Alec Macfarlane
ReutersBreakingviews
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Past articles by Alec:
Hong Kong speculators should read China Literature – Breakingviews
The fan-fiction startup leaped 86% on its first trading day in 2017, but is now underwater, alongside peers that enjoyed similarly oversubscribed floats. Low interest rates have the city’s retail investors back at playing IPOs, so another round of unsustainable pops is underway. → Read More
Realtor IPO overcharges for Chinese housing – Breakingviews
Tencent-backed KE’s U.S. debut could value it at $23 bln. Home sales in China are recovering on easier credit, and the company is growing fast. It’s an online play on a sector that has consistently proven sceptics wrong. The price, however, may cause buyers’ remorse. → Read More
Ant’s dual listing could double cross Wall St – Breakingviews
A chunk of the $150 bln fintech giant will be sold on Shanghai’s new tech board, where IPO fees are as generous as in New York. Foreign banks in Hong Kong could be left with a smaller share of the pie. If more issuers follow Ant’s march, Wall Street’s dues are in for a reckoning. → Read More
SoftBank lives the high life on yard sales – Breakingviews
The $129 bln group returned to profit last quarter, buoyed by a T-Mobile stock sale and other investment gains. Asset sales fuelled share buybacks that narrowed a wide group discount, and there are large Vision Fund exits to come. Boss Masayoshi Son can keep coasting for now. → Read More
Speedway adds financial inconvenience for 7-Eleven – Breakingviews
The retail chain’s Japanese owner, Seven & i, is gearing up to expand its U.S. footprint by buying Marathon’s gas station business for $21 bln. The synergies could help to eke out a sensible return. But investors have already discounted $2 bln, about half of their net value. → Read More
Ctrip invites funds to buy out China’s travel dip – Breakingviews
The $16 bln booking giant is mulling going private, Reuters reports. Ctrip has a clean balance sheet, no controlling shareholder, and premiums for delisting Chinese companies in New York have nearly halved. It’s a good target as domestic tourism revives. Funding is the trick. → Read More
Nomura leverages market turmoil to buy time – Breakingviews
Quarterly profit more than doubled to $1.4 bln, as trading volatility bolstered earnings and cost cuts bore fruit. But its retail unit is still struggling, rivals are attacking, and its turnaround plan is in its infancy. At least it can make hay while the sun doesn’t shine. → Read More
Ant IPO will clear Tencent’s low bar on governance – Breakingviews
A Hong Kong-Shanghai debut of Jack Ma’s $150 bln fintech giant could put dual class shares and Alibaba’s quirky partnership structure out of reach. Ant may even need to follow a stricter listing code than its local arch-rival. That would be a win for minority shareholders. → Read More
ByteDance will bust a softer groove without TikTok – Breakingviews
Political pressure from Washington could prompt a sale of the video app, curtailing the global ambitions of $140 bln Chinese parent ByteDance and erasing a fifth or more of its value. TikTok’s local equivalent, plus news, music and other apps, will help it retain viral appeal. → Read More
Toshiba mistakes activist opportunity for a threat – Breakingviews
The $15 bln conglomerate says that allowing pushy Effissimo to install directors would create conflicts of interest. Since overhauling the board, however, Toshiba’s performance has underwhelmed. Adding its biggest investor would be a confident move for the company and Japan Inc. → Read More
SoftBank will struggle to find equal love of Arm – Breakingviews
The Japanese conglomerate paid $32 bln for the chip designer in 2016. Businesses have been hived off, while sales growth and operating profit have underwhelmed. As boss Masayoshi Son contemplates floating a piece of Arm, under pressure, it could be hard to avoid a markdown. → Read More
Yum China can fill a pricier bucket in Hong Kong – Breakingviews
The $19 bln KFC operator is mulling a secondary float in the city. Its New York shares have been whipsawed by Sino-American tensions. An outsize base of U.S.-centric investors, a legacy of its spinoff, could be to blame. Heading East will fetch a more finger lickin’ valuation. → Read More
Sea’s $55 bln valuation can rise with the tide – Breakingviews
The Tencent-backed tech outfit’s market cap has risen eight-fold in the three years since its New York debut. A virus-related boom in games and e-commerce in Southeast Asia has helped justify a rapid rise, and expansion plans are on. Its payments unit may provide an extra buoy. → Read More
Ping An untangles one knot in its leadership – Breakingviews
Ma Mingzhe is giving up his CEO role and will remain chairman of the $187 bln insurer. The split is welcome but quirky governance endures with three other co-CEOs. Multiple bosses can be effective when responsibilities are clearly divided. Ping An mostly ticks that box. → Read More
Virgin Australia suitors strain to soar like TPG – Breakingviews
Buyout shop Bain and hedgie Cyrus are jostling to buy the carrier out of bankruptcy. The industry has foiled everyone from Warren Buffett to Gordon Gekko. David Bonderman’s TPG is one of the few with happy tales to tell. Replicating its success will require some fancy flying. → Read More
Crisis patience will reward buyout barons in Asia – Breakingviews
Private equity dealmaking in the region is up, defying a global slump, thanks to big purchases by Bain, KKR and others. Funds are hunting for bargains, but some of the worst deals were done during the last crisis. Sitting it out and delaying exits may help to avoid past mistakes. → Read More
China’s $9 bln classifieds buyout is an easy sale – Breakingviews
A group including Warburg Pincus will take U.S.-listed 58.com private. A 20% premium is decent for a business that has fallen out of favour to sexier tech stocks. Private equity boasts a strong record in classifieds, and can offer 58.com a clean exit from an unwelcoming market. → Read More
Tencent’s China car deal defies and disappoints – Breakingviews
A consortium led by the tech giant has agreed to buy New York-listed Bitauto for $1.1 bln, the same price proposed months ago. Globally, buyers have tried to cut lower prices on pre-pandemic deals. But the outlook for China’s auto market is rosier: Tencent is getting a bargain. → Read More
NetEase’s Hong Kong reception beckons to China Inc – Breakingviews
Local mom-and-pop investors ordered 360 times as many shares of the $58 bln video-game maker as were on offer. Easy money is distorting markets everywhere and NetEase has virus-resistance appeal. Exuberant retail buyers only make the case for other secondary tech listings easier. → Read More
Hong Kong tacks on Cathay to complicated itinerary – Breakingviews
The government is leading a $5 bln bailout of the struggling carrier, buying preferred shares. Owner Swire also vowed to keep control as part of an accompanying rights issue. That eases concerns about an Air China takeover, but it’s still a dicey deal amid the city’s unrest. → Read More