Bottom line: iQiyi won’t make an IPO next year even though Baidu would like to get the company off its books, while Renren’s privatization marks one of the last buyouts for a US-listed Chinese firm from a wave dating back to last year.
iQiyi reportedly eyes 2017 IPO
The year 2016 is winding down as an unmemorable one for Chinese IPOs, thanks to a rocky start that cast a chill over the entire space. That said, the new year could be a bit more lively, amid signs that China’s securities regulator is opening the gates a bit wider to new offerings. That signal could bode well for offshore listings as well, with word that loss-making online video site iQiyi, controlled by online search leader Baidu (Nasdaq: BIDU), is contemplating such an offering next year. Read Full Post…
Bottom line: Tencent’s Supercell purchase looks like a relatively smart use of its big cash pile, and will give it access to leading-edge games and let it focus on the more important task of developing an ecosystem of products and services around WeChat and QQ.
Tencent gets $8.6 bln charge from Supercell
Internet giant Tencent(HKEx: 700) has been a victim of its own success, accumulating one of China’s largest cash pots even as it remained quite conservative as an acquirer. But now the company has taken some pressure off of itself to invest that cash, with the announcement of its purchase of a controlling stake in Finnish game maker Supercell for a hefty $8.6 billion. I haven’t done any detailed research on the purchase, but this does appear to be the largest acquisition of all time by a Chinese Internet company, and is probably worth as much as or even more than all of Tencent’s other acquisitions to date combined. Read Full Post…
Bottom line: Tencent’s sharp focus, strong management and savvy strategic tie-ups make it China’s best Internet investment for the long term, though its shares may feel some short-term pressure due to high valuation.
Tencent builds empire on SNS
This week the series on my favorite Chinese stocks takes us to the “Big 3” of Baidu (Nasdaq: BIDU), Alibaba(NYSE: BABA) and Tencent(HKEx: 700) , sometimes called the BAT super trio because they’re the country’s biggest Internet companies by quite a large margin. I’ll end the suspense right away by saying my favorite among these 3 is Tencent, the only one that’s listed in Hong Kong.
I’ll look briefly soon at some financials comparing this trio, but will openly admit my Tencent attraction is less based on market fundamentals and instead is tied to its corporate personality that differs quite a bit from the others. These “personalities” are a direct reflection of each company’s founder, since all 3 are relatively young and the founder of each is still quite clearly in charge. Read Full Post…
Bottom line: Baidu’s reported plan to spin off many of its non-core units for separate listings in China looks like a smart move to attract Chinese buyers for its newer businesses while retaining US investors for its lucrative core search business.
Baidu eyes domestic IPOs for non-core units
Leading search engine Baidu(Nasdaq: BIDU) is reportedly eyeing plans to spin off many of its smaller units for IPOs in China, marking a novel alternative for the growing number of Chinese tech firms torn between listing at home and in the US. The US was the traditional choice for listings by Chinese venture-backed tech firms for most of the last 2 decades, since domestic listings were difficult or impossible during that time due to a heavy bias towards big state-owned companies.
But more recently China has rolled out a new group of boards aimed at attracting high-growth venture-backed companies. The earliest of those, the ChiNext board launched in 2009, has proven quite successful, nurturing such high-flyers as online video site LeTV (Shenzhen: 300104) and film production company Huayi Bros (Shenzhen: 300027). A more recently launched over-the-counter (OTC) board has also proven quite popular, and Shanghai plans to launch its own emerging industries board later this year. Read Full Post…
Bottom line: A growing alliance between JD.com and Tencent could start to seriously challenge Alibaba’s dominance of China e-commerce in the next 2 years, as the rivals use the upcoming November 11 Singles Day to showcase their prowess.
JD joins Nov 11 courtship of online shoppers
This year’s November 11 Singles Day shopping extravaganza is shaping up as a guerrilla courtship of Chinese online shoppers by the nation’s 2 e-commerce leaders, as each vies for supremacy on a date that’s become the world’s busiest for online buying. Just days after leading operator Alibaba (NYSE: BABA) announced its own grand plans to seduce shoppers, rival JD.com (Nasdaq: JD) has come out with its own counter scheme that aims to court China’s hordes or singles in an alliance drawing on its growing ties with leading social networking (SNS) operator Tencent (HKEx: 700).
The stakes in this brewing war are huge. Last year alone, Alibaba reported 278 million orders worth $9.3 billion around the promotion that it created on the November 11 holiday, which represents the epitome of singledom due to its numerical representation as 11-11, or four 1’s. JD declined to give a sales value for its orders last year, but said it posted 14 million orders, which would translate to far more modest but still significant sum of about $500 million worth of merchandise sold based on Alibaba’s rate. Read Full Post…
Bottom line: Tencent WeBank’s rapid growth over the last 2 months shows it intends to focus on high-interest small loans aimed at consumers and small businesses, challenging credit cards and credit lines from traditional banks.
WeBank lends $130 mln in 2 months
Seven months after its launch, Tecent-backed (HKEx: 700) WeBank is showing off some of its first financial accomplishments that hint at the direction it may take as it carves out a place in China’s banking sector. The numbers reveals that the bank, the first to launch under a private-sector pilot program by Beijing, is setting its sights on providing credit to small businesses and consumers. The tack looks like a direct challenge to traditional credit card issuers, and could ultimately provide consumers with yet another payment option in both the online and offline worlds. Read Full Post…
Supreme Court rules for Tencent in antitrust lawsuit
Big foreign multinationals may be feeling the heat from a recent string of anti-monopoly investigations, but Chinese Internet firms won’t have to face such worries anytime soon. That’s the latest message coming from Beijing, with word that China’s Supreme People’s Court has ruled in favor of social networking giant Tencent (HKEx: 700) in a long-running lawsuit claiming the company controlled a monopoly in the instant messaging market. I originally sided with Tencent when the case was filed 3 years ago by security software specialist Qihoo 360 (NYSE: QIHU), because I felt the lawsuit looked retaliatory for an unrelated suit between the pair at that time. But much has changed since then, most notably the meteoric rise of Tencent’s wildly popular WeChat mobile instant messaging service that has become an indispensable tool for millions of people in China, myself included. Read Full Post…
The microblogging realm was filled with words of sympathy this past week at the woes for some of China’s longest-serving foreign tech firms whose names have become household words over the last 20 years. Leading the list were a flood of comments on Nokia, whose name was once synonymous with cellphones in China but later fell on hard times and last week laid off a big part of its Chinese workforce. Meantime, other tech executives looked on in wonder at the recent plight of Microsoft (Nasdaq: MSFT) and Mercedes-Benz, which have joined a growing list of western firms being investigated by Chinese anti-trust regulators.
Chinese firms haven’t been the only ones feel the pain these past few weeks, as the nation’s Internet regulator has also cracked down on social media sites with its eye squarely on industry titan Tencent (HKEx: 700). As that happened, the operator of the popular WeChat and QQ instant messaging platforms got some rare sympathy from rival Weibo (Nasdaq: WB), the Chinese equivalent of Twitter, which itself came under a similar crackdown 2 years ago. Read Full Post…
Tencent’s (HKEx: 700) hugely popular WeChat and QQ instant messaging platforms are once again hogging the headlines, reflecting the increasingly important role the 2 services are playing for the future development of the Internet giant. This time WeChat is in the news after coming under new government restrictions aimed at censoring some of its content. Meantime, QQ has formally launched an official shopping channel in partnership with e-commerce giant JD.com (Nasdaq: JD), laying down a big challenge for sector leader Alibaba. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 11. To view a full article or story, click on the link next to the headline.
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Top executives at controversial software security maker Qihoo 360 (NYSE: QIHU) have been blitzing cyberspace these past few days with a campaign to convince the world that it’s suddenly become a defender of justice and occupier of the moral high ground. This sudden offensive almost looks coordinated, with Qihoo aiming its newest assaults at 3 of its favorite targets, search leader Baidu (Nasdaq: BIDU), top social networking firm Tencent (HKEx: 700) and fast-rising super-cool smartphone maker Xiaomi. Read Full Post…
