Viewsroom: CBS’s $184 mln #MeToo challenge 2 Aug 2018 That’s what CEO Les Moonves gets if he leaves the U.S. TV network – unless fired for cause. That’s rare in corporate America. But allegations he sexually harassed women put the board on the spot. Plus: Hong Kong battles the Big Apple for IPOs. And China faces a vaccine scandal.
China’s prickly new watchdog can hit at home too 2 Aug 2018 Fresh from its role in torpedoing Qualcomm’s $44 bln NXP bid, Beijing’s all-in-one consumer regulator is now investigating the newly-listed Pinduoduo over fake goods, sending the stock down 10 pct. China has built a powerful champion: investors are right to be afraid.
Falling yuan alone won’t save China from tariffs 2 Aug 2018 The United States may raise tariffs on $200 bln of Chinese goods to 25 pct up from 10 pct. Sharp depreciation against the dollar will cushion the blow. But the complexity of Asian supply chains, along with collateral damage from a devalued currency, will ensure the impact stings.
Google’s China re-entry plan looks evil and risky 2 Aug 2018 The internet giant is planning a censored search engine for China, The Intercept reports. Taking share from local champions like Baidu could prove profitable. But Beijing wants to get its hands on Google's AI expertise. Morality aside, a return would be dangerous business.
Baidu’s core strength exercise is underappreciated 1 Aug 2018 The $85 bln Chinese search giant delivered 45 pct earnings growth last quarter, having shed a few distractions. The market is still cautious on Robin Li’s big AI plan as economic headwinds loom. But applying machine learning to content delivery - and censorship – should pay off.
Chinese mega-merger should catalyze chemical M&A 1 Aug 2018 A changing of the guard at ChemChina suggests a Sinochem deal is getting closer. At more than $100 bln in annual revenue, the resulting giant would be on par with DowDuPont. Some forced sales may result, but Beijing's ambition will keep the focus squarely on more buying.
Asian videogame giant gives away online store 31 Jul 2018 Tencent-backed Sea, at $4.5 bln, trades at a 50 pct discount to the sum of its three parts, Breakingviews calculates. Investors essentially get the Shopee e-commerce business for free. With Alibaba-owned Lazada a big rival in Indonesia, the valuation gap may prove hard to close.
China’s Starbucks-wannabe has a weak brew 30 Jul 2018 Luckin Coffee says it's worth $1 bln after raising money from Singapore’s GIC and others. It’s growing fast and wants to woo consumers away from its dominant rival. Yet an emphasis on takeaways and sub-prime locations means the startup is not shaping up as a threat.
Baby food will only briefly sate consumer giants 27 Jul 2018 The best second-quarter sales performer for Reckitt Benckiser and Danone was infant formula. Demographics are favourable in China, and parents are less tempted by cut-price brands. But with so many companies homing in on this lucrative market, competitive pressures are growing.
Pinduoduo polishes New York’s tech IPO crown 27 Jul 2018 The shopping app’s shares rose 40 pct in their U.S. debut, valuing it at $34 bln. New York has lost some marquee China tech floats to Hong Kong of late, but those it won have mostly outperformed Fragrant Harbour debutants. The Big Apple is still the host with the most.
Qualcomm is set to pitch life without NXP 25 Jul 2018 The $90 bln chipmaker’s $44 bln purchase of its rival could die on Wednesday unless Beijing gives it an 11th-hour nod. Traders seem to think that’s unlikely. Going it alone won’t be easy for Qualcomm, but in the 21 months since striking the NXP deal it has not stood still.
China’s peer lender pain will hurt the little guy 26 Jul 2018 Scores of peer-to-peer lenders have imploded since last month thanks in part to a regulatory clampdown. Consolidation is inevitable, and helpful for big players like Lufax. But the $200 bln industry’s travails will make it harder for struggling small companies to find credit.
China Tower offering sends the right signals 25 Jul 2018 The phone-mast giant set a fair price range for its $9bln IPO. It also limited sales to cornerstone investors, attracting not just friends and family. It’s a welcome change to how SOEs are dumped in Hong Kong. A solid debut could inspire others to follow this friendlier approach.
Alibaba ad deal completes Carlyle engineering feat 25 Jul 2018 Jack Ma’s e-commerce titan is buying a stake in $24 bln Focus Media, some from the U.S. private equity firm. Carlyle led a 2013 New York buyout and profitable reverse merger into Shenzhen, but a complex structure and rigid rules made exiting hard. Alibaba provides the lucky coda.
China’s fiscal nudge betrays growth jitters 24 Jul 2018 The government is adding some $10 bln of corporate tax cuts as part of a broader policy push. It follows tussles between the central bank and the finance ministry over how to support an economy that just expanded 6.7 pct. Speed is as much a priority as rebalancing growth.
China’s pharma scandals sully healthcare cleanup 23 Jul 2018 Quality control problems at two drug makers in July have angered politicians, frightened consumers and destroyed over $2 bln in shareholder value. They come despite an earnest campaign to toughen standards. Big heads will probably roll. Better medicine may result.
KKR’s Taipei deal hints at Asian daring 23 Jul 2018 The buyout firm led by Henry Kravis is leading a $1.6 bln takeover of chemicals maker LCY. Taiwan has been a tough market for private equity, including KKR. Slow growth and tensions with China add concerns. As dry powder in the region grows, the risk calculus may be changing.
HNA’s market thaw provides only cold comfort 20 Jul 2018 Three listed units of the troubled Chinese conglomerate lost a combined $1.5 bln in value after long trading halts ended. It signals a lack of confidence about HNA’s restructuring plans as it regroups without its late chairman. Pity investors trapped by a 10 pct downside limit.
Aussie tycoon hammers home overboarding message 20 Jul 2018 James Packer resigned from a whopping 22 more directorships after he quit the Crown Resorts board for mental health reasons. Campaigns against such overstretched executives are on the rise, as evidence suggests returns can suffer. Companies would be wise to demand greater focus.
The Exchange: Asia’s bubbly entrepreneurs 20 Jul 2018 Pete Sweeney hits the RISE tech conference in Hong Kong and hears pitches on vegan cryptocurrency, fog computing and big data for shrimp farmers. Trade tensions haven’t dented enthusiasm, but venture capitalists expect a correction to flush the dumb money from the market.