Kenfair loses a billion

Hong Kong-based Kenfair organises the two-part Mega Show every October at the Hong Kong Convention and Exhibition Centre. This consumer products sourcing fair has been running since 1992 and is a solid piece of exhibition business. That is until the owners of Kenfair’s listed company decided to get into the commodities business in China. The parent company acquired the rights to a coal mine in Heilongjiang in 2008 and renamed the listed company, Sino Resources.

Since then coal deal has gone wildly off-track and both sides are suing each other. The coal mine and its business have been removed from Sino Resources’ books and the end result is a HK$990 million loss for the six months ended 30th September compared to an HK$83 million profit in the same period in 2008. The stock has remained suspended from trade on the Hong Kong Exchange since last July.

If Kenfair's owners would just stay focused on exhibitions, they might realise that they have a solid business there.

Alibaba’s 2009 revenues jump 29%, net income down 12%

Alibaba.com just released its 2009 financial results this afternoon. Revenues were an impressive US$567.5 million, a 29% increase over last year’s US$440 million. Net income fell significantly dropping from US$169 million to US$148 million - down more than 12%. On the upside, fourth quarter net income was up nearly 49% at US$41.2 million. The Hangzhou crew are also sitting on a mountain of cash – US$1.1 billion. That should see them through any recession.

Ali also added 9.6 million registered users in 2009 – a year-on-year increase of 25%. The company now has 47.7 million registered users. 11.5 million on its International Marketplace and 36.2 million on its China Marketplace. The International Marketplace, which generates most of the revenues, saw registered users grow by 46% last year.

Global Sources’ share price jumped 7.5% last night on news of declining revenues. Stay turned to see what Alibaba does tomorrow.

Global Sources' revenues slip 15% in 2009

NASDAQ-listed Global Sources just released full-year results. The company posted a more than 15% drop in revenues in 2009. Total revenues dropped from US$206.9 million in 2008 to US$174.5 million in 2009. GAAP net income also took a hit, falling from US$26.4 million to US$16.1 million – a plummet of more than 39%.

Online revenues dropped from US$94.5 million to US$85.4 million, a decrease of 9.6%. Print revenues continued their steady decline, falling from US$47.6 million in 2008 to US$30 million last year. That is a 37% decrease. Exhibitions held relatively firm (US$58.2 million vs. US$55.1 million).

On the upside, CFO David Gillian was “cautiously optimistic,” but expected the first half of 2010 to continue to be challenging. The company remains in a very strong cash position with US$158.3 million on hand and no debt. That results in a current PE of just over 8 if the cash is stripped out of the current market cap of US$292 million.

UBM, social media and Japan

Interesting to see this use of YouTube by UBM Asia Senior Vice President Chris Eve. It captures nicely the buzz of a new e-commerce event which opened today in Tokyo.



It seems increasingly clear that companies who can successfully combine their web offerings, social networks and face-to-face events can have a significant advantage over competitors who remain unconvinced about these things - a sizeable number based on straw polls at recent industry events we have attended.

Update: They're working on this during the course of the day and have an updated version available already at: http://www.youtube.com/watch?v=O8c1jJuDS1M. Very impressive guys!

China’s attitude shift

James McGregor, a journalist, media entrepreneur, investor and long-time resident of China, gave a sobering talk today at an Amcham lunch in Hong Kong. As an American living in China for more than 20 years, McGregor says that he loves both countries, but he thinks there has been an unsettling attitude shift in China recently. He believes that the arrogance that was once a less-than-appealing feature of U.S. businesses abroad has been adopted by the Chinese at an alarming rate.

Some of McGregor’s other observations included:

- A belief in “exceptionalism,” which was once an American position, is now common amongst Chinese business leaders and officials.

- More than ever before, Chinese authorities are moving to implement regulations to rig markets in favour of Chinese businesses. These regulations are designed to replace foreign businesses.

- “Indigenous Innovation” is a policy gaining traction at all levels of government in China. McGregor notes however, encouraging innovation which is protected from global competition by a net of regulations is not a plan that is likely to succeed.

- State-owned enterprises are enjoying a resurgence as Beijing has rediscovered its interest in maintaining an economic constituency that it can count on and control. Privately-owned Chinese businesses are beginning to feel they are at a disadvantage in their own country.

- Google was not about censorship. It was about corporate espionage.

- China is headed towards building the world’s largest intranet and if Chinese businesses want to compete globally, they can only do succeed if they have access to the same information that the rest of the world has.

Mark

MICE leaders gather in Subic Bay

This is Mark Cochrane here jumping into Paul's blog space...

I just returned from the annual Philippine MICE Conference. This year more than 300 delegates attended the event in Subic Bay. The conference featured leaders from all corners of Asia's MICE industry. MICE China's managing director, David Zhong, charted the growth of China's outbound meetings market which started from close zero just ten years ago. David noted that favourite destinations of mainland groups such as Singapore and Thailand have taken notice as the average group size has risen now to 300 persons with an average per head budget of RMB10,000.

Catherine McNabb, formerly of the Singapore Tourism Board, explained Singapore's knack for winning mega events. (It is a laser-focus on events that match its strengths and the alignment of all government departments like only Singapore can manage. "Nothing is done in isolation in Singapore.")

Social media was top of mind and featured prominently in the plenary sessions. Morris Sim, CEO of Circos, a brand analytics consultancy, urged event organisers to use Twitter as an "in conference tool" to open two-way communications and to use it after the event to steer participants back to the event website.

Shanghai Expo and social media

There's a very interesting piece on Marketing's daily e-newsletter from Hong Kong.Titled, Shanghai Expo spurs social media buzz, it's a piece by writer Adaline Lau's on Ogilvy's Thomas Crampton's thoughts about social media and the Shanghai World Expo (follow him on Twitter @thomascrampton). It's fascinating to see how the organisers of what will undoubtedly be the world's biggest event of this type in our life times have latched onto virtual experience and social networking as ways to extend its reach. They're now expecting up to 100 million people to attend in person but I noticed just this week on Monday when CCPIT Vice Chairman Wang Jinzhen spoke to the American Chamber of Commerce in Hong Kong, that he finished his presentation by talking about the virtual version of the Expo. It will, he said, be very necessary as it could take up to a month for a physical visitor to actually get around all 3.8 square km of exhibit space.

I'll be heading to the Expo in September but, in the meantime, will be moderating a panel discussion on social media and the events industry at the UFI CEO Forum this week in Geneva (springlike and sunny yesterday as you can see from the picture from my room at the Intercontinental). Follow us on Twitter with the #uficeoforum hashtag or by keeping an eye on my tweets at @pwoodwardhk or on the @ufilive page. See you online!

Ten Alps buys 10 Asian titles from Reed

Ten Alps buys 10 Asian titles from Reed | Media | guardian.co.uk
The Guardian story linked here includes some intriguing elements:

• Bob Geldof, the early 80s punk/pop star who hated Mondays is now buying into Asia B2B media;
• As UBM did in 2000, Reed is now selling out of its Asian travel publishing business, now much weaker than long-time rival TTG Asia which has rather thrived under the benign neglect of ownership by the china.com group;
• Reed is left with not much of anything in Singapore except expensive corporate staff. How much longer will they all be there we wonder?

What impact Walmart direct sourcing deal on B2B media?

The FT today leads its Companies and Markets section in Asia with a story headlined "Walmart reveals supply deal". If you're struggling to get over-excited about how Walmart buys cheap t-shirts and skirts in Asia, sit up and listen.

Products and services which support consumer merchandise sourcing dominate B2B media in Asia in terms of dollars earned. Companies such as Alibaba.com, Global Sources and the Hong Kong Trade Development Council (OK, not really a company, but bear with me) make most of their money out of exhibitions, web sites, directories, magazines and other services which support this huge activity.

So, when Walmart, the colossus of global buying, announces a tie-up with Li & Fung, the 300lb gorilla of the sourcing middle men world, it's worth wondering what impact this will have on the supporting media. The FT quotes Walmart's Eduardo Castro-Wright saying that the company could save up to $12 billion a year if it meets its goal of sourcing 80% of what it purchases directly from manufacturers, cutting out middle men at every step of the way.

Is this good news, bad news, or indifferent news for the Asian B2B media industry?

Bullish on exports

Much of South China's B2B media is still driven by exports, so it was interesting to see two of the key players making bullish noises about the prospects for 2010 this week. In a review of the prospects for the Hong Kong economy, the Bangkok Post says that Hong Kong Trade Development Council is forecasting 5% export growth this year.

The article quotes Subrina Chow, director of the HK government's Economic & Trade Office in Singapore saying that the relative improvement in China's external trade should augur well for better performance in Hong Kong's trade.

The surge in China's investment has directly and indirectly benefited Hong Kong's exports of capital goods to China. The trend is likely to continue in the coming months, she said.

"China's strong domestic demand has buttressed Hong Kong's exports of goods to China, which is its largest trading partner, accounting for about 48% of our total trade value," she said. "The declines in exports experienced by Hong Kong since the latter part of 2008 have been slower than those in many other Asian economies."

Meanwhile, JLM's Pacific Epoch quotes Alibaba.com CEO David Wei saying that Chinese exports could surge as much as 20% this year:

Online trading has bounced back faster than the traditional markets, Wei said. Alibaba.com's fourth quarter statistics demonstrate that consumption of developed markets like the U.S. has recovered more quickly than expected