Date
22 November 2017
General Economy Images As Citic Sees PBOC Staying Out of Market to Curb Debt

The Big Picture: E-COMMERCE LOGISTICS

Internet giant Tencent Holdings Ltd. (00700.HK) plans to step up its e-commerce game by taking a HK$1.5 billion (US$193.44 million) stake in China South City Holdings (01668.HK), a developer of logistics and retail centers.

Tencent will buy 680.3 million new shares of China South City to secure about 9.9 percent of the latter’s enlarged issued share capital, the China Securities Journal reported Thursday. China South City agreed to grant Tencent the option to buy another 244.8 million new shares in the developer, giving Tencent up to 13 percent of the company, the report said, citing a statement. The pair will collaborate on logistics, online payments as well as online-to-offline business, it said.

“Nowadays mobile phone is like a part of human body; it’s an electronic-organ,” Tencent chairman Ma Huateng {馬化騰} said in a forum in Hong Kong on Thursday. Internet companies must strengthen integration with traditional service providers as people expect to enjoy media, communication, entertainment and financial services through their handsets, he said. 

On the same day, Tom Group Ltd. (02383.HK), an internet firm controlled by tycoon Li Ka-shing, announced the establishment of a joint venture with China Post Group to develop e-commerce business in China. Tom Group will contribute 155 million yuan by taking up a convertible loan issued by the joint venture, according to a regulatory filing. The joint venture will then become the exclusive platform for China Post Group to build its e-commerce business. 

The joint venture will also sell 13.25 percent stake to some independent investors through placement, the filing showed. After the transactions, Tom Group will own a 42.51 percent stake in the joint venture while China Post Group will hold 44.24 percent. 

The latest moves from Tencent and Tom.com reflect their aim to take a bigger share of China’s e-commerce market, observers say. More similar deals are expected this year as internet giants map out new plans, encouraged by the 30 billion yuan sales achieved by Alibaba Group during the Singles Day online shopping festival on Nov. 11. 

Alibaba chairman Jack Ma {馬雲}, meanwhile, will try to protect his business and not let the challengers have an easy ride. The e-commerce giant will definitely boost investments in Cainiao, its logistics unit, while seeking to acquire more logistics firms. 

Shanghai bourse to keep close eye on new listings

The Shanghai stock exchange will conduct full-session monitoring of trading in initial public offering (IPO) shares for the first 10 trading days after they are listed, the China Securities Journal reported Friday, citing an unnamed manager in the exchange. That means Neway Valve (Suzhou) Co. Ltd.(603699.CN), the first company to list on the exchange since applications reopened, will be scrutinized during its pre-open, normal, and after-hours sessions from Friday, its first trading day. The exchange will post updates on the monitoring along with risk alerts on IPO trading through its weibo account. 

Nu Skin claims under scanner

China’s State Administration for Industry and Commerce (SAIC) said Thursday that it has ordered local authorities to investigate media reports that allege Nu Skin distributes false information and conducts illegal business in the country, Xinhua news agency reported. A spokesman for SAIC was quoted as saying that the administration will take legal measures if investigation results showed the media reports were true. The People’s Daily on Wednesday accused the New York-listed company of lying about its business in China. It said the firm had been exaggerating its influence and creditworthiness in company brochures by passing advertisement for news reports, and organizing “brainwashing” gatherings. The newspaper also said the firm is suspected of illegal multi-level marketing activities in China. 

– Contact HKEJ at [email protected]

JP/AC/RC

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