Bottom line: A backdoor listing plan by SF Express in Shenzhen, a New York IPO plan by China Music Corp and 3 new China OTC listings by ZTE units reflect creative approaches to new listings by Chinese firms due to bottlenecks for traditional IPOs.
SF Express eyes backdoor listing
A trio of IPO stories in the headlines are quite revealing, as none are happening through traditional channels on China’s 3 main stock exchanges in Shanghai and Shenzhen. Instead, the largest of the 3 plans has parcel delivery giant SF Express eyeing a backdoor listing using a shell company from the minerals business. Meantime, music streaming company China Music Corp has popped up across the Pacific in New York, where it is reportedly planning an IPO that could be the largest of its kind this year. Read Full Post…
The following press releases and news reports about China companies were carried on May 7-9. To view a full article or story, click on the link next to the headline.
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US Opens Patent Probe Against ZTE (HKEx: 763), Lenovo (HKEx: 992), 5 Others (English article)
Bottom line: Lenovo’s new emphasis on its year-old Zuk smartphone brand and TCL’s plunging sales reflect ongoing cutthroat competition in China, though neither company is likely to give up the domestic market anytime soon.
Lenovo launches new Zuk phone
New headlines surrounding 2 of China’s bigger stumbling smartphone makers reflect the market’s current state of chaos, as more than a dozen well-funded brands battle for surpremacy. Leading the headlines is PC titan Lenovo (HKEx: 992), which has decided to bring its young Zuk smartphone brand back into the parent company after initially letting it operate independently.
At the same time, faded giant TCL (HKEx: 2618) has just reported worrisome quarterly results that show its China smartphone sales plunged by more than half due to the market’s fierce competition. Both Lenovo and TCL are rapidly becoming victims in China’s bloody smartphone wars, though each is unlikely to withdraw from the market anytime soon due to strong backing from a cash-rich parent. Read Full Post…
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: Huawei stands a reasonably good chance of meeting its goal of becoming the world’s second largest smartphone brand in the next 3 years, while ZTE’s sell-off with the resumption of trading in its shares looks overblown.
Huawei unveils mid-range P9 at London event
Two of China’s oldest and largest telecoms names are in the headlines, though Huawei and smaller rival ZTE are moving in opposite directions as we close out the week. New data are showing that Huawei continued to pick up share in China’s smartphone market in February, as the division’s head discussed his latest timeline for overtaking global leaders Apple (Nasdaq: AAPL) and Samsung (Seoul: 005930) in the next 4-5 years. Meantime, shares of ZTE finally resumed trading, and promptly tumbled as much as 16 percent, after a difficult few weeks due to a tussle with Washington.
The 2 stories reflect the opposite recent paths of these crosstown rivals, both based in the southern Chinese boomtown of Shenzhen. Huawei’s rapid rise in the smartphone space dates back to the middle of last year. ZTE’s woes are more recent, dating back to last month when Washington punished the company for illegally selling US-made equipment to Iran. But I would caution that Huawei’s rising fortunes could quickly run out of fuel in the fast-changing smartphone world, while ZTE may be oversold following resolution of its tussle with Washington. Read Full Post…
The following press releases and news reports about China companies were carried on April 8. To view a full article or story, click on the link next to the headline.
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Online Grocer Yummy77 Goes Bankrupt Due to Funding Squeeze – Report (Chinese article)
Huawei Needs 3-5 Years to Pass Apple (Nasdaq: AAPL), Samsung – Executive (Chinese article)
ZTE (HKEx: 763) Dives as US Probe, Executive Shuffle Stoke Uncertainty (English article)
Didi Says New Funding Round Well Received, Value Exceeds Market Talk (Chinese article)
Mondelez (Nasdaq: MDLZ) Teams Up With Alibaba to Sell More Oreos in China (English article)
Bottom line: ZTE’s change of leaders is a much-needed move to revive the company’s fortunes, though the choice of its former technology chief as new chairman looks a bit conservative.
ZTE gets new chairman
Following a turbulent period that saw it nearly lose access to many of its key suppliers, telecoms giant ZTE (HKEx: 763; Shenzhen: 000063) has just announced the arrival of a new chief, as it seeks fresh starts in its 2 main businesses selling networking equipment and smartphones. Many are pointing to ZTE’s recent run-in with Washington for illegally selling products to Iran as the direct reason for the departure of Shi Lirong, who was chairman for the last 6 years.
Perhaps that’s partly true, but the reality is that Shi’s tenure at the helm of ZTE has been marked by a much longer series of stumbles that has cost the company millions of dollars in sales and market value. Those missteps led ZTE to launch a major overhaul a couple of years ago that seemed to be showing results for its older networking equipment business. But more recently ZTE’s newer smartphone business has been showing signs of stumbling, and the latest Iran controversy may have driven the board’s decision to replace Shi. Read Full Post…
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.
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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)
Bottom line: ZTE will avoid major fallout from its clash with Washington over illegally selling products to Iran, though its shares could drop 5-10 percent when trade resumes after its April 6 results announcement.
ZTE seals plea agreement with Washington
It’s not often that I write about earnings date announcements, but in this case one such announcement from telecoms equipment maker ZTE (HKEx: 763; Shenzhen: 000063) appears to show it believes it has found a long-term resolution to its recent run-in with Washington. ZTE was originally set to publish its fourth-quarter results on Wednesday this week, but hastily scrapped that plan after the clash began with Washington earlier this month.
Now ZTE has just published an announcement detailing what it hopes will be a long-term resolution to the clash, which began when Washington find it guilty of selling US equipment to Iran in violation of a ban. As a result, ZTE has announced a new date of April 6 for releasing its fourth-quarter and full-year results. (HKEx announcement) Read Full Post…
