The following press releases and news reports about China companies were carried on August 5. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Massive Funding, Apple (Nasdaq: AAPL) Backing Helped Didi Outrun Uber in China (English article)
China Starts to Lose Its Taste for McDonald’s (NYSE: MCD) and KFC (NYSE: YUM) (English article)
Tablet PC Sales Fall in Q2, But Lenovo (HKEx: 992), Huawei Post Gains (Chinese article)
Bitauto (NYSE: BITA) Consortium Invests $550 Mln in Yixin Capital (PRNewswire)
Online Children’s English Learning Platform Vipkid Wins $100 Mln Series C Funding (English article)
Bottom line: Didi Chuxing’s new marriage with Uber China could quickly come under stress due to rivalries between the pair outside China, and might force them to forge a broader global alliance.
Didi, Uber set to clash outside China
A couple of new reports are spotlighting how the new mega-merger between Didi Chuxing and Uber’s China unit is creating uncertainty for existing global alliances involving the 2 former bitter rivals. The larger of the headlines has Uber’s US rival Lyft suddenly questioning its alliance with Didi less than a year after the pair formed the tie-up. The other has Didi helping to raise money for Grab, also known as GrabTaxi, a bitter rival of Uber that operates service in 30 cities within 6 Southeast Asian countries. Read Full Post…
The following press releases and news reports about China companies were carried on August 3. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
China Regulator Says Didi, Uber Deal Will Need Mofcom Approval (English article)
Sanyuan Foods Gives Up Preferential Rights to Buy Beijing McDonald’s (NYSE: MCD) JV (Chinese article)
Trina Solar (NYSE: TSL) Enters into Agreement for Going Private Transaction (PRNewswire)
Baidu (Nasdaq: BIDU), Tencent (HKEx: 700) May Cut Wanda E-Commerce Ties (Chinese article)
Cheetah Mobile (NYSE: CMCM) Buys Global News Aggregation App ‘News Republic‘ (English article)
Bottom line: Didi’s merger with Uber China was driven by investor pressure to end their fierce price wars, and the newly combined company is likely to quickly reduce its subsidies and become profitable by year-end.
Didi Chuxing merges with Uber China
Just a week after reports emerged of a truce in the nonstop price wars between private car specialists Didi Chuxing and Uber China, the pair have suddenly announced a merger that will become the latest marriage of former bitter rivals in China. This latest shotgun union, which will put Didi Chuxing in the driver’s seat of the newly combined company, testifies to growing investor impatience at fierce price wars and resulting heavy losses that have become the norm in many emerging Chinese high-tech industries. Read Full Post…
The following press releases and news reports about China companies were carried on August 2. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Didi Chuxing Acquires Uber China Operation, Uber Founder to Enter Didi Board (Chinese article)
Fantasia (HKEx: 177) to Buy Wanda Commercial Property Management Arm for 2 Bln Yuan (Chinese article)
Bottom line: The CSRC needs to implement IPO reform, even though it may cause short-term stock market volatility, or risk more market distortions like the recent surge in New Third Board and backdoor listings.
Ucar lists on New Third Board
China’s over-the-counter (OTC) stock exchange notched a notable milestone last week, when a private car services provider with just a year of history made its trading debut with a hefty valuation of more than 40 billion yuan ($6 billion). The impressive valuation for Ucar extended a trend that has seen new listings and valuations explode this year on the Beijing-based National Equities Exchange Quotation (NEEQ) system, often called the New Third Board.
The explosion owes to a number of factors, most a by-product of a sharp slowdown for traditional IPOs on China’s more mature stock markets in Shanghai and Shenzhen due to the regulator’s concerns about market volatility. That same conservatism has prompted a growing number of companies to seek public listings by injecting their assets into existing traded shell companies, again creating distortions and chaos in the market through a process known as backdoor listings. Read Full Post…
Bottom line: Didi and Uber may reach a truce in their China price wars under pressure from their investors, and could ultimately merge their China operations in discussions that could begin later this year.
Didi, Uber under pressure to end price wars
The past year has seen some mergers of former bitter rivals due to financial pressures, and the latest reports indicate yet another such marriage could be coming between hired car services giants Didi Chuxing and Uber. The reports are grounded in word from insiders that the pair have begun talks about ending their bitter price wars, which have helped them to gain big market share but are also costing them millions or even billions of dollars in losses. Those talks have naturally led some to speculate that the pair might even merge, though in my view that possibility seems rather low, at least right now. Read Full Post…
Bottom line: Car Inc’s hired car services unit’s $5.5 billion valuation on China’s New Third Board is hugely overinflated, while Yidao’s new clash with Tencent shows the regulator needs to become more active in oversight of WeChat.
Two of China’s second-tier hired car services providers are in the headlines heading into the weekend, as these smaller companies fight an uphill drive to attract attention away from industry giants Didi Chuxing and Uber. The larger of the 2 stories has the hired car services unit of car rental leader Car Inc (HKEx: 699) receiving approval for a listing on China’s over-the-counter (OTC) New Third Board, valuing the company at a hefty 37 billion yuan ($5.5 billion). The second story has Yidao getting in a tussle that has seen promotion of its services blocked on Tencent’s (HKEx: 700) wildly popular WeChat platform . Read Full Post…
The following press releases and news reports about China companies were carried on June 16. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
The following press releases and news reports about China companies were carried on June 3. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Didi Chuxing, Uber Compete for Most Funds in Latest Drives (Chinese article)
Alibaba (NYSE: BABA) Announces Terms of Share Purchase from SoftBank (Businesswire)
China Says Midea’s (Shenzhen: 000333) German Robot Deal Shouldn’t be Politicized (English article)
Taobao Invests 28.2 Bln Yuan in Suning (Shenzhen: 002024), Becomes 2nd Largest Shareholder (Chinese article)
US Requests Documents From Huawei on Previous Trade Sanctions (Chinese article)
Bottom line: Apple’s $1 billion investment in a Chinese car services firm and establishment of an India R&D lab reflect China’s strength as an incubator of strong private companies and India’s as a software development hub.
Apple’s Tim Cook calls on China, India
It’s been an Asia-themed week for Apple (Nasdaq: AAPL) CEO Tim Cook, whose tour to China and then India casts a spotlight on 2 massive markets with huge potential for the company. This particular trip has been quite revealing for the gifts that Cook has awarded during the week, reflecting each country’s strengths and also its weaknesses.
China’s biggest gift was a $1 billion investment in local private car services firm Didi Chuxing, and also a smaller gift in the form of a new app to promote local musicians. India, meanwhile, secured a coveted R&D lab, which is one of Apple’s few outside the US and hugely prestigious. Read Full Post…
