Breakingviews

Time for Lenovo to get a grip in mobile

May 27, 2016

The tech giant is a trailblazer for Chinese firms going global by doing deals overseas and adopting Western governance. The ill-judged takeover of Motorola’s old mobile business is testing that reputation. Absent a quick turnaround, Lenovo’s credibility will take a real dent.

U.S. probe forces Alibaba in the right direction

May 26, 2016

The Chinese e-commerce giant’s accounting is under investigation. Depending on the outcome, Alibaba may have to consolidate its loss-making logistics business. If the scrutiny helps shed light on some of the group’s many blind spots, investors will be better off.

Yum’s China split doesn’t look too tasty right now

May 23, 2016

The KFC owner’s break-up plan was a sensible victory for activists. But worries about China mean this hasn’t yet done much for shareholders. With one of Yum China’s most logical partners walking away from a pre-spinoff investment, it may be even longer before value is created.

BASF best leaving Monsanto seeds for the birds

May 19, 2016

Bayer’s bid for the U.S. seed maker puts its German rival on the spot. Monsanto and BASF work together on research and there are few other potential merger partners. Yet the maths of a $50 bln-plus counterbid would be a stretch. BASF has sat out other big deals; it can again.

Tencent can shield itself from ad slowdown

May 19, 2016

The Chinese gaming giant warned a slowing economy may clip its fast-growing advertising business. But soaring revenue from mobile games, which topped $1.3 bln in the first quarter, cushions the blow. Besides, unlike rivals Alibaba and Baidu, Tencent relies less on ad dollars.

China’s $5 bln robot bid does not compute

May 18, 2016

The 36 pct premium Midea may offer for German robot maker Kuka is frothy. There are no cost synergies, the suitor doesn’t seek control, and governance could be messy. Yet unless Kuka can find a white knight, minority shareholders have every reason to take the Chinese cash.

BOC Aviation’s Hong Kong flotation deserves to fly

May 18, 2016

The plane-leasing group is taxiing towards a $1.1 bln offering. Being under Bank of China’s wing means cheaper funding and better returns than standalone rivals. Yet the premium valuation is only justified if the state-backed parent remains willing and able to act as a backstop.

Money trail shows China sticking to bad habits

May 16, 2016

Total credit jumped again in April, suggesting Beijing is making little progress weaning the economy off its addiction to debt. Infrastructure and property investment are still expanding quickly. Despite renewed talk of reform, growth still seems to be the main priority.

Apple’s $1 billion plucks a strange fruit in China

May 13, 2016

The tech giant says investing in car-hailing app Didi – whose Chinese name is “little orange” – will help it in the People’s Republic. Apple can afford to join a costly battle with rival Uber. But it’s less obvious how that will revive iPhone sales or clear regulatory hurdles.

China’s planners won’t let go of the stock market

May 12, 2016

Regulators are reportedly clamping down on fundraising in hot sectors, and may restrict overseas companies relisting at home. The desire to avoid a repeat of last year’s bubble is understandable. But China’s equity market won’t evolve as long as bureaucrats try to manage prices.