Tuesday Tech Briefing: Foxconn, Bilibili, Suning
DEALS AND FUNDRAISING
1. Apple Supplier Foxconn to List Second Unit on Mainland
What: Avary Holding (Shenzhen) Co. Ltd., a maker of printed circuit boards under Taiwan’s Hon Hai, better known by its trade name, Foxconn, received formal approval from the China Securities Regulatory Commission Friday to float shares on the Shenzhen Stock Exchange.
Why it’s important: Avary will be the second Foxconn subsidiary to list on the mainland, after the float of another unit garnered overwhelming traction from investors in June.
Foxconn received Chinese regulatory approval for its first subsidiary's listing just three months after applying, one of the shortest waiting periods ever in a country where initial public offerings can sometimes take years to go to market due to a backlog of applicants and a strict screening process.
Big picture: Parent Foxconn is the world’s top contract electronics-maker and assembles the bulk of Apple products, including iPhones. The conglomerate has diversified into new areas such as display screens, autonomous driving and cancer research. Foxconn has listed over 20 subsidiaries in Taiwan, five in Hong Kong, one on the Chinese mainland and another in Japan. (Source: Caixin)
2. Yuehua Entertainment Kicks Off New Round of Financing
What: Yuehua Entertainment, a company specializing in managing “idol” performers, has started a new round of financing and is in talks with news aggregation platform Jinri Toutiao and social media company Weibo, sources told Caixin.
Why it’s important: Yuehua is aiming to eventually list A-shares on a mainland stock exchange. The company listed on China’s New Third Board, its over-the-counter equity market, in 2015, but announced its withdrawal from the market in March. Then, in April, the China Securities Regulatory Commission disclosed that Yuehua had entered the A-share initial public offering counseling period.
Big picture: Recent “idol” talent programs “Idol Producer” and “Produce 101” have attracted a wide viewership, and drawn investor attention to the companies that manage these young performers. (Source: Caixin, link in Chinese)
BIG TECH COMPANIES
3. Yunda’s First-Half Profit Rises 33.78%
What: Express delivery company Yunda Holdings Co., Ltd. saw its revenue rise 36.95% in the first half of the year to 5.9 billion yuan, while its profit rose 33.78% to 1 billion yuan, the company announced Monday.
Why it’s important: Yunda is the fastest-growing among the four main Chinese express delivery companies that have listed on the A-share market, in terms of net profit growth. China’s express delivery companies have expanded rapidly in recent years, on the back of its booming e-commerce industry. (Source: Stock exchange filing, link in Chinese)
4. Bilibili Inc. Reports 70.3 Million Yuan Loss in Second Quarter
What: Leading online entertainment platform Bilibili reported a total net loss of 70.3 million yuan in the second quarter of 2018, more than the 50.4 million yuan it lost in the same period last year, even though its total net revenue reached 1.027 billion yuan, up 76% year-on-year.
Why it’s important: Bilibili returned to app stores this week after a one-month hiatus. The company’s video-streaming platform was a target of a recent government crackdown on “inappropriate” online content. The company said its total operating expenses had grown 88% in the second quarter from the same period last year, due to Bilibili more than doubling its marketing and research and development expenses. (Source: Press release)
5. Suning Payment to Become First Mobile Payment Method for Nanjing Metro
What: Suning Payment, a mobile payment service run by e-commerce company Suning Holdings, will become the first mobile payment method offered to commuters on the Nanjing Metro subway system before the end of the year, according to China News Service.
Why it’s important: Public transportation is considered the last “blue ocean” market for the mobile payment industry. According to industry estimates, 300 million trips are taken on public transportation across China on an average day. (Source: ChinaNews, link in Chinese)
6. Beijing Blasts Didi After Another Passenger Killed by Driver
What: The central government has ordered ride-hailing giant Didi Chuxing to make “passenger safety its bottom line” after a woman was allegedly raped and killed by her driver over the weekend while using its carpooling service.
On Sunday morning, public security and transportation officials in both Beijing and Tianjin summoned Didi executives to a meeting and demanded a “thorough reform” of its Hitch carpooling service, the Ministry of Transport said in a statement. The authorities said that Didi had “unshirkable responsibility” for the passenger’s death.
Why it’s important: The incident has raised questions about Didi’s ability to protect its users and has dealt a blow to the reputation of the company, one of China’s oldest and most established “unicorns” — startups valued at more than $1 billion. Didi currently boasts a user base of 550 million, mostly in China, according to a previous company statement.
The passenger’s death came just three months after Didi revamped its safety measures for Hitch after a female flight attendant was killed while using the service. Didi has faced repeated accusations of sexual harassment by its drivers as well as complaints that it abuses its near monopoly on ride-hailing to overcharge users. Multiple Didi drivers have also been convicted of rape. (Source: Caixin)
Compiled by Shen Xinyue
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