China

Viewsroom: Asia’s richest man, China dependency

22 October 2020

Mukesh Ambani can divide his $200 bln Reliance Industries and still rule, says India editor Una Galani. Meantime, European and U.S. multinationals are growing increasingly reliant on Chinese growth, seeding future financial and political risks, Rob Cox and columnists discuss.

Cox: China addiction looms as big corporate risk

22 October 2020

The People’s Republic has subdued Covid-19 while the West struggles. Its GDP grew 4.9% last quarter as consumers resumed consuming. From Ford to Durex, Hermès to Unilever, multinationals are developing a Chinese demand dependency that could backfire politically and financially.

Alibaba valuation hole bored deeper by Ant IPO

22 October 2020

The e-commerce giant's fintech stake might be crystallised soon at some $80 bln. A promising cloud computing business could be worth more, but investors ascribe hardly any value to it. Better financial disclosure would help narrow a discount CFO Maggie Wu keeps griping about.

Cathay is still overweight after layoffs

21 October 2020

Hong Kong's flagship airline will cut 8,500 jobs and ditch its Cathay Dragon brand. That's less aggressive than some other carriers, although shareholders took it well. The cuts will only slow the cash burn rate to around HK$1.5 bln per month. More savings will have to be found.

China’s headline recovery hides uglier subtext

19 October 2020

Economic activity rose 4.9% last quarter on rising exports and consumption. But with cheap credit flowing into stocks and housing, good news may prompt policymakers to tap the brakes on stimulus. That risks worsening pre-existing economic imbalances that the pandemic aggravated.

Alibaba grocery deal may stall at final checkout

19 October 2020

The Chinese e-commerce giant is buying out its French partner in supermarket chain Sun Art, for $3.6 bln. A mere 2% premium suggests an eager retreat for the seller. Given Alibaba’s brick-and-mortar ambitions, minority shareholders have less reason to settle for a discount price.

Lufax may find three’s a China fintech IPO crowd

19 October 2020

It’s like the proverbial bus: long waits before multiple new share sales arrive at once. The Ping An-backed outfit, last valued at $39 bln, is touting small-business bona fides to stand apart from Ant and JD Digits. New York could be a tougher venue to make the case, however.

Drone maker DJI will become the next Huawei

16 October 2020

The Chinese producer of unmanned aircrafts is flying high on Washington’s blacklist as lawmakers worry about it collecting data. But it is the world’s largest drone-maker by far. Expanding a ban will hurt the future of U.S. businesses – like farmers and energy companies.

Hong Kong’s rival city is vulnerable at the rear

16 October 2020

President Xi Jinping will give the tech hub of Shenzhen more autonomy. Relaxed capital controls and other policy preferences will help it compete with Hong Kong for talent and investment. But blistering property prices are putting its innovation advantage at risk.

Panic buying scrambles tech circuitry

16 October 2020

The world's top contract chipmaker, TSMC, expects a 30% rise in sales this year. That’s flattered by customers from Apple to Huawei stockpiling semiconductors amid supply chain disruptions and U.S.-China tensions. Such hoarding makes it harder than usual to discern future demand.

CICC seeks edge in increasingly cutthroat market

15 October 2020

The investment bank leading Ant’s IPO is planning a $1 bln secondary listing in Shanghai. It could fund mergers as officials push industry consolidation and help fend off Wall Street rivals. Local peers are also angling for super-broker status, making more capital essential.

Australia’s Crown trapped inside its gilded cage

15 October 2020

The $4 bln casino empire is facing intense regulatory scrutiny for allegedly dodgy dealings involving Chinese high-rollers. It puts a new resort licence in jeopardy. Billionaire James Packer also has conceded the ownership structure may need changing, but it could be a hard sell.

China Evergrande starts running low on options

14 October 2020

The property developer lost a fifth of its market value after a discounted stock sale raised only half the targeted $1.1 bln. Creditors also just cut the highly indebted company some slack. Boss Hui Ka Yan may be forced to accelerate asset sales to raise the capital he needs.

Ant’s IPO delay flags a recurring headache

14 October 2020

The Chinese fintech behemoth is being probed for using its Alipay app to collect subscriptions for mutual funds set up for its $35 bln listing. That’s unlikely to derail the process, but it’s a reminder of the risks Ant runs by constantly testing regulatory grey areas.

Chinese discount chain Miniso sells upscale IPO

14 October 2020

Now more than ever consumers should be attracted to the retailer’s fast-changing inventory of cheap-and-cheerful items. Overseas growth also looks promising despite the pandemic hit. A potential $6.2 billion valuation, however, would put a luxury price on designer dollar stores.

Player 2 wins out in Chinese e-sports deal

13 October 2020

Video-games streaming site Huya is buying smaller rival DouYu in a $6 bln stock swap. The target’s investors not only receive a generous 34% premium, but also half the combined group. Given Tencent's stakes in both, it's a surprising but welcome result for minority shareholders.

China tensions reach skyscraper heights in Sydney

12 October 2020

Sovereign fund CIC wants to take control of office tower Grosvenor Place at a $1.4 bln valuation. Canberra’s recent intervention in a dairy sale suggests Chinese investment cannot be taken for granted. Blocking this property deal would make a splintering relationship worse.

JD Digits IPO sells mutant Ant

12 October 2020

E-commerce giant JD.com’s fintech arm plans to raise $3 bln to fund credit businesses, plus ventures into pig farm AI and smart cities. It’s smaller than Jack Ma’s rival operation, and executives keep leaving. The listing will test investors’ ability to discriminate between species.

Macau casinos now playing for an inside straight

8 October 2020

China’s long holiday break has brought few visitors to the Asian gambling hub. That makes it hard to accept rosy forecasts that revenue at Sands, SJM and Galaxy will reach more than 85% of pre-pandemic levels next year. It’ll take consumer exuberance and policy help to get there.

Evergrande’s debt scares creditors into submission

7 October 2020

The stressed property giant persuaded investors owed nearly $15 bln to convert their obligations to unlisted shares. Details are scant, but it’s another miraculous escape for founder Hui Ka Yan. The deal looks crummy, and it highlights how real estate has trapped policymakers.