Bottom line: Meitu’s Hong Kong IPO plan is likely to get a positive reception due to strong sentiment for Chinese tech companies, while a plan to list US-focused Media.net in China via a backdoor IPO is likely to fail due to numerous obstacles.
Meitu eyes HK listing by year end
A couple of IPO stories are in the headlines, including what could become the largest listing for a Chinese tech firm this year by Meitu, operator of an app that helps users make self-enhanced selfies. The other deal looks quite unusual, and has a Chinese investor group buying US advertising services startup Media.net, with plans to list the company in China through a backdoor-style process. In all my years covering China this is the first time I’ve seen this kind of deal, which looks both interesting but also quite speculative.
Each of these deals is quite different, and both have one or two notable points. Meitu looks most notable not only for its size, which could be up to $1 billion, but also for its location. IPOs for this kind of high-tech company have traditionally come in New York, and more recently on China’s Nasdaq-style ChiNext board, but are seldom seen in Hong Kong. Read Full Post…
Bottom line: Alibaba’s 2 latest big investments in Snapchat and Snapdeal look like good bets for strong financial returns, but are unlikely to produce any major strategic benefit.
Alibaba in talks for Snapdeal stake
I was a bit confused on my first reading of the headlines today, after seeing articles saying e-commerce leader Alibaba (NYSE: BABA) was in talks to invest in 2 companies whose “snappy” names sounded quite similar. But a closer reading made it clear that these were 2 very different deals, one involving the popular US social networking service (SNS) Snapchat, and the other involving a popular Indian e-commerce site called Snapdeal.
Despite their big geographic and product differences, these 2 deals seem to represent a growing trend for Alibaba, which is no longer acquiring companies but instead only buying small strategic stakes. The strategy looks mostly advantageous to the investment targets. That’s because it’s helping to push up the valuations of names like Snapchat and Snapdeal to frothy levels, much the way Alibaba used similar investments to pump up its own valuation in the run-up to its IPO last year. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 12. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Preparing To Invest $200 Mln In Snapchat – Source (Chinese article)
Baidu (Nasdaq: BIDU) Halts Updates, Maintenance For Mobile OS (Chinese article)
Car Inc (HKEx: 699) Announces Full-Year 2014 Results (HKEx announcement)
Online Listings Site Ganji Launches IPO Process – CEO (Chinese article)
Chinese Shoe Factory Workers Strike Over Benefits (English article)
The slower summer months haven’t cooled down appetite for new M&A among Chinese Internet firms, with word that e-commerce leader Alibaba is chasing a massive investment that could see it purchase a stake in US social networking high-flyer Snapchat. At the same time, software security specialist Qihoo 360 (NYSE: QIHU) has just announced new plans to raise up to $1 billion through a convertible bond offer, in what also could be the prelude to a major new acquisition. Read Full Post…
The following press releases and media reports about Chinese companies were carried on October 30. To view a full article or story, click on the link next to the headline.
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Apple’s (Nasdaq: AAPL) iPhone Sales Face Test in China In Quarterly Results (English article)
Snapchat Could Get Funding From Tencent (HKEx: 700) This Week (English article)
