加上海尔自身在新兴市场的丰富经验，此桩交易对海尔似乎相对保险，而且最终应会增加海尔的净利，但前提是海尔能将收购的业务成功融入其全球网络中。

一句话：在海尔努力成就全球品牌地位之际，公司购三洋在东南亚白电业务看起来比较明智、可控。