China Herald: Citic

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Monday, April 23, 2018

State firms move in where private investments fail abroad - Shaun Rein

Shaun Rein

State moloch CITIC moved in to pick up 49% of Czech assets from CEFC Europe, owned by tycoon Ye Jianming. It is part of a trend, says business analyst Shaun Rein, author of The War for China's Wallet: Profiting from the New World Order to the South China Morning Post, as state firms are easier to control by China's central government and expand its policies abroad.

The South China Morning Post:

Since Ye’s problem in mid-February, the Rosneft deal has been stuck in limbo.

“State firms are the most ideal ones to take over the overseas projects because they are less sensitive to profits and more reliable politically,” said Shaun Rein, managing director of China Market Research, a strategic market intelligence firm.

“They will also take over assets in countries that China is trying to wield more political power. As for the Czech Republic, it along with Hungary, are critical to China’s ambitions in Europe. It is easier to buy influence there,” he said.

Up to 496 million shares of Shenzhen-listed CEFC Anhui International were frozen by four Chinese courts in late March. Shanghai-based CEFC, established by Ye in 2002 when he was in his mid-20s, had spent at least US$1.7 billion since 2015 buying energy-related businesses in Romania, the United Arab Emirates, Russia and Chad. The company also invested another US$1.2 billion buying financial services assets in the US and the Czech Republic.

Besides financial services, CEFC has stakes in Czech brewery group Pivovary Lobkowicz, Prague soccer club Slavia Praha, the national airline, hotels and property.

More in the South China Morning Post.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts who can help you in dealing with Chinese investors abroad at the China Speakers Bureau? Do check out this list.

Tuesday, January 10, 2017

McDonald´s also sells its China operation - Ben Cavender

Ben Cavender

In line with expectations, McDonald´s has sold a controlling stake of its China and Hong Kong operation to private investors, after competitor Yum did the same last year. With the new financial resources, the China operation can improve fast, says Shanghai-based retail analyst Ben Cavender to Bloomberg.

Bloomberg:

Oak Brook, Illinois-based McDonald’s and rival Yum China Holdings Inc., which owns the KFC and Pizza Hut brands in the mainland, are combating rising domestic competition as they fight to retain middle-class Chinese consumers who increasingly demand high-quality and healthier dining options. The fast-food giant is also looking at further deals in markets such as South Korea, Japan and Southeast Asia as it streamlines its sprawling global operations.

“Citic and Carlyle’s resources will allow McDonald’s to expand rapidly and refurbish old restaurants, which is expensive to do,” said Ben Cavender, a Shanghai-based analyst at China Market Research Group. “Given that McDonald’s lags behind KFC in terms of store count in China, we can expect them to expand aggressively and invest heavily.”

Yum China Holdings and Starbucks Corp. plan to add about double the number of stores -- as many as 3,000 in China -- over the same period.

Under the deal, Chinese state-backed conglomerate Citic and Citic Capital Partners will jointly take a 52 percent stake, while Carlyle will hold 28 percent.

While Citic and Carlyle are paying a “substantial price,” for 20-year franchise rights, the food and beverage chains are “cash machines,” Cavender said. In contrast, Yum China licensed the KFC and Pizza Hut brands from Yum! Brands Inc. for 50 years, with automatic renewals that could make it possibly indefinite.

More in Bloomberg.

Ben Cavender is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more strategy analysts at the China Speakers Bureau? Do check out this list here.

Baidu and KFC's new smart restaurant suggests what to order based on your face

Friday, September 18, 2015

Why Citic gets the blame for stock market crisis – Paul Gillis

Paul Gillis

China´s largest brokerage Citic is under investigation for causing the recent downfall in China´s stock markets. But they did just want the government initially wanted by cheering up the markets, says finance professor Paul Gillis to Bloomberg. The same government now needs a scapegoat.
Bloomberg:

Citic Securities is one of the brokerages whose margin lending fueled a spectacular stock market rally earlier this year that the state-controlled media cheered on. By singling out Citic Securities, said Paul Gillis, a finance professor at Peking University, the government has found a way to deflect public anger over the stock market collapse.

“In the past there has been little evidence of enforcement against market malfeasance and this sudden clampdown is just a knee-jerk reaction to a political crisis,” says Gillis.

“Regulators are looking for someone to blame for the meltdown though insider trading is not what caused the market bubble.”

More at Bloomberg.

Paul Gillis is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´ request form.

Are you looking for more financial experts at the China Speakers Bureau? Do check out this list.