Baidu, TenCent and Alibaba all looking for smartphone acquisitions (part 1)
In the last 2 weeks, the CEOs/Founders of Baidu, Tencent and Alibaba have all said they are looking for acquisitions in the smartphone space. NQ's 283M customers, 100%+ annual growth, strong China footprint, cross platform monetization and ultra-depressed valuation make it an obvious choice.
I don’t own NQ based on a M&A investment thesis. NQ’s business is accelerating, more channel partners are coming on-line and the company is executing very well. NQ’s deal pipeline is full. NQ is growing revenue and FCF 100%+ year-over-year, just signed a game-changing deal with American Movil, is trading at just 5.3x EV/EBITDA 2013 and 3.2x EV/EBITDA 2014.
NQ is destined to trade much higher.
2 recent articles...
Baidu open to acquisitions, CEO Li says
March 6, 2013, 2:29 a.m. EST
BEIJING--Baidu Inc. Chief Executive Robin Li said Wednesday that the company was "very open" to acquisitions of companies that make products for smartphones, though he wouldn't say whether Baidu was currently in talks with any companies.
Speaking on the sidelines of the Chinese People's Political Consultative Conference, Mr. Li said the company was focused on attracting more users to its mobile products and believed it would make money on the products later.
Though Baidu remains the most popular search engine on smartphones and also has a widely used map application, some analysts have worried the company is lagging behind other Chinese Internet companies like Tencent Holdings Ltd. and Sina in the race to attract users to its smartphone services.
"Whenever we can find some company that already has what we want to own, we prefer to buy rather than build it," he said.
Mr. Li's statement also highlights how China's largest Internet companies are increasingly looking to acquisitions to expand.
On Tuesday, Tencent Chief Executive Pony Ma also said his company is open to acquisitions.