(Originally published Jan. 3, 2012, in CBK’s weekly email newsletter, “Week in Review.”)
OF NOTE…
Youku.com & Ku6 Media Ink Pivotal Distribution Deals,
with 20th Century Fox and YouTube, Respectively
Everyday in the news commentators are debating what is going to work in China and what is not going to work in China. But one issue surely all would agree on is that Internet-based streaming video will be a growth industry. In such, those companies offering such services are of great import right now and pivotal to watch, no matter their stock prices. The partnerships forged now, in terms of distribution of copyrighted material, may prove historically pivotal to this nascent industry.
Earlier this month Youku.com (NYSE: YOKU) secured a deal with Twentieth Century Fox Home Entertainment to license 250 of its titles of new release and library films. The titles will appear on Youku Premium. The on-demand platform, which comes at an extra cost for subscribers, processed more than one million orders since launching in beta a year ago, according to a company press release. The titles include blockbusters like Planet of the Apes, Ice Age, X-Men and Alien and are already being offered in time for the Chinese New Year holiday.
This week Ku6 Media Co. Ltd. (Nasdaq: KUTV) announced it had entered into an agreement with YouTube which will allow Ku6′s international users to view original videos from China through a new channel operated by YouTube.
In Oct. 2011, Tudou.com (Nasdaq: TUDO) sealed a deal with the Walt Disney Company for the online distribution rights for mainland China to the Pixar’s animated movie “Cars 2″.
Of course, “first to market” companies sometimes fall prey to factors outside their control and are left behind. For instance, in Youku.com’s case bandwidth could be a major issue down the road, as it is in the U.S. Yahoo! got out-yahooed by Google. Kodak, an American institution, filed for bankruptcy today, but indeed, had a long run.
Still, were we making a timeline of pivotal deals made by emerging Chinese companies, this would be a good one to note.
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SEC UPDATE
Judgment in China Voice Fax Blast Campaign
On Dec. 21, 2011, the SEC obtained a judgment against Robert Wilson and two of his companies, Strategic Capital and Green Horseshoe Holdings, Inc., in regard to the fax blast campaign the companies conducted regarding false and misleading statements. Wilson did not disclose the amount and source of the compensation he or the companies received. According to the SEC News Digest, Wilson and Strategic Capital consented to entry of a judgment enjoining them from violations of Section 17(b) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, without admitting or denying any of the allegations. The judgment also provided that upon motion of the Commission, the Court may order disgorgement of ill-gotten gains and prejudgment interest thereon against Wilson, Strategic Capital, and Green Horseshoe Holdings, Inc., civil penalties in amounts the Court deems appropriate against Wilson and Strategic Capital, and a penny stock bar against Wilson.
Fisher Promoted to Deputy Director of International Affairs
On Jan. 12, 2012, the SEC announced the appointment of Dr. Robert M. Fisher as Deputy Director in the SEC’s Office of International Affairs. Fisher joined the SEC staff in 2002 as a financial economist in the Office of Economic Analysis. He later became an Assistant Director in the Office of International Affairs, where he has been responsible for the SEC’s international technical assistance program for emerging and recently-emerged markets. He will now oversee policy issues for the office. Fisher earned his Ph. D. in economics from Duke University.
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MARKET MOVES
Shanda Interactive Shareholders to Vote on Going Private
Shanghai-based Shanda Interactive Entertainment Ltd. (Nasdaq: SNDA) has called an extraordinary general meeting of shareholders to be held on Feb. 14, 2012. Shareholders will vote on the proposal to adopt the previously announced agreement and plan of a merger dated Nov. 22, 2011, which would take the company private and off the Nasdaq. The meeting will be held at 10:00 a.m. (Hong Kong time), 8th Floor, Room 802-3, The Hong Kong Club Building, 3A Chater Road, Hong Kong.
WSP to Change Ratio of ADS Shares
Wuxi-based company WSP Holdings Ltd. (NYSE: WH) announced that the company is working with its ADS depositary, JP Morgan Chase Bank, N.A., to change the ratio of its American Depositary Shares (“ADSs”) to ordinary shares from 1:2 to 1:10. The plan was approved by the board of directors of the company. The company anticipates the Ratio Change to bring its average ADS price above $1.00 per share in compliance with the New York Stock Exchange continued listing standard relating to minimum average share price. The company will update the investors immediately when the effective date of the Ratio Change is determined in due course. Founded in 1999, WSP Holdings develops and manufactures seamless casing, tubing and drill pipes used for on-shore and off-shore oil and gas exploration, drilling and extraction, and other pipes and connectors.
Puda Coal Director Resigns; SEC Likely to Institute Administrative Proceedings
Taiyuan-based Puda Coal Inc. (OTN: PUDA) announced the resignation of Jianfei Ni from its board. Additionally, on Dec. 28, 2011, Puda Coal received a notice from the SEC that it intends to recommend administrative proceedings against the company’s securities due to the company’s failure to comply with certain rules under the SEC Act of 1934, including the failure to file certain quarterly reports and non-compliance of the company’s previously filed annual reports due to the auditors’ resignation and non-reliance advice.
VLOV’s Ticker Reverts to VLOV.OB
The ticker symbol of Xiamen-based VLOV Inc. (OTC BB: VLOV) reverted back to “VLOV.OB” on Jan. 11, 2012. For 20 days prior it had a “D” temporarily appended to it in connection with the reverse stock split on Dec. 9, 2011. VLOV designs casual, “fashion forward,” apparel for men.
JinkoSolar Incorporates French Subsidiary
Shanghai-based JinkoSolar Holding Co., Ltd. (NYSE: JKS) announced the incorporation of its French subsidiary JinkoSolar S.A.S. and the opening of its French office in Montpellier, in the province of Languedoc-Roussillon. The new location will support JinkoSolar’s local partners and complement the growth of the region’s solar industry. JinkoSolar Holding Co., Ltd is a solar power product manufacturer.
Hollysys Signs $16.9 Million Deal
Beijing-based Hollysys Automation Technologies, Ltd. (Nasdaq: HOLI) announced that its wholly owned subsidiary Concord Corp. Pte. Ltd signed a contract with Sendan International Co., Ltd. to provide electrical, instrumentation and control installation works for Rabigh Power Plant II in Rabigh, Saudi Arabia, valued at approximately U.S. $16.9 million. Hollysys Automation Technologies is a provider of automation and control technologies and applications in China. Concord engages in providing end-to-end complete electrification related services in rail, power, semiconductor, pharmaceutical, petrochemical, and other industrial sectors.
CGA Subsidiary Makes ForbesChina.com List of Top 100 Companies
Xi’an-based China Green Agriculture, Inc. (NYSE: CGA) announced that Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. (“Jinong”), a wholly owned subsidiary of the company, was ranked 17th by Forbes China in its 2012 Top 100 Chinese Public Companies with the Greatest Potential, published on January 4, 2012 and available at forbeschina.com. These rankings were based on several indices, including growth, return on equity, profitability and revenue. According to the company, Forbes also conducted necessary field visits during its survey. This is the second consecutive year the company is recognized by Forbes. In 2011, Jinong was ranked 17th in Forbes’ ranking of the Best Small and Medium Enterprises in China. China Green Agriculture, Inc. mainly produces and distributes humic acid-based compound fertilizers, other varieties of compound fertilizers and agricultural products.
PEOPLE
ReneSola Makes New Management Appointments
Jiashan-based company ReneSola Ltd. (NYSE: SOL) announced that it has appointed Mr. Jijun Shi as president of the European region and Mr. Stephen Huang, the company’s vice president of wafer sales, as president of the Asia-Pacific region. In addition, Mr. Zhidong Zheng, the company’s vice president of wafer technology, has been promoted to senior vice president. Dr. Paul Li, the company’s president of JC Solar and senior vice president, has retired but will remain with the company in a consulting role until June 30, 2012.
Management Changes at Hollysys
Beijing-based Hollysys Automation Technologies, Ltd. (Nasdaq: HOLI) announced the departure of Peter Li, CFO, who is leaving the company due to personal reasons at the expiration of his three-year contract, effective Feb. 1, 2012. Ms. Herriet Qu, the company’s Financial Controller, will replace Li as CFO. Ms. Qu has been with company for more than four years. She has an M.B.A. degree from Oklahoma City University. Mr. Jianfeng He, CEO of Beijing Hollysys Group Corp, is promoted to Chief Operating Officer of Hollysys in charge of the company’s daily operations and supply chain management. Mr. He has been with the company for more than 14 years. He has a Ph.d in Automation from South China University of Technology. Mr. Baiqing Shao, Vice President of Beijing Hollysys Group Corp., is promoted to Senior Vice President Business Development in charge of merger and acquisition and new business exploration. Mr. Shao has been with the company for more than eighteen years as one of the founding group of engineers, with a master’s degree in computer science from the 6th Research Institute of China Electronics Corp. He has an M.B.A. from Beijing University. Ms. Jennifer Zhang, IR Manager, has been promoted to IR Director in charge of investor relations management and corporate communications. Ms. Zhang has been with the company for more than three years. She has a B.A. in English Literature from Nanjing Agricultural University. Hollysys Automation Technologies is a provider of automation and control technologies and applications.
ChinaEdu Announces Management Changes
Beijing-based ChinaEdu Corp. (Nasdaq: CEDU) announced changes to the management structure of the company. Mr. Shawn Ding, president and chief operating officer will resign from that role to become chief executive officer, effective immediately. Former chief executive officer and chairman of the board of directors, Ms. Julia Huang, will maintain her role as the chairman of the board of directors and will continue to work full time for the company as executive chairman. ChinaEdu Corp. is an educational services provider in China. Established in 1999, the company’s primary business is to provide services to the online degree programs of Chinese universities.
Xueda President/Director Resigns
Beijing-based Xueda Education Group (NYSE: XUE) has announced the resignation of its president and director, Mr. Jun Wang. Mr. Xin Jin, co-founder and chief executive officer of Xueda Educational Group, will assume Mr. Wang’s managerial duties effective Feb. 1, 2012. The company also announced the resignation of Mr. Hai Yang as Xueda’s chief information officer, effective April 1, 2012. With the recent completion of the rollout of its enterprise resource planning system, the company does not see the need to replace the position of chief information officer at this time. The company provides tutoring services for primary and secondary school students in China.
Jingqwei CFO Resigns
Shenzhen-based Jingwei International Ltd. (Nasdaq: JNGW) announced the resignation of Mr. Yong Xu as Chief Financial Officer. The company’s controller, Ms. Li Suwen, CPA, will serve as CFO until a replacement can be found. Ms. Cao Wei, Director of Investor Relations and Corporate Secretary, will continue to manage the company’s investor relations activities. Mr. Yong Xu has agreed to serve as an advisor to the company during this transition period. Jingwei provides data-mining and interactive marketing and software services.
China Sunergy Appoints CFO
Nanjing-based China Sunergy Co., Ltd. (Nasdaq: CSUN) has appointed Mr. Yongfei Chen as its Chief Financial Officer, effective immediately, with a contract for an initial three-year term. Chen has been serving as the company’s acting CFO since Nov. 2010. Prior to that Chen worked in China Electric Equipment Group Co., Ltd., or CEEG, China Sunergy’s affiliated company, where his last role was as general manager of the finance department. Prior to that, Chen was an accountant at Yangzhong Sub-branch of China Construction Bank from 1997 to 2002. Mr. Chen graduated from Yanshan University in Hebei, China with a bachelor’s degree in industrial management engineering in 1997. He is currently a PRC Certified Public Accountant. China Sunergy manufactures solar cells and modules.
