Chinese investment bank IPO flaunts tech conflicts 13 Sep 2018 Alibaba-affiliated Ant Financial has been lined up as a cornerstone investor in China Renaissance. Fan Bao’s boutique built its business advising JD and is among the last with loyalties to Jack Ma’s other big rival, Tencent. The knotty relationships potentially spell trouble.
Beijing’s confused tax message will strain growth 12 Sep 2018 A fiscal shake-up is set to slash personal taxes and leave China's workers with nearly $50 bln more to spend. Companies, though, may need to start paying a lot more social charges, raising their costs. That has left officials scrambling to avoid a fall in corporate investment.
Chinese $5 bln winter sports bid is hard to beat 11 Sep 2018 Fujian-based Anta has approached Finnish ski-wear maker Amer. The offer values the group at a hefty 17 times EBITDA. Anta’s need to fend off U.S. peers in its home turf suggests it will pay more than any rival. Still, the target’s share price suggests investors aren’t convinced.
Didi falls way behind Uber on road to IPO 11 Sep 2018 Both burn heaps of cash, but new figures reveal that the $56 bln Chinese app pockets just two cents of every rider dollar. For $72 bln Uber, the roughly equal sum after subsidies is 23 cents. Differences are getting clearer even if neither looks ready to ride onto public markets.
Chinese Tesla’s $1.3 bln IPO revs up too fast 11 Sep 2018 Electric-car maker Nio has a rich price tag to match its premium branding. Under the bonnet, though, it looks less shiny. The group combines an opaque legal structure favoured by tech giants with dependence on a local auto partner. Sales are still nascent, and rivals abound.
Volvo’s IPO problems go beyond brewing trade war 10 Sep 2018 The carmaker’s Chinese owner has paused a float worth up to $30 bln. Even without America’s tariff antics, that price tag would have been far too high. Investors are unconvinced old-school auto groups will get a return for their spending on electric and autonomous cars.
Jack Ma’s exit plan just raises more questions 10 Sep 2018 Alibaba says CEO Daniel Zhang will succeed the $420 bln group's co-founder as chairman in 2019. Planning ahead is laudable, but the sketchy blueprint, after a baffling interview, leaves worries over the top job and Ma's influence unanswered. It's one step forward, two steps back.
Jack Ma’s next moves will instruct China tech 8 Sep 2018 The charismatic co-founder of Alibaba says he plans to retire. It’s a sign of the $420 bln company’s maturity that others are ready to step up, unlike at rivals like scandal-hit JD. But he will still wield huge influence. Investors will want clarity on who really holds the reins.
Foreign carmakers are caught in a China drive-by 7 Sep 2018 Beijing wants to slash excess auto production at a time when Nissan, Toyota and others hope to expand. Draft rules could cut as much as a third of capacity in the world’s largest car market. Official feuding over the issue too could prove a speed bump, even for global giants.
Tianqi edges ahead in Hong Kong’s lithium race 7 Sep 2018 China’s top two producers of the battery ingredient are revving up $1 bln listings in the city. Both offer a bet on the electric car boom. But Tianqi’s quality resources give it a narrow advantage over processing giant Ganfeng, at a time when investor confidence is wobbling.
China flaunts firepower in Canadian copper deal 6 Sep 2018 Zijin Mining agreed to buy Nevsun for $1.4 bln, trumping hostile suitor Lundin. A cash bid at a 57 pct premium mostly to bet on a project in Serbia speaks to Beijing's relentless appetite for important metals, but also to scarce supply. Pockets of outbound M&A exuberance persist.
China’s London stock bridge goes halfway across 5 Sep 2018 Beijing has new draft rules for investing between the Shanghai and London exchanges. In theory the channel could see Chinese punters put billions into UK shares, as they have in Hong Kong. It’s otherwise more about diplomatic relations than market demand.
China 5G ambitions cross wires with M&A logic 5 Sep 2018 Beijing might merge wireless carriers China Unicom and China Telecom, creating a $70 bln-plus telco giant - and a market duopoly. As with T-Mobile and Sprint, consolidation could accelerate development of ultra-fast networks. But industrial policy will limit financial benefits.
China and Africa struggle to kick debt habit 3 Sep 2018 President Xi Jinping pledged another $60 bln to the continent while warning against the kind of binges that have led countries to default. Yet Africa shows no sign of restraint, and China’s lending remains opaque. Accusations of debt-trap diplomacy are likely to linger.
ICBC capital hike hints at more debt pain ahead 3 Sep 2018 China's largest commercial bank will raise $30 bln by 2020. Its bad loan ratio looks healthy enough on paper, but weak credit is getting rolled over. Stronger reserves will help it come clean as regulators tighten up. Its smaller rivals, though, will struggle to follow suit.
JD CEO’s arrest steps on governance landmine 3 Sep 2018 Richard Liu is being investigated for sexual misconduct in the United States. Super-voting stock gives him control of the $45 bln e-commerce firm; the board can't meet without him. Even if Liu is cleared, this raises questions about JD’s use of legally-untested structures.
Tencent’s big battle goes from fantasy to reality 31 Aug 2018 The “Honour of Kings” maker lost another $20 bln in market value on a fresh videogames crackdown. This time, Chinese officials say they’re worried about myopic kids. It leaves investors exposed to nearly unpriceable risks and Tencent’s failure to build new businesses fast enough.
China’s yuan support scaffolds its developers too 31 Aug 2018 Real estate firms like Evergrande are sitting on some $120 bln in offshore dollar debt, nearly double 2016 levels. That’s a worry as the yuan weakens, raising costs. Beijing's latest efforts to slow the currency’s decline, though, has bought a critical sector some time.
Market dominance defends China’s Didi from murder 29 Aug 2018 The $56 bln ride-hailing app is in big trouble after a driver killed a female passenger. With #MeToo gaining traction in China and an IPO in the pipe, the timing is terrible. Didi’s near-monopoly protects it from a shutdown, but tighter regulation could punish profitability.
Yum China will struggle to get a fancier takeout 29 Aug 2018 The U.S.-listed KFC operator has rejected a buyout bid worth nearly $18 bln from a group led by Hillhouse. The deal already builds in supersized prospects and a hefty debt burden. A sweetened offer, given hints of weaker spending ahead, would be demanding.