Hong Kong

Stricken Hanergy drops investors into black hole

1 March 2019

The solar company wants shareholders to swap frozen shares for stock in a vehicle which may or may not relist in China. Hanergy might well be ejected from the Hong Kong exchange before trading resumes, denying them an alternative. This raw deal would set a terrible precedent.

Hong Kong exchange primed for some M&A trades

28 February 2019

The $43 bln bourse operator enjoyed a blowout 2018, but its three-year strategic plan offers few bold ideas for reducing dependence on local equities. Looming Chinese reforms pose a further threat. A trio of new blue-chip advisers may be able to help HKEX diversify its portfolio.

StanChart makeover gets scarcely halfway there

26 February 2019

The Asia-focused bank kept expenses under control and curbed bad debts, but socking away $900 mln for fines restrained profit growth. CEO Bill Winters promises more cuts and to double return on equity to 10 pct by 2021. Even then, StanChart would seriously lag Singapore peer DBS.

Only next crash will test HK bank chief’s legacy

22 February 2019

Norman Chan, head of the Hong Kong Monetary Authority, plans to retire. Supervision was a bigger focus than traditional monetary policy during his decade in office, using controls such as mortgage curbs to limit a housing boom. Only a downturn will determine whether that worked.

Lenovo’s reboot could run low on battery

21 February 2019

Quarterly pre-tax earnings more than doubled from a year earlier, confirming a turnaround at the world's top PC-maker. That's mostly powered by cost cuts in the $9 bln group's handset and server units. With demand cooling for both, this comeback may prove difficult to sustain.

HSBC pushes investor goodwill to its limits

19 February 2019

The Asia-focused bank fell short of expectations after a fourth-quarter slowdown. Even so, boss John Flint is sticking to his 11 pct return on equity target for 2020 despite strong Brexit and China headwinds. Already valued at 1.2 times book value, there is no room for error.

China’s big urban-zone idea lacks finer points

19 February 2019

Beijing unveiled a blueprint to link Hong Kong, Macau and mainland cities into a $1.5 trln economic powerhouse. The Greater Bay Area plan is packed with industrial-planning jargon. What’s missing is nitty-gritty on taxes, consumer banking and commuting, which will matter most.

Foreign IPO tide flows back into Hong Kong

14 February 2019

Global Switch and Home Credit are eyeing $1 bln floats in a city which has struggled to attract interest offshore. AB InBev might list its Asia operations too. Rule changes letting the benchmark index include overseas-based firms are one incentive. A thin China pipeline is another.

SoftBank’s Einstein pitch fails relativity test

6 February 2019

Masayoshi Son invoked the Nobel Prize winner’s theories to argue the Japanese group is worth $110 bln more. But adjust his sums for low liquidity and the possibility of squandered cash, and the black hole is small. Massive objects like the Vision Fund distort the laws of physics.

Cox: Cannabis and impeachment on readers’ minds

28 January 2019

When asked which investment would outperform in 2019, participants at our Predictions events around the world chose Canadian weed stocks most over other assets. Most also put the chance of Congress impeaching Trump at 30 pct or higher. Consider some other surprising results.

L’Occitane picks odd time to bet on British beauty

14 January 2019

The Hong Kong-listed soap and hand cream brand has snapped up luxury skincare group Elemis for $900 mln in cash. At over 22 times last year’s EBITDA, the price looks a tad rich. The acquisition will also boost L’Occitane’s exposure to the UK at a time of economic uncertainty.

Temasek helps a drugstore giant flaunt its glow

10 January 2019

The state investor may sell part of its stake in health and beauty giant A.S. Watson. The retailer's size, moves upmarket in the mainland and growth elsewhere in Asia can justify a premium. Cashed-up buyout firms may well be tempted, helping Singapore to cash in on a $6 bln bet.

Asia’s tech titans face Nissan-style key-man risk

27 December 2018

Startup founders have flourished in the region, taking over where old-school tycoons left off. Yet after Carlos Ghosn and a storm at JD, shareholders see charismatic bosses as liabilities too. Such concerns may mean unwanted attention at SoftBank, Foxconn and others in 2019.

Hong Kong’s IPO crown rests on rickety market

20 December 2018

The financial centre's $32 bln haul of new listings this year puts it in the global lead. Yet 72 pct of debutantes are trading below their offer prices, and overall trading is thin. Too few long-term investors and a crowded but illiquid market are to blame. Both are hard to fix.

Club Med embarks on overheated holiday escape

13 December 2018

The vacation resorts arm of Chinese conglomerate Fosun priced its IPO at the bottom end of the indicated range. A $2.4 bln market cap, however, imputes a multiple on par with its most richly valued peers. Sluggish tourism trends could leave optimistic investors scorched.

Clash of activists could become feature in Japan

6 December 2018

Pushy U.S. hedge fund Elliott voted in favor of $5 bln Alps buying the rest of car navigation systems maker Alpine. Feisty Oasis had long been fighting to block the deal. Such rifts are rare, but may rise in a country where consolidation of affiliates is a growing battleground.

China’s video-game bulls are running out of lives

3 December 2018

Developer iDreamSky will list in Hong Kong at a price tag of roughly $1 bln, less than 10 times expected earnings. Its backer and larger peer Tencent trades at 30 times. The discount signals a mainland online crackdown is taking its toll: valuations have further to fall.

Michelangelo deal is work of abstract art

23 November 2018

Chinese waste hauler Yulong Eco-Materials has decided to become an owner of paintings and gems instead. It’s paying $75 mln for the Italian master’s “Crucifixion” after it bought a $50 mln sapphire. Bringing art investing to public markets is a risky form of creative destruction.

Private equity battens on the Asian state

15 November 2018

Australia’s Royal Commission, a P2P lending crackdown in China and a Korean tax overhaul were touted as opportunities at Hong Kong’s PE powwow this week. The industry usually leans on banks to find targets, but a surfeit of dry powder has it hoping governments can create deals.

Chinese tourists leave investors holding the bag

14 November 2018

Luggage giant Samsonite said mainland sales fell 5 pct last quarter, blaming trade tension and consumer anxiety. Travel website Ctrip is now more cautious, while peer Tongcheng-Elong shrank its IPO. The gloom will globe-trot, including to the planned market debut for Club Med.