Bottom line: Sesame Credit’s new tie-ups with Unicom and a shared phone company are part of a string of deals to aggressively build up its credit rating business, and could add buzz to Ant Financial’s future IPO.
Sesame Credit in 2 new deals
Lest anyone think Alipay is the only asset in financial services giant Ant Financial’s portfolio, the company’s newer Sesame Credit unit is also hankering for headlines these days, with a couple of new deals for its service. The larger of those will see China Unicom (HKEx: 762; NYSE: CHU), the nation’s second largest wireless carrier, waive deposit requirements for some of its users with high credit scores, based on Sesame’s system. The other deal looks similar, and will see a shared phone operator also waive deposits for people with similarly high credit.
This kind of aggressive promotion is quite typical of Jack Ma, founder of e-commerce giant Alibaba (NYSE: BABA) and one of the main people calling the shots at both companies. Ma likes to be ahead of the curve, and is quite aggressive about peddling his vision for emerging sectors like credit ratings. That strategy has served him well in e-commerce and electronic payments, where Alibaba now dominates. Read Full Post…
Bottom line: Baidu could suffer more lost business after purging stealth advertisers engaged in gambling and sex services, while its new credit-scoring tie-up looks like a smart way to take advantage of its huge volumes of user data.
Baidu purges search results of online gambling sites
A day after appearing in 2 major global entertainment stories, online search leader Baidu (Nasdaq: BIDU) is back in the headlines at home in a new scandal involving online gambling sites that used stealth methods to promote themselves on Baidu’s search service. Normally I would say this particular scandal looks relatively minor and wouldn’t have a major impact on Baidu. But such scandals have suddenly become much bigger news following one back in May, which was centered on Baidu’s longtime practice of combining paid search results with organic ones without disclosing that mixture. Read Full Post…
Bottom line: Domestic buyers are likely to comprise most of the investors in Ant Financial’s latest fund raising, though the use of foreign advisers indicates some overseas participation may also be allowed.
Ant Financial raises new funds
Ant Financial, the financial services arm of e-commerce giant Alibaba (NYSE: BABA), is going back to investors for a new mega fund-raising, just a year after taking money from private investors for the first time. But any foreigners hoping to buy into Ant will probably be disappointed, since it appears this new funding round will be mostly open to Chinese institutional buyers. Likewise, Ant’s IPO that could come as soon as next year is likely to happen on one of China’s domestic stock markets, again locking out foreign investors.
Perhaps it’s only fair that foreign investors stand on the sidelines in Ant’s high-growth story, since such investors already have easy access to some of China’s top private companies that are listed overseas. By comparison, domestic Chinese investors have little or no access to shares of Alibaba, Baidu (Nasdaq: BIDU) or Tencent (HKEx: 700), even though that trio of corporate giants derive nearly all their money from China’s booming Internet market. Read Full Post…
The following press releases and news reports about China companies were carried on March 12-14. To view a full article or story, click on the link next to the headline.
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Huawei Enterprise Unit Achieves Profitability in 2015 (Chinese article)
Canadian Solar (Nasdaq: CSIQ) Reports Q4 and Full Year Results (PRNewswire)
Alibaba’s (NYSE: BABA) Cainiao Logistics Arm Targets Colleges (English article)
Huayi (Shenzhen: 300027), Tencent (HKEx: 700) Prepare Vehicle for Hollywood, Korea Deals (English article)
Ant Financial’s Sesame Credit Starts Beta Testing of Enterprise Credit Service (English article)
Bottom line: The piracy scandal rocking Alibaba will blow over in a few weeks with minimal longer-term impact, though the company’s stock will enter a downturn over the next 6 months due to overvaluation.
Piracy scandal grows around Alibaba
This week could well go down as a turning point for high-flying e-commerce giant Alibaba (NYSE: BABA), whose growing war of words with a top government agency is quickly becoming a major scandal. The increasingly heated exchange has almost completely overshadowed the latest media reports that say Alibaba’s financial arm is preparing to launch a bank later this year. A separate company announcement indicates the bank will use an innovative credit rating system that draws on Alibaba’s huge volume of big data generated from the billions of transactions and other information exchanges that cross over its network. Read Full Post…
