Broader appeal fuels China’s Nasdaq presence
BEIJING, Nov 13 (Reuters) – Nasdaq OMX Group <NDAQ.O> said the number of Greater China companies that list on its exchange could double in as little as two years, fueled by a growing appetite for these shares from a wider range of U.S. institutional investors.
Three of the top 10 performing initial public share offerings in the United States this year are Chinese firms and all listed on Nasdaq, Robert McCooey, the head of global listings and a senior vice president, told Reuters in an interview on Friday.
“The U.S. investor, especially on the institutional side, is very receptive to the Chinese company,” said McCooey, referring to IPOs such as those from video games maker Changyou.com Ltd <CYOU.O> and Lihua International Inc <LIWA.O>.
Highlighting that broader appeal, mainland firms are now taking their roadshows to U.S. cities outside of the traditional stops in New York, San Francisco and Chicago, he said.
“They are going to Milwaukee, Minneapolis and St. Louis.”
Chinese firms are not just attracting the attention of portfolio managers focused on China, but also those eyeing more generally global growth businesses across a broad range of industries such as financial, healthcare and the consumer sector, he said.
“They recognize China has the greatest opportunities for their companies,” said McCooey.
China Unicom Q3 pft weak, trend to continue
BEIJING, Oct 30 (Reuters) – China Unicom <0762.HK>, the country’s No.2 mobile carrier, said profit declined from the previous quarter, a weakening trend that could continue as competition intensifies and expensive 3G networks are built.
Last week, rivals China Mobile <0941.HK>, the world’s No.1 mobile carrier, and China Telecom <0728.HK> also reported disappointing earnings. [ID:nPEK75764]
Unicom is building its 3G network with the world’s most mature standard, WCDMA, but is struggling to integrate new businesses after last year’s industry shakeup that saw it combined with another company to take on its current form.
Signing a three-year non-exclusive deal to sell Apple’s <AAPL.O> popular iPhone will help the company’s 3G launch, but the iconic handset is expensively priced and may eventually require more subsidies to achieve wider acceptance.
Unicom said on Friday that its third quarter net profit fell to 2.72 billion yuan ($398 million) based on Reuters calculations using data from the company’s website.
That performance comes with Unicom a different company from what it was last year when Beijing restructured the industry, aiming to increase competition and nurture a domestic 3G standard.
Unicom is integrating a fixed-line network it absorbed in the revamp, while also building a 3G network after selling its CDMA mobile network to China Telecom.
China Mobile Q3 profit ticks up, little growth seen
BEIJING, Oct 20 (Reuters) – China Mobile <0941.HK>, the world’s largest mobile carrier, faces little profit growth in the coming quarters as costs to build a new 3G network weigh and increasing competition push it towards lower value subscribers.
Profits for China’s top three mobile carriers have been under pressure since late last year when China Mobile and its two main rivals, China Unicom <0762.HK> and China Telecom <0728.HK>, embarked on a $58.5 billion plan to build new networks capable of carrying more data and multimedia content.
China Mobile reported its first year-on-year profit decline in years in the second quarter, after Beijing raised the number of mobile carriers to three from two in an industry-wide overhaul.
China Mobile is the largest by number of subscribers, with more than 500 million customers — more than the combined populations of the United States, Germany and Britain.
It eked out a slight year-on-year profit increase in the third quarter, but analysts say its profits will remain largely flat over the next two years before it realises any benefits from more sophisticated and profitable 3G services.
The company could post 2 percent net profit growth for all 2009 and the same for the next two years due to slow take-off for its 3G system, which is based on a homegrown standard known as TD-SCDMA, said Daiwa Securities analyst Marvin Lo.
“People are still looking for profit catalysts, which are not easy to find,” said Lo. “3G takeoff usually takes at least three years and may need larger handset subsidies.”
Unicom to sell Apple iPhones in China from October
BEIJING (Reuters) – China Unicom, the country’s No. 2 mobile carrier, will begin to sell Apple Inc’s iPhone in China for a retail price of 5,000 yuan ($732.50), as it leans on the phone to launch its 3G service.
The high price tag may force buyers of the popular handsets to sign up for subsidized packages carrying lower handset prices but also longer-term contract commitments, as competition heats up in China’s recently reformed telecoms sector.
In August, China Unicom struck a three-year deal with Apple, which has been trying to bring the iPhone to some of China’s nearly 700 million mobile subscribers. A majority of users in the world’s largest mobile market, however still use older 2G services.
CLSA analyst Francis Cheung said the pricing is likely to limit the phones to the highest end of the market, a relatively small but lucrative segment now dominated by the country’s biggest carrier, China Mobile.
“They look at this as a high end product, not mass market. All these plans offer subsidized phones,” he said.
“Most people will not buy a phone separate from a plan. It’s very expensive. I do get the sense there are going to be affordability issues.”
Unicom said the phones would be available for services starting October 1.
Google to $115 million in 4 months
Kai-Fu Lee, Google’s former China head, has officially launched his new firm, Innovation Works, an idea conceived while Lee was sick in a hospital and dogged by an investigation.Lee said the idea for his new company, a venture capital-like fund aimed at high-tech start-ups, and the $115 million to fund it have all come since June.”I was sick in the hospital and we were under that pornography investigation,” Lee told reporters, recalling the moment when the idea for his new company first came to him.”So I was just lying in bed thinking, ‘what should I do next?’”The former Microsoft executive leaves behind Google as it battles Baidu in the world’s largest Internetmarket by users and Beijing regulators who want to censor searches that lead to pornographic sites. Lee said his battles with regulators were not behind his unexpected exit from Google, but he conceded that business models focusing on information and media were not in his sights.”Media, in my mind, is not a big growth area,” he said.Executives from Google and other foreign Internet and media companies such as Yahoo have testified before angry U.S. lawmakers concerned about their role in helping Beijing authorities censure the Internet.”We are thinking about growth areas that are practical and those that coincidentally happen to be commercial and simpler to patent,” Lee said.Innovation Works is targetting start-ups focusing on the Internet, mobile Internet and cloud computing.The company has attracted venture capital from Foxconn Technology Group, Legend Group and WI Harper Group, New Oriental Education & Technology Group and Steve Chen, a cofounder ofYouTube, said Lee.
IBM skips around China Internet censorship
Foreign companies in China, which has the world’s biggest online community, have faced allegations of bowing to censorship rules in their hunt for market access. To be careful, they usually avoid questions on the subject altogether or deflect them with humour.”I don’t think I am the expert to comment on this,” Shirley Yu-Tsui, a vice president of strategy for IBM greater China, said at the Reuters China Investment Summit.“All I know is my children complain they can not get on Facebook,” she said.The subject is very serious, as companies such as Google and Yahoo have had their executives called to face angry congressional questioning in the United States to explain their business practices in China.”I don’t think they would come to IBM for that,” said Yu-Tsui when asked what IBM would do if asked to help monitor traffic on China’s Internet.China backed down only last month from a plan to pre-install the controversial “Green Dam” Internet filtering software on all personal computers sold in the country.Photo Caption: Shirley Yu-Tsui, a vice president of strategy for IBM greater China. REUTERS/Christina Hu
Lessons from children, old ladies
China’s banking system could take a cue from children andneighborhood social groups to strengthen lending rules andensure that credit flows to where it is needed most.The country’s banks lent a whopping record 7.37 trillion yuan($1.08 trillion) in the first half of the year, but regulatorsworry that a significant portion is not flowing into the realeconomy and smaller firms where funds are needed the most.”If you give children money without strings attached, theywon’t value it,” Yang Zaiping, the executive vice president ofthe China Banking Association, said at the Reuters China InvestmentSummit.Yang was making a point about firming up banks’ credit policyto ensure that borrowers understand the importance of maintainingtheir credit-worthiness.The executive said a traditional Chinese network of neighborsand old ladies that watched after neighborhood safety and otherlocal issues could be copied to help channel funds into small andmedium-sized companies, a long-standing problem in China.”Old ladies know a lot about the neighborhood,” he said.Yang said banks could lend to a group of small companies, andas long as all repaid their loans, then interest rates wouldremain low. But if only one borrower were to default, all would bepunished, putting more responsibility on all borrowers to ensureeach loan remains active.
Look in the mirror
The U.S. rejection of the $18.5 billion bid by China’s top offshore oil company, CNOOC Ltd, for Unocal in 2005 was not a move worthy of a world power such as the United States, asserts a Chinese academic with the government’s top economic planning agency.”If you are weak, then I can understand,” said Chen Dongqi, deputy director of the Academy ofMacro-Economic Research under the National Development and Reform Commission (NDRC).”The United States is a strong country. What is it afraid of?” he said at the Reuters China Investment Summit.“There is a problem there.” Chen was responding to a question about rising protectionism in China, and criticism that Beijing had blocked Coca-Cola Co from buying China’s Huiyuan Juice.Chen also said that blaming China for global climate change was also off the mark, as climate is affected by hundreds of years of human activity, not just a few decades.”China’s economy has been growing for only 30 years,” he said. “I don’t believe a few years of fast economic growth from one country is responsible for climate change.”Photo caption: Chen Dongqi, vice-head of the macro-economic institute under the National Development and Reform Commission (NDRC), speaks during the Reuters China Investment Summit in Beijing. REUTERS/Christina Hu
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