The following press releases and news reports about China companies were carried on May 20. To view a full article or story, click on the link next to the headline.
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Temasek, CIC-KKR Advance to 2nd Round of Yum (NYSE: YUM) China Stake Sale (English article)
BT (London: BT) Applies for Telecoms Value Added Service License In Shanghai FTZ (Chinese aticle)
Bottom line: Yum may sell control of its China unit to Chinese partners in a bid to become more local, while ZTE’s plans for a Nubia IPO reflect a growing emphasis on its younger, trendier smartphone brand.
China set to take control of local KFC?
A couple of big IPO stories are rippling through the headlines, led by word that an investor group headed by China’s sovereign wealth fund could buy control of the China unit of Yum Brands (NYSE: YUM), owner of the KFC fast-food chain, as it gets set for a spin-off and separate listing. This particular news marks a shift from previous reports that implied Yum would retain control of its China unit, even as it sold a major stake to big institutional investors.
While the Yum listing is likely to come later this year, another smaller but interesting deal has telecoms giant ZTE (HKEx: 763; Shenzhen: 00063) saying it plans to spin off and separately list its smartphone division that manufactures under the Nubia brand in the next 3 years. That hints that ZTE may be re-thinking its smartphone business, and perhaps preparing to slowly de-emphasize its older ZTE-branded phones in favor of its younger, higher-end Nubia line. Read Full Post…
The following press releases and news reports about China companies were carried on April 26. To view a full article or story, click on the link next to the headline.
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The following press releases and news reports about China 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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Ant Financial Completes Funding Round at $60 Bln Valuation (Chinese article)
China Sovereign Fund to Seek Control of $8 Bln Yum (NYSE: YUM) China Unit (English article)
Asos Closes China Business Under Weight of Alibaba (NYSE: BABA) Competition (English article)
ZTE’s (HKEx: 763) Nubia Smartphone Brand Says to IPO Within 3 Years (Chinese article)
New Oriental Announces Fiscal Q3 Results (PRNewswire)
Bottom line: McDonald’s plan to sell its wholly owned China stores to China Resources looks like a smart move that should help it achieve its aggressive new expansion plans in the market and broadly benefit both sides.
McDonald’s, China Resources eye tie-up
Leading consumer conglomerate China Resources looks like a company with an identity crisis these days, with word that it’s bidding to buy the China store operations of global fast food giant McDonald’s (NYSE: MCD). Such a deal would be huge, since China is now home to more than 2,200 McDonald’s, and the US company recently announced plans to open another 1,000 restaurants in the market over the next 5 years.
It’s important to note that many of McDonald’s existing China restaurants are run by local franchising partners, and that a potential sale of its China stores to China Resources wouldn’t affect those outlets. McDonald’s uses a similar franchising model throughout most of the rest of the world. It originally owned and operated most of its China restaurants when it entered the country in the 1990s due to the newness of the market and lack of suitable partners. But it has said recently that it wants to move to a franchising model there as well. Read Full Post…
Bottom line: Yum’s China unit is getting a relatively low value due to the country’s unique risks and slowing economy, while YTO’s backdoor listing is likely to get a cool reception due to intense competition in China’s parcel delivery sector.
Yum seeks investors for China unit
Two major IPOs are in the headlines today, one from the more mature fast-food business and the other from the fast-growing but extremely competitive package delivery sector. The first deal has Yum Brands (NYSE: YUM) in talks to sell up to 20 percent of its China division to private equity investors, as it tries to value the unit in the run-up to a highly anticipated IPO. The second has Alibaba-backed (NYSE: BABA) parcel delivery service YTO Express launching a backdoor listing in Shanghai, as it looks for cash to support its operations that are probably losing big money.
Chinese IPOs have gotten off to a slow start this year, both in China and overseas, for a number of reasons. Beijing has banned new domestic offerings for now, in a bid to stabilize markets after a massive sell-off at the beginning of the year. New US listings have also been slow, as many start-ups that previously would have chosen New York now consider listing at home instead. Hong Kong has been the only area with significant new activity, though even there the volatility in China have also depressed the market. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 13. To view a full article or story, click on the link next to the headline.
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Shanghai Disney (NYSE: DIS) Resort to Open on June 16 (English article)
China Telecom (HKEx: 728), Unicom (HKEx: 762) Partner to Improve Operations (English article)
Yum’s (NYSE: YUM) China Sales Rose 1 Pct in December Before Planned Spinoff (English article)
The following press releases and media reports about Chinese companies were carried on December 11. 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 October 6-8. To view a full article or story, click on the link next to the headline.
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Meituan, Dianping in Merger Talks – Source (Chinese article)
Apparel, Footwear Industry Calls for Taobao Relisting as “Notorious Market” (press release)
China to Hasten Roll-out of Car Charging Network: Xinhua (English article)
Yum’s (NYSE: YUM) China Missteps Amplify Calls For Spinoff, Other Change (English article)
Canadian Solar (Nasdaq: CSIQ) Closes Purchase of Ontario Assets from KKR (PRNewswire)
Bottom line: Yum’s new leadership change marks the start of a new period of sustained same-store sales growth for KFC in China, which could include a spin-off of the company’s China business over the next 2 years.
Yum names new China head
Market wisdom often says that China is too big to ignore for most multinationals, despite the market’s complexities and many restrictions. Now a new trend is emerging that says China is too big and complex to be run as part of a company’s bigger global operations, and needs to be split off into a separate unit for major global firms.
That’s the interpretation some are making following Yum Brands’ (NYSE: YUM) naming of a new China chief, and growing speculation that the parent of the KFC and Pizza Hut chains will spin off its China business into a separate company. In this case, Yum’s naming of Micky Pant as CEO of Yum Brands China comes as KFC is in the midst of a major overhaul for its largest market outside the US. Read Full Post…
The following press releases and media reports about Chinese companies were carried on August 20. To view a full article or story, click on the link next to the headline.
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