Tag: China

Chinese Automaker Geely Auto Scraps STAR Market Listing Plan

China’s Geely Automobile Holdings Ltd said on Friday it is dropping plans to list new shares on the mainland’s Nasdaq-like STAR Market.

Zhejiang-based Geely Auto, China’s highest-profile automaker thanks to parent Zhejiang Geely Holding Group’s investments in Daimler AG and Volvo Cars, is listed in Hong Kong with a market capitalization of HK$255 billion ($32.85 billion).

In September, Geely Auto said in a filing that it planned to raise 20 billion yuan ($3.10 billion) from the STAR Market listing.

Geely Auto is aiming to sell over 1.5 million vehicles this year. It also said would seek external funding for its newly-launched electric Zeekr brand.

In February, Geely Auto said it abandoned the merger plan with sister company Volvo Cars.

June 28, 2021
Fonterra sells stakes in two Chinese farms
Fonterra Co-Operative Group said today it will sell its stakes in two joint-venture farms in China’s Shandong province to Singapore-based AustAsia Investment Holdings for NZ$88 million (US$62 million).

The sale comes amid a retreat by the world’s largest dairy exporter since 2019 from an ill-fated overseas expansion that drew sharp criticism from its 10,000-plus farmer-shareholders.

Fonterra, which owns 51 percent of the two farms, said the sale is not subject to any regulatory approvals and is unconditional.

AustAsia, 75 percent owned by Singaporean agri-food company Japfa, will buy the farms outright for US$115.5 million, with the difference being paid to Fonterra’s joint venture partner, the New Zealand co-operative said.

“Greater China continues to be one of our most important strategic markets. We remain committed to our China business,” CEO Miles Hurrell said in a statement.

The dairy giant in April sold two fully-owned farms in China to Inner Mongolia Youran Dairy for NZ$552 million.
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June 28, 2021
Ant Group in Talks to Form Credit Scoring JV with Beijing

Ant Group is reportedly in discussions with state-owned enterprises to create a credit scoring firm that houses data collected from its massive user base.

The formation of the new entity could see Ant Group cede control over financial data of more than a billion users, according to a report citing unnamed users.

Ant Group’s data sharing process with Beijing has been ongoing with reports earlier this year that the People’s Bank of China was unhappy with the progress.

According to the report, considerations are being made to form a joint venture co-owned by Ant and state-owned enterprises (SOEs) – including an unnamed Shanghai-based financial conglomerate.

The talks also covered the types of data collected, alignment between the credit scoring system and broader state plans as well as whether the joint venture should be controlled by Ant or SOEs.

The entry could be established as soon as the third quarter this year though discussions are ongoing and no final decisions have been made.

June 28, 2021
Huawei to reportedly build its own chipsets in Wuhan starting next year

In May 2019, the U.S., claiming security issues, placed Chinese phone manufacturer Huawei on the entity list. As a result, Huawei was no longer able to access the U.S. supply chain that it had spent over $18 billion on during the previous year, and was even banned from using software developed by Google. Exactly one year later, the U.S. Commerce Department made a change in export rules preventing foundries using American technology from shipping cutting-edge chips to Huawei without a license.

Since the U.S. export rule change prevented Huawei’s contract foundry TSMC from shipping to the Chinese manufacturer the powerful 5nm Kirin chips that Huawei had designed itself, there had been talk about Huawei manufacturing its own chipsets. Like most major consumer electronics firms including Apple, Huawei farms out its chip designs to contract foundries like TSMC and the latter builds the actual chips using its fabs.

Prior to the U.S. ban on chip deliveries to Huawei, the latter was TSMC’s second-largest customer behind Apple. Since being placed on the entity list, Huawei has learned to make its own software and hardware to replace parts of the supply chain it can no longer obtain such as the Google licensed version of Android (replaced by Huawei’s HarmonyOS, and Huawei Mobile Services).

Industry sources are calling for Huawei to turn on the “start” button for its own wafer fab in Wuhan. Production is expected to start in phases beginning in 2022. Huawei’s HiSilicon unit certainly has the capability to design high-powered chips like the 5nm Kirin 9000. Wafers, made from silicon, go through several processes before getting sliced up and packaged to become individual chipsets.
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June 28, 2021

Chinese Bitcoin Mining Exodus to U.S. Continues

More Chinese bitcoin miners are reportedly shifting operations to the U.S. after Beijing ramped up its crackdown against cryptocurrencies.

Guangzhou-based logistics firm Fenhua International was moving bitcoin mining machines to Maryland, according to social media post, with a total weight of approximately 3,000 kilograms.

This is estimated to be equal to a small batch of 200 mining units.

This marks the latest mining exodus after the Chinese government ramped up its crypto crackdown with other firms, such as mining pool BTC.TOP also reportedly planning to shift operations to North America.

Beijing’s latest move on crypto included a meeting between the central bank and various financial giants which subsequently led to a new announcement and related initiatives launched by industry players.

Separately, the city of Ya’an had also reportedly committed to rooting out all bitcoin and ether mining operations.

According to Compass Mining chief business officer Thomas Heller in a CoinDesk report, there are an estimated 526,000 ‘S19 machines’ – a type of crypto mining device – weighing 80,000 metric tons have been switched off in China.

June 24, 2021

Australia to take China to WTO over wine tariffs

Australia’s complaint to the World Trade Organisation over China’s anti-dumping duties on wine exports should enable bilateral negotiations, Foreign Minister Marise Payne said on Sunday.

The government filed a complaint on Saturday over duties that were applied last year and nearly wiped out exports of Australian wine to the Chinese market.

“What lodging the dispute enables us to do is begin dispute consultation settlements, which actually is a bilateral discussion with China about the issues,” Payne said in an interview on the Australian Broadcasting Corp’s (ABC) ‘Insiders’ program.

“We’ve seen duties of over 200 percent applied to Australian wine. We don’t believe that that is consistent with China’s obligations under the WTO. So that part of the process enables us to have that direct conversation.”

The Australian government has complained frequently that China has ignored calls to ease trade tensions.

It is the second time in six months Australia has appealed to the WTO. In December, Canberra launched a formal appeal seeking a review of China’s decision to impose hefty tariffs on imports of Australian barley.

Relations with China, already rocky after Australia banned Huawei from its nascent 5G broadband networking in 2018, have worsened since Canberra called for an international inquiry into the origins of the coronavirus, first reported in central China last year.

China, Australia’s largest trading partner, responded by imposing tariffs on Australian commodities, including wine and barley and limited imports of Australian beef, coal and grapes, moves described by the United States as “economic coercion”.

Asked about the fresh international push to find answers to the origin of the virus that causes Covid-19, Payne said it was important to maintain the momentum.

“We are very determined to work with our partners to ensure that (…) investigation is able to access the material that it needs, including within China,” Payne said.

June 21, 2021

Baidu’s Apollo Aims To Offer Robotaxi Service to 3 Million Users In 2023

Chinese tech giant Baidu said on Thursday its smart driving unit Apollo plans to cater to a total of 3 million users in China with a fleet of 3,000 robotaxis in 2023.

Baidu also announced that it is partnering with BAIC Group’s electric vehicle (EV) brand ARCFOX to develop Apollo Moon, EV robotaxis that are set to be mass-produced at a cost of 480,000 yuan ($74,766.36) per unit.

The duo will produce 1,000 Apollo Moon EVs in the next three years, Baidu told a press conference in Beijing.

June 17, 2021

Cafe de Coral ramps up Mainland China expansion plans

Hong Kong-listed Cafe de Coral Holdings, one of Asia’s largest restaurant and catering groups operating quick-service restaurants, will speed up its expansion in mainland China with 17 store openings in the pipeline.

The company revealed its plans after its net profit for 2020 almost quintupled, despite lower revenue in Hong Kong, thanks to pandemic relief and subsidies by the Chinese and Hong Kong governments, and other actions it undertook to save on costs.

“Our business in mainland China has recovered after the initial severe lockdown. The group will continue to expand its network in the Greater Bay Area,” Sunny Lo Hoi-kwong, chairman of the company, said in a filing with the Hong Kong stock exchange on Tuesday.

Cafe de Coral was able to take advantage of China’s fast recovery from the economic dislocation caused by the coronavirus pandemic. China’s economy was already growing at 2.3 percent even while Hong Kong’s economy was registering a 6.1 percent contraction in 2020.

The company “took advantage of the situation to increase the pace of network expansion, opening 13 new stores during the year with a strategic focus on Guangzhou and Shenzhen – and currently has 17 stores in the pipeline to open next year”, he said. As of 31 March 2021, the company had 352 stores in Hong Kong and another 121 in mainland China.

“As the mainland China market was able to quickly control the severity of the Covid-19 pandemic, domestic consumption is expected to rebound at a faster rate,” Lo said.

The company’s net profit skyrocketed 3.88 times to HK$359.1 million (US$46.3 million) for the year ended 31 March 2021, from HK$73.6 million in the previous year, according to the filing. In contrast, its revenue fell 15.7 percent to HK$6.7 billion.

Cafe de Coral received pandemic relief and subsidies from governments in the city and the mainland totaling HK$638.9 million, including HK$486.8 million under the Employment Support Scheme in Hong Kong.

It also adapted product offerings and operations to a “new normal”, implemented stringent cost controls, manpower deployment, and acceleration of technology upgrades to capture more takeaway and delivery business. These measures, combined with relaxed social distancing restrictions, led to improved revenue in the second half of the financial year.

Its net profit, however, still does not match pre-pandemic levels of up to HK$569.9 million for the year ended 31 March 2019, before the onset of protests and the coronavirus pandemic. Restrictions prompted by the pandemic barred dinner service for 114 days in the financial year, in addition to the nine days that it voluntarily suspended operations.

“As the pandemic situation resolves, the group expects business performance to make progress along with the economy,” Lo said. “The industry has faced a severe shock and many weaker players have already exited the market. Those that remain are lean, fit, and aggressive. And we anticipate a sharply competitive environment in the year ahead.”

A final dividend of 28 HK cents per share was recommended on Tuesday, compared with nil in the previous financial year.

June 16, 2021

Huawei’s 7th Cyber Security and Privacy Protection Transparency Center opens its doors in China

Huawei has opened its 7^th and largest Global Cyber Security and Privacy Protection Transparency Center in Dongguan, China, with representatives from GSMA, SUSE, the British Standards Institution, and regulators from the UAE and Indonesia speaking at the opening ceremony. During the opening ceremony, H.E. Dr. Mohamed Hamad Al Kuwaiti, head of cybersecurity, UAE, delivered a keynote on the importance of cyber cooperation for a resilient and vibrant digital future.

Along with the opening of the new center, Huawei also released its Product Cyber Security Baseline, marking the first time the company has made its product security baseline framework and management practices available to the industry as a whole. These actions are part of the company’s broader efforts to engage with customers, suppliers, standards organizations, and other stakeholders to jointly strengthen cybersecurity across the industry.

“Cybersecurity is more important than ever,” said Ken Hu, Huawei’s rotating chairman, at the opening of the Dongguan center. “As an industry, we need to work together, share best practices, and build our collective capabilities in governance, standards, technology, and verification. We need to give both the general public and regulators a reason to trust in the security of the products and services they use on a daily basis. Together, we can strike the right balance between security and development in an increasingly digital world.”

Over the past few years, industry digitalization and new technologies like 5G and AI have made cyberspace more complex than ever, compounded by the fact that people have been spending a greater portion of their lives online throughout the COVID-19 pandemic. These trends have led to a rise in new cybersecurity risks.

During his speech, Hu also emphasized the importance of cybersecurity and shared responsibility to Huawei. Huawei has been committed to cooperative cybersecurity as early as 2000. There are now more than 3,000 cybersecurity R&D personnel in Huawei. Moreover, Huawei’s annual R&D investment in cybersecurity and privacy protection accounts for about 5% of its total R&D expenses.

Huawei opened the new Global Cyber Security and Privacy Protection Transparency Center in Dongguan to address these issues, providing a platform for industry stakeholders to share expertise in cyber governance and work on technical solutions together. The center is designed to demonstrate solutions and share experience, facilitate communication and joint innovation, and support security testing and verification. It will be open to regulators, independent third-party testing organizations, and standards organizations, as well as Huawei customers, partners, and suppliers.

H.E. Dr. Mohamed Hamad Al Kuwaiti, head of cybersecurity, UAE, said, “A public-private partnership will be critical to build collaboration among private, public and government entities so as to establish a globally trusted digital oasis in the UAE.”

To further a unified approach to cybersecurity in the telecoms industry, organizations like GSMA and 3GPP have also been working with industry stakeholders to promote NESAS Security Assurance Specifications and independent certifications. These baselines have seen wide acceptance in the industry, and will play an important role in the development and verification of secure networks.

Mats Granryd, director general of GSMA, spoke at the opening of Huawei’s new center. “The delivery of existing and new services in the 5G era will rely heavily on the connectivity provided by mobile networks and will fundamentally depend on the underlying technology being secure and trusted,” he said. “Initiatives such as the GSMA 5G Cybersecurity Knowledge Base, designed to help stakeholders understand and mitigate network risks, and NESAS, an industry-wide security assurance framework, are designed to facilitate improvements in network equipment security levels across the sector.”

Hu also highlighted the importance of knowledge sharing. At the event, Huawei also released its Product Cyber Security Baseline, the culmination of over a decade of experience in product security management, incorporating a broad range of external regulations, technical standards, and regulatory requirements. The Baseline, together with Huawei’s other governance mechanisms, helps ensure the quality, security, and trustworthiness of the company’s products. Over the years, Huawei has built over 1,500 networks that connect more than three billion people across 170 countries and regions. None of these networks have ever experienced a major security incident.

Hu emphasized that the more knowledge and best practices we share, the more effectively we can strengthen cybersecurity as a community.

According to Huawei, the baseline covers 15 categories, 54 requirements, and 112 specific implementation instructions and interpretations, ensuring the high-quality, security, and trustworthiness of Huawei products. It includes 4 categories of legal compliance requirements (prevention of backdoors, prevention of malware and malicious behaviors, protection of user privacy and protection of communication freedom) and 11 categories of security and functional assurance requirements (including secure coding, compilation, sensitive data protection, encryption, secure boot, integrity protection, and lifecycle management).

“This is the first time we’ve shared our security baseline framework with the entire industry, not just core suppliers,” said Sean Yang, director of Huawei’s Global Cyber Security and Privacy Protection Office. “We want to invite all stakeholders, including customers, regulators, standards organizations, technology providers, and testing organizations, to join us in discussing and working on cybersecurity baselines. Together, we can continuously improve product security across the industry.”

At present, the industry still lacks a standards-based, coordinated approach, especially when it comes to governance, technical capabilities, certification, and collaboration.

“Cybersecurity risk is a shared responsibility,” concluded Ken Hu in his opening remarks. “Governments, standards organizations, and technology providers need to work closely together to develop a unified understanding of cybersecurity challenges. This must be an international effort. We need to set shared goals, align responsibilities, and work together to build a trustworthy digital environment that meets the challenges of today and tomorrow.”

Two years ago, Huawei opened a similar center in Brussels, with others located in the UK, Canada, Germany, Italy, and the UAE.

June 16, 2021

Oriental Watch profit soars as Chinese shop at home instead of travel

Most readers would already be aware that Oriental Watch Holdings’ stock increased significantly by 37% over the past three months. As most would know, fundamentals are what usually guide market price movements over the long term, so we decided to look at the company’s key financial indicators today to determine if they have any role to play in the recent price movement. Specifically, we decided to study Oriental Watch Holdings’ ROE in this article.

Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.

The ‘return’ is the profit over the last twelve months. That means that for every HK$1 worth of shareholders’ equity, the company generated HK$0.05 in profit.

So far, we’ve learned that ROE is a measure of a company’s profitability. Depending on how much of these profits the company reinvests or “retains”, and how effectively it does so, we are then able to assess a company’s earnings growth potential. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don’t share these attributes.

On the face of it, Oriental Watch Holdings’ ROE is not much to talk about. We then compared the company’s ROE to the broader industry and were disappointed to see that the ROE is lower than the industry average of 8.5%. However, we were pleasantly surprised to see that Oriental Watch Holdings grew its net income at a significant rate of 42% in the last five years. So, there might be other aspects that are positively influencing the company’s earnings growth. Such as – high earnings retention or efficient management in place.

Next, on comparing with the industry net income growth, we found that Oriental Watch Holdings’ growth is quite high when compared to the industry average growth of 8.5% in the same period, which is great to see.

The basis for attaching value to a company is, to a great extent, tied to its earnings growth. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. This then helps them determine if the stock is placed for a bright or bleak future. Is Oriental Watch Holdings fairly valued compared to other companies? These 3 valuation measures might help you decide.

The three-year median payout ratio for Oriental Watch Holdings is 45%, which is moderately low. The company is retaining the remaining 55%. So it seems that Oriental Watch Holdings is reinvesting efficiently in a way that it sees impressive growth in its earnings (discussed above) and pays a dividend that’s well covered.

Moreover, Oriental Watch Holdings is determined to keep sharing its profits with shareholders which we infer from its long history of paying a dividend for at least ten years.

June 15, 2021

Crypto Exchange Searches Blocked in China

Chinese users were reportedly unable to find results for popular cryptocurrency exchanges on major search engines in the country.

Keyword searches for trading platforms such as Binance, OKEx and Huobi yielded no results, according to various media outlets.

The searches were conducted on major search engines like Baidu, Sogou, Zhihu, and Weibo.

This marks yet another sign of further tightening on cryptocurrencies, especially with regards to online content.

Earlier this month, multiple popular Weibo accounts featuring related content were reportedly suspended or shut down over violation of the social media platform’s rules.

June 14, 2021

China to become major buyer of Vietnam’s garments

China is set to become a major export market for Vietnam’s textile and garment industry, making up for the lull in traditional markets like Japan and the EU.

According to Vietnam National Textile and Garment Group (Vinatex), Covid-19 has rendered some of the main markets unstable. For example, the E.U. is facing the risk of a pandemic resurgence, while Japan’s economy is yet to revive. Therefore, Vietnam’s textile and garment exports to these two markets are not expected to rise this year.

Meanwhile, China has indicated in its 14th five-year plan that it will not concentrate on textile and garment production in the 2021-2025 period.

Vietnam’s textile and garment exports to China in Q1 experienced the highest growth among the five largest textile and garment export markets (the U.S., Japan, South Korea, E.U., and China), Vinatex reported. Textile and garment export value to China during the period was as high as that to the E.U. at $680 million.

One challenge for Vinatex this year is the falling demand of office wear, which is one of the group’s main products. Amidst the pandemic, consumers prefer casual wear and sportswear. Another difficulty is that inflation is expected to rise this year, resulting in higher lending rates and increased financial expenses.

Vinatex targets revenues of VND1.5 trillion ($66 million) this year, up 5 percent year-on-year, and pre-tax profit of VND201 billion, up 37 percent. The group said it will continue to divest from ineffective companies this year.

Vietnam’s textile and garment exports in the first five months of 2021 hit $12.2 billion, up 15 percent year-on-year, according to the General Statistics Office.

June 11, 2021

Chow Tai Fook profit rebounds as Mainland China focus pays off

Hong Kong-listed Chow Tai Fook Jewellery Group Ltd reported a forecast-beating 108% jump in annual profit on Tuesday, thanks to one-off COVID-19 related rent concessions, an unrealised gain on gold loans and foreign exchange gains.

China’s largest jeweller by market value said net profit surged to HK$6.03 billion ($777 million) from HK$2.9 billion in fiscal 2020. That compared to a forecast of HK$5.23 billion profit by 14 analysts, Refinitiv SmartEstimate data showed.

It was the highest annual profit since 2014.

A COVID-19 related rent concession amounted to HK$127.6 million as compared to HK$16.2 million in fiscal 2020, while net foreign exchange gain amounted to HK$336.4 million against HK$234 million loss in a year ago period.

Revenue for the year to March 31 rose 23.6% to HK$70.16 billion from HK$56.75 billion a year earlier, driven by retail expansion amid improving consumer sentiment in mainland China and a softer gold price in the second half of the fiscal year.

“As we are optimistic about the mid- to long-term growth in the mainland China market, we will focus on our mainland China’s business development in the coming future,” Chairman Henry Cheng said in a statement to the Hong Kong Stock Exchange.

“We will continue our retail expansion strategy through penetrating into lower tier cities and leveraging franchisees’ local knowledge,” he added.

The retail network expanded to 4,591 point-of-sales (POS) by the end of March, with a net addition of 741 POS. The company plans to add at least 700 POS in mainland China in fiscal 2022 but may close 10-15 POS in Hong Kong and Macau.

Same-store sales surged 31.9% in mainland China but plunged 41.3% in Hong Kong and Macau as major border crossings remained closed during the period.

June 9, 2021

DBS Kicks Off Business at Chinese Securities JV

DBS’ securities joint venture in China will officially commence business operations after receiving its license from the mainland regulator.

Securities joint venture DBS Securities (China) will kick off operations, according to a statement, effective immediately after receiving its securities business license from the China Securities and Regulatory Commission.

The joint venture will operate brokerage, securities investment consulting, securities underwriting and sponsorships, as well as proprietary trading.

DBS joins other global banks to capitalize on China’s market-opening especially with regards to the securities business where the likes of J.P. Morgan and Goldman Sachs are seeking to obtain full ownership of their joint ventures.

Today, DBS Securities is honored to become the first Sino-Singapore securities joint venture, said DBS group chief executive Piyush Gupta. We hope to continue to facilitate China’s economic growth and look forward to contributing to its ‘Dual Circulation’ strategy.

DBS Securities currently has a registered capital of 1.5 billion yuan ($230 million) and is majority-owned by DBS (51 percent). Other shareholders include Donghao Lansheng Investment Management (24.67 percent), Shanghai Huangpu Investment Holding (13.33 percent), Shanghai Huiyang Asset Management (6.5 percent) and Shanghai Huangpu Guidance Fund Equity Investment (4.5 percent).

June 8, 2021