Tag Archives: Tencent

Tencent latest Business & Financial news from Doug Young, the Expert on Chinese High Tech Market, (former Journalist and Chief editor at Reuters)

IPOs: ZhongAn Pops in Trading Debut, But Does It Have Legs?

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Bottom line: ZhongAn should perform reasonably well over the short- to medium-term by drawing on its big-name investors for business, but faces uncertainty due to an untested business model.

ZhongAn banks on online insurance

There’s not a ton to say about the year’s first blockbuster IPO from the fintech realm, since it really went pretty much according to plan. I’m talking about the just-concluded listing for online-only insurance startup ZhongAn Online Property & Casualty Insurance, which was almost guaranteed a strong debut when its shares began trading yesterday in Hong Kong.

The bigger question for ZhongAn and its other fintech peers will be whether they can continue to thrive once the spotlights are gone and they have to do business over the longer term. Anyone can pretty up their books in the run-up to an IPO, but keeping the business flowing afterwards is often a bit more problematic. ZhongAn could be a good case in point, as its product lineup seems to be constantly evolving, as does the lineup for many of these fintech firms, due to individual and broader industry factors. Read Full Post…

IPOs: Fintech Hot, Logistics Not in New Listings for Qudian, Best

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Bottom line: ZhongAn’s and Qudian’s IPOs are likely to price and debut strongly over the next few weeks on excitement about China fintech, while Best’s will debut to indifference following the slashing of its size.

ZhongAn, Qudian IPOs look hot

Three companies likely to list in New York and Hong Kong by the end of this month are setting the tone for what’s set to be a busy fall for similar new offshore offerings from Chinese companies. Two of those are coming from the hot fintech sector, where online microlender Qudian and online insurance seller ZhongAn appear to be drawing strong interest in IPOs that could each raise north of $1 billion. But logistics company Best Inc is moving firmly in the other direction, with the announcement that it has just slashed the size of its fund-raising plan by nearly half.

Neither of these themes is completely surprising, since fintech has become a hugely lucrative area in China due to the relatively greenfield nature of the sector. Until only very recently, nearly all financial services in China were dominated by state-run companies, which aren’t exactly known for their innovation and embrace of technology. That’s also partly true for logistics, though in that case the industry has quickly become a bit of a bloodbath plagued with cutthroat competition among around 10 major players. Read Full Post…

MEDIA: Tencent, Alibaba in Music Swap as Regulator Gets Involved

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Bottom line: A new music re-licensing deal between Alibaba and Tencent, combined with a meeting between the copyright regulator and major online music sellers, hint at attempts to create a more level playing field in the space.

Alibaba, Tencent in music cross-licensing deal

A couple of items from the music sector are in the headlines today, showing how tricky the situation is becoming with copyrights and online licensing in China. One of those has two major players, the music services of Internet giants Alibaba (NYSE: BABA) and Tencent (HKEx: 700), signing an agreement to cross-license music to each other when one of them owns the rights to such music. The other has China’s copyright office actually calling a meeting between those two companies and two other major players, NetEase (Nasdaq: NTES) and Baidu (Nasdaq: BIDU), to discuss issues confronting the industry.

Two issues appear to be driving these two deals that appear to be related. One is concerns from the music industry that rights to their songs will become fragmented and confined to single platforms under the current licensing system, limiting consumer choice. Similar concerns might also be what’s driving the regulator to get involved as well. An interesting footnote to this might be whether the same thing could soon happen in the video licensing arena, which shares similar issues. Read Full Post…

INTERNET: Google Steps Up Beijing Dance With AI Drive

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Bottom line: Google’s campaign to build a China-based artificial intelligence team is at least partly designed to woo Beijing, as part of its broader effort to get permission to open a China-based Google Play app store.

Google Play edging towards China?

In the latest signal of its move back to China, Internet titan Google (Nasdaq: GOOG) is apparently on a hiring spree in Beijing that looks aimed at building up an artificial intelligence (AI) team in the world’s largest online market. This particular move doesn’t come as a huge surprise, and seems to be part of Google’s recent obsession with the world’s biggest Internet market.

The backstory is that Google quit China seven years ago, at least for its core search business that is the backbone of its operations in other markets, due to a dispute over Beijing’s tough policies requiring all sites to self-police themselves for sensitive content. But over the last two or three years Google has had a change of heart, realizing it really can’t afford to ignore an Internet market that has 750 million users. Read Full Post…

E-COMMERCE: JD.com Shops for Expansion in Thailand

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Bottom line:  JD.com’s Thai joint venture looks like a smart move into Southeast Asia, though it shouldn’t move too aggressively abroad and instead focus on becoming profitable.

JD.com tests out Thailand

China’s big Internet companies have a pretty varied record for expanding abroad. At one extreme there’s Alibaba (NYSE: BABA), which is using its big cash pot to buy a wide range of assets concentrated mostly in East and South Asia. Tencent (HKEx: 700) is in the middle, mostly buying strategic stakes in game-related companies, while Baidu (Nasdaq: BIDU) appears to have mostly abandoned the market after a few half-hearted attempts at global M&A and trying to open search sites in other countries.

And then there’s Johnny-come-lately JD.com (Nasdaq: JD), which admittedly has a far shorter history and is also the only one of the four leading Internet companies that’s still losing money. But that doesn’t mean that JD doesn’t have cash, and now it appears the company is looking to make its biggest splash abroad to date with the formation of a joint venture in Thailand. Read Full Post…

TELECOMS: Giddy Unicom Picks 14 Mixed-Ownership Partners

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Bottom line: Unicom’s choice of 14 partners for a mixed-ownership reform plan involving its Shanghai-listed unit is far too many, and is ultimately likely to fail when those partners become frustrated and sell their shares.

Unicom puts 14 new partners into its mix

What I feared might happen has come to pass in a mixed-ownership reform plan being crafted by China Unicom (HKEx: 762; NYSE: CHU), one of the nation’s three telcos that is experimenting with selling some of itself to private investors. That’s a reference to reports in early August that the company might be planning to take on as many as 20 partners in the plan to sell a significant stake in its Shanghai-listed unit, China United Network Communications (Shanghai: 600050), to strategic private investors.

My worry was that taking on so many partners would effectively dilute the plan, since none of the partners would receive a very big stake and Unicom’s attention would be too fragmented. As it turns out, the number 20 was a bit too high, but not far off the mark. That’s the latest word, as Unicom has finally announced its mixed-ownership reform plan that will see it partner with 14 private companies in a bid to become more dynamic. Read Full Post…

RETAIL: Alibaba, Tencent Take Wars to Convenience Stores

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Bottom line: Alibaba’s move into unmanned coffee shops could stand a strong chance of success due to its relative simplicity, while WeChat’s move into Hong Kong convenience stores should also be relatively well received.

Alibaba samples coffee shops

Convenience stores are shaping up as the next battlefield in the wars for supremacy between Internet titans Alibaba (NYSE: BABA) and Tencent (HKEx: 700), at least based on the latest headlines. One of those has Alibaba preparing to roll out an unmanned coffee store concept in its hometown of Hangzhou, while the other has Tencent’s WeChat rolling into Hong Kong in a big way in a new tie-up with 7-Eleven convenience stores.

Starbucks (Nasdaq: SBUX) probably doesn’t need to be too worried just yet about the new threat from Alibaba in coffee shops, though many of the dozens of smaller coffee chains that have set up shop in China these last few years might take note. Likewise, Hong Kong’s incumbent electronic payments service, Octopus, probably doesn’t need to worry just yet either. Read Full Post…

INTERNET: Tencent – China’s New Opiate of the Masses?

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Bottom line: Tencent could be forced to take more measures to control addictive play of its popular “Honour of Kings” game, which could take a short-term toll on its gaming business.

Military critical of Tencent hit game

Internet juggernaut Tencent (HKEx: 700) has been in nonstop headlines lately for its smash hit game called “Honour of Kings”, along with its stock price that keeps reaching new highs. The company must certainly be feeling a bit uneasy from all the publicity, especially since Tencent tends to be quite low-key in line with the style of founder Pony Ma. But equally worrisome is the negative publicity “Honour of Kings” has been getting due to its addictive nature.

There’s a reason that Tencent and some of its major peers can continue to post strong double-digit growth despite their huge size. In Tencent’s case the reason lies at least partly with its phenomenal success as a game developer and operator, and also its related ability to create strong online communities from such gamers.  Read Full Post…

TELECOMS: Unicom Plan Gaining Too Many Partner

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Bottom line: Unicom’s mixed-ownership reform plan could prove a dud if it chooses too many partners, which looks likely based on the latest reports.

Unicom eyes too many cooks for pilot plan

I haven’t written for a while about a highly anticipated plan to inject some new life into perennial laggard telco China Unicom (HKEx: 762; NYSE; CHU) through a Beijing-led pilot program, even as reports build that an announcement of the mixed-ownership plan are imminent. Those reports include the latest word that an announcement could finally come later this month.

But what caught my eye in this particular report was the number 20, a reference to how many private companies could potentially take part in this plan. That number looks a bit ridiculous to me, and would completely wipe out any potential benefits that Unicom might have received from the program. But perhaps that’s what this laggard carrier wants. Read Full Post…

INTERNET: Tencent Limits Gamers, Joins with TCL

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Bottom line: Tencent’s roll-out of time playing limits for teenager gamers for a popular new title looks aimed at preventing a regulatory intervention, while its new TCL tie-up could presage a spin-off of its video business.

Tencent limits teenage gamers

Internet titan Tencent (HKEx: 700) is in a couple of headlines as the US observes its Independence Day holiday, starting with word that it’s limiting teenagers from playing too much of a very popular new title. The other headline has the company teaming up with TV stalwart TCL (HKEx: 1070; Shenzhen: 000100) in a new smart TV tie-up.

The only real common thread to these headlines is that they both involve Tencent, though each does spotlight a certain pattern that’s quite typical for China’s most successful Internet company. In the first case, the game story spotlights Tencent’s strong record at developing and operating games, which are its largest source of revenue. The TCL story highlights Tencent’s fondness for making strategic minority investments, often with mixed results. Read Full Post…

VIDEO: Xunlei Founder Resigns as CEO, Sale Coming?

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Bottom line: The resignation of Xunlei’s founder as CEO, even as he retains his chairman’s title, could indicate a sale is coming soon, with the most likely buyer as Xiaomi.

Big shifts happening in Xunlei boardroom

The incredible shriveling online video company Xunlei (Nasdaq: XNET) is making a tiny splash in the headlines as we head toward the weekend, with word that its founder is relinquishing his position as CEO. The move seems potentially significant, since one of the main obstacles that keeps more companies from being acquired in China is resistance by their founders to relinquish their “empires” to someone else.

In this case, Xunlei’s empire is rapidly vanishing, as it gets overtaken by larger rivals like Baidu’s (Nasdaq: BIDU) iQiyi and video services operated by Tencent (HKEx: 700) and Sohu (Nasdaq: SOHU). That may mean that no one really wants Xunlei anymore, including ordinary stock investors. The company’s shares have been on a downward trajectory since its Nasdaq IPO three years ago, and now trade at $3.24 apiece, about a quarter of their IPO price of $12. Read Full Post…