|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||45.63 - 46.37|
|52 Week Range||31.54 - 51.24|
|Beta (3Y Monthly)||1.27|
|PE Ratio (TTM)||33.75|
|Forward Dividend & Yield||0.26 (0.56%)|
|1y Target Est||56.42|
South African e-commerce giant Naspers said on Friday the delayed multi-billion euro listing of its international internet assets, including its over 30% stake in China's Tencent, will go ahead on Sept. 11. Naspers was forced to delay the listing of its newly created Prosus subsidiary - which houses the assets worth more than 100 billion euros ($112.36 billion) - on Amsterdam's Euronext exchange in June following an administrative error by a third party involved in the planned flotation. "It's a significant step for Naspers and will present a new opportunity for global internet investors," Chief Executive Bob van Dijk said in a statement, adding he was pleased the listing was on track following the delay.
(Bloomberg) -- Sign up for Next China, a weekly email on where the nation stands now and where it's going next.Less than a year after President Xi Jinping first touted the project, China’s new stock venue designed for technology startups will start trading on Monday.Twenty-five companies will be part of the launch in Shanghai, out of the more than 100 hopefuls that applied to go public on the platform. Endorsement from top officials helped generate such enthusiasm that the firms raised a combined $5.4 billion, about 20% more than planned. Demand from retail investors has outstripped supply by an average 1,800 times, even as some analysts voiced concern over lofty valuations. One company priced its shares at 171 times earnings.“The first-batch listings are expected to be boosted by investor demand,” said Mark Huang, an analyst at Bright Smart Securities. “There’s a good chance we’ll see a rush into these stocks due to the limited supply.”Modeled after the Nasdaq Stock Market in the U.S., the so-called STAR board is China’s latest attempt to avoid losing the next Alibaba Group Holding Ltd. or Tencent Holdings Ltd. to exchanges in New York or Hong Kong. It’s also a testing ground for regulators, who have waived rules on valuations and first-day price limits for the first time since 2014. The venue will be the first in China to welcome companies that have yet to make a profit, as well as shares with unequal voting rights.The listing companies include China Railway Signal & Communication Corporation Ltd. -- already listed in Hong Kong -- and gastrointestinal equipment maker Micro-Tech (Nanjing) Co. Ltd. Advanced Micro-Fabrication Equipment Inc., which sells products used to make semiconductors, is the most expensive stock of the batch. Its 171 multiple compares with an average of 53 times for the group, and 33 for similar stocks on other Chinese venues.A handful of stocks linked to the first batch advanced on Friday, showing investor enthusiasm ahead of the new board’s debut. And another two firms joined the queue to list: Amlogic (Shanghai) Co. and Shanghai Friendess Electronic Technology are aiming to raise a combined 2 billion yuan ($291 million), according to their prospectuses.Despite the hype, there are questions about whether the excitement will give way to the lukewarm sentiment that’s blanketing the world’s second-largest equity market. On the other hand, a sustained period of ultra-high demand risks draining funds other exchanges, where volumes are shrinking. Mainland markets sank earlier this month after China announced the STAR board’s official start date. The Shanghai Composite Index rose 0.8% on Friday.It’s not the first time China has sought to create an alternative venue for smaller companies. The ChiNext board was launched in Shenzhen almost a decade ago with fewer listing requirements than the main venues. The tech-heavy exchange was at the center of a spectacular boom and bust in 2015 that burned hordes of novice traders. Officials will be keen to avoid such extreme volatility -- the ChiNext remains more than 60% below its peak four years ago.Shares on the STAR board will have no daily price limits for the first five trading days, followed by a 20% cap in either direction. To limit volatility, the venue will feature a mechanism that suspends activity for 10 minutes if a stock moves by 30% and then 60% from the opening price in the first five trading days, a wider band than the rest of the stock market.The STAR board’s launch dovetails with Beijing’s pledge to boost direct financing for companies struggling to raise funds, and has taken on added significance as heightened trade tensions with the U.S. threaten China’s technology supply chain.“It’s one of China’s key strategies to support technological innovation,” said Zhang Yankun, fund manager at Beijing Hone Investment Management Co. “If investors can get decent returns from these listings, it would attract more money to the sector and help China’s capital market compete with developed markets.”(Updates with stock moves in sixth and seventh paragraphs.)\--With assistance from Irene Huang and Lujia Yu.To contact Bloomberg News staff for this story: Ken Wang in Beijing at email@example.com;Evelyn Yu in Shanghai at firstname.lastname@example.org;Fox Hu in Hong Kong at email@example.com;Ludi Wang in Shanghai at firstname.lastname@example.orgTo contact the editors responsible for this story: Sofia Horta e Costa at email@example.com;Sam Mamudi at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
BMW has teamed up with Chinese technology giant Tencent in a bid to accelerate its development of self-driving cars. The companies will build a processing and storage centre to handle data from test trials in China and BMW’s computer simulations.
German automaker BMW and Chinese online gaming giant Tencent Holdings are teaming up to launch a computing center in China that will help develop self-driving cars in the world’s biggest auto market, the companies said on Friday. The computing center, which will start operations by the end of the year, will provide cars with data-crunching capabilities to help them drive semi-autonomously and, eventually, autonomously. The establishment of the center “will support BMW’s autonomous driving development and innovation in China,” Jochen Goller, head of BMW's China operations, said in a statement.
(Bloomberg) -- Chinese video-game live-streaming platform DouYu International Holdings Ltd. ended flat in its trading debut after its $775 million U.S. initial public offering.Shares of the company, backed by Tencent Holdings Ltd., closed their first day of trading Wednesday at $11.50, the same price as when they were sold in its IPO on Tuesday.DouYu, which delayed its listing amid market jitters in May, sold 44.9 million American depository shares and its investors sold another 22.5 million. The shares, which which had been priced at the bottom of the marketed range, opened down 4.2% and never rose more than 0.4% on Wednesday.The offering, which valued DouYu at $3.73 billion, was the biggest cross-border listing from China since Tencent Music Entertainment Group raised $1.07 billion in its U.S. IPO in December.DouYu, one of China’s top two video-game live-streaming platforms, initially planned to start its IPO roadshow in May but postponed it following President Donald Trump’s threat to boost tariffs on China, people familiar with the matter said at the time. The Wuhan-based company had filed for its IPO on April 22, almost a year after its biggest competitor, Huya Inc., went public in the U.S.DouYu had net income of $2.7 million on revenue of $222 million in the first quarter, according to its filings with the U.S. Securities and Exchange Commission. That compared with a loss of about $23 million on revenue of $97 million during the same period last year.Existing investors that sold shares in the IPO included Aodong Investments and Co-Chief Executive Officer and co-founder Zhang Wenming, according to the company’s filings.Morgan Stanley, JPMorgan Chase & Co., Bank of America Corp. and CMB International Capital Ltd. led the offering. The shares are trading on the Nasdaq Global Select Market under the symbol DOYU.(Updates with closing share price in second paragraph)\--With assistance from Crystal Tse.To contact the reporters on this story: Michael Hytha in San Francisco at email@example.com;Yueqi Yang in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Polina Noskova at email@example.com, ;Liana Baker at firstname.lastname@example.org, Michael Hytha, Matthew MonksFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
China-based DouYu International failed to excite investors with its initial public offering that priced at the low end of its range. The livestreaming service raised $775 million in the IPO.
(Bloomberg) -- Visa Inc. has become the latest investor in ride-hailing giant Go-Jek as the two companies push digital payments across Southeast Asia.The world’s biggest payments network has invested an undisclosed amount in Go-Jek as part of the Indonesian company’s ongoing series F fundraising round, the two companies said Wednesday. The move follows Go-Jek’s announcement this month it had secured funding from Thailand’s Siam Commercial Bank Plc, Mitsubishi Motors Corp., Mitsubishi Corp. and Mitsubishi UFJ Lease & Finance Co. The terms of that deal were also not disclosed.Go-Jek, which debuted its app for hailing motorbike taxis in Jakarta in 2015, is expanding beyond Indonesia to cater to consumers across Southeast Asia, building an all-purpose consumer app similar to Tencent Holdings Ltd.’s WeChat in China. It’s valued at $10 billion according to CB Insights, and hosts more than 20 on-demand services on its platform from food delivery to digital payments.The two companies have “a shared goal to bring formal financial services to the unbanked and underserved, including micro, small and medium businesses,” Visa Regional President Asia Pacific Chris Clark said in a statement. “We will explore ways to leverage the power of Go-Jek and Visa’s networks to expand financial access in Southeast Asia.”Visa and Mastercard Inc. have teamed up with mobile startups in Southeast Asia in recent years, where the vast majority of transactions are still cash-based and the pace of adoption of digital payments is slow. Mastercard has partnered with Go-Jek rival Grab, while Visa has announced a partnership with gaming accessories maker Razer Inc.To contact the reporter on this story: Yoolim Lee in Singapore at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
NEW YORK/HONG KONG, July 16 (Reuters) - DouYu International Holdings Ltd, China's largest live-streaming platform, on Tuesday said it sold $775 million in stock at a $3.73 billion valuation after pricing its U.S. initial public offering (IPO) at the bottom of an indicative range. DouYu, which is backed by Chinese social media and gaming giant Tencent Holdings Ltd, sold American depositary shares (ADS) at $11.5 each, compared with a previously stated target of $11.50 to $14.00, the firm said in a statement. The IPO was also a test of U.S. investor demand for Chinese stocks after Anheuser Busch InBev NV called off the Hong Kong listing of its Asia-Pacific brewing business due to weak orders from U.S. "long only" fund managers.
(Bloomberg) -- Google’s chief executive officer told U.S. Senator Mark Warner that the company has ended some partnerships in China, the lawmaker said Tuesday on Bloomberg Television.The search giant’s ties to China were in the spotlight this week after technology investor Peter Thiel suggested on Sunday that the U.S. government probe Google’s “seemingly treasonous” work. President Donald Trump said he wanted the U.S. attorney general to look into the claims.Google pulled its search engine from mainland China in 2010. But the company began developing a separate prototype Chinese search service as early as 2016. Reports of the project, called Dragonfly, surfaced shortly after Google nixed a U.S. military contract, drawing criticism from the Pentagon and U.S. politicians from both parties. Earlier this year, Google said it had moved staff off of Dragonfly, and on Tuesday Karan Bhatia, Google’s policy chief, said the project was “terminated.”Warner, a Democrat from Virginia, didn’t specify what projects he discussed with Google CEO Sundar Pichai. A spokeswoman for the senator said they spoke about a “range of partnerships.”“I do think there’s some explaining that Google needs to make,” Warner said in an interview with Emily Chang on “Bloomberg Technology.” “I’ve met with the Google CEO. He said they are backing out of some of those partnerships, and they’re willing to work with the U.S. government.”A Google spokeswoman declined to comment on Warner’s interview.In January 2018, Google parent Alphabet Inc. signed a deal with Chinese tech giant Tencent Holdings Ltd. to cross-license technology and intellectual property. Google was also in talks with Tencent and several other Chinese firms about bringing its cloud services to China, Bloomberg News has reported. Google has a research partnership with Beijing’s Tsinghua University.In a speech on Sunday, Thiel, a Facebook Inc. board member, raised the question of whether Google’s management was “infiltrated” by foreign intelligence agencies. On Monday, the company said it has never worked with the Chinese military.“I think that Mr. Thiel and Mr. Trump’s statements are a little over the top,” Warner said.To contact the reporters on this story: Mark Bergen in San Francisco at email@example.com;Emily Chang in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Jillian Ward at email@example.com, Anne VanderMeyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The DouYu IPO, a spinoff of China internet giant Tencent Holdings, is scheduled to price shares for its initial public offering late Tuesday and trade Wednesday, raising about $859 million.
Despite trade tensions between the U.S. and China and Altaba (NASDAQ:AABA) liquidating its stake in Alibaba (NYSE:BABA), Alibaba stock has done very well in 2019, rising 21% year-to-date. A big part of its success this year is BABA's plan to list its shares in Hong Kong.Source: Shutterstock According to Bloomberg, Alibaba has filed confidentially for a Hong Kong listing in what could be the territory's biggest listing sale since 2010. Although the final fundraising target isn't finalized, Alibaba could raise as much as $20 billion from the listing.Before it IPO'd in New York in 2014, Alibaba considered listing in Hong Kong but decided against it due to tougher ownership regulations in the territory. If Alibaba listed in New York, Jack Ma and cofounder Joseph Tsai could still retain control of the company despite not owning a majority percentage of Alibaba. In Hong Kong, Ma and Tsai would not be able to control Alibaba so effectively.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAlthough Hong Kong hasn't changed its ownership rules, Alibaba is now much more inclined to a Hong Kong listing. First, Jack Ma plans to retire and focus more on philanthropy. Second, the Chinese government seems to want more Chinese companies to list in China rather than in New York. * 10 Stocks Driving the Market to All-Time Highs (And Why) Naturally, many investors wonder how much upside a Hong Kong listing would mean for Alibaba's U.S. shares. A Listing That's Bullish, But Only Partly SoI believe Alibaba's U.S. listed stock will benefit from the listing, but only slightly. If Alibaba were to list in Hong Kong, I believe the stock would be valued at a higher multiple than its current valuation in New York. More people use Alibaba's services and websites in China and Hong Kong, and the added awareness will likely generate more buying from retail investors, which could give Alibaba a higher valuation. While that sounds like great news for U.S. owners of Alibaba, it's only partly bullish because the two exchanges are hard to arbitrage. In an ideal world, if Alibaba's stock in Hong Kong were priced higher than it was in New York, an astute investor could buy the New York stock and sell the Hong Kong stock, and hope for an eventual closing in a relatively risk-free manner. The problem is that a closing isn't guaranteed to happen in the real world. Although the Hong Kong dollar is pegged to the U.S. dollar, there isn't a Hong Kong New York stock exchange connect where an investor could easily buy the Hong Kong listed Alibaba stock and simultaneously sell the New York listed stock. Meaningful discounts between similar securities have also persisted for many years before. For a long time, South African conglomerate Naspers traded for a 30% discount to its Tencent (OTCMKTS:TCEHY) stake alone, despite Naspers owning things outside of Tencent. Are There Plenty More Reasons to Buy Alibaba Stock?There is a lot to like about BABA stock besides the fact that it will list in Hong Kong. Although it dominates e-commerce in China, BABA trades for just 19 times forward earnings estimates, which almost makes it a value stock considering its future earnings growth potential. Furthermore, Alibaba isn't just an e-commerce play. Due to various astute investments, Alibaba has exposure to China's mobile payments market with partial ownership of Alipay, exposure to China's cloud growth with Alibaba Cloud, and exposure to a variety of future markets due to its leadership in artificial intelligence. By being one of China's top two tech companies, Alibaba has the financial resources to buy or copy the business models of competitors that might disrupt it. It has the financial resources to invest in startups of promising sectors and participate in their growth as well. * 7 Stocks Being Inflated by Low Rates As for the potential long-term effect of the Hong Kong listing, the listing could improve Alibaba's fundamentals if management executes. If the company uses the money raised for productive purposes such as investing more in the cloud or artificial intelligence, Alibaba's margins and earnings-per-share could go higher and that'll benefit investors everywhere, not just in Hong Kong.As of this writing, Jay Yao did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Dependable Dividend Stocks to Buy * 10 Stocks Driving the Market to All-Time Highs (And Why) * 7 Short Squeeze Stocks With Big Upside Potential The post Will Alibaba Stock Soar Thanks to Its Hong Kong Listing? appeared first on InvestorPlace.
(Bloomberg Opinion) -- Since the U.K. decided more than three years ago to leave the European Union, the nation's savviest investors have succeeded by putting their money where Brexit matters least.Uncertainty about the date of Britain’s departure (now pushed back to Oct. 31) and the terms of the divorce has meant purging the U.K. from their holdings or limiting them to investments traditionally impervious to man-made and natural disasters. Over 38 months, British sterling depreciated 16 percent, the worst shrinkage for any similar period in 8 years. The pound remains the poorest performer in the actively-traded foreign exchange market and inferior to the No. 3 euro.Europe's strongest major economy in the 21st century became a shadow of its former self, reversing two decades preceding the June 23, 2016 referendum when the U.K. outperformed the European Union in growth and investment. London's stock and bond markets similarly languished as laggards to world benchmarks, after beating them consistently in the 20 years prior to the decision to leave the EU, according to data compiled by Bloomberg.“If I give myself some credit, I would say that we acted reasonably fast liquidating U.K. shares” in 2016, said Ben Rogoff, whose Polar Capital Technology Trust PLC has been the most consistent winner out of the 212 British global funds with at least 1 billion pounds this year and during the past three years. His team's 114 percent total return (income plus appreciation) was 22 percentage points better than the Dow Jones World Technology Index, mostly because 68% of the fund is invested in the U.S., two-thirds of that in California companies, according to data compiled by Bloomberg. “It's all about the Internet and where do you get exposed to the Internet? The U.S. and China,” Rogoff said last month during an interview at Bloomberg in London.While Rogoff reduced his holdings of three California tech powers during the past year — Cupertino-based Apple Inc., Menlo Park-based Facebook and Santa Clara-based Advanced Micro Devices — he acquired more shares in Hong Kong-based Tencent Holdings Ltd, Hangzhou-based Alibaba Group Holding Ltd, South Korea's Samsung Electronics Co. and Tokyo-based Yahoo Japan Corp., according to data compiled by Bloomberg.The 46-year-old graduate of St. Catherine's College, Oxford, became the lead manager of the trust in 2006, “and at that time,” he said, “the U.K. weighting might have been 5% to 10%, so if you had already been backing away to the door, it's a lot easier to escape than if you built a career around being an expert in U.K. equities.” Since the Brexit referendum, he said, “There's just been a complete buyers' strike of U.K. equities.”Proof of such disdain comes with the crisis this year at the LF Woodford Equity Income Fund, Britain's most-prized investment when it was launched by star money manager Neil Woodford in 2014. The celebrated stock picker became even more prominent with his contrarian bullish stance on Brexit. The fund plummeted 31% during the past two years by holding a combination of large and small U.K. companies and has frozen redemptions indefinitely.“It's symptomatic of a broader problem,” Bank of England Governor Mark Carney told reporters earlier this month. “Our sense is that the financial-stability risks are increasing.”One U.K. investor who’s successfully resisted the trend away from domestic stocks is Nick Train, who manages Finsbury Growth & Income Trust. It returned 61% the past three years — more than twice the FTSE All-Share Index benchmark — as the most consistent one- and three-year performer among the 129 U.K.-based funds investing mostly in domestic stocks or bonds, according to data compiled by Bloomberg. Unlike Woodford, who doubled down on the British economy writ large, Train, a 60-year-old graduate of Queen’s College, Oxford, dramatically increased his holdings in consumer staples. These are the companies that make such essentials as food, beverages and household goods and can resist business cycles because their products always are in demand.Train, who declined to be interviewed, increased the consumer staples weighting relative to the benchmark to 27% from 23% in 2015 and he enhanced his holdings of Deerfield, Illinois-based Mondelez International Inc., which manufactures and markets packaged food products, and London-based Diageo PLC, the world's largest producer of spirits and beer, according to data compiled by Bloomberg.That's likely to be a safe bet as no one is counting on the British economy rebounding significantly from near the bottom of the EU while the uncertainty created by Brexit persists. “If you take a long view, then this may well be a great time to be investing in U.K. equity,” said Rogoff. “Thankfully, I don't have to make that binary call because there are very few U.K. companies I'm frankly interested in.”\--With assistance from Shin Pei, Richard Dunsford-White, Kateryna Hrynchak and Suzy Waite.To contact the author of this story: Matthew A. Winkler at firstname.lastname@example.orgTo contact the editor responsible for this story: Jonathan Landman at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Matthew A. Winkler is a Bloomberg Opinion columnist. He is the editor-in-chief emeritus of Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
China still has a lot of headroom to add more Internet and mobile payments users, as a recent report highlights.
Generation Z, born after the year 2000, has grown up in a world dominated by the cloud czars, where cynicism about technology motives and actions is pervasive, and where protecting your identity rather than publicizing it is the norm.Source: Shutterstock It's a vast new market that Snap (NASDAQ:SNAP) thinks it can win with new features and augmented reality.Wall Street has been buying this argument, and loving the growth, in 2019. Shares that traded at under $6 in January are now trading at over $15. The market cap is up to $21.1 billion and CEO Evan Spiegel, once considered Facebook (NASDAQ:FB) road kill, now has a net worth of $3.5 billion.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Dependable Dividend Stocks to Buy But the shares are still below their post-IPO high, below their February 2018 peak. Snap is still a minnow next to Facebook, let alone Chinese giants like Tencent Holdings (OTCMKTS:TCEHY). Does this move have legs? The Bull Case for SNAP StockSnap's growth is once again in overdrive. After bringing in $1.18 billion of 2018 revenue, the company brought in $320 million in the first quarter and is expected to report over $350 million for the June quarter on July 23, albeit with an 8 cent per share loss. If it can keep that up for the rest of the year, Snap could bring in $1.52 billion for all of 2019, a growth rate of nearly 29%.Snap is getting new respect from developers for Scan, an augmented reality platform that can be used to create .gifs on the fly, solve math problems from pictures, and become the heart of a new gaming system.Previous AR platforms lacked the community and daily use to interest Wall Street. Snap is also rolling out a new ad platform to monetize Scan. It says it is now used by 90% of 13-24 year-olds, which is more than Facebook reaches with either its main platform or Instagram.Snap's earlier features, like self-erasing messages, were quickly copied by Facebook. The hope is it can innovate its way away from the larger company. Goldman Sachs (NYSE:GS) recently put Snap back on its buy list. Analysts are also enjoying a new gender swap filter that can let users disguise themselves to friends. The Bear Case for SNAP StockThere can be a downside to anything.Stalkers could use the gender swap filter to cozy up to victims. The AR platform could also be misused. Snap is still focused on making money from advertising built on personal information, which is why many turned away from Facebook and even Alphabet's (NASDAQ:GOOGL, NASDAQ:GOOG) Google.Snap has gone from being cheap to being overvalued, cynics say, arguing bulls are getting ahead of themselves. They note that Twitter (NASDAQ:TWTR) generates three times Snap's revenue from a smaller user base. They say paying more than 10 times expected 2019 revenue for a money-losing company near the end of a recovery is, at best, speculative. Even some who are bullish on Snap are now suggesting option strategies to limit risk. The Bottom LineSnap is more than fully valued.If you're going to put money into it, you are going to have to watch that money closely. A negative earnings report, or a single bad headline, can still send Snap crashing to Earth.If you got into Snap at its lows, a hard fall still leaves you with an attractive acquisition target, at a price higher than what you paid. But even in that case, the take-out would not be at a premium to the current price.What you're left with is a trade, a speculation for young investors who might lose their stake but will at least learn a lesson from it. If you make this old man look foolish with your fat profits, you can buy me dinner.Dana Blankenhorn is a financial and technology journalist. He is the author of the mystery thriller, The Reluctant Detective Finds Her Family, available at the Amazon Kindle store. Write him at firstname.lastname@example.org or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this article. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Dependable Dividend Stocks to Buy * 10 Stocks Driving the Market to All-Time Highs (And Why) * 7 Short Squeeze Stocks With Big Upside Potential The post Snap Stock: The Youth Market is Back appeared first on InvestorPlace.
(Bloomberg) -- Netease Inc. is planning an initial public offering in the U.S. of its Youdao arm that could raise at least $300 million, people familiar with the matter said, propelling its expansion into a crowded online education arena.The company is working with Morgan Stanley and Citigroup Inc. on the share sale with a goal to list as early as in the third quarter, said the people, asking not to be identified as the information is private. A deal could value Youdao at about $2 billion, one of the people said. The firm could file confidentially as soon as in coming weeks, according to another person.Netease -- Tencent Holdings Ltd.’s closest competitor in the world’s biggest mobile gaming market -- is delving deeper into adjacent sectors from e-commerce to media content. Its Youdao arm, founded in 2006, explored several business models before settling on becoming an internet education platform about five years ago. It now offers everything from online dictionaries to math courses and prep classes for important certification-tests.The company completed its first round of financing in April last year at a post-money valuation of $1.12 billion, according to its website. Deliberations are at a preliminary stage and details of the share sale including fundraising size and timeline could still change, the people said. Representatives for Netease, Morgan Stanley and Citi declined to comment.Netease is trying to court investors during a volatile time for capital-raising, roiled by U.S.-Chinese trade tensions and worries about a global downturn. But it wants to grab a bigger slice of a market that’s projected to boom in coming years, and make headway against rivals from New Oriental Education & Technology Group to VIPKid and iTutorGroup. Online revenue from children at nurseries and students attending kindergartens up to high school, also known as the K-12 group, could rise 38% a year though 2022, Bloomberg Intelligence cites iResearch as saying.“Revenue contribution from online courses will likely increase for reputable tuition providers as more students from lower-tiered Chinese cities pay for access,” Bloomberg Intelligence analysts Catherine Lim and Sheng Tan Zhu wrote Monday. “New digital teaching technology may raise the learning efficiency of online students and increase their academic performance, fueling stronger demand.”\--With assistance from Zheping Huang.To contact the reporters on this story: Lulu Yilun Chen in Hong Kong at email@example.com;Crystal Tse in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com;Fion Li at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
UBTech, a maker of humanoid robots backed by Chinese technology group Tencent, is readying an initial public offering in what would be a rare coup for China’s markets, which have struggled to attract large tech listings. It turned profitable last year, according to chief brand officer Michael Tam, and two months ago changed its corporate structure.
Can the former payments monopoly in China regain lost ground against the payment systems of Alibaba and Tencent?
Nio (NYSE:NIO) is on fire. Since late June, Nio stock has risen by close to 65%. This offers welcome relief to NIO shareholders who have seen little else but decline since the stock launched its IPO in 2018.Source: Shutterstock Still, despite the improved sentiment, production remains low, and losses continue to mount. The better-than-expected sales numbers may stoke optimism. However, the conditions that turned NIO into a penny stock remain in place. NIO Benefits From a Dramatic TurnaroundNio stock saw nothing but pain from March to June. A spike in the stock price took NIO briefly past the $10 per share mark in early March. However, a "greater than anticipated" slowdown cited in their earnings report took the Nio stock price down by more than 20% in a single day and more than 11.5% in the following trading session. From there, NIO saw a steady slide, falling to below $2.50 per share by last June.InvestorPlace - Stock Market News, Stock Advice & Trading TipsOver the last two weeks, sentiment has shifted dramatically. The latest surge in the stock came when the company reported a "greater than anticipated" number of deliveries. As a result, the stock has risen substantially from the $2.50 per share range where it traded in late June. Now, with the Nio stock price hovering close to $4 per share, many wonder if now is the time to buy NIO.In fairness, some optimism has returned to the market. Its much larger American counterpart Tesla (NASDAQ:TSLA) has risen by more than 30% since early June. The China Passenger Car Association also reported a 4.9% increase in sales. This is the first such increase in about one year. The Rally in Nio Stock Is Unlikely to HoldHowever, none of this changes the fact that analysts project nothing but losses for the foreseeable future. Yes, I did not see the surge in Nio stock coming recently. However, I predicted NIO would tread water, but little else. I stand by that sentiment.For one, it remains a small player. Our own Tezcan Gecgil points out that Chinese companies produced 254,000 electric vehicles (EVs) in the first quarter of 2019. Nio produced just under 4,000 of those cars.Gecgil makes good points that may ensure its survival. The company has backing from the likes of Baidu (NASDAQ:BIDU) and Tencent (OTCMKTS:TCEHY). It also remains true that pollution guidelines in places such as Beijing and Shanghai make it challenging to obtain licensing for non-electric vehicles.However, judging by the company's financial statements, that survival could come at a high cost to holders of Nio stock. Nio lost just over ¥2.65 billion renminbi ($390 million) in the previous quarter alone. Its ¥7.45 billion renminbi ($1.08 billion) in cash will not last long at that rate. Moreover, with ¥9.25 billion renminbi ($1.35 billion) in short and long-term debt, they have little room left to borrow.Hence, its backers will probably want more stock in return for funding. While the increased stock price helps with fundraising, the stock dilution will hurt current shareholders. The Bottom Line on Nio StockDespite the optimism surrounding Nio stock, Nio remains a troubled company struggling to survive. Indeed, improved sales bode well for the company. The suffocating pollution in China's large cities also helps drive sales in the EV industry.However, despite a slight uptick in sales, Nio stock will likely post losses for years to come. Moreover, with cash levels likely to fall, and debt burdens becoming increasingly heavy, the company will probably have to issue more stock to stay in business.Given the push for cleaner energy, EVs are likely here to stay. However, to earn investment returns in this industry, established car companies and even Tesla stock offer safer options. With better choices out there, and the risk that the latest move amounts to a dead cat bounce, I see no reason to buy Nio stock.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell for an Economic Slowdown * 7 Marijuana Penny Stocks That I May Buy * 7 of The Best Schwab ETFs for Low Fees The post Investors Should Not Expect Nio Stock to Keep Cruising Higher appeared first on InvestorPlace.
In China, the uncertainty around trade and dynamics with the U.S. adds to challenges that private-sector companies have been feeling since early 2018.
Since reaching nearly $200 in early May, Alibaba (NYSE:BABA) stock has come under pressure. But over the past few weeks, Alibaba stock has seen notable improvement.Source: Shutterstock The reason: There was a relaxation of tensions in the trade war between the U.S. and China. President Trump agreed to hold off on any new tariffs and he loosened restrictions on selling technology to Chinese powerhouse, Huawei.So there was good reason for a rally. In fact, for the year so far, the BABA stock price has risen about 24%. This is actually in-line with the kinds of returns for the past few years.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut of course, the main question now is: What's in store for Alibaba stock going forward? Well, besides the improvement with the trade situation, there are other major catalysts that should help with BABA stock. So let's take a look at three: China Ecommerce PowerhouseAs seen with Amazon (NASDAQ:AMZN) in the U.S., the dominance of the ecommerce market is a mega advantage. It allows for the collection of massive amounts of data and provides a platform for launching new services. * 7 of The Best Schwab ETFs for Low Fees And yes, when it comes to BABA, the company is essentially the Amazon of China … but with a much more profitable model. The company operates a high-margin digital marketplace that connects buyers and sellers.Keep in mind that the scale is enormous, dwarfing the U.S. market. BABA has 721 million mobile monthly active users (MAUs), up 104 million on a year-over-year basis.To get a sense of how large the opportunity, here's what BABA Executive Vice Chairman, Joseph Tsai, said during the fourth-quarter earnings call: "The middle class in China has reached critical mass of over 300 million, almost as large as the entire U.S. population. The middle class will double in the next 10 years, especially from the lesser developed Chinese cities. While total Chinese domestic consumption is $5.5 trillion today, consumption from these third-, fourth-, and fifth-tier cities, with a combined population of 500 million people, will triple from $2.3 trillion to nearly $7 trillion in the next 10 years."The company has also been aggressive in building on-demand services, such as for food delivery. Part of the strategy has been to partner with companies like Starbucks (NASDAQ:SBUX). Such efforts will certainly be a big help in providing more convenience and stronger connections with customers. Cloud And AIAgain, BABA has borrowed from the Amazon playbook by making an aggressive move into the cloud industry. This may actually turn out to be the biggest growth driver. In fact, BABA's cloud business is already the largest not only in China, but the whole Asia Pacific region.During the latest quarter, revenues in the segment spiked by 76% to $1.15 billion. To keep up the growth, BABA has been rapidly innovating the cloud platform by adding new services for blockchain, cybersecurity, database systems and AI.Note that BABA has also been leveraging these technologies across its own properties. For example, Tmall Genie is an AI-powered smart speaker. Then there is the Amap app, which is China's largest mobile provider of mapping, navigation and traffic information. Financials And ValuationThe valuation on BABA stock is fairly reasonable. Consider that the forward price-to-earnings multiple is 19X. By comparison, JD.com (NASDAQ:JD) trades at 29X - and is growing at a much slower pace. For example, BABA reported revenues that jumped a sizzling 51% to $13.9 billion during the latest quarter.And with the resources, BABA has been making smart investments. Perhaps the most significant is Alipay, which has become one of the largest payment networks in China along with Tencent's (OTCMKTS:TCEHY) WeChat.Tom Taulli is the author of the upcoming book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy on College Students' Radars * 7 Retail Stocks to Buy for the Second Half of 2019 * The S&P 500's 5 Best Highest-Yielding Dividend Stocks The post 3 Reasons Alibaba Stock Will Continue to Rise appeared first on InvestorPlace.
(Bloomberg) -- Tencent Holdings Ltd. is pressing China’s top smartphone vendors and app stores to boost the cut of revenue it gets from games sold through their platforms, people familiar with the matter said, stepping up efforts to claw back profits as its business slows.The social media giant is seeking as much as 70% of the sales generated from its games, up from just 50% now, said the people, who requested anonymity discussing private negotiations. That would bring Tencent’s portion in line with the proportion shared with game publishers on other platforms, including Apple Inc.’s iOS store and Google Play, which each keep 30% of revenue that comes from apps. Negotiations vary from platform to platform, and Tencent may not be asking as much from each app store operator, the people said.Tencent is keen to shore up its bottom line as growth in China, the world’s No. 2 economy, decelerates, sapping consumer spending on entertainment and hurting advertising. The company’s gaming division -- its largest -- was battered in 2018 by a series of regulatory crackdowns and in May, Tencent reported the smallest increase in sales since going public in 2004.At the same time, Tencent has gained leverage in negotiations because the pipeline of new games has shrunk, the result of Beijing’s clampdown on what it views as gaming addiction among youths. Fewer than 5,000 new games will be approved this year, versus more than 8,500 in 2017, Asia-focused gaming researcher Niko Partners estimates.Tencent “is likely to gain stronger bargaining power against its distribution channels,” Citigroup analysts led by Alicia Yap wrote in a research note this week.The social media titan initiated talks in recent weeks with most of the country’s largest app stores, run by leading smartphone makers such as Oppo, Lenovo Group Ltd. and Xiaomi Corp., as well as internet outfits such as Baidu Inc. and 360, the people said. Tencent is focusing on only a subset of its games at present, they added. But if the 70-30 split becomes the standard, that could translate into billions of dollars of additional revenue annually.Tencent dominates the market thanks to its all-purpose WeChat app, which serves more than a billion people, and a development machine that consistently cranks out hits such as Honour of Kings and Peacekeeper Elite. Now, the company is taking advantage of its heft -- its closest rival is the much smaller NetEase Inc. -- to pressure app distributors to cough up more revenue, the people said.P.H. Cheung, a spokesman for Tencent, didn’t immediately respond to an email and text query on the company’s plans, which were previously reported by gaming industry media outlet Gamelook. Baidu and Oppo declined to comment.Those negotiations are by no means all one-sided. If anything, Tencent may have to work hard to change the status quo. The country’s four biggest smartphone names -- Oppo, Vivo, Huawei Technologies Co. and Xiaomi -- run app stores for their users that together account for about 40% of market share.Among the new titles Tencent wants a bigger revenue cut on is role-playing mainstay JX Online 3, developed by China’s Kingsoft Corp., and Crazyracing Kartrider, a mobile remake of a popular title from South Korea’s Nexon Co., one person said. As of now, neither title is available on stores operated by Oppo and Vivo, suggesting those two device-makers have yet to agree to Tencent’s proposal.App developers and publishers compete to get games listed on those stores, whose operators host in-game payments for things such as virtual goods, character skins and power-ups. In return, developers get a cut of that revenue. Unlike in the U.S. and Europe, where a 70-30 split is common, revenue-sharing varies hugely across different Chinese stores but is commonly pegged at 50%. Furthermore, that cut is usually negotiated directly with each of the stores, sometimes on a game-by-game basis.What’s in the app stores’ favor is the sheer volume of competition. While Google Play is blocked in China, there are approximately 400 Android app stores, though many have an extremely small number of mobile users. The country’s app stores focus especially heavily on games because that’s where the money is -- many don’t even levy a cut of revenue at all on non-gaming apps.\--With assistance from Lulu Yilun Chen.To contact Bloomberg News staff for this story: Zheping Huang in Hong Kong at email@example.com;Gao Yuan in Beijing at firstname.lastname@example.orgTo contact the editors responsible for this story: Tom Giles at email@example.com, Edwin Chan, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.