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: A special meeting between 8 Chinese government agencies is a positive sign for Uber and its rivals, indicating Beijing wants to forge a unified national policy to foster the development of hired car service operators.
Beijing meeting sends positive signal for Uber
The brash Uber and its rivals are seeing some encouraging signs in China, with reports that Beijing has convened a special meeting of 8 ministries to clearly define a national policy on these up-and-coming providers of hired car services. At the same time, Uber has broadened its stable of China partners by forming an alliance with homegrown smartphone sensation Xiaomi to promote their products and services in Southeast Asia. Lastly, Uber is also in a slightly troubling headline that spotlights some of risks it will face, as media in southern Guangdong province report that one of the company’s drivers may have been murdered by a customer. Read Full Post…
Bottom line: Uber’s latest mega funding from a Chinese investor demonstrates its determination to stay in China, while Yidao’s marginalization could force it to sell itself to an Uber-Baidu alliance at a bargain price.
Hillhouse eyes Uber investment
The race for supremacy in China’s hired car services market is taking several new twists, with reports that US giant Uber is close to landing a major new funding from a Chinese backer as it shows no signs of leaving the market. At the same time, intense competition could be close to claiming its first big victim, with separate reports saying Yidao Yongche has made major layoffs as it struggles to keep up with Uber and homegrown Chinese giant Didi Kuaidi.
The hired car services story in China has been a noisy one, upsetting a stodgy industry that was mostly dominated for years by traditional taxis. But a new generation of companies are taking advantage of global positioning technology to offer location based services (LBS) that allow customers to easily find and book hired private cars that are nearby and also cheaper than taxis. That potent combination has resulted in a “democratization” of hired car services, which were usually considered a semi-luxury but are now increasingly used by people as an affordable substitute for public transportation. Read Full Post…
Bottom line: Uber and rival homegrown Chinese hired car services are likely to ultimately get a green light to operate throughout China, providing a much-needed shot of competition to traditional taxi fleets.
Uber plows big bucks into China
Anyone who thought that US hired car services hotshot Uber might be stalling in China might want to reconsider that view, following new reports that say the company has budgeted a cool $1 billion for its China expansion this year. The reports are all citing an internal company email, which strongly suggests that Uber deliberately leaked the message to quash any talk that it might be losing its resolve to push ahead in a China market that is quite difficult but also has huge profit potential.
At the same time, another report is saying that Uber and other providers of similar hired car services could ultimately find their business model outlawed, as a number of cities consider banning or heavily restricting the use of private cars that compete with traditional taxis. I seriously doubt that will happen, however. That’s because Beijing has shown an usual desire to accommodate these newer, high-tech services that have the potential to drive China’s economy in the future as many traditional industries lose momentum. Read Full Post…
Bottom line: A Yidao Yongche merger with Uber China continues the rapid consolidation in China’s hired car services, which could be followed soon by a successful bid by Uber and Baidu for Nokia’s digital mapping division.
Yidao Yongche to merge with Uber China
Rapid consolidation is taking place in China’s hired car services market, with word that a new alliance is shaping up between major local player Yidao Yongche and an existing tie-up between global giant Uber and local Internet search leader Baidu (Nasdaq: BIDU). As a longtime Chinese Internet watcher, I’m quite surprised at the sudden and rapid speed of consolidation in this particular sector, since such consolidation in other areas tends to be a slow and painful process that often takes years.
A major factor behind this sudden and rapid consolidation could be the participation by all 3 of China’s top Internet players, including Baidu, alongside social networking giant Tencent (HKEx: 700) and e-commerce leader Alibaba (NYSE: BABA). Two of those companies are also involved in a related headline that is seeing Baidu and Tencent making separate bids for the digital mapping division being sold off by former cellphone giant Nokia (Helsinki: NOK1V). Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 18. To view a full article or story, click on the link next to the headline.
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Uber, Yidao To Merge Under Baidu-Led (Nasdaq: BIDU) Plan – Source (Chinese article)
Alibaba (NYSE: BABA) Post-IPO Lock-Up Period Ends, Releasing 340 Mln Shares (Chinese article)
Unicom Proposes Plan To Buy Back Up To 10 Pct Of Shares (HKEx announcement)
Phoenix Satellite TV Announces Full-Year 2014 Results (HKEx announcement)
Solar Power Installation To Hit 17.8 Gigawatts This Year, Ahead Of Forecasts (Chinese article)
Bottom line: China’s regulators are unlikely to veto the merger of taxi apps Didi and Kuaidi, and should encourage similar consolidation to allow for creation of Internet firms that can be globally competitive.
Yongche accuses Didi-Kuaidi of creating monopoly
Just a day after China’s leading 2 taxi apps announced their plan to merge, a series of observers are voicing concerns that the marriage would be anti-competitive and should be vetoed on antitrust grounds. The sudden debate about the merger of Kuaidi Dache and Didi Dache isn’t too surprising, since it would create a company that would control the vast majority of China’s market for taxi and private car services. But the regulator will need to decide whether such talk of monopoly is justified, since in many ways the newly merged company is still quite small and will also face strong competition from global rivals. Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 17. To view a full article or story, click on the link next to the headline.
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Ourpalm (Shenzhen: 300315) Acquires 3 Game Firms In 4.3 Bln Yuan Deal (Chinese article)
Anbang Pledges $1.1 Bln Capital In Purchase Of Vivat (English article)
Zynga (Nasdaq: ZNGA) Loses $226 Mln In 2014, Shutters Zynga China (English article)
Vipshop (NYSE: VIPS) Reports Unaudited Q4 And Full Year 2014 Results (PRNewswire)
Yongche Complains Of Monopoly With Didi-Kuaidi Taxi App Merger (Chinese article)
The following press releases and media reports about Chinese companies were carried on February 4. To view a full article or story, click on the link next to the headline.
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The following press releases and media reports about Chinese companies were carried on December 20. To view a full article or story, click on the link next to the headline.
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Hershey (NYSE: HSY) To Buy Majority Of Shanghai Golden Monkey Food Co (Businesswire)
AsiaInfo-Linkage (Nasdaq: ASIA) Stockholders Approve of Merger Agreement (PRNewswire)
Alibaba, Wanda Group Team Up On Movie Ticket Payments On Alipay (Chinese article)
Ctrip (Nasdaq: CTRP) Invests in Online Car Rental Firm Yongche (English article)
Tesla (Nasdaq: TSLA) Starts Offering Cars In China With No Chinese Name (English article)
