Weibo IPO plan stretches financial logic 25 Feb 2014 Listing a $500 million stake in China’s version of Twitter looks like a response to sky-high tech valuations. But investors can already buy shares in parent Sina, whose value is mostly made up of Weibo already. They should be skeptical about the idea that two plus two is five.
China’s yuan slide not nice but necessary 24 Feb 2014 The currency has reversed course, rapping the knuckles of investors who had been betting on continued gains. The unwinding of speculative trades could remove a useful source of inflows, and add pressure to the parched system. Still, adding more market forces is mostly helpful.
Sinopec spinoff shows desire to pump valuation 24 Feb 2014 The Chinese oil giant plans to sell up to 30 percent of its marketing division, which operates 30,000 forecourts and brings in half the group’s revenue. Exposure to China’s consumer boom should lure investors. More importantly, it suggests Sinopec is serious about boosting value.
Miners are finding that disinvestment pays 20 Feb 2014 For an industry wrestling with the end of a once-in-a-lifetime demand surge, big miners aren’t faring badly. Prices are still high, and results at Rio Tinto and BHP Billiton show austerity working. Supply trends favor lower ore prices, but diggers may reap big profits for a while yet.
WhatsApp’s Chinese copycat deserves its premium 20 Feb 2014 Tencent’s WeChat app is worth around $30 bln. That’s more than the $19 bln Facebook paid for its U.S. rival, even though the Chinese version has two-thirds as many users. But customer numbers matter less than the ability to make money. WeChat’s prospects justify a higher valuation.
Pimped-up Peugeot ready to steer away from crisis 19 Feb 2014 The French carmaker’s 3 bln euro capital hike is the missing link in its turnaround. Peugeot has tackled overcapacity and costs, invested in new cars, and found a capable new CEO. It is set to go global. But it will be encumbered by its new, complex shareholder structure.
Fear and loathing in China’s trust industry 19 Feb 2014 The $1.8 trillion sector is the enfant terrible of Chinese finance. The inherent mismatch between long-term loans and shorter-dated investments means trust products depend on confidence to survive. Yet widespread failures are less of a risk than reckless bailouts.
China copper IPO seeks gold in financial recycling 18 Feb 2014 Unloved Chinese companies with U.S. listings will be watching China Metal. Just 15 months after it quit the NYSE, the copper recycler is going public in Hong Kong at 10 times its last public market value. With earnings polished by tax refunds, any upside may be short-lived.
China potential sparks electric car investment 18 Feb 2014 The People’s Republic is already the biggest car market. Now the likes of Tesla and parts maker Wanxiang are betting on a boom in electric vehicles. Though infrastructure lags behind the West, a dense urban population and strong central planning could give the market a jolt.
Chinese loans are building a bridge to nowhere 17 Feb 2014 Banks lent like crazy in January. But why? The fight for deposits looks ever fiercer, and growth in a narrow measure of money supply was the lowest on record. Add in poor economic signs, and the explanation seems to be that productive lending has given way to extending.
From soccer pitch, lessons on Chinese tycoon risks 14 Feb 2014 As trophy hunters flash more cash overseas, the sale of 12 pct of Birmingham FC by a Hong Kong tycoon to an obscure Chinese entity offers a cautionary tale. Having a big personality as a big shareholder is risky, but Chinese buyers bring extra anxieties.
Lenovo’s turnaround trick will be harder this time 13 Feb 2014 Buying IBM’s PC unit launched the Chinese group onto the global stage. Absorbing Motorola poses a similar challenge with a smaller upside: the U.S. handset maker is no longer a brand leader. Cost savings and scale should help reduce losses, but Lenovo’s timeline is ambitious.
Alibaba tests the limits of non-bank banking 12 Feb 2014 The Chinese e-commerce group allows customers to save with interest, make investments, and take out loans. In theory, this enables it to challenge China’s banks with no liquidity risk and minimal exposure to bad debts. However, customers and regulators may feel differently.
Alibaba’s $1.6 bln map deal fuels online land grab 11 Feb 2014 The Chinese group offered a 39 percent premium for the 72 percent of online mapper AutoNavi it doesn’t already own. There’s strategic logic, but the real motive may be keeping up with rivals Baidu and Tencent. Location-based services are hot, but profits are hard to pinpoint.
China’s "biggests" come early, late or not at all 7 Feb 2014 Recent superlatives include top red wine consumer, car purchaser and oil importer. Being the biggest brings China investment, but can also be a sign of inequality and inefficiency. Meanwhile, some coveted firsts still look a long way off.
China index: Searching for signs of a slowdown 7 Feb 2014 Weak data from China has exacerbated emerging market concerns. Despite a monthly decline, our updated index shows things aren’t terrible - property sales and freight volumes grew. But exports look weak and slow truck sales suggest sluggish domestic demand.
Chinese e-commerce IPO more Amazon than Alibaba 6 Feb 2014 JD.com has filed for a U.S. listing ahead of its bigger rival. The online retailer has a different strategy and is barely breaking even. Like its Seattle role model, the bet is that expansion now leads to future earnings. To keep growing, JD.com will need capital to keep flowing.
Smog obscures looming water risk for China 4 Feb 2014 Bad air is visible, and vexes the urban rich. But recent attempts to fix China’s airpocalypse may exacerbate another acute risk: water. Thirsty energy companies and consumers may not see the threat just yet; they will if policy and price changes pull the plug on cheap supply.
Chinese M&A rings in new year with Auld Lang Syne 31 Jan 2014 The $2.5 bln sale of Cooper Tire was undermined by its joint-venture partner in Rongsheng. The two sides have now agreed a deal that helps them part ways. Given what transpired, other foreigners may also fancy singing “should old acquaintance be forgot” in the Year of the Horse.
Lenovo’s M&A spree challenges investors’ faith 30 Jan 2014 The Chinese group is buying Google’s Motorola phones just days after picking up IBM’s low-end server unit. The two loss-making divisions will cost up to $5.2 bln. Though there’s some strategic logic, shareholders have few details to help them work out whether the deals stack up.