Corporate Governance

Charge into Chinese scooter’s VIE fine print

21 Aug 2020

Ninebot, the maker of two-wheelers which famously bought Segway, is set to be the first IPO on the mainland using an arcane variable interest entity structure. Beijing’s blessing does not clear up the legal fuzziness. Investors should be ready to scrutinise the specifics.

China Evergrande pawns the family silver

17 Aug 2020

The country’s largest developer is again taking a quirky approach to a trend. As rivals float property management arms, Evergrande sold 28% of its own to 14 investors at a $10.7 bln valuation. They have a put option if there’s no IPO, but boss Hui Ka Yan now has options too.

SoftBank lives the high life on yard sales

11 Aug 2020

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.

China bank failure fires quiet warning shot

10 Aug 2020

Beijing will let Baoshang Bank go under in the first such insolvency since 2001. The liquidation of the lender, used as a piggy bank by an insurer, will raise credit costs for small peers, pushing more of them to the brink. It’s an overdue cleansing, but a risky time to do it.

HDFC Bank’s new boss is good choice for hard times

4 Aug 2020

Veteran insider Sashidhar Jagdishan will succeed Aditya Puri, who has led the $73 bln Indian lender for 26 years. The group has excelled at controlling bad debt and taking market share. With Covid-19 pains still raging, Jagdishan is a solid pick to defend outsize returns.

James Murdoch headlines broader ESG challenges

2 Aug 2020

The one-time heir apparent to his father’s media empire quit the board of Wall Street Journal publisher News Corp. He cited clashes over content and strategy. If the ultimate insider can’t have much sway at a company, imagine how hard it is for outsiders such as BlackRock.

Ant IPO will clear Tencent’s low bar on governance

28 Jul 2020

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.

Hostile takeover tests Japanese love for free food

27 Jul 2020

Restaurant chain Ootoya rejected a bid from Colowide, saying it would spoil its home-style ethos. The company is hoping its retail investors will remain loyal to the dining coupons they get for holding shares. They would be better off taking the 46% premium, and dining elsewhere.

PetroChina’s $38 bln sale unlocks reform and value

24 Jul 2020

The state-owned giant is spinning off its oil and gas pipelines in an overdue shake-up that will allow more private competition. The assets will be divested at twice the parent’s book value. It’s a reminder that Beijing can attain its goals without hurting minority shareholders.

Unilever almost looks fair and lovely in India

22 Jul 2020

A focus on hygiene, health and nutrition helped lift earnings at the consumer giant’s local unit, a $73 bln maker of skin-lightening products and more. Newly acquired Horlicks is pulling its weight, too. It goes some way to justifying a valuation three times its global parent.

China’s firewater bulls need some liquid courage

22 Jul 2020

Moutai shares took a hit after state media lambasted the booze group for lubricating graft. They’re still up 40% this year, valuing it at more than twice Diageo and Pernod combined. But with Beijing fretting over stock bubbles and corruption, Moutai faces puritans on two fronts.

Crisis forces Australia and China closer

21 Jul 2020

Despite diplomatic tension, miners BHP and Rio are cashing in on Beijing's infrastructure stimulus. Supply disruptions in Brazil and weak global demand have left the two trading partners even more dependent on each other. Politics can’t change facts under the ground.

Toshiba mistakes activist opportunity for a threat

17 Jul 2020

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.

SoftBank will struggle to find equal love of Arm

14 Jul 2020

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.

Sea’s $55 bln valuation can rise with the tide

3 Jul 2020

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.

Pinduoduo is stuck in startup governance mode

2 Jul 2020

China's e-commerce darling has swapped its founder CEO for the other co-founder. The pair wields supervoting stock and controls the board. The $100 bln company doesn’t even have a CFO or other top executives. They need to upgrade management, but this is an odd way to start.

Ping An untangles one knot in its leadership

2 Jul 2020

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.

Tencent embraces its inner Goldman Sachs

29 Jun 2020

The Chinese tech titan’s investment portfolio has swollen to more than $65 bln with stakes in Warner Music, Afterpay and more. The deals, led by a Wall Street banker, are now vital to Tencent’s growth. Financial and strategic returns from buying make up for a lack of building.

Paroled Chinese tycoon greases GOME rally

26 Jun 2020

Shares of the $4.5 bln electronics retailer rallied as much as 25% after founder Huang Guangyu was released after a decade in jail. GOME has lost money for years, but investors are betting his return, plus recent deals with JD.com, herald a comeback. That could be a long shot.

The looming war over working from home

24 Jun 2020

After decades of false starts in telecommuting, the pandemic has ushered in a real revolution. It’s great for collaborative technology developers, less so for office landlords. The next big clash between labour and capital over the fruits of productivity is also set to kick off.