China

Xiaomi phones, not services, are eating the world

19 November 2018

A 50 pct surge in quarterly sales confirms the success of the nearly $50 bln Chinese group's smartphones in India and beyond. Xiaomi is mainly about hardware. Boss Lei Jun's bets in video-streaming, fintech and other internet plays may prove to be costly distractions.

Global hotel chains get Kentucky fried in China

19 November 2018

A video showing staff at Marriott, Hilton and other chains cleaning cups with dirty towels has gone viral, forcing local managers to apologise. As Yum Brands found, Chinese smear campaigns can become big business headaches. An escalating trade war only increases the stakes.

Anta deal would be a marathon not a sprint

19 November 2018

Tencent may join the Chinese sportswear company and others in their $5.3 bln approach for Salomon owner Amer. The price, plus initial hits to the margin and dividend, worry shareholders. And yet if Anta could replicate what it did with Fila, the acquisition might pay off in time.

M&A can bring relief to Asia’s crowded skies

19 November 2018

Too many carriers, with too many planes, offering cheap fares have left the industry on its knees, and put price controls back on the agenda. Consolidation is a better fix. With Indonesia’s Garuda taking over a rival and India’s Jet Airways in play, a turning point may be near.

JD governance overhaul becomes more urgent

16 November 2018

The $35 bln Chinese web retailer is expected to post another fall in quarterly profit. Its shares are down by nearly half this year. A rape allegation against boss Richard Liu has left a cloud over JD. Walmart and other big backers have good reason to urge him to loosen his grip.

Asian IPO slump brings welcome valuation sanity

16 November 2018

Having raised $62 bln in nine months via 480 listings, economic anxieties have infected overheated equity markets in Hong Kong and beyond. Deals from Tencent and others are being delayed or repriced in an overdue correction. With luck, rationality will creep in elsewhere, too.

A cooling China may chill Sinochem Energy’s IPO

16 November 2018

The state giant wants to raise up to $2 bln by listing its trading and refining arm in Hong Kong. It can benefit from lower oil prices. But squeezed margins, volatile markets and jitters over demand at home won’t help. Smart pricing and Beijing’s support will make the difference.

China’s impact investing is an expat project

15 November 2018

Global institutions want to extend ESG criteria to the PRC. But domestic share owners simply expect returns. Meanwhile, reliable information is scarce, investors and companies talk past each other, and there are other governance priorities. For now it’s looking like a luxury.

Chinese phenom Pinduoduo has some explaining to do

15 November 2018

The $19 bln favoured e-commerce site for frugal “aunties from Wuhan” is inflating its top line and understating its costs, alleges short-seller Blue Orca. If true, the charges are damning and threaten PDD’s superlative as the fastest-growing internet seller on the planet.

Private equity battens on the Asian state

15 November 2018

Australia’s Royal Commission, a P2P lending crackdown in China and a Korean tax overhaul were touted as opportunities at Hong Kong’s PE powwow this week. The industry usually leans on banks to find targets, but a surfeit of dry powder has it hoping governments can create deals.

Tencent armour shines in battle with Beijing

14 November 2018

The $330 bln tech titan beat earnings expectations despite a regulatory crackdown on its videogames business. Investment gains helped, but strength in advertising and mobile services also shielded profitability. Now boss Pony Ma has a sword to swing at rivals like NetEase.

Chinese tourists leave investors holding the bag

14 November 2018

Luggage giant Samsonite said mainland sales fell 5 pct last quarter, blaming trade tension and consumer anxiety. Travel website Ctrip is now more cautious, while peer Tongcheng-Elong shrank its IPO. The gloom will globe-trot, including to the planned market debut for Club Med.

Richemont’s Alibaba tie-up can’t come soon enough

9 November 2018

The luxury watchmaker’s sales growth is lower than where it was, and where rivals are. An obvious way to expand is to hike online sales. Teaming up with the Chinese digital giant would give Richemont a greater chance of parity with European luxury peers.

Trade war ushers in the compartmentalized economy

8 November 2018

Beijing and Washington’s conscious uncoupling could unravel decades-old commercial ties. That doesn’t mean the rest of the world has to choose sides. Companies like electronics maker Philips are mulling how to take advantage of both markets. Business can continue, at a cost.

China’s abused offshore yuan is scarred for life

8 November 2018

As the currency nears 7 to the dollar, its weakest since 2008, officials are attacking short-sellers exploiting gaps in overseas derivatives trade. Beijing is trying to run two exchange rate regimes. A muddled strategy is making an already difficult balance unsustainable.

China Renaissance buyback aggravates IPO botch

7 November 2018

Roughly a month after a pared-down listing, the $1.3 bln investment bank and boss Fan Bao are buying a chunk of stock on the market. Companies globally are splurging on shares, and the gambit has improved prices a little. Investors and clients, though, will need more substance.

The Exchange: Pascal Lamy

6 November 2018

Few people have dedicated their careers to expanding international trade and globalism like Lamy, the former head of the WTO and EU commissioner. But rising rhetoric and increased tariffs between the U.S. and China have him worried, as he tells Rob Cox and Liam Proud in Paris.

Xi enters Shanghai in high-stakes tech IPO race

6 November 2018

China's leader granted the city a new board to compete with Shenzhen and Nasdaq for startups. It also will test a looser U.S.-style registration system for new listings. The steps are overdue, but officials may rue the governance risks and trading volatility they’re apt to bring.

U.S.-China mistrust heightens armed-conflict risk

5 November 2018

A near-collision between American and Chinese naval vessels in the South China Sea is a dangerous sign. Both militaries are stepping up readiness. With trade tensions high and the usual back channels dysfunctional, a clash – or worse – is a concern investors should not dismiss.

Naspers’ Vision Fund-lite carries less baggage

5 November 2018

The South African internet giant’s $8 bln answer to SoftBank’s mega-fund is quietly taking shape. Besides shunning the limelight, the Cape Town-based firm also lacks Masayoshi Son’s Saudi connection. Some of its early punts haven’t done too badly either.