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Tag Archives: JD.com
Jingdong (jd.com) latest Business & Financial news from Doug Young, the Expert on Chinese High Tech Market, (former Journalist and Chief editor at Reuters)
Bottom line: JD.com’s new share repurchase program looks like a good use of cash due to likelihood of a rebound for its stock, while its tie-up with a top Korean peer also looks like a good way to target Chinese consumers who like imported goods.
JD launches share buy-back
After amassing huge quantities of cash through a series of IPOs and other fund-raising activities, Chinese Internet companies are rapidly discovering a new use for those idle funds by buying back their own stock. The latest such move has JD.com (Nasdaq: JD), the nation’s second largest e-commerce company, announcing a new plan to buy back up to $1 billion worth of its shares, on the belief they have become undervalued in a recent sell-off.
JD was also in the headlines for another new tie-up with a major Korean retailer, announcing the opening of a flagship store to offer imported goods from South Korean e-commerce giant Lotte.com. This particular move is part of an ongoing drive by Chinese e-commerce firms to offer more imported goods to local consumers who are often wary of domestic products that are fakes and suffer from poor quality. Rival Alibaba (NYSE: BABA) has embarked on a similar drive, announcing its own new tie-up with Germany’s Metro Group the same day as the JD announcement. (company announcement) Read Full Post…
The following press releases and media reports about Chinese companies were carried on September 9. To view a full article or story, click on the link next to the headline.
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Bottom line: Alibaba’s new tie-up with a leading US wine maker is mostly symbolic and represents a boom in the e-commerce market for imported goods, while NetEase’s new share buyback plan is unlikely to provide much support for its sagging stock.
Robert Mondavi launches on Tmall
Leading Chinese Internet companies Alibaba (NYSE: BABA) and NetEase (Nasdaq: NTES) are trying different approaches to boost their sagging stocks, amid a broader sell-off for US-listed Chinese companies in tandem with China’s own tanking markets. The first case has e-commerce leader Alibaba launching a new online wine shop with US giant Robert Mondavi, as part of a broader move to let Chinese consumers buy imported goods online. The move by online game giant NetEase looks a bit more conventional, with its announcement of a plan to buy back up to $500 million of its stock.
Alibaba and NetEase certainly aren’t alone in watching their shares tumble, amid a broader sell-off for US-listed Chinese stocks over the last 2 months. Alibaba shares have lost nearly half of their value from their all-time high reached last November, and now trade about 5 percent below their IPO price from a year ago. NetEase shares have lost a quarter of their value since early August, in a plunge coinciding with China’s own tumbling stock markets. Read Full Post…
Bottom line: New O2O take-out dining investments involving companies backed by Tencent and Alibaba reflects intensifying competition in the space, and is likely to result in a costly price war for market share.
Alibaba, Tencent in new take-out dining investments
The take-out dining space continues to heat up, with word of a major new funding for Ele.me, the service backed by social networking giant Tencent (HKEx: 700), and a big new investment for Koubei, the service owned by e-commerce leader Alibaba (NYSE: BABA). Both investments reflect a recent rush into online-to-offline (O2O) services by all 3 of China’s top Internet companies, as each tries to forge a hybridized mix of services that are likely to make up the retailing landscape of the future.
The larger of the 2 deals has Ele.me raising as much as $630 million in new funding, in a deal that brings in existing investors Tencent, along with its main e-commerce partner JD.com (Nasdaq: JD) and several other major private equity firms. The second has Koubei, Alibaba’s recently resurrected take-out dining site, investing a more modest 300 million yuan ($50 million) in a rival that operates the service called SHBJ.com. Read Full Post…
Bottom line: Premier Chinese Internet names should eschew China’s stock markets and continue to make IPOs in New York, where they can gain more accurate valuations and greater access to global capital markets.
NY offers best value for China Internet listings
Shares of e-commerce giant Alibaba (NYSE: BABA) achieved a dubious milestone late last week, when they officially closed at their lowest price since the company’s record-breaking IPO nearly a year ago. The big rise and subsequent fall of Alibaba’s stock was part of a broader sell-off of US-listed Chinese shares, sparked by an equally large drop on China’s domestic stock markets.
The US sell-off once again cast a spotlight on the question of whether some of China’s most promising private companies should pursue such offshore listings or make IPOs at home where their names are more familiar. Despite occasional volatility like last week’s sell-off, such offshore listings remain the best choice because they provide companies with relative stability and far more accurate valuations than what their peers are getting in China’s immature markets. Read Full Post…
The following press releases and media reports about Chinese companies were carried on August 20. To view a full article or story, click on the link next to the headline.
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Huayi Bros (Shenzhen: 300027), Ping An Bank in 30 Bln Yuan Entertainment Tie-Up (Chinese article)
Lenovo (HKEx: 992) Joins Smartphone Compatriots for ’Make in India’ (English article)
Sina (Nasdaq: SINA) Reports Q2 Financial Results (PRNewswire)
Fund Piles Into Baofeng Tech (Shenzhen: 300431), Becomes Top Shareholder (Chinese article)
Tuniu (Nasdaq: TOUR) Takes Over JD.com’s Online Travel Business After Tie-Up (Chinese article)
Bottom line: Pepsi’s launch of a new oat-based dairy drink in China using an online promotion looks like a smart and savvy marketing move to tap growing consumer demand for healthier beverages.
Pepsi rolls out China oat drink
PepsiCo (NYSE: PEP) is taking aim at increasingly health-conscious Chinese consumers with its introduction of a new oat-based dairy drink to the market. This particular new drink, which is called Quaker High Fiber Oats Dairy Drink, is also tapping Chinese fondness for online purchasing through a tie-up that will see it sold exclusively at first through a partnership with e-commerce giant JD.com (Nasdaq: JD).
This launch seems quite gimmicky, aimed as much at gaining publicity as it is at introducing a product that consumers will really want. But that said, Chinese consumers do seem to love a good gimmick, especially when it involves hip and trendy online activity. That fact has been reflected in the huge success of Single’s Day, an online shopping extravaganza created by Alibaba (NYSE: BABA), and the phenomenal success of smartphone maker Xiaomi, which for its first few years sold all of its products online only. Read Full Post…
Bottom line: After a slow start, China’s VNO program is showing signs of starting to gain momentum and could start to pose a meaningful challenge to the country’s big 3 mobile carriers by the end of next year.
VNOs move slowly but steadily
China telecoms regulator has just released some new data on the country’s virtual network operator (VNO) program a year after the first service launched, aimed at providing some competition for the country’s big 3 state-run telcos. While some observers are saying they’re disappointed at the data that shows China had 8.2 million VNO subscribers at the end of last month, I would actually take a contrarian view and say I find the figures somewhat encouraging.
Frankly speaking, I wasn’t at all confident that the VNO program would attract many subscribers at all. That’s because the program relied on cooperation from China’s big 3 telcos, which were required to sell capacity on their networks to these virtual operators, who would then sell service under their own brand names. The big and obvious problem lies in conflict of interest, since the big state-run telcos would hardly want to support these private companies that could quickly become major new competitors. Read Full Post…
Bottom line: Aggressive spending on O2O initiatives by China’s traditional and online retailers is likely to produce a new boom-bust cycle, and companies should consider more M&A as part of their plans.
Retailers spend millions on O2O
Online-to-offline retail services, often called O2O, have become the flavor of the day for traditional and web-based Chinese retailers over the last year, with at least 3 major new announcements coming out on the topic late last week. Two involved big internal campaigns to boost O2O services at electronics retailer Gome (HKEx: 493) and traditional supermarket chain Renrenle (Shenzhen: 002336), while a third saw e-commerce giant JD.com (Nasdaq: JD) make a major investment in traditional retailer Yonghui Superstores (Shanghai: 601933).
Those efforts come just a week after leading search engine Baidu (Nasdaq: BIDU) reported disappointing quarterly earnings due to heavy spending on O2O, and more generally as O2O has become a buzzword for nearly all of China’s major traditional and online retailers. The activity surge reflects realization that leading retailers of the future will operate a hybrid model that uses both online and offline channels to sell products and services. Read Full Post…
Bottom line: Both Autohome and especially BitAuto look like strong candidates for buyout bids, following rapid declines in both companies’ stocks due to a rapid slowdown in China’s car market.
Internet auto stocks run out of steam
We’ll begin the new week with a look at 2 of China’s leading online auto specialists, BitAuto (NYSE: BITA) and Autohome (NYSE: ATHM), whose shares have both tanked over the last 3 months in tandem with a rapid cooling of China’s car market. The trend is similar to what’s happened at online real estate service providers, whose shares have slumped for the last year due to a prolonged and much-needed correction in China’s overheated property market.
China stock watchers will know that E-House (NYSE: EJ), one of the two major US-listed real estate services firms, launched a privatization bid in June, part of a broader wave that has seen dozens of Chinese firms leave New York this year due to low valuations. (previous post) That leads to my next prediction, namely that BitAuto, Autohome or potentially both could soon become the latest companies to join the privatization queue. Read Full Post…
The following press releases and media reports about Chinese companies were carried on August 8-10. To view a full article or story, click on the link next to the headline.
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Jin Jiang (HKEx: 2006) in Talks To Buy China-based Vienna Hotels Group (Chinese article)
JD.com (Nasdaq: JD) to Buy 10 Pct of Yonghui Superstores for 4.3 Bln Yuan (Chinese article)
Gome’s (HKEx: 493) E-commerce Unit Appoints New Management in Drive to IPO (English article)
Anbang Insurance to Make Over $1 Bln Bid for Japan’s Simplex: Sources (English article)
Youku Tudou (NYSE: YOKU) Changes Name, to Spend 10 Bln Yuan on Content Development (Chinese article)
