Bottom line: The ongoing privatization wave of Chinese firms abandoning New York listings is likely at or near a peak, with gaming and solar companies as some of the likeliest candidates to make new announcements.
E-House heads for exit door
The exodus from New York by neglected Chinese companies marches on this week, with online real estate company E-House (NYSE: EJ) becoming the latest to receive a management-led buyout offer. At the same time, online dating site Jiayuan (Nasdaq: DATE) has announced that a suitor who made a similar offer for the company in March has sharply raised its bid, following complaints that the original offer grossly undervalued the company.
When the history books are written, the second quarter of 2015 could well go down as the height of a wave of privatization bids for New York-listed Chinese firms, whose shares have languished in the last few years due to lack of interest from US investors. At the same time, many of those companies are casting an envious eye on China’s rallying stock markets, and are almost certainly hoping to re-list at home in the future. Read Full Post…
Bottom line: Online real estate stocks could resume their rebound if their latest forecasts are accurate, while Youku Tudou shares are holding steady despite widening losses on hopes for a merger deal with iQiyi.
Online real estate stocks drop on weak earnings
This week marks the height of earnings season for US-listed Chinese stocks, prompting me to look at a quartet of struggling companies in the real estate and online video spaces that have just reported results. The former category has seen the trio of SouFun (NYSE: SFUN), E-House (NYSE: EJ) and Leju (NYSE: LEJU) all release their earnings over the last 2 days, revealing gloomy results as an ongoing correction shows no signs of easing in China’s real estate market. Meantime, former online video leader Youku Tudou’s (NYSE: YOKU) latest results also look weak, showing the company’s losses ballooned as it continues to search for an elusive model for long-term profitability. Read Full Post…
Bottom line: An IPO plan for Jupai could raise up to $100 million and perform relatively well if it can sell itself as an asset manager well positioned to profit from China’s real estate downturn.
E-House grooms Jupai for IPO
The year’s first IPO for a Chinese company in New York could finally be in the pipeline, with word that an asset management firm controlled by real estate services firm E-House (NYSE: EJ) has made its first filing for a listing. The plan comes in a broader announcement by E-House, which has transferred its asset management business to a third company called Jupai, which in turn has submitted a draft registration to the US securities regulator in preparation for a proposed IPO.
If the plan goes forward, it could become the first listing for a Chinese company in New York this year, stealing the distinction from another IPO plan by group buying site 55Tuan. IPO watchers will know that 55Tuan filed its listing plan back in January, but missed several deadlines for unexplained reasons without formally saying it is scrapping the plan. (previous post) Read Full Post…
Bottom line: Shares of E-House and Leju are likely to trade flat to downward over the next year due to continuing pressure on China’s real estate market, while Renren is likely to get bought out over that period.
Property downturn puts pressure on Leju, E-House
The latest earnings from 2 of China’s 3 top listed online real estate firms reflect the challenges facing the sector, with soaring costs undermining profits at both E-House (NYSE: EJ) and its affiliated Leju (Nasdaq: LEJU). Meantime, a separate earnings report from fast-fading social networking site Renren (NYSE: RENN) shows the former Internet superstar is fast becoming worthless as it sells off assets and its core SNS business shrinks. I expect the end will come soon for Renren, probably in the next 12 months, since the company’s largest asset now is its big cash pot that could attract a buyer who simply wants the money. Read Full Post…
Bottom line: 58.com’s purchase of a secondary real estate trading site at a big discount looks like a shrewd move for the longer term, but could cause a short-term drag on profits due to weakness in China’s property market.
58.com buys Anjuke for bargain price
Local media are buzzing about a relatively large Internet deal that will see leading online classified advertising site 58.com (NYSE: WUBA) buy Anjuke, one of China’s largest online platforms for services involving secondary real estate. But the source of the buzz isn’t the deal itself, but rather the huge bargain that 58.com is getting compared to what Anjuke said it was worth just a year ago. That massive discount reflects the broader gloom surrounding China’s real estate market as it teeters on the edge of a major correction, and certainly doesn’t bode well for listed peers like E-House (NYSE: EJ) and SouFun (Nasdaq: SFUN). Read Full Post…
Bottom line: Momo’s IPO will go ahead but could debut weakly due to wrongdoing allegations against its CEO, while SouFun and Xunlei shares will be weak through 2015 due to a bad real estate market and stiff competition.
NetEase accuses Momo CEO of wrongdoing
The China Internet world is being rocked with scandals as we head into the end of the year, led by new allegations of wrongdoing against the founder and CEO of mobile social networking service Momo on the eve of its New York IPO. Meantime, recently listed online video site Xunlei (Nasdaq: XNET) is being rocked by accusations of putting pornography in some of its pop-up ads. Finally there’s leading real estate website SouFun (NYSE: SFUN), which is taking a hit after a highly-trumpeted agreement with a major real estate agency has fallen apart as China’s property market deteriorates. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 10. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
NetEase (Nasdaq: NTES) Says Momo CEO Was Corrupt While At Company (Chinese article)
Qunar (Nasdaq: QUNR) Forecasts Profit By End Of 2016 (Chinese article)
SouFun (NYSE: SFUN) Terminates Strategic Cooperation With Century 21 China (PRNewswire)
Tencent (HKEx: 700) Doubles 2015 Budget For Literature Subsidiary (English article)
LeTV (Shenzhen: 300104) Seeks License to Make Electric Car (English article)
The following press releases and media reports about Chinese companies were carried on November 7. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
Bright Food Targets Listing Cereal-Maker Weetabix By 2016 (English article)
Online real estate services empires that took years to build are suddenly coming unglued, with word that Shanghai property firms are joining a list of clients who have stopped giving their business to sector leader SouFun (NYSE: SFUN). I’ll be quite blunt and say that anyone who didn’t see this coming must be living in a cave, even though I was somewhat surprised that the stocks of SouFun and its peers quickly recovered from a sell-off after similar reports emerged last month and in June. We’ll have to wait and see if the stocks rebound again this time, though perhaps this latest news will finally make investors realize that SouFun and its peers could be looking at a prolonged downturn as China’s real estate market finally goes through a much needed correction. Read Full Post…
The following press releases and media reports about Chinese companies were carried on August 6. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
WH Group (HKEx: 288) Gains as Biggest Pork Producer Debuts in Hong Kong (English article)
Luxury Car Makers Under Anti-Monopoly Investigation (Chinese article)
Tesla’s (Nasdaq: TSLA) China Trademark Dispute Ends As 2 Sides Reach Agreement (Chinese article)
The following press releases and media reports about Chinese companies were carried on July 19-21. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
Forbes Media Sells Off Most Of Company To HK Investor Group (Chinese article)
Paipai Re-launch to Bring JD.com (Nasdaq: JD) Experience to C2C (PRNewswire)
SouFun (NYSE: SFUN) Announces 5-Year Plan with a New Flagship Website Fang.com (PRNewswire)
SCA And Vinda To Integrate Hygiene Business In China (Businesswire)
