Dec 24, 2018 05:12 PM

Monday Tech Briefing: Czech Government Reverses Partial Ban on Huawei Smartphones

1. Czech Government Reverses Its Partial Ban on Huawei Smartphones

The Czech Republic has reversed its stance on banning government officials from using smartphones manufactured by Chinese telecom giant Huawei Technologies.

Czech Republic’s National Cyber and Information Security Agency issued a warning on Dec. 17 that said Huawei and ZTE products posed a “security threat” to the country. Prime Minister Andrej Babis then ordered government officials to stop using Huawei phones.

The Czech National Security Council reversed the decision in a meeting Friday, saying that the “security threat” warning had no tech basis. The council said the Czech Republic welcomes all kinds of foreign investment.

Huawei’s Europe president Li Jian welcomed the latest decision and said he hopes “Huawei will not be harmed by baseless accusations again,” (Xinhua, link in Chinese)

2. China Proposes Prohibiting Forced Technology Transfers

China is expected to prohibit local governments from forcing foreign businesses to transfer technology or illegally restrict their market access, according to a draft law reviewed by the legislature on Sunday.

The law will also ensure foreign investors enjoy equal treatment with domestic counterparts in China, except in areas specified in a negative list.

The Standing Committee of the National People’s Congress began reviewing China’s foreign investment law on Sunday. The new law, if adopted, is expected to replace three existing laws on Chinese-foreign equity joint ventures, contractual joint ventures and wholly foreign-owned enterprises. (Caixin)

3. Foxconn to Build $9 Billion Chip Factory in Zhuhai

Foxconn Technology Group is planning to launch a $9 billion semiconductor factory in Zhuhai, a city in the southern province of Guangdong.

As demand for iPhones wanes, the Apple supplier has been looking for other sources of income in the last few years. Foxconn will make chips for ultra-high definition 8K televisions and camera-image sensors in the factory, since the company already owns Japanese display maker Sharp Corp., Nikkei has learned.

Foxconn is also aiming to expand its 12-inch chip factory in the future, to manufacture chips for robotics and autonomous cars. (Nikkei)

4. Mobike Founder Hu Weiwei Steps Down as Meituan Takes Control

Beijing Mobike Technology Co. Ltd. founder Hu Weiwei will step down as CEO from the company for “personal reasons,” the bike-sharing startup announced Sunday. Liu Yu, president of Mobike since April, will succeed Hu as CEO.

Hu co-founded Mobike in 2015, but sold it to China’s largest on-demand services platform Meituan Dianping in April 2018 for $2.7 billion.

Hu’s resignation comes at a time when the bike-sharing business is under intense scrutiny for its lack of a clear, sustainable business model. Mobike’s main competitor Ofo is struggling to repay massive debts to suppliers — several of which have filed lawsuits — and customers who are lining up for hours in hope of getting refunded the deposit they gave Ofo to use its bicycles.

In her letter to Mobike employees, Hu said that people should be more optimistic about the bike-sharing business and give it more time to mature. Hu said she plans to continue working in the transportation business. (Caixin, link in Chinese)

5. HNA Hopes to Sell Ingram Micro for $7.5 Billion

Debt-ridden HNA Group is in talks with private equity firm Apollo Global Management to sell the world’s largest IT distributor Ingram Micro Inc.

HNA bought Ingram Micro in 2016 for $6 billion and is hoping to sell it for $7.5 billion, including $1.5 billion in debt, The Wall Street Journal reported.

While several U.S. private-equity firms are discussing the sale with HNA, the talks with Apollo appear to be the most advanced. Both sides are working to see if they can agree on a sale price, and there is no guarantee for a deal. (The Wall Street Journal)

6. Luckin Coffee to Lose More than $127 Million in 2018

Luckin Coffee, the Chinese chain that hopes to challenge Starbucks, will lose more than 857 million yuan ($127 million) in 2018, the company told Caixin Saturday. The revelation comes after Luckin’s financial information was leaked online on Friday.

According to the leaked information, Luckin’s revenue was 375 million yuan in the first nine months of 2018, but the company lost 857 million yuan in this period as it opened hundreds of shops nationwide. Luckin hopes its revenue can reach 18.5 billion yuan in 2021.

Luckin told Caixin that a loss in 2018 was expected and is in line with its current strategy for expansion. The company was founded in January, and is now valued at $2.2 billion after a $200 million B funding round in December financed by Joy Capital, Dazheng Capital, China International Capital Corp. and Singapore’s GIC Private Ltd. (Caixin, link in Chinese)

7. JD. Com Faces Enormous Challenges Even as Its Founder Clears U.S. Charges

The year 2018 has been a nightmare for China’s 20-year-old e-commerce giant Inc. and its billionaire founder Richard Liu. Haunted by bad news including weakening sales and a sexual assault scandal involving Liu,’s Nasdaq-listed shares took a nosedive this year, losing as much as 60% of their value from a January peak. got some relief when Minnesota prosecutors said Friday that they wouldn’t press felony rape charges against Chairman Liu because of insufficient evidence. But challenges on other fronts still hang over the company.

In November, reported disappointing results and its first sequential decline in annual active customers since its 2014 listing in New York. Sales for the third quarter of 2018 were 104.8 billion yuan ($15.3 billion), a year-on-year increase of 25%. The gain fell well below previous growth rates, which reached more than 60% in 2015. (Caixin)

Compiled by Zhang Erchi

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