Bottom line: Yum’s purchase of a high-end take-out delivery service looks smart in targeting a higher margin, niche product in the competitive space, while McDonald’s and Starbuck’s rapid growth in mobile payments reflects rapid growth of the technology.
Yum buys take-out specialist Sherpa’s
Three of the world’s top restaurant chain operators are in the China headlines as we head into summer, in different moves that reflect their attempts to tap into the nation’s growing love affair with high-tech dining. The most interesting of the headlines has Yum Brands (NYSE: YUM), parent of the KFC and Pizza Hut chains, buying up one of China’s oldest take-out delivery services, hinting at a potential big push into the ultra competitive space. The other two headlines have McDonald’s (NYSE: MCD) and Starbucks (Nasdaq: SBUX) independently releasing new data that show just how hot electronic payments have become for both companies.
As someone living here in China, I have to admit I have completely embraced the country’s homegrown brand of mobile electronic payments, which has quickly become dominated by Ant Financial’s Alipay and Tencent’s (HKEx: 700) WeChat. But at the same time, I’ll also openly admit I’ve eschewed the home delivery services that are also all the rage in China, though the tide seems to be fading as people rediscover the fun of actually going out to eat. Read Full Post…
The following press releases and news reports about China companies were carried on October 28. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Bottom line: Yum’s China operation could see profit growth accelerate as it steps up its expansion, providing a boost for its newly listed stock over the next 3-5 years.
Yum China eyes big KFC expansion
Fast food giant Yum (NYSE: YUM) is kicking off a publicity blitz in the run-up to the formal spin off of its China business, discussing ambitious growth targets for its biggest global market. It’s not surprising that the operator of the KFC and Pizza Hut brands is focusing on the future, since its China data in the present is far from impressive. That includes a surprise same-store sales decline in its latest quarterly report, and unimpressive profit growth of around 15 percent. Read Full Post…
Bottom line: Yum China’s new stock will post moderate gains of 3-6 percent when trading begins on November 1, while Merchants Securities’ IPO shares will price in the middle of their range and debut flat to up slightly.
Merchants Securities makes HK listing
IPOs are heating up as we head into the fourth quarter of 2016 and companies race to complete offerings before the traditionally slow period between Christmas and Chinese New Year. The last week alone has seen progress on what could be the world’s 2 biggest offerings this year, being made by Postal Savings Bank of China and P2P lender Lufax. (previous post) Now 2 more mega listings are in the headlines, as brokerage Merchants Securities prepares for an IPO in Hong Kong and KFC parent Yum (NYSE: YUM) gets set to spin off and separately list its China unit in New York. Read Full Post…
Bottom line: Yum and McDonald’s are likely to complete spin-offs of their China units by year end, offering a new business template for multinationals that should be encouraged with incentives from Beijing.
Yum names board for China unit
Separate plans by fast food giants KFC and McDonald’s (NYSE: MCD) to spin off their China businesses into separate companies were in the headlines last week, in a new trend that could see other big multinationals take similar steps to address the market’s huge size and unique qualities. Each company is using a slightly different strategy, with KFC parent Yum Brands (NYSE: YUM) choosing a key strategic partner and separate listing for its China unit. By comparison, McDonald’s is simply selling its China stores to a strategic partner in a franchise-style arrangement, while maintaining control of its bigger China operations. Read Full Post…
The following press releases and news reports about China companies were carried on September 15-19. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
WuMart Joins Bidding for China McDonald’s (NYSE: MCD), 3 Groups Submit Bids (Chinese article)
PayPal (Nasdaq: PYPL) Reaches Deeper Into China With UnionPay Partnership (English article)
Tesla (Nasdaq: TSLA) Investigates Potential Autopilot Link in Fatal China Crash (English article)
China or India Next on Pokemon Go Roadmap – Reports (Chinese article)
Mengniu (HKEx: 2319) Unexpected Changes Chief, Danone (Paris: DANO) Plays Bigger Role (Chinese article)
The following press releases and news reports about China companies were carried on August 13-15. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
China Film (Shanghai: 600977) Jumps 91 Pct in 1st Week After Record Entertainment IPO (English article)
McDonald’s (NYSE: MCD) to Stop Using Antibiotic Food in US, No Word on China (Chinese article)
E-House (NYSE: EJ) Announces Completion of Merger (PRNewswire)
China Mobile (HKEx: 941) to Eliminate Domestic Roaming Fees by Year End (Chinese article)
AC Milan’s Chinese Buyers Name Club’s Future CEO (English article)
The following press releases and news reports about China companies were carried on August 5. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Massive Funding, Apple (Nasdaq: AAPL) Backing Helped Didi Outrun Uber in China (English article)
China Starts to Lose Its Taste for McDonald’s (NYSE: MCD) and KFC (NYSE: YUM) (English article)
Tablet PC Sales Fall in Q2, But Lenovo (HKEx: 992), Huawei Post Gains (Chinese article)
Bitauto (NYSE: BITA) Consortium Invests $550 Mln in Yixin Capital (PRNewswire)
Online Children’s English Learning Platform Vipkid Wins $100 Mln Series C Funding (English article)
The following press releases and news reports about China companies were carried on August 3. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
China Regulator Says Didi, Uber Deal Will Need Mofcom Approval (English article)
Sanyuan Foods Gives Up Preferential Rights to Buy Beijing McDonald’s (NYSE: MCD) JV (Chinese article)
Trina Solar (NYSE: TSL) Enters into Agreement for Going Private Transaction (PRNewswire)
Baidu (Nasdaq: BIDU), Tencent (HKEx: 700) May Cut Wanda E-Commerce Ties (Chinese article)
Cheetah Mobile (NYSE: CMCM) Buys Global News Aggregation App ‘News Republic‘ (English article)
Bottom line: Recent calls for boycotts of KFC, iPhones and McDonald’s by Chinese patriots are unlikely to result in long-term damage for any of the companies, but could become a problem if any of China’s ongoing territorial disputes escalate.
Chinese patriots call for KFC boycott
It seems China’s restless patriots are back at work following a 4 year break, venting their latest anger at the US by smashing Apple (Nasdaq: AAPL) iPhones and calling for boycotts of KFC. This particular bout of Chinese patriotism follows a ruling 2 weeks ago by an international court that found in favor of the Philippines in a territorial dispute with China. The last major bout of similar patriotism came back in 2012, and involved another territorial dispute between China and Japan. But in that instance, Beijing gave much freer rein to many of the patriots, which resulted in long-term Chinese sales declines for the big Japanese automakers. Read Full Post…
The following press releases and news reports about China companies were carried on June 24. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
MIIT to Forbid Non-telcos from Providing Free Enterprise Voice Calling – Reports (English article)
Sanpower Group Enters Bidding for McDonald’s (NYSE: MCD) China Stores (Chinese article)
Qunar (Nasdaq: QUNR) Announces Receipt of “Going Private” Proposal (GlobeNewswire)
Mango TV Raises 1.5 Bln Yuan in Second Funding Round, Valuation Doubles (Chinese article)
Huawei Lowers 2016 Smartphone Target by 20 Mln Units – Report (Chinese article)
