Breakingviews

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.

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.

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 listing doubts leave Qihoo investors on edge

May 11, 2016

The U.S.-listed web group’s shareholders have accepted a $9 bln buyout offer. Yet a regulatory crackdown may scupper plans to float in China. Even after a rebound the shares trade at an 8 pct discount. That’s scant compensation for the risk that the buyout group may walk away.

Baidu selloff understates long-term health risks

May 10, 2016

Regulators have ordered China’s top search engine to rein in healthcare advertising after a scandal. That could knock as much as a fifth off earnings. Investors who have marked the shares down by 13 pct so far may be underestimating the broader impact on Baidu’s business model.

Alibaba’s strong core comes with shaky periphery

May 5, 2016

The Chinese e-commerce group’s revenue soared 39 pct year on year, faster than volumes of stuff sold on its sites. Alibaba also disclosed losses on its fintech, services and logistics affiliates. Those trends can co-exist, so long as online shopping growth stays sturdy.

Baidu shows health is a huge flashpoint in China

May 3, 2016

A dying student accused the search giant of promoting false medical information. The ensuing probe has cut $5 bln from Baidu’s market value: a big move but not an overreaction. Health scandals are highly sensitive and authorities pay close attention to outbursts of online anger.

Jack Ma’s jewel is a $20 bln mystery for Alibaba

April 27, 2016

The e-commerce group’s financial affiliate is now valued at $60 bln. Alibaba has an option to take a 33 pct stake, or extend a profit-sharing agreement between the two. Yet their future relationship is clouded by regulatory uncertainty. Alibaba’s shareholders are in the dark.

Top Chinese travel agent makes an odd diversion

April 22, 2016

Ctrip is buying a $463 mln stake in China Eastern Airlines, and could yet buy more. Investors in China’s largest web travel agency probably did not expect to own a minority stake in a state carrier. But this may be the only way Ctrip can avoid a damaging boycott by big airlines.

Marissa Mayer has only one last job to do at Yahoo

April 20, 2016

Underscoring the lack of progress in her nearly four years as CEO, the web company’s quarterly revenue fell another 11 pct. Google and Facebook are cleaning up in ads, especially mobile. It’s time to offload Yahoo’s core business before bidders like Verizon lose interest.