The latest sign of distress in the battered e-commerce sector is coming from online clothing retailer Vancl, with media reporting the company has slashed operations at its package delivery arm in what looks like a desperate cost-saving move. Frankly speaking, I wholeheartedly support this kind of move, if it’s really true, as I personally believe that e-commerce companies shouldn’t be delivering parcels to begin with, and instead should leave that part of the business to professional specialists like UPS (NYSE: UPS) and China’s own China Postal Express, which itself is preparing for a domestic IPO to help fund its ongoing expansion. (previous post)
Tag Archives: Vancl
News Digest: August 21, 2012 报摘： 2012年8月21日
The following press releases and media reports about Chinese companies were carried on August 21. To view a full article or story, click on the link next to the headline.
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- Youku (NYSE: YOKU) Announces Shareholder Approval for Tudou Merger (PRNewswire)
- MIIT Signals Approval for TD-LTE Development (English article)
- Beyondsoft (Shenzhen: 002649) to Acquire Achievo Subsidiaries for $56 Mln (English article)
- Camelot Information Systems (NYSE: CIS) Announces Unaudited Q2 Results (PRNewswire)
- Vancl Cuts Back Ad Spending As Online Apparel Sellers Suffer (Chinese article)
- Latest calendar for Q2 earnings reports (Earnings calendar)
News Digest: May 30, 2012 报摘： 2012年5月30日
The following press releases and media reports about Chinese companies were carried on May 30. To view a full article or story, click on the link next to the headline.
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◙ E-Commerce Value Reached 6 Trillion Yuan in 2011 – Commerce Ministry (Chinese article)
◙ China’s State Grid to Buy Brazil Assets From Spain’s ACS (Madrid: ACS) (English article)
◙ 360buy, Vancl Apply for Nationwide Courier Service Licenses (English article)
◙ Shui On Land (HKEx: 272) Plans IPO for Xintiandi Redevelopment Unit (English article)
◙ Perfect World (Nasdaq: PWRD) Announces Q1 Unaudited Financial Results (PRNewswire)
Cars: Vancl’s Delivery Cuts & A Low-End EV Drive 汽车：凡客诚品配送服务收缩和低端电动汽车推进
I’ll start out my musings this Friday with 2 car-related stories, one that’s seeing online clothing seller Vancl idle part of its delivery service and another that looks at a low-key type of electric vehicle that is making huge inroads in China’s rural markets. Let’s look at the Vancl story first, which has media reporting the company, which has repeatedly delayed a planned New York IPO, has closed or consolidated a number of locations for its fully-owned Rufengda delivery unit. (Chinese article) Vancl itself appears to confirm the report by calling the move an “adjustment” rather than a cost-saving measure, and is stressing the move is unrelated to the health of its broader business. Followers of Vancl will recall the company made another “adjustment” last year when it reportedly laid off about 5 percent of its workforce. (previous post) Vancl also recently lost its CFO, something that often happens when a company is facing financial difficulties. Or course, these kinds of rumors are inevitable for such a high-profile company like Vancl, as the entire e-commerce sector faces a cash crunch due to rampant competition that is already forcing limited sector consolidation. Look for more such “adjustments” from Vancl, which is likely to forge ahead with its IPO if and when market sentiment ever improves, which is unlikely before the late third or even fourth quarter. Meantime, my old employer Reuters is reporting on an interesting kind of super low-end electric vehicle that is quietly gobbling up market share even as Beijing’s plans sputter to promote larger traditional EVs. (English article) These super low-end cars appear to be gaining popularity in the countryside mostly, where farmers are buying them for around $5,000 apiece. They seem to be filling a niche somewhere in between a tractor and a real car, with limited speeds of only up to 50 kilometers per hour and running on environmentally unfriendly lead-based batteries. But they’re fast approaching the 100,000 mark for annual sales, with a company called Shifeng as the industry leader, compared to only 8,000 true EVs sold last year despite generous incentives from Beijing. This space could be one to watch, as Shifeng claims that representatives from the likes of Toyota (Tokyo: 7203) and Mitsubishi have come to check out its operations in search of similar alternatives to more costly traditional EVs. Stay tuned for some potentially interesting initiatives to come out of the segment, where China for once has the potential to become a true innovator if this space doesn’t get squashed by Beijing.
Bottom line: Vancl’s scale back of its delivery service is its latest adjustment as it tries to save money, with more moves likely before it makes its delayed IPO later this year.
Related postings 相关文章:
◙ China IPO Train Hits Bump With Vancl Resignation 中国上市事件撞上凡客诚品CFO辞职
◙ China Internet Bubble Sees Vancl Dressing Down 中国互联网泡沫见证凡客裁员
◙ Foreign Automakers Uncharged on China EVs 外国汽车商对中国电动汽车市场态度谨慎
News Digest: April 20, 2012 报摘： 2012年4月20日
The following press releases and media reports about Chinese companies were carried on April 20. To view a full article or story, click on the link next to the headline.
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◙ People’s Daily Site Raises $222 Million in Enlarged IPO (English article)
◙ Chinese Search Engines Forbidden to Index Microblogs – Data Center Official (English article)
◙ ENN, Sinopec (HKEx: 386) Explain Bid to China Gas (HKEx: 384) Workers (HKEx announcement)
◙ Vancl’s Rufengde Delivery Service Closes Some Stations, Vancl Denies Scaleback (Chinese article)
◙ Proview Says Talking With Apple (Nasdaq: AAPL) to Resolve iPad Trademark Dispute (Chinese article)
◙ Latest calendar for Q1 earnings reports (Earnings calendar)
News Digest: March 20, 2012 报摘： 2012年3月20日
The following press releases and media reports about Chinese companies were carried on March 20. To view a full article or story, click on the link next to the headline.
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◙ Google’s (Nasdaq: GOOG) Motorola Mobility (NYSE: MMI) Buy Still Awaits China Approval (Chinese article)
◙ China Increases Fuel Prices for Second Time in Two Months After Crude Gain (English article)
◙ NEC (HKEx: 6701) Releases Smartphone, Tablets in China (English article)
◙ Vancl CFO Resigns, IPO Shelved for at Least 2 Years – Source (Chinese article)
◙ LDK Solar (NYSE: LDK) Revises Q4 Guidance, Announces Q4 Reporting Date, 2012 Outlook (PRNewswire)
◙ Latest calendar for Q4 earnings reports (Earnings calendar)
Vipshop Takes Lead in IPO Race 维品会或成为今年首家赴美上市中国企业
The race to make China’s first New York IPO of 2012 is nearing the finish line, with online discount retailer Vipshop emerging as the likely winner after getting off to a late start.The listing will mark not only the first Chinese IPO in New York this year, but also the first in months following disastrous debuts for a few companies that launched offerings last summer at the height of a confidence crisis towards US-listed Chinese stocks after series of accounting scandals. I previously said that growing signs are emerging that the worst of the crisis has passed (previous post), and at least the initial response to Vipshop’s offering appears to confirm that trend. According to a domestic media report, Vipshop has set the price range for the offering at $8.50 to $10.50 per share, meaning it would raise $95 million at the low end of the range and up to $120 million if it can get the highest price. (Chinese article) This range is quite significant, as it is unchanged from Vipshop’s announcement in its first public filing that it planned to raise up to $120 million from the IPO. (previous post) That means that investor reception to the offering was within expectation, unlike last year when many companies had to sharply scale back their capital raising plans after receiving weak or no investor demand at the height of the crisis. Online video site Tudou (Nasdaq: TUDO) became a symbol for how bad things were when it went ahead with its Nasdaq IPO despite awful sentiment last August, with its shares tumbling 12 percent on their first trading day. They continued their downward spiral after that, along with most other US-listed China firms, and now trade at just over half their IPO level. Vipshop became China’s second company to file for a New York IPO last month, following another application by car rental specialist China Auto which planned to raise up to $300 million. Online entertainment specialist Shanda has also filed for an IPO for its Cloudary online literature unit, but the Vipshop plan now looks like the furthest advanced and thus the likely winner. I would expect to see it price near the bottom end of its range as some investor skepticism remains, with its shares likely to trade flat on their debut. But even that kind of performance would be a huge improvement over last year, and would likely spark a flurry of refilings for many of the IPOs that got pulled last year as companies rush to take advantage of a new window of improved sentiment. If that happens, look for companies like online clothing retailer Vancl to file in the next 2 months, and even possibly from group buying leader LaShou, which is reportedly preparing to refile for an IPO after its previous plans also ran into trouble last year.
Bottom line: Vipshop’s New York IPO, the first for a Chinese firm this year, is likely to price near the bottom of its range, but would still mark a sign of improving investor sentiment for China stocks.
Related postings 相关文章:
◙ Vipshop Vies For First Internet Listing of 2012 唯品会欲在赴美上市电商公司中力拔头筹
◙ Debut Offshore IPO Looks Weak, But Not So Bad 阳光油砂上市首日表现差强人意
Vancl: Sales Soar, But Where’s the IPO?
Leading online clothing retailer Vancl has held a high-profile press conference where its Chairman and CEO Chen Nian talked at length about his company’s latest developments, including its phenomenal growth since its founding as well as its missteps over the last year. But what’s perhaps most revealing is what he didn’t talk about, namely the company’s long-delayed IPO, reflecting the intense competition that has developed in online retailing over the last year that has perhaps caused Vancl to quietly slip into the red — if it was ever profitable to begin with. Chinese media reports cite Chen giving out a multitude of figures for his company in 2011, including 150 percent sales growth. (English article; Chinese article) The reports also cite Chen saying his company made some missteps last year, mostly due to management’s loss of strategic direction. That confession, combined with previous reports of layoffs amid a cash crunch (previous post) and no mention of profits at the press conference, all tell me that Vancl is losing money, possibly a lot of money, and may be coming under intense pressure to raise more funds or cut costs or both. Vancl reportedly completed all the necessary steps for a New York IPO last year and was waiting for the right time to make its offering, but ultimately had to scrap its plans when market sentiment toward Chinese companies — especially money-losing ones — tanked in the second half of the year. Online video site Xunlei sounded a cautiously positive note for the market last week when reports emerged that it was reactivating its own New York IPO, which it also had to scrap last year due to the weak market sentiment. (previous post) But unlike Vancl, Xunlei was already in the black as early as 2009, when it posted a profit of $5.5 million. When the US IPO market for Chinese companies finally does improve, profitable companies like Xunlei are much more likely to lead the next wave of new offerings than money-losers like Vancl and 360Buy, another money-losing candidate for a US IPO, which investors won’t embrace so easily. If that’s the case, look for more cost-cutting by Vancl in 2012, with an IPO unlikely before the second half of the year at earliest — if the company survives that long.
Bottom line: 2012 will be a tough year for cash-strapped money-losing Vancl, which won’t be able to make a long-delayed US IPO until the second half of the year at earliest.
Related postings 相关文章:
◙ Qihoo, Vancl Fend Off New Attacks 奇虎、凡客和人人承受压力
◙ 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
◙ China Internet Bubble Sees Vancl Dressing Down 中国互联网泡沫见证凡客裁员
News Digest: January 17, 2012
The following press releases and media reports about Chinese companies were carried on January 17. To view a full article or story, click on the link next to the headline.
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◙ China to Ease Controls on HK Listings: Regulator (English article)
◙ Vancl 2011 Revenue Increases 150% YoY (English article)
◙ Baidu-Invested (Nasdaq: BIDU) Qunar Considers US IPO (Chinese article)
◙ China Telecom (HKEx: 728; NYSE: CHA) to Launch iPhone 4S by March – Source (English article)
◙ Huawei Aims To Become One of World’s Top 3 Cellphone Brand in 3 Years (Chinese article)
Qihoo, Vancl Fend Off New Attacks 奇虎、凡客和人人承受压力
Chinese Web firms continue to come under attack as they stare at a Web bubble that is showing early signs of bursting, with listed companies fending off assaults from short sellers and others struggling to retain employees amid the latest rumors of cash crunches and layoffs. The latest trio to face such assaults include web security software firm Qihoo 360 (NYSE: QIHU), leading clothing retailer and IPO candidate Vancl, and struggling social networking services site Renren (NYSE: RENN), which are all putting out various fires in their ranks. Qihoo, after coming under attack from a small research house called Citron last month (previous post) questioning many of its user numbers, has come under assault again by Citron with more similar allegations. Qihoo has come out with its own statement blasting Citron and explaining to worried investors why all its numbers are accurate. (company announcement) I previously said I wouldn’t be surprised if Citron’s claims are at least partly accurate (previous post), though investors so far seem to be giving Qihoo the benefit of the doubt. The company’s stock still trades at around $18, not far from the level it was at when Citron issued its first report and far higher than the $5 per share that Citron estimated Qihoo shares were worth. Meantime, Vancl is fending off reports from an anonymous blogger that it is facing a cash crunch as it repeatedly delays its planned New York IPO. (Chinese article) Vancl has denied the posts, which apparently carry some credibility due to the recent departure of a company vice president and reports in September that it was cutting 5 percent of its workforce. (previous post) Reports earlier this week that Vancl has just received $230 million in new venture funding (previous post) would seem to indicate the company has ample cash for now, but clearly it is feeling pressure to raise even more as competition rages in China’s e-commerce space. Last but not least there’s Renren, which is reportedly getting ready to offer its shares to all employees to let everyone “enjoy the company’s success.” (Chinese article) The only problem is that Renren’s shares now trade at about $3.50, or one-quarter of their $14 IPO price in May. To me this plan looks like desperation in a bid to retain Renren workers, many of whom are probably having doubts about their company’s future.
Bottom line: Assaults on Qihoo 360, Vancl and Renren are the latest signs of turbulence as China’s Internet bubble starts to burst, with many more to come.
Related postings 相关文章:
◙ Report Takes Wind Out of Inflated Qihoo 奇虎遭遇Citron釜底抽薪
◙ China Internet Bubble Sees Vancl Dressing Down 中国互联网泡沫见证凡客裁员
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
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
