Bottom line: McDonald’s is likely to reach a final deal to sell its China-owned stores by the end of summer, while Cheesecake Factory is likely to enjoy modest success as it launches its first China stores.
Cheesecake Factory comes to Shanghai
A couple of restaurant stories are in the headlines today, one featuring fast-food veteran McDonald’s (NYSE: MCD) as it seeks a new China partner, and the other starring the popular US Cheesecake Factory (Nasdaq: CAKE) chain as it prepares to open its first China restaurant. The McDonald’s story is clearly the larger of the stories, and focuses on a drive to shed direct ownership of its China stores and move to a franchise-based model that has underpinned its success in the west. Meantime, I have to admit that one of my main reasons for writing about Cheesecake Factory is that I used to be a big fan of the chain, though the remote location of its first China restaurant means I probably won’t dine there. Read Full Post…
The following press releases and news reports about China companies were carried on June 15. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Alibaba (NYSE: BABA) Sees Growth Rising to 48 Pct in First Forecast (English article)
ChemChina, New Hope Said to Weigh McDonald’s (NYSE: MCD) Franchise Bids (English article)
Yingli Green Energy (NYSE: YGE) Reports Q1 Results (PRNewswire)
China’s Midea (Shenzhen: 000333) Wants Only 49 Pct of Kuka: Sources (English article)
NXP (Nasdaq: NXPI) Selling Products Unit for $2.75 Bln to Chinese Group (English article)
Bottom line: CIC’s withdrawal from the bidding for a stake in Yum’s China unit represents a minor setback, but Yum’s long history in the market makes finding major local investor less important.
CIC ends bid for Yum China stake
KFC parent Yum Brands (NYSE: YUM) has lost a major potential ally as it prepares to spin off its China business, with word that China’s sovereign wealth fund has dropped out of the bidding for 20 percent of the unit. Reuters is reporting that China Investment Corp (CIC) abandoned its bid for a number of reasons, including Yum’s refusal to sell a controlling stake to the new investor group. Yum has previously said it wants to sell just 20 percent of the China unit, which includes 7,200 stores. It also plans to sell more of the unit’s shares through an IPO later this year in Hong Kong or New York. Read Full Post…
Bottom line: Yum may sell control of its China unit to Chinese partners in a bid to become more local, while ZTE’s plans for a Nubia IPO reflect a growing emphasis on its younger, trendier smartphone brand.
China set to take control of local KFC?
A couple of big IPO stories are rippling through the headlines, led by word that an investor group headed by China’s sovereign wealth fund could buy control of the China unit of Yum Brands (NYSE: YUM), owner of the KFC fast-food chain, as it gets set for a spin-off and separate listing. This particular news marks a shift from previous reports that implied Yum would retain control of its China unit, even as it sold a major stake to big institutional investors.
While the Yum listing is likely to come later this year, another smaller but interesting deal has telecoms giant ZTE (HKEx: 763; Shenzhen: 00063) saying it plans to spin off and separately list its smartphone division that manufactures under the Nubia brand in the next 3 years. That hints that ZTE may be re-thinking its smartphone business, and perhaps preparing to slowly de-emphasize its older ZTE-branded phones in favor of its younger, higher-end Nubia line. Read Full Post…
Bottom line: McDonald’s plan to sell its wholly owned China stores to China Resources looks like a smart move that should help it achieve its aggressive new expansion plans in the market and broadly benefit both sides.
McDonald’s, China Resources eye tie-up
Leading consumer conglomerate China Resources looks like a company with an identity crisis these days, with word that it’s bidding to buy the China store operations of global fast food giant McDonald’s (NYSE: MCD). Such a deal would be huge, since China is now home to more than 2,200 McDonald’s, and the US company recently announced plans to open another 1,000 restaurants in the market over the next 5 years.
It’s important to note that many of McDonald’s existing China restaurants are run by local franchising partners, and that a potential sale of its China stores to China Resources wouldn’t affect those outlets. McDonald’s uses a similar franchising model throughout most of the rest of the world. It originally owned and operated most of its China restaurants when it entered the country in the 1990s due to the newness of the market and lack of suitable partners. But it has said recently that it wants to move to a franchising model there as well. Read Full Post…
The following press releases and news reports about China companies were carried on April 15. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
McDonald’s (NYSE: MCD) Targeting Buyout Firms As It Seeks to Sell North Asia Stores (English article)
Google (Nasdaq: GOOG) in New China Move with Event for Entrepreneurs (Chinese article)
Okmetic (Helsinki: OKM1V) Board Recommends National Silicon Industry Group Offer (GlobeNewswire)
Focus Media (Shenzhen: 002027) to Raise 5 Bln Yuan in Share Issue After Backdoor Listing
US Says China to Scrap Some Export Subsidies (English article)
The following press releases and news reports about China companies were carried on April 1. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Bottom line: McDonald’s could see a strong rebound in China over the next few years, as consumers give the chain a second look following an overhaul that includes the roll out of a high-tech burger customization program.
McDonald’s expands China high-tech burger program
Chinese consumers are welcoming a McDonald’s (NYSE: MCD) high-tech program for customized hamburgers, with word that the world’s largest burger chain will aggressively expand the concept in China this year. I have yet to visit one of the new stores in the program, but admit I’m intrigued by the concept that allows customers to personalize their burgers at computer kiosks inside stores before having them delivered to their tables.
That kind of curiosity and novelty factor could be key to jump-starting McDonald’s China business, which has stalled over the last few years as customers flock to a wide range of other alternatives more suited to local tastes. Both McDonald’s and crosstown rival KFC (NYSE: YUM), which is in the process of spinning off its China unit into a separate company, have suffered from slowdowns to their China operations in recent years for similar reasons. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 31. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
China to Increase Wind, Solar Power Capacity by 21 Pct in 2016
McDonald’s (NYSE: MCD) Supplier OSI China Trial Concludes in Shanghai (English article)
China Investment Corp (CIC) Sells Down SMIC (HKEx: 981) Stake (HKEx announcement)
Hareonsolar De-listing Risk Up After United PV (HKEx: 686) Acquisition Hits Obstacle (Chinese article)
China Telecom (HKEx: 728) Announces Resigation of Chang Xiaobing as Chmn, CEO (HKEx announcement)
Bottom line: UnionPay’s launch of a new mobile payments service is a long-overdue answer to challenges by Alibaba and Tencent, and is somewhat late but also vital to maintaining its eroding position in China’s electronic payments market.
UnionPay rolls out mobile wallet card
After coming under growing assault over the last 2 years from the private sector, state-run behemoth UnionPay is finally fighting back by launching a mobile-based payment service to counter rival products from Internet giants Alibaba (NYSE: BABA) and Tencent(HKEx: 700). There’s no mention of either of China’s top 2 Internet companies in an announcement of the new service from UnionPay, even though Alibaba’s Alipay Wallet and Tencent’s WeChat Pay are clearly present in the subtext.
UnionPay is just the latest big state-run company to feel the heat of private sector competition, which is shaking up China’s entire financial sector that was previously dominated by big state-run companies. But UnionPay’s case is even more extreme, since the company operated a state-granted monopoly financial transactions settlement network for the first decade of its existence, similar to global systems run by credit card giants MasterCard (NYSE: MA) and Visa (NYSE: V). Read Full Post…
This week’s Street View gets us into the festive holiday mood with a look at food, including the latest take-out dining craze sweeping our city and a much smaller but still significant development in the main campus cafeteria at the university where I teach.
The bigger trend has seen a sudden explosion of take-out dining services in our city, resulting in a new flood of bicycles and other deliver vehicles zipping through the streets of Shanghai. The smaller item saw the main dining hall at Fudan University officially launch a western-style restaurant over the past week, bringing tasty but greasy items like pizza, pasta, steaks and upscale coffee to some of our city’s best and brightest young minds.
One of my favorite things about writing this column is getting to chronicle the many booms and subsequent busts that continually sweep through a major city like Shanghai. I’ve previously written about local explosions in convenience stores, beauty salons, coffee shops and most recently asset management companies, as entrepreneurs and big chains flocked to these latest business trends. Read Full Post…
