Bottom line: Zhaopin’s slight raising of its privatization price could reflect minority investor complaints about undervaluation, while Autohome’s buyout price could rise up to 20 percent in a game of strategic maneuvering with Ping An.
Zhaopin raises buyout price
Minority investors have long complained that a wave of privatization bids for US-listed Chinese companies are grossly undervalued, and now the companies may finally be responding to those grievances. That’s my assessment based on the latest reports that say online recruitment site Zhaopin (Nasdaq: ZPIN) has quietly raised the bid price for its privatization plan, as valuation questions also threaten to derail a similar plan by online car site Autohome (NYSE: ATHM).
Minority investor complaints about undervaluation center on the fact that top managers often control a majority of their companies’ shares through direct and indirect relationships. That means they can choose whatever bid price they want and be assured of its acceptance at shareholder votes. But threats of lawsuits and rival bids, and also perhaps worries about being seen as greedy and unethical are forcing some of the management-led buyout groups to rethink their prices and offer more. Read Full Post…
Bottom line: 58.com’s stock could be set for some upside in the second half of the year, as it returns to profitability after a well-executed acquisition spree that has sharply boosted its revenue growth.
58.com feasts on ads, acquisitions
Classified ads may not sound like the sexiest area of the Internet, but they’ve provided some strong growth for the acquisitive 58.com (NYSE: WUBA), which is fast emerging as a leader in the space and is often called the Craigslist of China. The company’s aggressive acquisition campaign has led to explosive revenue growth, but has also pushed the company into the loss column as it digests its many recent purchases.
That could present a good buying opportunity for investors with a longer term perspective, as 58.com looks set to return to the profit column and continue its strong revenue growth. If all goes according to plan, 58.com could end next year as China’s undisputed leader in the online advertising services realm. The company is already squarely ahead of the older 51job.com (Nasdaq: JOBS) and is on track to surpass current leader Zhaopin (Nasdaq: ZPIN), which both focus on online job recruiting. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 20. To view a full article or story, click on the link next to the headline.
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Meituan-Dianping Completes $3.3 Bln Funding, Values Company at $18 Bln (Chinese article)
Bottom line: Baidu could buy a small stake in Xunlei but is unlikely to acquire the company outright as part of their new alliance, while 58.com’s plan to rebuild its newly acquired job site should have good chances of success.
58.com goes to work on ChinaHR
I’ve been predicting a marriage for a while for online video orphan Xunlei (Nasdaq: XNET), even as it remains stubbornly single despite its lack of scale to survive as an independent company. First it appeared the company might get bought by smartphone sensation Xiaomi after the pair boosted their strategic tie-up in May, but then nothing more happened. Now the gossip mills are likely to start turning again, following the latest announcement of a major partnership between Xunlei and Baidu’s (Nasdaq: BIDU) iQiyi online video service.
58.com
Meantime in another Internet news bit, the top executive at leading online classified ad site 58.com(NYSE: WUBA) is saying he will need 2 years to turn around the underperforming online job site ChinaHR, which he acquired earlier this year. His assessment comes after the site laid off nearly all of its staff as part of the deal that saw 58.com buy ChinaHR from its Irish owner. Read Full Post…
Bottom line: 58.com’s new purchase of an online job site extends its spree of recent acquisitions and partnerships, which looks like a focused, well-conceived plan that could position it to emerge as a leading Chinese Internet advertising specialist.
58.com gets into jobs space
The savvy online classifieds site 58.com (NYSE: WUBA) is back in the headlines as we close out the week, with word that it’s signed a deal to purchase online job specialist ChinaHR. If true, the deal would mark the latest in a steady stream of acquisitions for 58.com, which looks well positioned to become a truly diversified leader in online classified advertising services.
Such a focused strategy looks much better than the more diversified M&A being practiced these days by China’s largest Internet companies, which are all venturing far beyond the core businesses that brought them their initial success. Of course it’s much easier for companies like 58.com to keep their focus due to their small size. Compared to names like Tencent (HKEx: 700) and Alibaba (NYSE: BABA), which are each valued at around $200 billion, 58.com still has a relatively small market value of about $7 billion. Read Full Post…
The following press releases and media reports about Chinese companies were carried on August 6. To view a full article or story, click on the link next to the headline.
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WH Group (HKEx: 288) Gains as Biggest Pork Producer Debuts in Hong Kong (English article)
Luxury Car Makers Under Anti-Monopoly Investigation (Chinese article)
Tesla’s (Nasdaq: TSLA) China Trademark Dispute Ends As 2 Sides Reach Agreement (Chinese article)
After a 2 week pause with no new listings, the market for overseas tech IPOs has come chugging back to life with a strong trading debut for video sharing site Xunlei (Nasdaq: XNET). That solid performance could bode well for online karaoke company Tiange, which has just filed for its own new listing in Hong Kong, continuing a recent trend towards more Chinese Internet listings in the former British colony. Both news bits provide the latest evidence that the overseas market for Chinese IPOs is finding a second wind after a losing momentum in April and May. That new momentum is likely to last through August when e-commerce leader Alibaba is expected to make what could be the largest IPO ever by an Internet company. Read Full Post…
After going the entire week without a major IPO story, 3 major developments are showing there’s still some life in the market despite earlier signs of stumbling. At the top of the news is online recruiting site Zhaopin (NYSE: ZPIN), which has just posted a nice trading debut after a solid pricing for its new American Depositary Shares (ADSs). Meantime, video sharing site Xunlei is steaming ahead with its own listing by formally setting a price range for its shares, which means a final pricing and trading debut are likely next week. Last but not least there’s restaurant ratings site Dianping, which has formally hired investment banks for a new mega offering to raise up to $1 billion. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 13. To view a full article or story, click on the link next to the headline.
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Alibaba In Low-Profile US Tmall Launch, Eyes Amazon (Nasdaq: AMZN) (Chinese article)
Zhaopin (NYSE: ZPIN) Climbs 8.5 Pct In US Trading Debut (Chinese article)
BMW (Frankfurt: BMW) Places 800 Mln Yuan Auto Loan ABS In China (English article)
Wanxiang,NEC (HKEx: 6701) Form JV For Grid Energy Storage in China (Businesswire)
Two big fund-raising stories are in the headlines as people return to work after the Dragon Boat holiday, including a new IPO filing by online recruitment site Zhaopin.com and a big new funding round by a year-old mobile news app developer. The first news bit has seen Zhaopin announce a price range for its IPO nearly a month after making its first public filing for the offer. Meantime, the app whose name translates roughly to Today’s Top News, is showing big promise in the mobile news space, with word that its developer has just raised an impressive $100 million in new funding. Read Full Post…
The following press releases and media reports about Chinese companies were carried on May 31-June 3. To view a full article or story, click on the link next to the headline.
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Dutch Pension Fund APG Invests Up To $650 mln In China Warehouse Firm (English article)
Web Cleanup Expands With Investigation Of 14 Mobile Game Firms (Chinese article)
China Telecom (HKEx: 728) 2014 4G Capex to Reach 40 Bln Yuan (English article)
