Bottom line: China Postal Bank’s signing of several major global institutions as cornerstone investors reflects the attractiveness of conservative financial service firms as China’s economy slows.
Conservative Postal Bank draws big global investors
What’s likely to be this year’s biggest IPO has just moved one step closer to market, with word that Postal Savings Bank of China is near a deal to sell about 15 percent of itself to a group of mostly foreign investors ahead of a planned $20 billion new offering. This particular IPO will provide one of the most conservative choices yet to investors looking to buy into China’s financial services market.
That’s because Postal Bank historically served as a place for consumers to park their savings, and did little actual lending like traditional banks. That difference appears to be a major factor making Postal Bank so attractive now compared with more traditional lenders like ICBC(HKEx: 1398; Shanghai: 601398), which are standing on the cusp of a bad loan crisis as China’s economy rapidly slows. Read Full Post…
Bottom line: Beijing should wean big state-run banks off government hand-outs to force them to lend more responsibly, and should even consider allowing one or two failures to make its point.
3 banks seek public, private money
Three mid-sized Chinese banks were in the fund-raising headlines last week, reflecting the difficult times many now face as they struggle with growing volumes of bad debt due to China’s slowing economy. The trio, Postal Savings Bank of China, Everbright Bank (HKEx: 6818) and Huishang Bank, were aiming to raise a massive $10 billion collectively to bolster their balance sheets, each by taking in new investors.
But their target investors were quite different. Postal Savings Bank and Huishang both chose to court the private sector through share offerings to big institutional buyers. By comparison, Everbright chose to seek funds from its state-run parent. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 18. To view a full article or story, click on the link next to the headline.
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Citic Securities (HKEx: 6030) Seeks $4.7 Bln in Share Sale; Temasek Among Buyers (English article)
Qihoo 360 (NYSE: QIHU) Announces Receipt of Proposal to Acquire the Company (PRNewswire)
Alibaba (NYSE: BABA), Foxconn in Talks to Invest $500 Mln in India’s Snapdeal (English article)
Trina Solar (NYSE: TSL) Plans $500 Mln India Plant Amid Ban (English article)
Imax (NYSE: IMAX) Sets China Unit IPO Goal at $300 Mln (English article)
Bottom line: JD.com’s latest results show it could reach profitability on an operating basis later this year, while its new tie-up with Tuniu looks like a well-conceived plan that reflects a growing wave of equity tie-ups among Chinese Internet firms.
JD’s loss narrows, ties with Tuniu
China’s second largest e-commerce firm JD.com (Nasdaq: JD) has been busy wowing investors these last few days, starting with its latest quarterly ressults that shows it is making strong progress in moving towards sustainable profits. Meantime, the company has also become the largest individual stakeholder in online travel site Tuniu (Nasdaq: TOUR) through its participation in a deal that saw Tuniu raise $500 million by selling shares to a larger group of investors.
Wall Street greeted the pair of news stories with mildly positive reaction, bidding up JD.com shares by 2 percent after the reports came out. The stock has rallied nearly 50 percent this year and is 77 percent above its IPO price from a year ago, as investors grow more bullish on this company that is China’s biggest challenger to the much larger Alibaba (NYSE: BABA). Tuniu shares also got a nice lift from the news, rising 4.5 percent. Read Full Post…
Bottom line: 55Tuan’s stock is likely to move steadily downward following its long-delayed IPO, while the booming P2P online lending sector could be due for a bust next year similar to the recent one for group buying sites.
P2P lending site Jimu Box raises big funds
After writing far too much about the repeatedly-delayed IPO for group buying site 55Tuan (Nasdaq: WOWO), I’m happy to report the offering has finally happened and now I can stop following this company. The 2 main reasons for writing about this offering at all were its potential to become China’s first publicly listed group buying site, and also the first Chinese Internet firm to list in New York this year. The actual company and offering were both quite small and the debut went reasonably well, which I’ll detail shortly.
Meantime, another new fund-raising story has me a bit more excited, with peer-to-peer (P2P) lending site Jimu Box on the cusp of a major new funding that will reportedly total about $400 million. It does seem somewhat appropriate to group the 55Tuan and Jimu Box stories together, since P2P companies are now in the midst of a similar boom that group buying sites experienced when they first burst on the scene 5 years ago. Read Full Post…
Bottom line: Many of Alibaba’s older stakeholders are likely to sell some or all of their shares after their lock-up period ends, driving the stock down to or even below its IPO level over the coming months.
Alibaba lock-up period ends
Top managers at China’s Alibaba (NYSE: BABA) are almost certainly watching their company’s stock with acute angst this week, even as business continues as usual with word of the e-commerce leader’s latest overseas expansion into Korea. The angst is the direct result of an end to the lock-up period for Alibaba’s stock, which could technically flood the market with up to 340 million shares that were forbidden from trading for the first 6 months after its record-breaking $25 billion IPO.
Put differently, all of those shares would be worth about $29 billion at Alibaba’s current price, accounting for more than one-tenth of its total market capitalization of about $210 billion. The shares officially become eligible for trading when the lock-up period ends on Wednesday, March 18, which is exactly 6 months after the shares made their trading debut on the New York Stock Exchange. (Chinese article) Read Full Post…
Bottom line: Dianping’s bigger-than-expected fund-raising underscores its popularity among investors, and could pressure it to make an IPO worth $1 billion or more this year to capitalize on positive market sentiment.
Dianping closes $850 mln funding
China’s online group buying space could be closer to getting its first IPO, with word that Dianping, one of the industry’s 2 leaders, has just raised a whopping $850 million in its fifth funding round. The massive funding has actually been in the works since late last year, but kept growing as more investors clamored for a piece of this hot company. The move sends the latest signal that Dianping may be eying an IPO later this year that could raise up to $1 billion or more.
Word of the funding comes as a more advanced IPO plan has gone missing from smaller rival 55Tuan, which was hoping to become China’s first publicly listed group buying site. 55Tuan made a public filing for a New York IPO back in January, and a later filing indicated it planned to sell its shares and begin trading on February 25. But that date has come and gone with no listing, and there’s still no word on the reason for the delays more than 2 weeks later. Read Full Post…
Bottom line: A new alliance between SMIC and a leading Chinese chip tester in the buyout of Singapore’s Stats ChipPac could be the latest signal of a Beijing-led drive to consolidate China’s chip sector.
SMIC joins group buying Stats ChipPac
The semiconductor world is buzzing today on news that a Jiangsu-based company will buy Singaporean semiconductor chip maker Stats ChipPac (Singapore: STAT), but what caught my attention was the name of leading Chinese chip maker SMIC (HKEx: 981; NYSE: SMI) as a member of the buyer group. I’ve been saying for many years now that China’s semiconductor sector is sorely in need of consolidation, but that such an overhaul is often blocked by the local stakeholders who often eschew mergers as they look after their own interests. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 3. To view a full article or story, click on the link next to the headline.
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Wanda Group In Talks to Buy Lions Gate (NYSE: LGF), MGM in Hollywood Push (English article)
21Vianet (Nasdaq: VNET) Gets $296 Mln From Kingsoft, Xiaomi and Temasek (Globe Newswire)
Wal-Mart (NYSE: WMT) Cuts Another 250 China Jobs, Shuts Dalian Office (English article)
The following press releases and media reports about Chinese companies were carried on November 25. To view a full article or story, click on the link next to the headline.
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Carrefour (Paris: CA) Launches Convenience Store Brand In China (Chinese article)
JD.com (Nasdaq: JD) To Invest 2 Bln Yuan In Dongguan Operations Center (English article)
China Buying REC Solar (Norway: RECSOL) For $640 Mln Avoids Trade Spat (English article)
ICBC (HKEx: 1398; Shanghai: 601398) is in a couple of separate headlines today, spotlighting 2 very different phenomena taking place at China’s largest and most aggressive bank. The first has Singaporean sovereign wealth fund Temasek increasing its stake in ICBC by a small amount, in a largely symbolic move that reflects the recent lack of interest in Chinese bank stocks by global investors. The second has ICBC in talks to underwrite a yuan-denominated bond sale by Russian energy giant Gazprom, reflecting the bank’s rising stature on the global stage as China seeks to internationalize its local currency. Read Full Post…
