Tag Archives: Morgan Stanley

News Digest: August 17-19

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The following press releases and media reports about Chinese companies were carried on August 17-19. To view a full article or story, click on the link next to the headline.
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  • Goldman, Morgan Stanley In Talks To Buy Stake In China’s Huarong: FT (English article)
  • China Seen Probing IBM, Oracle, EMC After Snowden Leaks (English article)
  • E-House (NYSE: EJ) Reports Q2 Results (PRNewswire)
  • Qihoo 360 (NYSE: QIHU): So.com Search Query Share Nears 20 Pct (English article)
  • L’Oreal Offers $840 Mln For Chinese Facial Mask Maker Magic (HKEx: 1633) (English article)
  • Latest calendar for Q2 earnings reports (Earnings calendar)

IPOs: WeChat In Singapore, CICC Eyes HK

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IPO Tuesday: WeChat, CICC and 500wan.com

I’m calling today “IPO Tuesday” because there are quite a few interesting news bits involving Chinese listing plans, led by an unexpected report that Internet giant Tencent (HKEx: 700) is eying Singapore for a listing for its popular WeChat mobile messaging service. That same report cites a source saying that Tencent itself eventually aims to complement its existing Hong Kong listing with a dual listing in New York — another unexpected twist for one of China’s most dynamic Internet companies. Meantime, China’s largest investment bank CICC is also making headlines with word of a listing plan, as Internet company 500wan.com moves ahead with its own New York IPO. Read Full Post…

Local China Banks March To HK

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Huishang Bank targets HK IPO

The ongoing cash crunch at Chinese banks may be partly behind reports that a trio of regional banks are aiming to make IPOs in Hong Kong, with Bank of Shanghai, Huishang Bank and CGB all aiming to list in the second half of the year. These regional lenders may also be losing patience while waiting for China to lift a freeze on new IPOs that dates back to last year, which has led to a backlog of dozens of companies that want to make offerings. The China Securities Regulatory Commission (CSRC) had been giving signals that it could soon lift the freeze, though it may change its mind if the current sell-off on Chinese stock markets continues. Read Full Post…

News Digest: January 11 报摘：2013年1月11日

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The following press releases and media reports about Chinese companies were carried on January 11. To view a full article or story, click on the link next to the headline.
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  • Founder of Group Buying Site 24Quan Confirms Company Has Closed (Chinese article)
  • Apple’s (Nasdaq: AAPL) Tim Cook Meets With China Mobile (HKEx: 941) Chmn (English article)
  • Morgan Stanley (NYSE: MS) Buys 7.1 Pct of Youku Tudou (NYSE: YOKU) (Chinese article)

CITIC Securities Solidifies Global Push 中信证券巩固全球化战略

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China’s biggest brokerage CITIC Securities (HKEx: 6030; Shanghai: 600030) could be a company to watch over the next 2-3 years as it attempts to become the country’s first truly global player using its newly acquired CLSA unit as a stepping stone. If I were making bets, I would say the company has the resources it needs to become one of the top second-tier global players in the next 4 or 5 years, competing successfully with the likes of names like Japan’s Nomura and Britain’s Barclays Capital. If it can do that, I would even give the company a chance of eventually entering the echelons of a global elite that includes names like Morgan Stanley (NYSE: MS) and Goldman Sachs (NYSE: GS), though that will take at least a decade or possibly longer.

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Carlyle, Home Inns Drive Hotel Consolidation 酒店业整合加速：如家快捷和凯雷投资的并购

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Consolidation is accelerating the budget hotel space with new acquisitions by industry leader Home Inns (Nasdaq: HMIN) and private equity giant Carlyle (Nasdaq: CG), as China’s top operators look for ways to maintain their growth going amid a slowing market. This growing string of smaller deals is building up to the big story that’s likely to come in the next 2 years, when we could see a Chinese player make a global acquisition or one of the big foreign operators buy up a Chinese brand.

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IPOs: BMW Distributor Crashes, PICC Revs Up 永达汽车搁置IPO计划 中国新股持续遇冷

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Just a week after a top Chinese auto rental firm scrapped its plans for a New York IPO, another auto specialist, Yongda Automobile Services has also junked plans for a listing in Hong Kong, reflecting not only cooling overseas demand for Chinese IPOs but also the chill that is settling over the country’s auto sector. But the true test for offshore Chinese IPOs could still be coming, as insurance major PICC gets set for a mega-IPO in Shanghai and Hong Kong to raise up to $6 billion. Let’s look at the Yongda news first, which has seen the operator of China’s largest distributor of cars from luxury German automaker BMW (Frankfurt: BMWG) cancel its plans for a Hong Kong plan to raise up to $430 million due to anemic demand. (English article) The decision comes just a week after auto rental specialist China Auto also formally scrapped its plans for a New York IPO after originally filing for the offering back in January. (previous post) The failure of both of these IPOs reflects not only weak sentiment for new offerings in general, but also the anemic state of car sales in China, which passed the US in 2010 to become the world’s largest auto market but has seen growth slow dramatically over the last year as China’s economy slows. While the failure of China Auto’s IPO isn’t too surprising, the withdrawal of the Yongda listing was a bit more unexpected because sales of luxury cars like BMW seemed to be more immune to the slowdown in China. Thus this lack of investor interest seems to indicate that markets expect an imminent slowdown as well for the luxury segment, which is still seeing growth in the 30-40 percent range even as broader market gains have fallen into the low single digits. Meantime, People’s Insurance Company of China (PICC), one of China’s top insurers, is hoping to avoid a similar fate to Yongda by bringing more major investment banks into its dual listing plans. (English article) Foreign media are reporting the company has added 14 investment banks, including powerhouses like Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS), to the group underwriting the Hong Kong portion of its IPO aiming to raise around $3 billion from foreign investors. The addition of so many major foreign investment banks, combined with PICC’s strong state backing, means that this offering is very likely to go forward despite weak sentiment in the broader market, though I wouldn’t expect it to price very strongly and the final amount of funds raised in Hong Kong could be closer to $2 billion. One of the few Chinese companies to successfully make a major Hong Kong IPO in recent months was another insurance company, New China Life (HKEx: 1336), which raised $1.3 billion in the Hong Kong portion of a dual listing late last year. The company’s shares initially surged, but have since given back most of the gains and are now just slightly ahead of their offering price — roughly in line with the broader market. Given recent uncertainty in the broader insurance market, I wouldn’t expect too much excitement from this PICC offer though it should indeed go forward. When that happens, look for the stock to trade sideways or sink lower after its trading debut.

Bottom line: The scrapping of an IPO by China’s top BMW distributor and addition of major banks to a planned IPO for major insurer PICC reflect continued weak demand for new China offerings.

Related postings 相关文章:

◙ China Auto IPO Crashes 神州租车的IPO之梦告吹

◙ Ping An Returns to Market With Second Big Fund Request 中国平安拟发大规模可转债

◙ Year End Brings Problematic New IPO Wave 中国新一波IPO潮或无法达预期效果

Alibaba’s Yahoo Buyback: Deal Finally Near? 阿里巴巴回购雅虎所持股权可能为期不远

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I haven’t written for a while about Alibaba’s endless quest to buy back the 40 percent of its shares held by faded US search giant Yahoo (Nasdaq: YHOO), so now seems like a good time to revisit the subject yet again following reports that China’s e-commerce leader is near finalizing a $3 billion bank loan it will need to complete the buy-back. (English article) Of course the main problem with this deal has never been the financing, though news of this loan could mean a deal may be near for this tortured buy-out that began with the firing of former Yahoo CEO Carol Bartz last September and has now dragged on for 8 months. According to the latest reports, Alibaba expects to finalize the loan by the end of this month, which will be a syndicated deal involving a large number of mostly foreign banks including Credit Suisse (Switzerland: CSGN) and Morgan Stanley (NYSE: MS). Both Alibaba and Yahoo have shown that they want to complete a deal, so clearly there’s determination on both sides. Alibaba wants to reclaim the stake  so it can sell it to other investors in the run-up to an eventual IPO, while Yahoo wants to get rid of a stake it considers a valuable but unneeded distraction as it struggles to turn around its core US-based search business. Neither company has commented on the major stumbling blocks that have kept them from signing a deal, but based on what I’ve seen the major obstacle seems to be unrealistic expectations from both sides, including Yahoo’s desire to structure the deal in a way that will allow it to avoid paying taxes on the $10 billion or more in gains it will make through the sale. Reports in early February indicated the 2 sides were restarting discussions for the buy-out with more realistic expectations, after a previous round of talks faltered and stalled out late last year. (previous post) Neither side has commented since then, but this latest news that Alibaba is close to finalizing the $3 billion loan may indicate that the deal is finally moving forward and we could actually see an announcement in the next 2-3 weeks. Of course, hopes were high for a deal to be finalized last year after Yahoo’s big leadership change, even though those talks eventually failed, leaving everyone in limbo. The big difference this time is that new Yahoo CEO Scott Thompson has been in his job for 5 months now, during which time he has started his overhaul plan which included announcement of mass layoffs. The Alibaba stake clearly has no part in Thompson’s future vision for Yahoo, and thus he probably feels that now would be a good time to get rid of this distraction. Accordingly, he will be willing to make compromises, most likely with strong backing from the Yahoo board, to finally reach a deal. Personally speaking, I can’t wait for that day to come so this troubled marriage can finally end in divorce and both Alibaba and Yahoo can move on to more important matters.

Bottom line: Word that Alibaba is close to finalizing a $3 billion loan to buy back the 40 percent of its shares held by Yahoo indicates a deal in this drawn-out process may finally be near.

Related postings 相关文章:

◙ Alibaba: Let’s Get This Show Finished 阿里巴巴和雅虎赶紧“离婚”吧

◙ Yahoo, Alibaba Dance Nears Finale　　雅虎应与阿里巴巴撇清干系

◙ Alibaba Scrambles to Prove High Valuation 阿里巴巴高估值或将作茧自缚

China Tech Start-Ups: Coming Home? 中国科技企业扎堆国内上市？

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There’s an interesting report out this morning noting that a growing number of Chinese tech start-ups that once looked like strong candidates for New York IPOs are opting for home listings instead, deterred by higher scrutiny and weak sentiment overseas and a much friendlier — if not volatile — environment on ChiNext, China’s 2-year-old Nasdaq-style enterprise board. In the latest move on that front, Chinese media are reporting a company called Baofeng, maker of a popular online and cellphone video player, has filed to make a public listing on the ChiNext, reversing its plans last year when it said it would make a 2012 listing overseas. (Chinese article) Frankly speaking, Baofeng does have the exact profile of a company that would have traditionally gone to either the Nasdaq or New York Stock Exchange to raise funds as its first choice a year ago, followed by Hong Kong as a second choice and the ChiNext as a distant third. But much has changed from a year ago, when foreign investors were still quite bullish on Chinese Internet stocks, giving them relatively rich valuations compared with peers based in more developed western markets. Such stocks have suffered a major reversal of fortune over the last year, with investors dumping their shares following a series of accounting scandals that also led to higher regulatory scrutiny and the delisting of a number of smaller players. Amid all the scandals last year, China’s securities regulator also got involved, trying to insert itself into the overseas listing process as the central government also reportedly discussed either limiting or shutting down that process completely. As far as I know, nothing specific has happened yet in terms of new Chinese government oversight, though a number of big-name western investment banks have refused to underwrite New York IPOs for some China firms over concerns about their accounting. In one of the highest profile cases, Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) both reportedly resigned from an IPO last summer for leading group buying site LaShou, which went on to hire some smaller banks but has yet to make an offering. (previous post) The lone Chinese company that did make a New York IPO this year, discount retailer Vipshop (NYSE: VIPS) was an unqualified disaster, pricing well below its indicated range and falling 30 percent since its trading debut. This new report notes that Baofeng is just the latest example of a Chinese tech start-up going to ChiNext rather than overseas, following similar moves by firms like online game developers Wushen Century Network Technology and Suzhou Snail Game. It’s probably too early to say if this move to the ChiNext will be a long-term phenomenon, and I suspect these start-ups that list there will quickly discover the market’s high volatility is far less desirable than the more stable environments in New York and Hong Kong. But if the ChiNext can implement reforms to lower volatility in the market, perhaps by opening up to more foreign investors, it could seize this opportunity to quickly position itself as a strong alternative to New York and Hong Kong for China’s vibrant field of tech start-ups.

Bottom line: A recent move by tech start-ups to China’s Nasdaq-style enterprise board could become a viable IPO alternative if the board can create a more stable listing environment.

Related postings 相关文章:

◙ China IPO Winter Goes On as Vipshop Flops 唯品会大跌，中国IPO冬季持续

◙ Outlook Cloudy As Shanda Refiles for Literature IPO 盛大文学重启赴美IPO计划

◙ China IPO Train Hits Bump With Vancl Resignation 中国上市事件撞上凡客诚品CFO辞职

55tuan Restarts IPO Race With LaShou 窝窝团和拉手网重启IPO争先赛

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An IPO race pitting 2 of China’s top group buying sites, LaShou and 55tuan, is showing signs of restarting in the Year of the Dragon, though I’m still a bit dubious of whether either of these 2 companies will ever really make it to market. New reports in the Chinese media say 55tuan is denying rumors that it has scrapped plans for a New York IPO, saying it is moving forward with a timetable for an offering in the second quarter. (Chinese article) The denial marks the latest twist in a race that started to take form last summer, when both 55tuan and LaShou appeared to be moving ahead with plans for offerings to raise much-needed cash. Both companies had trouble finding underwriters for their offerings, with names like Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) resigning from LaShou’s plan (previous post), while Credit Suisse (NYSE: CS) and Merrill Lynch reportedly declined to bid for the 55tuan deal. (previous post) All the big banks were reportedly concerned about the accounting used by both companies for some of their many acquisitions, amid a broader series of accounting scandals that hammered US-listed Chinese stocks last year. LaShou ended up hiring several second tier-players, including domestic heavyweight CICC and Japan’s Nomura; but one of my sources tells me that even Nomura ended up dropping the deal and was replaced by Britain’s Barclays Capital. LaShou appeared to have the edge in the race when it made its first public IPO filing last fall, but then saw that plan derail after the US securities regulator grew suspicious and asked for more information. (previous post) That happened in November and we haven’t heard anything since then, leading me to believe that the plan could be delayed indefinitely while LaShou does some major reworking of its books to satisfy both regulators and its own underwriters. In the meantime, I’m also skeptical that 55tuan will really make a second-quarter IPO, as it is having its own problems in the highly competitive group buying space that saw it make mass layoffs last year. Turmoil in the space appeared to claim its latest victim earlier this week when Groupon.cn, which has no relation to US giant Groupon, reportedly put most of its employees on extended holiday after the Chinese New Year break. (previous post) At the end of the day, one or both of these companies could finally make it to market, but both would be well advised to wait until the end of the year when they can generate more excitement — if they have the financial resources to survive that long.

Bottom line: A second-quarter IPO timetable for group buying site 55tuan looks overly ambitious, and an offering closer to the end of the year looks both more prudent and realistic.

Related postings 相关文章:

◙ Groupon.cn Becomes 2012 First Group Buy Victim 团宝网员工被放假 中国团购业料将加速整合

◙ LaShou IPO Derails

◙ 55tuan: A Company in Denial 窝窝团拒不接受现实

CDC Kicks Off China Bankruptcy Parade 中华网打开赴美上市公司破产魔盒

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The confidence crisis in US-listed China stocks has claimed its latest victim in CDC Corp (Nasdaq: CHINA), the former high-flying software maker which filed for bankruptcy in the US on Wednesday as it struggled under the weight of a costly lawsuit. (Chinese article) Old-timers will recall that this company, formerly known as Chinadotcom, was one of China’s first US-listed web firms to go public more than a decade ago. That makes its current demise somewhat significant, though the company had faded from prominence for quite a while before this latest development. In an ironic twist, CDC’s ticker symbol is CHINA, symbolizing the broader downfall of many US-listed China stocks in recent months amid a crisis of confidence about their accounting. In CDC’s case, the crippling blow was a recent $65 million judgment against it resulting from a 2009 lawsuit from another company called Evolution CDC. (English article) There are no other details about the lawsuit, but based on the plaintiff’s name and fact that it was filed 2 years ago, this looks more like a disagreement between CDC and one of its vendors than a shareholder lawsuit like many of the ones we have seen in recent weeks against Chinese firms whose share prices have plunged on a steady stream of news about financial irregularities. CDC could nowl see similar shareholder suits coming its way, as its shares plunged more than 50 percent after it announced the bankruptcy filing. I checked the details on CDC’s major shareholders and was surprised to find such big names as CalPERS, the massive California pension fund, and Morgan Stanley (NYSE: MS) among them as of June, underscoring just how popular these companies had become among investors before their recent demise. I’m sure we’ll see more similar bankruptcy filings in the next year or two, as the steady stream of shareholder lawsuits now being lodged get resolved in the courts, many in shareholders’ favor. In the latest of those, a company named SinoTech Energy (Nasdaq: CTE) is facing a new class action lawsuit for allegedly including misleading information in its registration statement. (lawsuit announcement) Stay tuned for more such lawsuits, and subsequent bankruptcy filings, as the ongoing confidence crisis plays out over the next 2 years.

Bottom line: CDC Corp’s bankruptcy is the first but almost certainly not the last for US-listed Chinese firms, which are defending themselves against a raft of shareholder lawsuits.

Related postings 相关文章:

◙ US China Stocks: Bloodbath Becomes Correction 在美上市中资股遭抛售 迈入股价修正新阶段

◙ US-Listed China Firms Fight Back — Finally 中国赴美上市公司最终还击

◙ Securities Regulator Seizes on US Confidence Crisis 中国证监会或介入企业海外上市