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Yahoo in China latest Business & Financial news from a former Journalist and Chief editor at Reuters

News Digest: February 8, 2012 报摘： 2012年2月8日

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The following press releases and media reports about Chinese companies were carried on February 8. To view a full article or story, click on the link next to the headline.

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◙ Apple (Nasdaq: AAPL) Removes Qihoo 360 (Nasdaq: QIHU) Apps From App Store (Chinese article)

◙ CIC, Sinopec (HKEx: 386) Among Investors in Oil Sands IPO: Source (English article)

◙ Yahoo (Nasdaq: YHOO) Chairman Exits, Review Drags On (English article)

◙ Sinopec (HKEx: 386), PetroChina (HKEx: 857) See First Fuel Price Increase in 10 Months (English article)

◙ Beijing Real Name Registration System to Be Fully Implemented by March 16 (Chinese article)

◙ Latest calendar for Q1 earnings reports (Earnings calendar)

Alibaba: Let’s Get This Show Finished 阿里巴巴和雅虎赶紧“离婚”吧

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Let’s get this story finished and move on! I don’t mean to sound impatient, but that’s my first reaction on reading the latest reports about Alibaba’s endless saga in its quest to buy out the 40 percent stake in itself held by Yahoo (Nasdaq: YHOO). I realize this deal involves a big amount of money, possibly as much as $10 billion, but that said, it’s also quite straightforward since the 2 companies have essentially no shared assets and thus literally all that’s needed is agreement on a price and then for Alibaba to find the financing. According to the latest reports, Alibaba and Yahoo have finally entered into serious discussions, following Yahoo’s naming of a new CEO last month, and the 2 sides fully expect to reach an agreement by mid March. (Chinese article) I personally can’t wait until they  announce a deal, as it will finally mark the end of a major corporate marriage that started with lots of promise, only to see things sour and end with a divorce that has taken way too long to reach. I’m probably being a little unfair here, as a final deal was unlikely to happen until Yahoo finally named a new CEO to replace Carol Bartz, who was a major source of friction between the 2 companies and whose firing last year finally set in process that will finally see Alibaba get its long-sought divorce. From Alibaba’s perspective, the sooner the settlement comes the better, as the divorce has become way too big a distraction as the company hopped from one crisis to the next at many of its core businesses last year, including its oldest B2B Alibaba.com (HKEx: 1688) site and its promising Taobao Mall, both of which were rocked by scandals that they are still recovering from. For its part, Yahoo also needs to put this story behind it and get to work trying to resuscitate its struggling search business, once a pioneer in the sector but which later lost its way as global giant Google (Nasdaq: GOOG) stole most of its business. A final settlement will not only end the hostilities, but will also leave Yahoo with a nice pile of cash to use to rebuild its business. It will also leave Alibaba with a pile of shares it can sell to more passive investors who are interested in its strong growth potential without wanting a strong say in its bigger management decisions. All that said, my final word to both sides, at least for now is: Let’s really try to end this saga by the mid-March deadline. Believe me, you won’t be the only ones celebrating!

Bottom line: The world will celebrate with Alibaba and Yahoo when they finally finish their divorce, ending an unhappy chapter for both companies that dragged on way too long.

Related postings 相关文章:

◙ Yahoo, Alibaba Dance Nears Finale　　雅虎应与阿里巴巴撇清干系

◙ New Loan Brings Alibaba Value Into Focus

◙ Alibaba Scrambles to Prove High Valuation 阿里巴巴高估值或将作茧自缚

News Digest: February 7, 2012 报摘： 2012年2月7日

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

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◙ Starbucks (Nasdaq: SBUX) to Partner with Ai Ni Group to Export Yunnan Coffee (Businesswire)

◙ Sohu.com (Nasdaq: SOHU) Reports Q4 Unaudited Results (PRNewswire)

◙ Yum (NYSE: YUM) Profit Up as China Keeps Growing (English article)

◙ Citi (NYSE: C) Gets Approval to Issue Credit Cards in China (English article)

◙ Alibaba, Yahoo (Nasdaq: YHOO) to Reach Final Agreement by Mid March – Source (Chinese article)

◙ Latest calendar for Q1 earnings reports (Earnings calendar)

News Digest: January 19, 2012

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The following press releases and media reports about Chinese companies were carried on January 19. To view a full article or story, click on the link next to the headline.

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◙ China Said to Let Biggest Banks Boost Lending This Quarter to Spur Growth (English article)

◙ American Express (NYSE: AXP) Partners with Chinese Mobile Top-Up Provider Lianlian (Businesswire)

◙ CNOOC (HKEx: 883) Announces Its 2012 Business Strategy and Development Plan (PRNewswire)

◙ China Accounts for 32% of Qualcomm (Nasdaq: QCOM) Revenue (English article)

◙ Alibaba, Yahoo (Nasdaq: YHOO) Talks Advance, Buyout Possible By Mid-Feb – Report (Chinese article)

Yang Departure Cuts Final Yahoo-Alibaba Ties 雅虎即将与阿里撇清关系

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If Yahoo (Nasdaq: YHOO) was looking for a way to tell the world that its troubled relationship with Chinese e-commerce giant Alibaba Group was nearing an end, then the just-announced resignation of Yahoo co-founder Jerry Yang from all his posts at both companies looks like the perfect and very appropriate signal. Yang’s resignation means he will relinquish his positions as a director on the boards of both Yahoo and Alibaba, marking a quiet end to a stormy chapter in both companies’ history. (English article) Yang and Alibaba founder Jack Ma made headlines in 2005 when they announced that Yahoo would buy 40 percent of Alibaba for $1 billion to create a potent partnership that would combine Alibaba’s expertise in e-commerce with Yahoo’s in online search. But it soon became clear that Jack Ma was more interested in Yahoo’s money than anything Yang or his company had to offer in terms of advice — a reality that was fine with both sides as Yang focused on trying to rebuild Yahoo’s core US-focused business as it rapidly lost share to a more nimble Google (Nasdaq: GOOG). All that changed when Yang resigned as Yahoo CEO and yielded the job to Carol Bartz, an executive whose aggressive style clashed with Ma’s own similar style and led to a prolonged period of tense relations between the 2 companies. Through all of that, Yang, who remained as a non-executive board member of Yahoo, continued to maintain personal ties with Alibaba, getting invitations and often attending the Chinese company’s Alifest big annual conference in its hometown of Hangzhou. Yang’s resignation from both the Alibaba and Yahoo boards comes just 2 weeks after Yahoo named Scott Thompson as its new CEO, filling the position that has been vacant since Bartz was fired last year. I suspect the departure was a condition when Thompson agreed to take the job, aimed at giving him a clear mandate to run the company with a fresh start. Alibaba and its bankers have been sending a nonstop series of signals to the market that they have raised enough money to buy out Yahoo’s 40 percent Alibaba stake, and Yang’s departure should remove the final reminder of the forces behind the original tie-up that can let this much-needed divorce finally go forward. When that happens, which could be in the next 2 months, I wouldn’t be at all surprised to see Yang suddenly appear in Alibaba, either as an investor or perhaps even an executive in one of the company’s units.

Bottom line: Jerry Yang’s resignation from the boards of Yahoo and Alibaba signal a pending divorce of the 2 companies, which could see Yang ultimately end up as an investor or executive at Alibaba.

Related postings 相关文章:

◙ Yahoo, Alibaba Dance Nears Finale　　雅虎应与阿里巴巴撇清干系

◙ Alibaba Scrambles to Prove High Valuation 阿里巴巴高估值或将作茧自缚

◙ Alibaba Tests Waters for Yahoo Buyout – Again 阿里巴巴再试水竞购雅虎股权

Yahoo, Alibaba Dance Nears Finale　　雅虎应与阿里巴巴撇清干系

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I normally don’t like to write about the same deal twice in one week, but in this case things suddenly seem to be moving quickly in the story of faded Internet giant Yahoo (Nasdaq: YHOO), which may soon dispose of some or all of its 40 percent stake in Chinese e-commerce leader Alibaba as well as its holdings in Yahoo Japan (Tokyo: 4689). Reports in the foreign media are slightly conflicting, but what’s clear is that the Yahoo board was set to meet on Thursday to discuss a plan that would see it sell either 25 percent of its stake in Alibaba, or perhaps the entire 40 percent stake, under a deal that would be worth around $17 billion. (English article) I had written earlier in the week on other reports that said Alibaba was working with partners to lead a group that would buy out Yahoo entirely (previous post), in a deal that might value Alibaba at around $20 billion. But the latest reports indicate that the Yahoo board would prefer to sell off its valuable Asian assets rather than be acquired outright, and appears to be moving quickly in that direction with the Thursday board meeting. This kind of strategy looks good, as it would allow Yahoo to quickly raise some big cash and also to get rid of a major distraction from these Asian assets as it hires a new chief executive to turn itself around following the recent departure of controversial CEO Carol Bartz. I’m a bit puzzled about why Yahoo might want to hold on to some of its Alibaba stake, as at least one of the reports said the company would still like to keep 15 percent of the Chinese e-commerce giant. In my view, this asset, which Yahoo purchased for around $1 billion in 2005 and which could now be worth about $8 billion, was very successful from an investment perspective but disastrous from a strategic one. A personality clash between Bartz and Ma was largely to blame for the bad relations between the 2 companies, and perhaps Yahoo’s board feels the relationship could be salvaged under a new CEO. But in my view, Jack Ma is a brilliant but very opinionated leader head who is unlikely to listen to anyone whose views differ from his own, and Yahoo would be well advised to completely sell its Alibaba stake, as any attempts at future strategic initiatives between the two sides would most likely end as major disappointments.

Bottom line: Yahoo is on the cusp of selling off its distracting stakes in Alibaba and Yahoo Japan, and should sell off all of its Alibaba holdings to focus on reviving its core search business.

Related postings 相关文章:

◙ Alibaba Scrambles to Prove High Valuation 阿里巴巴高估值或将作茧自缚

◙ Alibaba Tests Waters for Yahoo Buyout – Again 阿里巴巴再试水竞购雅虎股权

◙ Alibaba’s Incredible Shrinking Profit Growth 阿里巴巴盈利呈加速放缓趋势

News Digest: December 23, 2011

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The following press releases and media reports about Chinese companies were carried on December 23. To view a full article or story, click on the link next to the headline.

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◙ Post Office Aims to Split Off Courier Delivery Logistics Unit for IPO (Chinese article)

◙ Yahoo (Nasdaq: YHOO) to Weigh Deals For Asian Assets: Sources (English article)

◙ Spreadtrum Communications (Nasdaq: SPRD) Declares Quarterly Cash Dividend (PRNewswire)

◙ Joy Global Approved for Strategic Investment in Int’l Mining Machinery (HKEx: 1683) (Businesswire)

◙ Shanda (Nasdaq: SNDA) Cloudary’s Hongxiu Reaches RMB 100 Mln in 2011 Revenue (English article)

New Loan Brings Alibaba Value Into Focus

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New figures coming out of a foreign media report are starting to shed some light on the value Alibaba, China’s biggest e-commerce group, as it moves forward with a deal that would see it lead a group to buy out faded Internet giant Yahoo (Nasdaq: YHOO) and then personally buy back the 40 percent of itself that Yahoo current holds. The interesting element to all this is that based on the latest numbers, Alibaba’s valuation is likely to come in around $20 billion, not bad for a company whose only listed unit, B2B specialist Alibaba.com (HKEx: 1688) is only worth about $5 billion, but also a far cry from the $32 billion that some would like others to believe. According to the latest report, Alibaba is close to assembling a $4 billion loan that it would use to buy back the 40 percent of itself held by Yahoo after the bigger Yahoo buyout, which itself would be valued at around $25 billion. (English article) We already know from public data that Yahoo’s other big Asia asset, its 35 percent stake in Yahoo Japan (Tokyo: 4689), is worth about $6 billion at current market rates. That means $19 billion of the $25 billion purchase price would cover Yahoo itself and the 40 percent of Alibaba that it owns. We also know that Alibaba is raising $4 billion in bank loans to buy out the 40 percent of itself owned by Yahoo, which presumably represents perhaps about half of the financing for the deal. So that would mean Alibaba may pay about $8 billion for the 40 percent stake in the end, valuing itself at about $20 billion and the rest of Yahoo at about $11 billion. I know that may look like a lot of math, but at the end of the day we’re looking at 3 big pieces: A new Yahoo worth about $11 billion, an Alibaba worth about $20 billion and a Yahoo Japan which we already know is worth $18 billion. The Alibaba figure is the most interesting to me, as one of the company’s newest investors previously said the price his company paid for a stake in Alibaba this summer valued the group at $32 billion (previous post) I said that figure looked quite inflated and was indicative of China’s looming Internet bubble, which is already showing signs of bursting. Alibaba certainly realizes all this, which is why it is working hard to quickly close this deal and maintain a respectable valuation in the $20 billion range before the bubble really bursts.

Bottom line: The latest figures on a pending deal to buyout Yahoo show Alibaba is worth about $20 billion, a respectable sum but still well below a figure floated in the market earlier this year.

Related postings 相关文章:

◙ Alibaba Scrambles to Prove High Valuation 阿里巴巴高估值或将作茧自缚

◙ Alibaba Tests Waters for Yahoo Buyout – Again 阿里巴巴再试水竞购雅虎股权

◙ Alibaba’s Incredible Shrinking Profit Growth 阿里巴巴盈利呈加速放缓趋势

News Digest: December 8, 2011

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The following press releases and media reports about Chinese companies were carried on December 8. To view a full article or story, click on the link next to the headline.

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◙ Alibaba Wants to Buy Back Yahoo (Nasdaq: YHOO) Stake For $13 Bln – Source (Chinese article)

◙ China Approves Nestle’s (Switzerland: NESN) Candy Maker Purchase (English article)

◙ Apple (Nasdaq: AAPL) Loses iPad Trademark Lawsuit in Shenzhen (English article)

◙ Buffett Makes a Big Bet on Solar (English article)

◙ China Factory Unrest Spreads Amid Economic Uncertainty (English article)

Alibaba Tests Waters for Yahoo Buyout – Again 阿里巴巴再试水竞购雅虎股权

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Alibaba chief Jack Ma is clearly not someone to take “no” for an answer, as evidenced by his company’s latest effort to assemble a group to buy out its controlling shareholder, Yahoo (Nasdaq: YHOO). There’s not enough detail in a media report (English article) to make too much sense of this latest attempt, after Ma was rebuffed during the summer when he suggested a similar buyout.  But all things considered, this new attempt could stand a much better chance of success. First the facts. The media report on the bid is coming out of New York, meaning the sources are probably private equity firms that are working with Alibaba on the deal, giving the story a bit more credibility. Given the history of Ma’s previous attempt at a buyout (previous post), I suspect that what’s happening now is that this latest group will propose buying out Yahoo and then immediately selling off its core US-based portal operations to a prearranged buyer. Ma’s Alibaba-led group would then be left with Yahoo’s two main Asian assets, namely the 40 percent it owns of Alibaba and its stake in Yahoo Japan (Tokyo: 4689), a joint venture with Japan’s Softbank (Tokyo: 9984). Not surprisingly, Softbank is also a member of the group that Alibaba is leading for this latest buyout deal, according to the report. I have to say that this deal, if this is indeed what’s happening, stands a much better chance of success than Ma’s earlier effort, as it would keep Yahoo’s core operations under US ownership and management while selling its 2 big Asian assets back to their respective local partners. In fact, Reuters reported earlier this week that another major private equity group, Thomas H. Lee Partners, was hoping to do a leveraged buyout of Yahoo’s US business (English article), meaning that bid would fit nicely with a split-up scenario that Alibaba and Softbank may be trying to engineer. According to the latest report, Alibaba would only formally launch its latest offer if Yahoo is interested in such a deal, meaning it won’t consider a hostile bid. But if a break-up is indeed part of Alibaba’s plan that would allow Yahoo’s core operation to remain in US hands, and if the price is right, this latest bid could stand a much better chance of success.

Bottom line: A new buyout attempt of Yahoo by an Alibaba-led group could stand a good chance of success if the aim is a break-up of Yahoo.

Related postings 相关文章:

◙ Alibaba Sharpens Focus in Yahoo Buy-Out, Taobao Mall 阿里巴巴回购雅虎所持股权有望

◙ Alibaba: The Little Genie That Roared?

◙ Alibaba’s Incredible Shrinking Profit Growth 阿里巴巴盈利呈加速放缓趋势

 

Alibaba’s Incredible Shrinking Profit Growth 阿里巴巴盈利呈加速放缓趋势

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Leading B2B e-commerce platform Alibaba.com (HKEx: 1688) has become skilled at putting out its results during times when the least people are watching, as it aims to deflect investor attention from the fact that its profit growth is following a worrisome shrinking pattern. It released its first quarter results in May at the height of its headline-making spat with 40 percent stakeholder Yahoo (Nasdaq: YHOO), and now it has just released an extremely lackluster third-quarter report over the US Thanksgiving holiday, when New York markets are closed and most investors are unlikely to see the results when they get back to work next week. (English article; Chinese article) There’s good reason it doesn’t want too many people to see these results: they show that its third-quarter profit grew at an anemic 12 percent, even after it implemented steep price hikes for merchants who trade on its site in a bid to reignite growth as the actual number of merchants started to fall. (previous post) The 12 percent figure was less than half of the second-quarter’s 28 percent profit growth rate, which itself was down sharply from the first-quarter’s 37 percent growth rate. Do we see a trend here? Profit growth seems to be dropping by 10-15 percentage points each quarter, meaning we might actually see single-digit or no growth in the fourth quarter as the company’s prospects fade. Investors seem to have realized that Alibaba.com’s heady growth days are finished, at least for the next year or 2, as there don’t appear to be any real new growth engines for the company in that time frame. The latest results were actually in line with market forecasts, reflecting investors low expectations for the company, and Alibaba.com shares themselves are trading at half the levels of their 52-week high. Unless it can find some new magic soon, which appears unlikely, look for this stock to be stuck in the doldrums for quite some time and perhaps to even fall further still if a serious, more innovative competitor appears.

Bottom line: Alibaba.com’s profit growth will stall in the fourth quarter and into 2012, as it struggles for new revenue sources amid stagnation at its core B2B trading business.

Related postings 相关文章:

◙ Tencent and Alibaba: It’s Not Easy Being Big 腾讯和阿里巴巴：想当老大不容易

◙ Albaba Faces New Assaults From Merchants, 360Buy 阿里巴巴受到中小商户和京东商城的双重夹攻

◙ Alibaba.com Blows Smoke With HiChina Spin-Off Plan 阿里巴巴网络分拆万网放烟幕弹