Jun 28, 2018 10:54 AM

Thursday Tech Briefing: Youxin, Rokid, Huawei


1. China’s Used-Car Trade Platform Youxin Valued at $2.76 Billion in Listing on Nasdaq

What: Chinese used-car online trading platform Youxin listed on Nasdaq Wednesday with a market value of $2.76 billion, after years of burning money. Youxin originally planned to raise up to $500 million through its initial public offering (IPO), but later lowered its goal to $225 million. Its shares opened at $10.4 on their first day of trading and quickly fell below their offering price of $9 before recovering slightly and closing at $9.67.

Why it's important: Youxin is the very first Chinese used-car online trading platform to go public. Although the market has been advancing, second-hand car e-commerce platforms still depend on financing and have not yet developed a mature profit model. Youxin has been making a loss since its establishment seven years ago.

Big picture: Sales of second-hand cars are surging in China. The volume of used cars traded in China grew from 6.82 million in 2011 to 10.39 million in 2016. By 2020, sales of used cars in China are forecasted to reach approximately 10 million vehicles, with an annual growth rate of 20.7%. (Source: People’s Daily, link in Chinese)

2. E-Commerce Platform for Steel to Forge Hong Kong IPO

What:, an e-commerce platform for the buying and selling of steel is set to have its shares publicly traded in Hong Kong. The company filed an IPO prospectus to the Hong Kong Stock Exchange on Tuesday, but didn’t disclose the debut date nor how much it plans to raise.

Why it's important: Zhaogang claims to be China’s largest e-commerce platform for steel with over 94,000 registered customers. Compared to the traditional steel-trading system, the e-commerce platform attempts to cut intermediaries between customers and suppliers, thus improving efficiency and reducing transaction costs.

Big picture: Growing demand in the world’s largest steel market has boosted Zhaogang’s business. Zhaogang’s upcoming float would make it the latest in a series of Chinese internet services to tap Hong Kong’s capital market recently. (Source: Caixin)

3. ‘Tinder of China’ Gets Some Action in Bond Market

What: Nasdaq-listed Momo Inc., operator of a mobile dating app often called the “Tinder of China,” is raising up to $750 million through a convertible bond offering, with plans to use some of the funds for its February purchase of rival dating app Tantan. The offering consists of $650 million in notes that will come due in 2025, with another $100 million available as an overallotment if demand is sufficient.

Why it's important: Tantan, which allows users to browse others’ profiles based on their location and sexual orientation, much like Tinder, has grown rapidly since it was founded in 2014.

Big picture: Momo is heavily dependent on China’s booming market for livestreaming internet services, and announced its Tantan deal in February as Beijing was conducting one of its periodic crackdowns on the sector for problems like false advertising, pornography and fraud. (Source: Caixin )

4. Baidu Approves a Share Buyback of Up to $1 Billion

What: Baidu Inc. has announced a $1 billion buyback of its own shares over the next 12 months.

Why it's important: The move could give Baidu’s stock a boost amid growing global market volatility. Baidu’s shares rose more than 7 percent this year, outperforming rival Chinese internet giant Tencent Holdings Ltd., which is down 7 percent in 2018, but underperforming the Nasdaq Composite’s gain. (Source: Bloomberg)


5. Rokid Releases Smart Speakers, Promises to Mass Produce AR Glasses

What: Chinese smart-home device-maker Rokid has unveiled an updated version of its augmented reality (AR) glasses, and said the glasses would enter mass production by the end of the year. It also announced a new version of its portable smart speaker, the Rokid Me, priced at 799 RMB.

Why it's important: AR glasses are difficult to mass produce and are currently available only in limited quantities and at high price points. Many companies such as Intel, Google, Microsoft and Magic Leap have tried to produce AR glasses but their products have not succeeded in gaining mass popularity. The growing Chinese market for smart speakers is dominated by Alibaba and Xiaomi, whose low-priced speakers account for 94% of the market. (Source: Caixin, link in Chinese)

6. Huawei ‘Doesn’t Apologize’ for Australian Politicians’ Trips to China

What: The world’s largest manufacturer of telecommunication gear Huawei Technologies Co. Ltd. said it isn’t sorry for flying Australian lawmakers to visit its Chinese headquarters, after a think tank listed it as the biggest corporate sponsor of overseas travel for the country’s national politicians over the last eight years.

Why it's important: In 2013, Huawei was blocked on security grounds from supplying equipment to Australia’s national broadband network, and Australia this month said it will forbid Huawei from building an internet cable between Australia and the Solomon Islands.

Big picture: Huawei’s alleged links to the Chinese government and military have caused concern over national security in Australia. The company has met similar hurdles in the U.S. (Source: Caixin)

7. Ford, Baidu Join Forces to Develop Smarter Cars in China

What: Ford and Baidu have agreed to jointly develop in-vehicle infotainment systems and digital services based on Baidu’s voice-interaction system DuerOS. The two companies also plan to set up a lab to conduct research on cloud computing, as well as explore innovation in the automotive and mobility businesses.

Why it's important: The collaboration with Baidu may help Ford to localize its service for Chinese users and further explore the Chinese market. ( Source: Reuters)

Compiled by Hou Qijiang, Qian Tong.

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