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)

News Digest: December 28, 2011

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The following press releases and media reports about Chinese companies were carried on December 28. To view a full article or story, click on the link next to the headline.

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◙ Chinese Banks Under Pressure To Raise Cash Next Year: Source (English article)

◙ Regulator To Promote Broadband With Higher Speeds, Lower Prices in 2012 (Chinese article)

◙ CITIC Securities (HKEx: 6030) Receives Approval For RQFII Qualification (company announcement)

◙ Tencent (HKEx: 700), CNTV Partner on Multi-product Platform (English article)

◙ China Says Western Digital (NYSE: WDC) Buying Hitachi Unit Hurts Mkt Competition (English article)

Weibo Gets Confidence Vote From Digital Sky DST投资消息或提振新浪短期前景

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Sina (Nasdaq: SINA), China’s leading web portal whose shares have been battered lately, has received a rare piece of good news in the form of a potential major new investment for its controversial Twitter-like Weibo service from heavy-hitter Digital Sky Technologies (DST). (English article; Chinese article) There’s so much to say on this subject that I’m not sure where to start, so perhaps the best place would be with the actual news. Media are reporting that DST, an early investor in Facebook and which has taken a recent liking to the Chinese Internet, is in talks to pump around $200 million into Weibo via a convertible bond exercisable at $65 per Sina share. That price would have been a bargain just 7 months ago, when Sina shares were trading  as high as $140. But anyone who follows this company knows its stock has plummeted in recent months and now trades at around $55, following a string of big write-offs for its e-commerce and real estate services investments (previous post), and amid a broader confidence crisis towards US-listed China stocks after a recent series of accounting scandals. Further clouding the picture was Beijing’s announcement this month that all users of microblogging services would have to register using their real names, a move with strongly negative implications for Sina’s wildly popular Weibo service that boasts more than 250 million users and was one of the company’s few bright spots. (previous post) Clearly this new investment by DST will come as a vote of confidence in Weibo, in Sina’s sputtering campaign to monetize the recently spun-off service for a potential future IPO. But company watchers should also note that DST is hedging its bets by buying a convertible bond rather than making a direct investment. Furthermore, DST is hardly the best barometer for good China Internet investments, as it has made a wide range of such investments this year, often at overinflated valuations. DST’s recent string of China purchases include stakes in e-commerce firm 360Buy, also known as Jingdong Mall, and a recent purchase of a stake in Alibaba, China’s e-commerce leader. The company was also interested in previously buying a stake in Kaixin, one of China’s leading social networking services, and itself is part owned by leading Chinese Internet company Tencent (HKEx: 700) All that said, this latest investment may help to boost Sina and Weibo’s prospects in the very short term, but the longer-term picture for both still looks quite cloudy.

Bottom line: A potential $200 million investment in Sina’s Weibo microblogging service by DST should help to boost the company in the short term as it tries to shore up its battered image.

Related postings 相关文章:

◙ New Rule Hits Sina, Instant Messaging to Benefit? 微博实名重创新浪 即时信息服务有望受益

◙ Sina Results: Not So Diversified After All 新浪仍依赖广告,突围遇阻

◙ Digital Sky Looking for Piece of the China Pie 俄罗斯DST或与Facebook联手进军中国市场

Microblog Clampdown: Only Chapter 1? 实名制向网络行业吹去冷风

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A new rule requiring microbloggers to register using their real names continues to send chills through the online world, with a new report saying the campaign will soon be extended to other social media. The domestic media reports cite an unnamed government official in Beijing, which announced the initial rule late last week (previous post), saying more guidelines will follow requiring all sites to implement real-name registration throughout their various social networking sites to give operators like Sina (Nasdaq: SINA), Tencent (HKEx: 700) and Renren (NYSE: REN) quick and easy access to who is doing what and pass that information to government officials upon request. (English article) If China was looking to kill or severely stifle development of its fledgling but vibrant social media, this certainly looks like a good way to do it. The initial rule appeared to target microblogging sites, which would have dealt a blow to a limited number of companies, most notably Sina’s popular Weibo service. But this new expanded rule would potentially affect any and every kind of social media service, from microblogging to social networking services (SNS) operated by Renren and Kaixin and even instant messaging services like Tencent’s popular QQ. The traditional SNS services may be best positioned to weather this storm, as most encourage their users to register using their real names, whereas the big majority of microblogging and instant messaging users use Internet names that are often difficult or impossible to trace. But regardless of any of that, this expanded requirement will send a strong signal that anything and everything a person writes in any of these sites is being monitored by the government, discouraging many from using the services at all. In some ways, this latest crackdown looks similar to one 5 or 6 years ago on the then-vibrant text messaging services industry, a mainstay of Sina, Sohu and NetEase (Nasdaq: NTES) at that time. That crackdown effectively killed the industry in the years that followed. I doubt results of this crackdown will be as severe, but I would still look for activity on these social media sites to slow and even drop off sharply in the next year.

Bottom line: Beijing’s potential expansion of its real-name policy to all social media will send a chill through the industry and severely hamper its development.

Related postings 相关文章:

◙ New Rule Hits Sina, Instant Messaging to Benefit? 微博实名重创新浪 即时信息服务有望受益

◙ Govt’s Microblog Shift Looks Good for Weibo 政府口风转变或有利於新浪微博

◙ Weibo Still Faces Crackdown Despite Govt Tie-Up 新浪微博难改“被监管”命运

New Rule Hits Sina, Instant Messaging to Benefit? 微博实名重创新浪 即时信息服务有望受益

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The Internet world has been buzzing over the weekend about a new rule announced by the Beijing municipal government late last week requiring all microbloggers to use their real names. First off, I should applaud regulators for at least flagging this issue before making the actual move, as a high-ranking official said back in October that such a rule was being considered. (previous post) But that said, the new rule itself has left lots of people scratching their heads over what it all means. Clearly the big loser is Sina’s (Nasdaq: SINA) Weibo service, which stands to lose many of its more than 200 million users when the new rule is fully implemented. At least a few of my friends say they won’t keep using Weibo if they have to register with their real names, and I wouldn’t be surprised to see the service lose up to half of its active users by the time things settled down. Sina, which is already struggling after taking massive write-downs for its real estate and e-commerce investments (previous post), said it is still studying the new rules to figure out their impact. (company announcement) The news marks a major setback for Weibo, often called the Chinese equivalent of Twitter, which Sina was in the process of trying to monetize though progress was slow. This new rule may make Sina think twice about putting too much emphasis on Weibo, potentially killing plans for a separate IPO for this formerly promising business. In the meantime, one of my sources tells me the move by the Beijing city government is likely to be followed by other cities, meaning rival services from companies like NetEase (Nasdaq: NTES) will also be affected, though the impact should be limited since most of those have far fewer users than Weibo. What’s far less clear is how, if at all, instant messaging services, which have many microblogging-type characteristics, will be affected. I wrote about one of those in the mobile space last week, the Weixin service being developed by Tencent (HKEx: 700) (previous post), and many other companies are developing similar services, especially for use on mobile phones. I suspect these instant messaging services will escape regulation for now under this new rule, and could  even potentially benefit when droves of microbloggers start to defect from Weibo and other services in the months ahead.

Bottom line: Sina’s Weibo is the clear loser in Beijing’s new campaign to clamp down on microblogging, while instant messaging firms like Tencent could emerge as possible beneficiaries.

Related postings 相关文章:

◙ Watch Out Weibo, Weixin Is Growing 新浪微博要小心腾讯微信要崛起

◙ Govt’s Microblog Shift Looks Good for Weibo 政府口风转变或有利於新浪微博

◙ Sina Results: Not So Diversified After All 新浪仍依赖广告,突围遇阻

Watch Out Weibo, Weixin Is Growing 新浪微博要小心腾讯微信要崛起

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While most of the China Internet world has been fixated on the meteoric rise of Sina’s (Nasdaq: SINA) Weibo microblogging service, a rival offering from Tencent (HKEx: 700) called Weixin, which literally means “tiny letter”, has quietly gained momentum and could pose a serious challenge in the near term. The looming Weibo vs Weixin rivalry also casts an interesting spotlight on the broader issue of PC vs mobile Internet, as Weibo is the clear leader in desktop web surfing while Weixin has a number of features that make it more suitable for mobile Internet use. Domestic media are reporting that Weixin had 50 million registered users, 20 million of those active, at the end of November. (English article) Of course those number still pale with Weibo’s 200 million registered users that Sina reported at the middle of this year. But considering Weixin was just launched early this year while Weibo has been in business for over 2 years now, Weixin clearly looks like an interesting bet. Others have tried to take on Weibo, including search titan Baidu (Nasdaq: BIDU), which shuttered its struggling microblogging service in May (previous post), and Renren (NYSE: RENN), which just recently joined the fray. (previous post) But Tencent has taken an interesting approach by developing Weixin as a product maximized for mobile microblogging, with features that, for example, allowing one’s phone to make a sound each time a new post is received and also allowing audio posts. Given that more and more of the Internet is going mobile, this initiative from Tencent, which has a strong track record of entering new business areas popularized by others, could have a good chance of success and pose the first strong challenge to Weibo. Meantime in the China Internet world, the cleanup of weaker US listed companies continues, with China CGame (Nasdaq: CCGM), a company whose market cap is just $4 million, reportedly being notified of its imminent de-listing from the Nasdaq — reports the company denies (Chinese article). Frankly speaking, I’m surprised this company hasn’t been delisted already, as it has traded below the $1 threshold required for continued listing since August. Such small companies have no business being listed on a big board anyhow, and the sooner this kind of company is purged from the big US exchanges the sooner investor confidence will return to this group of battered companies.

Bottom line: Tencent’s Weixin could soon pose a serious challenge to Sina’s Weibo microblogging service, drawing on its strong features aimed at mobile Internet users.

Related postings 相关文章:

◙ Sina’s Weibo: Growth Engine or Growing Burden? 新浪微博：动力or负担？

◙ Govt’s Microblog Shift Looks Good for Weibo 政府口风转变或有利於新浪微博

◙ Baidu’s Latest Botch: Microblogging 百度“微博”的倒掉

Internet Investors Seek Refuge in Big Names 互联网投资者选择性支持中国市场领头羊

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Financing for Chinese web firms may have slowed as the country’s Internet bubble starts to burst, but a couple of major new deals show it certainly hasn’t stopped, with investors simply becoming more selective about who they support. The latest deals have seen Internet heavyweight Tencent (HKEx: 700) raise a hefty $600 million in its first US dollar bond offering, while leading clothing retailer Vancl has reportedly raised $230 million in new venture funding. Let’s look at the Tencent deal first, whose $600 million was at the lower end of its original plan to raise anywhere from $500 million to $1 billion. (English article) The fact that the figure came in at the low end shows investors are still somewhat wary of Chinese Internet firms, which have been the source of a series of recent accounting scandals on Wall Street. Concern is also no doubt high that China’s overheated Internet sector could be nearing a correction. Lastly, some investors might also be concerned about potential overseas acquisitions that Tencent might be eying for this new money. The company has previously courted dubious overseas acquisitions including News Corps’ (Nasdaq: NWSA) faded MySpace social networking service, even though it ultimately lost out in that bidding war. But that doesn’t mean that Tencent won’t bid for more troubled overseas Internet assets. Meantime, Vancl’s securing of this latest funding probably comes as a welcome relief for a company that has had to repeatedly delay a planned US initial public offering due to very weak sentiment towards China Internet stocks amid the recent string of reporting scandals. (English article) Several companies have gone ahead with IPOs despite the current negative climate, mostly with poor results. Vancl clearly isn’t as badly in need of cash as these other companies, and its receipt of these new funds should help it to buy more time until the IPO climate hopefully improves next year. All this shows that investors are still willing to support premium Chinese Internet names, though don’t look for many start-ups to receive major funding or make public offerings in the next 6 months.

Bottom line: New major fund raising by Tencent and Vancl show investors are willing to fund premier Internet names, though younger firms are likely to see far less investor interest in the next 6 months.

Related postings 相关文章:

◙ China Internet Bubble Sees Vancl Dressing Down 中国互联网泡沫见证凡客裁员

◙ 360Buy $5 Bln IPO Plan Looks Like Desperation 京东商城50亿美元上市计划凸显绝望

◙ Xiu.com Funding Puts Glamor in Online Fashion 服饰类网站前景看好

Search Wars Heat Up With Latest Anti-Baidu Moves 中国网络搜索战升温

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The latest mass movement against online search leader Baidu (Nasdaq: BIDU) looks set to sow new chaos in China’s online community, once again underscoring that Beijing needs to step in and bring some order to the marketplace or risk major disruptions. Chinese media are reporting that 3 major web firms, Tencent (HKEx: 700), Qihoo 360 (NYSE: QIHU) and Youku (NYSE: YOKU), have all announced new search engine initiatives to rival Baidu, which dominates the market with nearly 80 percent share. (Chinese article) Tencent’s search engine, Soso, is actually already 5 years old, so that part of the story isn’t really news. (previous post) But what’s alarming is that the report says Youku, China’s leading online video sharing site, is launching its initiative after noticing that the number of Baidu search results directing users to its site has dropped sharply since Baidu launched its own video sharing service, called Qiyi. In fact, this is just the latest example of a frequent Baidu practice, namely tampering with its search results to make its advertisers and its own products appear at or near the top of its search results even when other web pages would rank higher under more objective conditions. This latest conflict pitting Baidu against 3 other major web firms comes just weeks after another similar mass protest saw major online retailers including Dangdang (NYSE: DANG) and 360Buy block their web pages from searches by Alibaba’s Etao search engine. (previous post) These kind of turf wars between major online players have the potential to create real chaos on the Chinese Internet by undermining the credibility of search engines that are often the first place web surfers go to find what they want on the vast worldwide web. I’m usually opposed to any attempts by Beijing to step in and regulate the online world, but this really seems like one exception where the government should step in and act as impartial arbitrator to set up some basic ground rules that everyone can agree upon to end these turf wars. Otherwise, China’s online world could be looking at 1-2 years of major disruptions until the building brouhaha gets resolved by market forces.

Bottom line: A new uprising by 3 major web firms against Baidu marks the latest unrest in China’s online search market, which needs Beijing to step in and act as impartial arbitrator.

Related postings 相关文章:

◙ Alibaba’s Etao Faces New Merchant Revolt

◙ Tencent Search: Baidu Beware? 腾讯搜搜成功关键依赖创新

News Digest: November 12-14, 2011

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The following press releases and media reports about Chinese companies were carried on November 12-14. To view a full article or story, click on the link next to the headline.

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◙ New China Life Seeks $2.5 billion Shanghai-HK IPO (English article)

◙ Tencent (HKEx: 700) to Invest RMB 1 Bln in Soso Search Engine Next Year (English article)

◙ Sinopec (HKEx: 386) Agrees to Pay $3.54 Billion for 30% Stake in Galp’s Brazilian Unit (English article)

◙ China Securities Regulate Confirms Studying Ways to Oversee Overseas VIE Listings (Chinese article)

◙ Hilton Opens 7th DoubleTree In China, Continues Fast Development of Brand (Businesswire)

News Digest: November 10, 2011

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The following press releases and media reports about Chinese companies were carried on November 10. To view a full article or story, click on the link next to the headline.

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◙ Goldman (NYSE: GS) Selling Up to $1.54 Billion in China ICBC (HKEx: 1398) Stake (English article)

◙ China Telecom (HKEx: 728), China Unicom (HKEx: 762) Face Monopoly Probe (English article)

◙ Tencent (HKEx: 700) Announces 2011 Q3 Results (PRNewswire)

◙ Suntech (NYSE: STP) Announces Preliminary Results for Q3 2011 (PRNewswire)

◙ Sina (Nasdaq: SINA) Weibo Reaches 250 Mln Users (English article)

News Digest: November 5-7, 2011

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The following press releases and media reports about Chinese companies were carried on November 5-7. To view a full article or story, click on the link next to the headline.

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◙ PepsiCo (NYSE: PEP) Sells China Bottling Assets to Tingyi (HKEx: 322) (English article)

◙ Alibaba, Tencent (HKEx: 700), Baidu (Nasdaq: BIDU) in Land Grab (Chinese article)

◙ China Mobile (HKEx: 941) TD-SCDMA Procurement Bids Rise – Source (English article)

◙ Sinopec (HKEx: 386), PetroChina (HKEx: 857) Up on Fuel-Pricing Change Speculation (English article)

◙ UCWeb Sues Tencent (HKEx: 700) For Unfair Competition (Chinese article)

Report Takes Wind Out of Inflated Qihoo 奇虎遭遇Citron釜底抽薪

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A report from a small research house appears to have finally awakened the world to the reality behind the Chinese Internet comedy known as Qihoo (NYSE: QIHU), which has steadily lured in investors — achieving a ridiculously high valuation — since its IPO in March. The research report by Citron sparked a sell-off in Qihoo shares, which tumbled 10 percent on Tuesday during a turbulent session that saw the broader indexes also fall by more than 2 percent. So, what exactly did Citron say that got everyone so spooked and prompted Qihoo to issue a “clarifying” press release? (Qihoo announcement) I haven’t seen the actual report so can’t comment in too much detail. But based on other media reports and Qihoo’s own announcement, the Citron report essentially called into question many of Qihoo’s claims about the size of its user base and the company’s scale as a major Chinese Internet player. Citron further commented that Qihoo’s stock price should be around $5 per share, or about a quarter of its value of $20 per share at the beginning of the Tuesday New York trading day. (Chinese article) Bloomberg data lists Qihoo’s forward price-to-earnings ratio at a massive 900 times, which seems overstated although I’ve read that its PE is the largest of all China Internet companies. All of this doesn’t surprise me, as I’ve repeatedly questioned Qihoo’s credibility, as the company has been the subject of a number of high profile lawsuits, most of which it has lost, though with little financial consequences. (previous post) I honestly don’t know why investors have been so excited about the stock, and wouldn’t be surprised if this unethical company has engaged in some manipulative activity to get its valuation so high even compared with leaders like Baidu (Nasdaq: BIDU) and Tencent (HKEx: 700). All that said, this new report looks like it may finally awaken investors to all the questions surrounding this company, and could well mark the beginning of a broader decline to Citron’s $5-per-share target or even lower.

Bottom line: A report by a small research house has finally awakened investors to the many questions surrounding Internet firm Qihoo, whose stock could drop steadily for the rest of the year as a result.

Related postings 相关文章:

◙ Qihoo Goes to War With Mobile Browsers 奇虎360加强移动互联网布局

◙ Qihoo Loses Yet Another Lawsuit, But No One Cares 奇虎败诉不足为戒

◙ China Legal System Takes Bite Out of Tencent’s Qihoo Lawsuit 中国法律体系让奇虎在与腾讯的官司中免受重大损失