China's e-commerce and cloud services giant Alibaba has bought 15% of the shares of Uniview's parent company, TransInfo, in a deal worth ~$500 million.
The move means Uniview is now partly-owned by Alibaba, 'the Amazon of China' and the second-largest Chinese company by market cap (currently worth ~$400 billion). This comes at a time when Alibaba is expanding into the video surveillance / AI market.
In this note, we examine the deal and its impact on video surveillance, including:
Deal and cloud partnership overviewed
Uniview's financials examined
How this can help Uniview
What Alibaba is doing in security / video surveillance
Maybe, though the market is much, much bigger inside of China for 'smart city' / public surveillance than US budget / SMB / mass market cameras. And Alibaba is much stronger inside of China than the US.
It could happen, they could invest in such an operation but structurally it strikes me as being more attractive to double down domestically inside China.
UNV has been offered generous partnership terms with an American owned distribution company that has been in business for longer than they've existed and has had distribution all figured out in our native land. They think they can do better on their own, of course. They're also wrong, like every other Chinese corporation to attempt launching in America...
We saw what happened with Hik and DH, therefore we already know what will happen with UNV. Unless they do a total 180 and become the first Chinese company to actually embrace the west and its natural citizens, and not just give them lip service and go on with the PRC's master plan.
They'll do well in China with their current mentality, but they won't do well over here unless they learn to be humble and accepting of advice and guidance, if they truly want partners and not just temporary customers until they establish roots in the west (then fall down the same path DH and Hik fell down).
ROFL how can you disagree with this post? Explain yourself or don't click the button. Honestly, John, you should make people explain why. We're developing factions that just fight each other on this site, whether there is a valid point to be made or not. Kind of like American politics.
I did not disagree (nor agree) with your original comment. I disagreed with the claim that "you should make people explain why". Not everyone is going to explain why. The world is a big place, plenty of people disagree without explaining and even when they do often it's incoherent, e.g. see here.
Interesting development. I was struck by the stated results for Alibaba. That seems like unbelievably good results to me. Especially for a company often called the "Amazon of China"
Alibaba had "...$54 billion in revenues and $24 billion in profits last year...
Did Alibaba really make almost $1 profit on every $2 in revenue?
How credible are stock markets and accounting practices in China? As a general comment; it feels like China just kind of pays lip service to most of the fundamental concepts of western liberal economic practice. Are the publicly traded companies more credible than the double-speak we hear from the Chinese government and its "companies"?
How credible are stock markets and accounting practices in China?
There's a fair amount of skepticism, to say the least. Of course, it is hard to say how off various financials or metrics are. For example, most economists do not believe the PRC' s GDP growth is the 6.5% they claim but is it 5.5%, 4.5%, 2.5%, etc.?
Good catch - the numbers in the post are not correct and have been updated. Those numbers were based on a Yahoo Finance summary but I confused "gross profit" for "net income". Anyway, Alibaba doesn't count calendar years (Jan 1 - Dec 31) but goes by fiscal year (March 31 - March 31). So for the latest fiscal year, i.e. March 31, 2018 to March 31, 2019, Alibaba's revenue was $56.125 billion, and its net income (profit) was $11.9 billion. So they are still highly profitable but definitely not as much as the post made it seem. (These figures are according to Alibaba itself, not Yahoo Finance.)
As for your comment about the figures potentially being unreliable due to PRC stock exchanges, Alibaba is listed on the New York Stock Exchange, so I think the numbers are pretty solid.