Caixin
Jan 16, 2019 06:17 PM
YOUR BRIEFING

Wednesday Tech Briefing: Huawei Founder Hits Back at Spying Claims

1. Huawei Founder Hits Back at Spying Claims

Ren Zhengfei, the founder of Huawei Technologies Co., said his company has never spied for the Chinese government — and never would — as he made a rare public appearance following the arrest of his daughter in Canada, The Wall Street Journal reports.

While praising Donald Trump for his tax cuts, Ren also implicitly criticized the U.S. move in asking Canada to arrest his daughter for “scaring off potential investors.”

Ren also addressed doubts about the privately held company’s ownership structure, which critics describe as opaque. Huawei says it is owned solely by Mr. Ren and other Huawei employees, and Ren reiterated that the company has no outside ownership. (The Wall Street Journal)

2. WeChat Feels the Heat as Three Competitors Schedule Same-Day Launch

Three highly anticipated social media platforms all scheduled their releases for Tuesday — a move that some Chinese media have seen as posing a collective threat to China’s biggest social network, WeChat.

WeChat’s own reaction seems to at least partially confirm those suspicions. Links to the most talked-about of Tuesday’s releases, Matong MT, were blocked on WeChat as early as one day before its scheduled release. Links to ByteDance’s release, a short-video platform named Duo Shan, were also blocked Tuesday. The third release, meanwhile, is more of an upgrade — a revamped version of Bullet Message. (Caixin)

3. Tencent Plugs Holes and Boosts Profits With 163 New Investments

WeChat owner Tencent accelerated its investment pace last year by putting money into more than 163 deals globally compared to 143 in 2017, according to the South China Morning Post. In the third quarter, Tencent’s profit increased 30% mainly due to gains from investment-related items.

Tencent has two priorities for its investment: culture and entertainment, which covers a quarter of the deals; and enterprise services — a reflection of the company’s latest shift toward a focus on the industrial internet.

The company’s latest earnings results show that Tencent’s investment strategy has helped offset slower growth in its core gaming business, which has faced uncertainties due to tighter government regulation. (South China Morning Post)

4. Evergrande Makes New Attempt to Tap Electric Vehicle Market

A subsidiary of major Chinese property developer Evergrande has agreed to pay $930 million for 51% of National Electric Vehicle Sweden AB (NEVS), a Swedish carmaker. Evergrande will finance the deal with a $1.1 billion three-year unsecured loan.

The investment is a fresh attempt by Evergrande to tap into the booming electric car sector as part of a business transition strategy.

Backed by investments from Tianjin’s municipal government and a Beijing-based research firm linked to a government think tank, NEVS set up a China venture in 2015, qualifying for electric vehicle production in 2017. The venture late last year delivered its first batch of 500 vehicles to government customers and car-hailing companies. The company expects to start sales to individual consumers in March. (Caixin)

5. Another Xiaomi Stock Sale Adds Grease to $31 Billion Rout

An undisclosed Xiaomi investor has joined others dumping the company’s stock by selling 231 million Class B shares at HK$9.45 ($1.20) apiece, a 5.1 percent discount to Tuesday’s close, sources told Bloomberg.

The placing follows the end of a six-month lockup last week that has allowed early shareholders to sell Xiaomi stock for the first time. The shares fell as much as 2.7 percent Wednesday.

Xiaomi was one of the world’s most-hyped initial public offerings in recent years, with bankers initially touting a valuation of as much as $100 billion. The Chinese smartphone-maker’s market capitalization has dropped to about $30 billion from a high of $61 billion reached after its Hong Kong debut. A flurry of off-exchange block trades last week signaled that many had taken the opportunity to offload the stock. (Bloomberg)

Compiled by Hou Qijiang and Qian Tong

Contact editor Teng Jing Xuan (jingxuanteng@caixin.com)

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