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Email UpdatesMelco Crown Entertainment Ltd. (NASDAQ: MPEL) is holding up better than many might have expected after the stellar rise seen in the casino stocks with Macau ties. Melco Crown turned a wider loss over a year ago, despite a 70% revenue rise. The loss was on a net basis rather than operating basis on higher depreciation and related expenses as well accounting for interest payments from the City of Dreams project. This has implications for the coming Las Vegas Sands Corp. (NYSE: LVS) IPO, and possibly even for MGM Mirage (NYSE: MGM) after Wynn Resorts Ltd. (NASDAQ: WYNN) managed its IPO for Macau.
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Posts related to ‘China’
Melco Crown Outlines IPO Risks at Las Vegas Sands, MGM Too (MPEL, LVS, MGM, WYNN)
24/7 Wall St. TV: China Pushes US To Raise Interest Rates Which Would Undermine Recovery
The Federal Reserve and most economists believe that keeping US interest rates at near zero has been critical to the recovery of the American economy. Even with rates at historically low levels, banks and financial companies have been stingy in their lending practices because of the fear of risk from providing capital to people and businesses whose financial positions have been crippled by the recession.
Fed officials have hinted that the agency may not move rates up at all until 2011 because unemployment and tight credit will only allow a very fragile advance in GDP between now and then.
China would like the US to raise interest rates based on its theory that the low cost of capital is causing massive speculation in equity and commodities markets. China claims that Fed policy will cause bubbles that will burst and cause both another sharp downturn in the global economy and damage to the credit markets. Read More
Another Sign That China Rules The World: Mercedes Sales
As another sign of the truth that most of the world’s rich people have moved to China or were born there, sales of the $150,000 Mercedes S class are now higher in the People’s Republic than in the US or Germany.
According to USA Today, Mercedes CEO Dieter Zetsche says that China is its No.3 market just behind the US and Germany for total sales of all the company’s car and light truck brands regardless of size or cost.
Douglas A. McIntyre
China’s Artificial Recovery
China’s industrial production was up more than 16% in October. Retail sales were up by about the same percentage, oddly enough. No one was shocked that exports fell a sharp 13.8%.
The Chinese recovery is no recovery at all. It is the product of a $585 billion stimulus package for a nation that has a GDP of $4.4 trillion. The US stimulus program, by way of contrast, is $787 billion against a $14. 3 trillion GDP. The totalitarian communist central government can push its investment in the economy quickly. The American democratic system is burdened more substantially with red tape. Read More
24/7 Wall St. TV: GM Doubles China Sales In October
GM sold 166,911 cars and light trucks in China last month. The No.1 US auto company sold 177,603 vehicles in its domestic market in the same period. The FT reports that “A total of 946,400 passenger cars were sold in October, up sharply from 538,500 units sold a year earlier.”
AES Debate: China’s Infrastructure Grab (AES)
China is at it again buying key infrastructure access. AES Corp. (NYSE: AES) disclosed on Friday, along with earnings, that the company was raising significant cash. This is a capital raise which also may ‘raise some eyebrows’ because the company is selling a 15% stake to China’s sovereign wealth fund, China Investment Corporation. The stake sale will bring in $1.58 billion for expansion of global projects. AES also announced a Letter of Intent to sell a 35% minority stake in its global wind generation business valued at $571 million on top of the stake sale.
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China Goes To Texas: The Great Wind Farm Dispute
Chinese interests and private capital will build a huge wind farm in West Texas. China-based wind turbine firm A-Power Energy Generation Systems (NASDAQ:APWR) will lead the project. It will cost as much sa $1.5 billion and could supply energy to nearly 180,000.
Senator Charles Schumer of New York State does not like the Texas project, although he might like it more if the turbines were destined for up-state New York. Schumer believes that $450 million in federal stimulus funds could go into the project from the government’s stimulus package. That would help to create as many as 3,000 jobs at turbine plants in China according Reuters. Read More
Disney (DIS) Goes To China, And Locals Get Angry
China has approved a plan for Disney (NYSE:DIS) to build a theme part in Shanghai. The American entertainment company has been trying to get a go ahead to build the $4 billion project for several years. The Chinese government gave no reason for the timing of its announcement. Shortly after the news became public, Chinese residents began to attack plans to build the park. The Wall Street Journal reports that, based on online polls and comments “Walt Disney won’t make Shanghai the happiest place in the world.”
Disney joins a long list of companies from Dell (NASDAQ:DELL) to Wal-Mart (NYSE:WMT) to McDonald’s (NYSE:MCD) and Ford (NYSE:F) which are willing to bet that the Chinese consumer will eventually become a critical part of the expansion of the economy in the world’s most populous country. China’s GDP has been driven by exports. The US, where most consumer-focused firms have made their profits over the years, has counted on those consumers to be the engine of its economic expansion. Read More
Apple (AAPL) iPhone Sales In China Only 5,000 During First Weekend
China Unicom (NYSE:CHU) released its earnings yesterday and as part of its comments to investors it said it had only sold 5,000 iPhones since it started offering the handset.
China Unicom posted moderately good earnings. Its first three quarter’s financial statement said the big cellular company had revenue of 114,928 million RMB and 9,338 million RMB in net income.
Unicom Chairman Chang Xiaobing said more than 1 million 3G subscribers had been signed up and that the launch of Apple’s iPhone would boost revenue in the fourth quarter. The firm did not give any more specific forecasts. Read More
Chinese Hotel IPO: 7 Days Group Holdings Limited (SVN, HMIN)
7 Days Group Holdings Limited is national economy hotel chain based in China, and it has just filed to come public via an Inital Public Offering. No terms were disclosed other than it will sell up to $100 million in common stock via ADRs. It plans to list its stock under the “SVN” ticker on the New York Stock Exchange with J.P. Morgan and Citigroup as the lead underwriters.
To many investors, this will sound like the story of Home Inns & Hotels Management Inc. (NASDAQ: HMIN).
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Recently Completed SPAC Deals Tripped up by De-Listing Threats (TMI, WLBC, CNWHF)
SPACupdate.com provides daily reports and e-mails covering blank checks, their targets and relevant trading data. The team has provided 24/7 Wall Street with many examples of solid developments in special purpose acquisition companies, but today we have examples of how not all deals will be positive in the sector. Two blank checks that recently completed deals have been threatened with de-listing by the AMEX. SPACs’ buoyancy after deal completions—and even value gains after favorable merger votes are tallied—have created arbitrage opportunities for unit holders who can split shares from warrants and sell each off at a markup in excess of 25% of a unit’s redemption value.
Low Demand For Apple (AAPL) iPhone In China
In the United States, people will line up for blocks and camp out in the cold to be the first customers into Apple’s (NASDAQ:AAPL) retail stores when the consumer electronics wonder introduces a new product. The Chinese response to the introduction of the iPhone was muted.
The Wall Street Journal reports that iPhone sales in China may be slow, at least compared to those in the US. Among the reasons are a retail price that can be over $1,000 and the fact that two million iPhones has already been sold through unauthorized dealers. Read More
The China Stimulus Follies
China managed to pull another rabbit out of its growth hat. The world’s most populous nation said its GDP grew 8.9% in the third quarter. Some outside analysts are skeptical about how China keeps its records of such things, but its economy is clearly growing faster than that of any other large economy in the world.
Today, China announced its purchasing managers index rose to 55.2 in October up a point from September. The index has risen eight straight months and that has caused economists who follow China to say that the nation’s stimulus package of $585 billion is working perfectly. Read More
Expedia Expands in China After Earnings (EXPE)
Expedia Inc. (NYSE: EXPE) is looking solid on all fronts. Online travel is winning despite tight purses on direct travel as buyers look for better deals. Last night the online travel company beat earnings as its profits rose by 23%. Earnings were $117 million or $0.40 EPS net, but non-GAAP earnings were $0.48 EPS. Also noted was a 2% rise in revenue to $852.4 million. Thomson Reuters had estimates pegged at $0.43 EPS and $828.9 million in revenues. Then this morning came an acquisition in China.
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No Stock Market Bubble In China
In a clear display of how much money is chasing investment in the equities markets in China, the new small cap stock market, ChiNext, had a spectacular debut. The average value of the 28 companies in the index doubled the first day. Trading had to be halted several times.
According to Reuters, as many as 1,000 firms will try to list on ChiNext in 2010. If the Chinese economy falters, the ChiNext index could drop 50% in a day.
Douglas A. McIntyre
Ideation Cleared for China Advertising Activities (IDI, FMCN, VISN, AMCN)
Ideation Acquisition Corp. (AMEX: IDI) has been freed up to become SearchMedia, as expected. The special purpose acquisition company, or SPAC, issued a release noting that its shareholders approved all of the company’s proposals related to the acquisition of SearchMedia International Ltd. As we have noted, investors and traders were using Ideation as a cheap backdoor play into the aspect of advertising in China, very similar to Focus Media Holding Ltd. (NASDAQ: FMCN), the larger pure-play Chinese advertising stock, and to the smaller players there called VisionChina Media Inc. (NASDAQ: VISN) and AirMedia Group Inc. (NASDAQ: AMCN).
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Baidu (BIDU): China’s Search Engine Has Clay Feet
Baidu (NASDAQ:BIDU), China’s No.1 search engine based on market share, had the same problem Google (NASDAQ:GOOG) does. Its revenue is not growing as fast as it was last year. The critical difference is that Internet use and the size of the Chinese population should be driving rapid improvements in Baidu’s sales, and they are not.
Baidu revenue in the third quarter of 2009 was $187.3 million, a 39.1% increase from the corresponding period in 2008. Net income in the third quarter of 2009 was $72.2 million, a 41.7% increase from the same period a year ago.
Going forward, the picture as not as good. Read More
Applied Materials Still Expanding Solar (AMAT, FSLR)
Applied Materials, Inc. (NASDAQ: AMAT) appears to not be slowing down on its solar ambitions, or at least not as much as we might have all guessed about six months ago when new expansions were being canned and when oil was at far lower prices. This morning came an Applied Materials announcement that the company had opened the world’s largest non-governmental advanced solar research and demonstration facility in Xi’an, China. We have not compared this to other large solar players, but the size of the labs and office buildings was listed as covering more than 400,000 square feet. The site also contains an entire Applied SunFab™ thin film manufacturing line and a complete crystalline silicon pilot process, which are configured to closely simulate customer fabrication environments.
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Korea Joins China in Foreign Oil Acquisitions in Americas
Harvest Energy Trust (NYSE: HTE) is a Canadian energy trust that has gone unnoticed by many Americans. Yet today it is one of the top percentage gainers because the trust is being acquired by Korea National Oil Corp. in South Korea. It seems that South Korea is joining in following the waves of Chinese acquisitions of oil and energy sources located throughout the world. We have noted China’s insatiable appetite of securing these raw energy assets, and common sense would dictate that only more deals will come down the pipe.
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The China Miracle Meets Wal-Mart (NYSE:WMT) Price Cuts
China’s GDP rose 8.9% amid talk that the increase was caused by the nation’s $585 billion stimulus package and not a significant improvement in its huge manufacturing and export engine. The news means that China’s stimulus has worked better, or at least much faster, than the American $787 billion stimulus package. That would make sense. The China program is a larger piece of the nation’s GDP than the one in the US.
China must worry about whether its growth can continue at the rapid pace as easy money and government support for infrastructure building and consumer spending go away. Read More
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