Youku Tudou inc News

INTERNET: Baidu’s iQiyi Raises $1.5 Bln, as Investors Hedge Bets

By newsdoug on February 22, 2017

Bottom line: iQiyi’s issue of convertible notes to raise its latest $1.5 billion shows it continues to post big losses, and investors are increasingly skeptical that it can become profitable in the next 2 years.

iQiyi lures investors with convertible notes

It seems no one is quite ready to believe that China’s cash-burning online video sites are ready for the profit column just yet. That seems to be the message coming from Baidu-backed (Nasdaq: BIDU) iQiyi, one of the leading players, which has just raised a fresh $1.5 billion via a convertible note issue. That would indicate that investors are hoping they can convert their notes into iQiyi stock when they come due, but can also simply collect back their money with interest instead. Read Full Post…

INTERNET: Baidu-Meituan Merger Talk Looks Spicy, But Dicey

By newsdoug on September 7, 2016

Bottom line: Rumors that Baidu may be planning to merge its take-out dining and group buying units with Meituan-Dianping are consistent with recent market trends, but are less likely to be true due to Baidu’s strong denial.

Baidu denies merger plan for group buying, dining units

I normally try to avoid writing about rumors that lack strong foundation, but the latest gossip about a potential new mega tie-up between 2 non-core units of online search leader Baidu (Nasdaq: BIDU) and group buying giant Meituan-Dianping look too spicy to ignore. Baidu came out with a statement late on Tuesday denying any talks were taking place to combine its take-out dining and Nuomi group buying services with Meituan-Dianping. But that said, any veteran China watcher will know that companies frequently deny such rumors even when they’re true. Read Full Post…

VIDEO: PPTV’s Cryptic Farewell, Xunlei Swings to Loss

By newsdoug on May 12, 2016

UPDATE: Since issuing its original microblog post, PPTV has issued new posts on its account that appear to indicate it won’t be closing. To view the latest posts, please click here.

Bottom line: PPTV looks set to become the first major victim of China’s online video wars after its microblog publication of a farewell message, while the money-losing Xunlei could become the second casualty.

Two of China’s major online video companies with mid-sized backers are in the headlines today, with ominous signals coming from PPTV and Xunlei (Nasdaq: XNET) that reflect the intense competition they face. The most intriguing headline has PPTV, which is owned by electronics retailing giant Suning (Shenzhen: 002024), announcing on its official microblog that it is closing, even as its actual website remains active.

The other headline has Xunlei, which is backed by smartphone maker Xiaomi, announcing its latest quarterly results that showed it swung to a loss as it battles with much larger rivals for an audience. We can probably also assume that PPTV was losing big money, and in fact just about everyone in China’s online video space is now in the red. Typical of the group is Youku Tudou, the industry leader whose net loss doubled to $70 million in last year’s third quarter before it was bought by e-commerce giant Alibaba (NYSE: BABA). Read Full Post…

China News Digest: April 6, 2016

By newsdoug on April 6, 2016

The following press releases and news reports about China companies were carried on April 6. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════

Alibaba (NYSE: BABA) Completes SCMP Acquisition, Makes Digital Content Free (English article)
China’s ZTE (HKEx: 763) Names New Chief as It Grapples With US Blacklist (English article)
Youku Tudou (NYSE: YOKU) Announces Completion of Merger (PRNewswire)
Temasek Sees Valuation Concerns in Chinese Technology Industry (English article)
Ku6 Media (Nasdaq: KUTV) Enters Merger Agreement For Going Private (PRNewswire)

INTERNET: Xunlei Swings to Loss, Where’s Xiaomi?

By newsdoug on March 11, 2016

Bottom line: Xunlei’s performance and stock price could come under pressure over the next year due to stiff competition in China’s consolidating online video market and lack of support from struggling strategic partner Xiaomi.

As rumors swirl of a potential merger between the online video services of Tencent (HKEx: 700) and Sohu (Nasdaq: SOHU), smaller rival Xunlei (Nasdaq: XNET) has just announced its latest quarterly results that show why it may be difficult for the company to remain independent in the rapidly consolidating sector. Xunlei swung to a loss in the quarter and saw its revenue contract — hardly encouraging signs for a company that’s already quite a small player in China’s fiercely competitive online video market.

The big “elephant in the room” in this instance is struggling former smartphone sensation Xiaomi, which purchased 30 percent of Xunlei around the time of its 2014 IPO for a reported price of about $200 million. Xiaomi went on to form a content distribution service with Xunlei last summer, leading me to predict that it could make an offer to buy the company outright. (previous post) Read Full Post…

INTERNET: Sohu Playing Video with Tencent?

By newsdoug on March 11, 2016

Bottom line: Sohu is likely to combine its online video service with Tencent’s in an ongoing consolidation of the Chinese sector, and the tie-up could presage a Tencent-backed privatization bid for Sohu later this year.

More consolidation could be coming in China’s online video sector, with word that web portal Sohu (Nasdaq: SOHU) may soon sell a major stake in its video service to social networking giant Tencent (HKEx: 700). The move would follow a similar tie-up between this pair in the online search space, and might lead some to wonder if Tencent may even be preparing an eventual bid for Sohu itself. I’ll end the suspense on that matter by saying such a sale seems unlikely, for reasons I’ll explain later. But the pair could still ultimately do more deals together

This particular tie-up would mean that China’s online video sector is firmly consolidating around the country’s 3 biggest Internet companies and a handful of others. Leading search engine Baidu (Nasdaq: BIDU) is closely associated with Qiyi.com, a leading player, while Alibaba (NYSE: BABA) last year purchased Youku Tudou, another leader. The other major player is LeEco (Shenzhen: 300104), formerly known as LeTV, and state-owned broadcasters in Shanghai and Hunan are also making big pushes into the space. Read Full Post…

ENTERTAINMENT: Qiyi Eyes Music, Qihoo Goes Video

By newsdoug on March 2, 2016

Bottom line: Qiyi’s new tie-up with Universal Music could presage its purchase of Baidu’s music unit, while Qihoo’s new video campaign is likely to stumble due to intense competition from existing players.

A couple of new reports are casting a spotlight on the rapid colonization of the video and music spaces by new media companies. The most intriguing of those has Qiyi.com, the online video site affiliated with search leader Baidu (Nasdaq: BIDU), taking a major step into the music space through a tie-up with global entertainment giant Universal Music. The second has the aggressive Qihoo 360 (NYSE: QIHU) making a late but big push into the online video space via a major new hire.

Both of these stories reflect the big challenge that private companies are now posing to traditional TV and radio stations, as they rapidly challenge a state-owned establishment that held a monopoly on China’s entertainment sector for decades. The resulting boom in video and music services has been great for consumers. But in usual Chinese fashion the explosion has sparked another cycle of hyper-competition that has pushed everyone deeply into the red, and is almost certain to end with the typical bust in a few years. Read Full Post…

ENTERTAINMENT: iQiyi Eyes IPO, Youku Nears NY Exit

By newsdoug on February 15, 2016

Bottom line: Baidu’s sale of its Qiyi video unit is a first step before a domestic IPO, and the valuation from that sale shows that Alibaba is overpaying for rival video site Youku Tudou and that industry leader LeTV is still highly overvalued.

Baidu sells Qiyi video unit in run-up to IPO

Two of China’s largest online video sites are in the headlines as the nation returns to work after the week-long Lunar New Year holiday, led by word that Baidu (Nasdaq: BIDU) is selling its controlling stake of its iQiyi online video unit. In this case the move looks like preparation for a domestic IPO by the unit, since the buyer of the stake is a group led by Baidu founder Robin Li and iQiyi chief Gong Yu.

The second report has Youku Tudou (NYSE: YOKU) announcing a date for its shareholders to vote on an offer to sell the company to e-commerce leader Alibaba (NYSE: BABA). The meeting will take place on March 14, and will mark a final step before Youku Tudou ceases its brief but stormy life as a publicly traded company and becomes part of Alibaba. Read Full Post…

News Digest: February 2, 2016

By newsdoug on February 2, 2016

The following press releases and media reports about Chinese companies were carried on February 2. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════

Youku Tudou (NYSE: YOKU) VP Questioned by Police for Illegal Activity (Chinese article)
New Oriental Proposes China IPO for Xun Cheng, After Tencent Investment (PRNewswire)
Blackstone Shops China Software Firm Pactera to Potential Buyers (English article)
Sinovac (Nasdaq: SVA) Announces Receipt of Proposal to Buy the Company (PRNewswire)
OPPO, Vivo Snap at Apple’s (Nasdaq: AAPL) Heels in China Mobile Market (English article)

MEDIA: TCL, LeTV Partnership Moves Ahead with New Smart TVs

By newsdoug on January 15, 2016

Bottom line: TCL’s smart TV alliance with LeTV brings together 2 strong names and is getting off to a good start with a strong lineup of new products, but could have trouble over the longer term due to the rapidly changing industry.

TCL announces new products with LeTV

TV stalwart TCL (Shenzhen: 000100) has just announced an expansion of its young partnership in smart TVs with industry high-flyer LeTV (Shenzhen: 300104), in what could become the first of an earlier wave of such tie-ups to finally gain some traction. Many of the similar tie-ups were announced in rapid succession a couple of years ago, as newer online video companies rushed to forge partnerships with traditional TV manufacturers.

The idea was that the TV makers would produce customized products optimized to offer video services from a particular Internet company, creating a new generation of online-connected smart TVs that could compete with traditional cable TV services. But it seems many of those alliances never really got very far, and these days many video companies have decided to focus instead on making special set-top boxes that be easily mounted on any TV. Read Full Post…

INTERNET: Sina Board Shrinks, Sale Ahead?

By newsdoug on January 14, 2016

Bottom line: Sina’s latest board reduction to just 5 members looks like a strategic move by Chairman and CEO Charles Chao, as he prepares a sale that will give him a major executive position at his company post-merger.

The share price isn’t the only thing shrinking these days at leading web portal Sina (Nasdaq: SINA). The board of one of China’s oldest Internet companies has also just undergone a major reduction, with 2 of its 7 members leaving without any sign of replacements. I’m not extremely familiar with Sina’s board and its dynamics, but it does seem like 5 members is quite small for a company of Sina’s size and could reflect a power play by longtime Chairman and CEO Charles Chao.

Such a play could be prelude to the sale of Sina to a rival, with e-commerce giant Alibaba (NYSE: BABA) as the most likely candidate. I’ve been predicting such a sale for a while now, and this latest move looks like the latest signal that Chao could be clearing out board members who might oppose such a deal. With just 5 members left on the board, Chao would only need 2 to agree with him to approve a deal that he would personally negotiate. Read Full Post…