Beauty of selfie-app IPO is only skin deep 24 Aug 2016 Millions of young Chinese use Meitu to airbrush pictures, whitening their skin or applying virtual makeup. But the company is basically a small smartphone business made up to look like a big Internet player. A $700 mln Hong Kong IPO should be seen through a sceptical lens.
China SOE merger is tiny step dressed as a big one 23 Aug 2016 Construction giants Sinoma and CNBM are being crunched together, following similar mergers in moribund sectors like steel and shipping. It’s unlikely to create job cuts and closures on the scale an investor might want, but streamlining the bureaucracy could generate small gains.
ChemChina’s Syngenta joy has a downside 22 Aug 2016 U.S. regulators okayed the Chinese chemical group’s $43 bln bid for its Swiss peer, and only limited spin-offs may be required. With no synergies, ChemChina needs the skills it acquires to be compelling. The fact it was waved through raises the risk they may not be.
Review: The limits of predicting China’s demise 19 Aug 2016 The country's prospects are bleak, David Shambaugh argues in "China's Future". His critique of the Communist Party's political flaws goes far deeper than most forecasts of economic collapse. Yet foretelling doom at some indeterminate point in the future still has limited value.
Nestle’s rich valuation needs recipe to match 18 Aug 2016 The Swiss kibble-to-Kit Kat maker, like its peers, trades on a high multiple of earnings because of its defensive qualities. Generating cash is a formula Nestle has down, but creating growth to justify consumer goods companies' lofty share prices calls for disruptive thinking.
China tech’s M&A upgrade should alarm global banks 18 Aug 2016 M&A advisers are missing out on juicy deals like the $35 bln Didi-Uber China tie-up and heavyweights are poaching bankers for in-house teams. That echoes trends across the region and in global tech. It's also fresh evidence of the difficulties of making money on the mainland.
Tencent is sturdiest rock inside China’s firewall 18 Aug 2016 China's closed internet has allowed giants Baidu, Alibaba and Tencent to thrive. The fortunes of the trio are diverging, however. While Baidu has stumbled and Alibaba too often goes off track, Pony Ma's focus makes the $240 bln Tencent look like the best of the bunch.
Shenzhen-HK stock link tees up “Bubble Connect” 17 Aug 2016 Investors in the two cities will soon get access to each other's bourses. The addition to the Shanghai Stock Connect further opens mainland markets. The prospect of China's get-rich-quick punters exporting their investing tactics into Hong Kong small-caps is less heartening.
Unilever finds new ways to banish grubbiness 16 Aug 2016 The consumer goods giant is buying Blueair, a posh Swedish air purifier that is big in China and Japan. It follows a $1 billion purchase of subscription service Dollar Shave Club. On one hand, both are strategic shifts; on the other, they’re just creative takes on cleanliness.
China’s Netflix-to-Tesla is spread painfully thin 16 Aug 2016 Jia Yueting's LeEco is pushing into TVs, mobile handsets, electric vehicles and video-streaming. That poses huge financial and strategic challenges for his mostly private group. These are fast-moving, capital-intensive industries with very well-resourced competitors.
Evergrande harks back to the Eighties 16 Aug 2016 The Chinese developer is building the kind of conglomerate that fell out of fashion in the West decades ago. It is also mounting corporate raids, amassing stakes in rivals Vanke and Langfang even while debts are uncomfortably high. The overall combo makes for a weak foundation.
China Film’s opening week follows bad IPO script 15 Aug 2016 Shares in China's biggest film distributor have more than doubled in their first week of trading. Never mind that ticket sales are falling across China. Artificially low prices and curbs on new issues mean that post-IPO performance is often divorced from fundamentals.
Alibaba notches up milestones and millstones 11 Aug 2016 The Chinese e-commerce giant's quarterly sales jumped 59 pct year on year, the highest since its IPO. Alibaba now gets more from each dollar of mobile sales than from desktop - and has upped its disclosure. It takes the edge off ongoing regulatory problems and logistics losses.
China backlash bandwagon rolls over Li Ka-shing 11 Aug 2016 Australia may block an $8 bln power grid sell-off on security grounds, since both bidders had ties to China. But the Hong Kong tycoon is very different from Beijing-owned State Grid. After recent snubs in Britain and Canada, the climate for Chinese investment is souring rapidly.
China overplays its hand in UK nuclear debate 9 Aug 2016 Making the $24 bln Hinkley reactors an acid test of mutual trust is unwise. The Sino-British relationship is already tilted in China's favour, so Beijing has little to retaliate with if the UK scraps the project. Conversely, forcing it to go ahead could prove a pyrrhic victory.
China’s soccer haul enters a league of its own 8 Aug 2016 Mainland buyers have just bought AC Milan, West Bromwich Albion and Auxerre, adding three teams to an already large stash of European football assets. With hazy financial logic, funky structures and political undertones, these deals echo China's wider overseas M&A boom.
Evergrande share raid cements love-or-hate status 5 Aug 2016 The Chinese developer has waded into the power struggle at rival Vanke, grabbing a 4.7 pct stake for $1.4 bln. The motive is unclear, and the group's leverage and sprawl should worry investors. Yet Evergrande's aggressive stance still appears to have plenty of fans.
Mixed messages will hamper China’s SOE mergers 5 Aug 2016 Consolidation is picking up amongst state-owned enterprises. Executives running enlarged companies have to meet a plethora of contradictory goals to keep their Communist Party bosses sweet. The confusion means China's state-run giants could end up pleasing no one.
Hong Kong’s special status is in need of renewal 4 Aug 2016 The former colony has mostly thrived in the 19 years since China took charge with a promise to leave it alone until 2047. But society is divided and the rule of law under strain. Without reassurances about its long-term future, Hong Kong faces an exodus of citizens and companies.
China’s draconian IPO rules squeeze foreign banks 3 Aug 2016 Local media say the securities watchdog may seize licences from brokerages that don't properly audit firms that come to market. Other recent rules leave underwriters exposed to botched listings. That might help cut the IPO backlog. It also further sidelines foreign banks.