The following press releases and news reports about China companies were carried on April 29. To view a full article or story, click on the link next to the headline.
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Carl Icahn Says Sold Entire Apple (Nasdaq: AAPL) Stake on China Woes: CNBC (English article)
Bottom line: Spring Airlines is richly valued at current levels, but could be a strong bet over the next decade as it builds an Asia-wide budget carrier run out of Shanghai.
Spring Air growth set to accelerate
I’m not usually a fan of airline stocks, though one notable exception is budget carriers that tend to be more nimble and cost conscious, and are often run by entrepreneurs rather faceless corporate types. As China’s oldest budget carrier, Spring Airlines (Shanghai: 601021) certainly fits that profile, which is why it’s one of my favorites among Chinese stocks listed both domestically and abroad.
Since making its long-delayed IPO in Shanghai last year, Spring’s stock has soared, more than doubling in price since it first started trading in January 2015. That’s quite remarkable when one considers that the benchmark Shanghai index is down 15 percent over the same period, as China’s stock markets undergo a major correction that dates back to last June. Read Full Post…
Bottom line: Baidu’s new fund raising for its O2O take-out dining service is aimed at finding strategic partners and deflecting criticism from its shareholders, while Spring Airlines new fund-raising presages an aggressive expansion into Japan.
Baidu beefs up take-out dining service
A couple of major fund-raising stories are in the headlines on this final trading day of 2015, setting the stage for what’s likely to be a busy year ahead in the take-out dining and budget air travel sectors. The larger of the 2 items has online search leader Baidu (Nasdaq: BIDU) reportedly near a deal to raise up to $500 million for its young and fast-growing online-to-offline (O2O) take-out dining service. The smaller has China’s oldest budget carrier Spring Airlines (Shanghai: 601021) in the process of raising nearly 1 billion yuan ($150 million) to fuel its expansion into nearby Japan.
These 2 deals cap a year that saw an explosion in private funding for start up Chinese companies in the first half of 2015, including several deals worth more than $1 billion. But the pace of funding has slowed sharply in the last few months due to concerns over China’s slowing economy, and these latest 2 deals are likely to become the new norm in terms of deal sizes we’ll see in 2016. Read Full Post…
Bottom line: Upbeat reports from leading pork producer Smithfield and aircraft giant Boeing show that consumer-focused companies should continue to thrive despite China’s slowing economy, while policy-driven state-run firms could suffer more.
Boeing ups China aircraft outlook
A couple of upbeat new reports from aircraft giant Boeing (NYSE: BA) and leading global pork producer Smithfield are providing an interesting contrast to broader forecasts of gloom and doom for China’s slowing economy. In the first instance, Boeing has upgraded its 20 year forecast for aircraft demand in China, while the second has Smithfield has saying its exports to China rose 45 percent in the first half of this year.
Each of these stories is slightly different, but both point to a growing divide in the Chinese economy that has big implications for the nation’s major industries. On one side of the aisle are companies like Boeing and Smithfield, which make products and services directly tied to consumer demand. Such products and services are part of the so-called “real economy” and are things that the market really wants. These should be able to continue thriving even if China’s economy slows. Read Full Post…
Shanghai may be famous for its entrepreneurial spirit, but its track record isn’t quite so stellar when it comes to nurturing top entrepreneurs. That could be starting to change, however, with word that Dalian Wanda Group, one of China’s most dynamic companies, plans to move its headquarters to Shanghai from its current location in Beijing.
As a longtime foreigner living in Shanghai, I’ve always been surprised by the relatively small number of major private companies for a city of our size. We should certainly be proud of some of our city’s most outstanding entrepreneurs, with names like Guo Guangchang of Fosun Group and Spring Airlines (Shenzhen: 601021) Chairman Wang Zhenghua as 2 outstanding examples. Read Full Post…
Bottom line: A mega IPO by Postal Savings Bank next year is likely to attract little or no interest from private investors, while an upcoming IPO by 55Tuan could do slightly better but will still get only a lukewarm reception.
55Tun misses pricing target date
A couple of unattractive IPOs are in the headlines as China gets back to work after the Lunar New Year holiday, led by a massive plan by China’s Postal Savings Bank to raise up to $25 billion as soon as next year. While that plan may be a year or more away, a more advanced listing by group-buying site 55Tuan has failed to price its shares by a previously announced target date, leading some to speculate that the deal is running into trouble. Neither of these deals looks very exciting to me, and I suspect they won’t attract much interest from private investors either. Read Full Post…
Bottom line: Wanda Cinema and Spring Airlines represent a new generation of major private companies to list in China, and should enjoy strong share gains over the short to medium terms following their IPOs.
Spring Air leaps on first 2 trading days
There was plenty of spring in the stocks of 2 hot companies that listed in China this week, with budget carrier Spring Airlines (Shanghai: 601021) and theater operator Wanda Cinema Line (Shenzhen: 002739) jumping 44 percent in their trading debuts. The pair are part of a new generation of privately owned companies starting to list on China’s main stock markets, stealing the spotlight from an older group of state-run firms that still dominate the country’s 2 main stock exchanges in Shanghai and Shenzhen.
Obviously profits and broader performance will be the biggest determiner of whether these companies’ stocks continue to rise after the euphoria of their IPOs starts to fade. But from the perspective of a western buyer like myself, Wanda Cinema and Spring Air are 2 of the first Chinese-listed firms that I’ve seen whose stocks I would personally consider buying. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 22. To view a full article or story, click on the link next to the headline.
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Spring Airlines (Shanghai: 601021) Jumps 44 Pct In Shanghai Trading Debut (Chinese article)
Alibaba (NYSE: BABA) Seeks Stake In Insurer New China Life (HKEx: 1336) – Paper (English article)
Huawei, Global Union Partner On OTT TV Service (English article)
Dalian Wanda Group Pays 45 Mln Euros For Soccer Club Atletico Madrid (Chinese article)
eHi (Nasdaq: EHIC), Ctrip (Nasdaq: CTRP) Launch Next Phase Of Partnership (PRNewswire)
The following press releases and media reports about Chinese companies were carried on January 21. To view a full article or story, click on the link next to the headline.
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Itochu, Charoen (Tokyo: 8001) Pay $10.4 Bln for Stake in Citic (HKEx: 267) (English article)
China Telecom Incremental Increases Outpace China Mobile, Unicom in 2014 (Chinese article)
Spring Airlines (Shanghai: 601021) To Make Trading Debut In Shanghai (Chinese article)
New Oriental (NYSE: EDU) Announces Second Fiscal Quarter Results (PRNewswire)
Bottom line: IPOs this week by Spring Airlines and Wanda Cinema should debut strongly, and a proposed Hong Kong listing by Sinopec’s retail arm should also do well if broader market sentiment remains strong.
Spring IPO set for liftoff
We’re only 2 weeks into the New Year, but already the IPO market is getting off to a roaring start with major new listings from budget carrier Spring Airlines and the movie theater unit of real estate giant Wanda Group. At the same time, other media are reporting that the newly spun off retail arm of oil refining giant Sinopec (HKEx: 386), already flush with cash from a major stake sale to private investors last year, is also eying an IPO in Hong Kong. Read Full Post…
Bottom line: Momo’s stock should continue to perform well over the next few months as investors ignore a scandal around its CEO, while Spring Airlines stock should also debut strongly later this month in its newly approved IPO.
Spring Airlines approved for Shanghai IPO
It seems investors aren’t too concerned when CEOs of their companies are accused of corporate crimes, at least based on the strong trading debut for mobile social networking app maker Momo (Nasdaq: MOMO). Frankly speaking, I’m not surprised about the strong performance for Momo, whose CEO was accused of stealing property from his former employer NetEase (Nasdaq: NTES) and using that property to start up his new company. The fact of the matter is that such dishonesty and unethical behavior is quiet common in China’s corporate sector, and thus is unlikely to result in any punishment, be it a jail sentence or even negative investor sentiment. Read Full Post…
