Thursday Tech Briefing: Didi Reportedly Lost $1.6 Billion in 2018

1. Didi Reportedly Lost $1.6 Billion in 2018

Didi Chuxing, China’s leading ride-hailing company, reportedly tripled its losses in 2018 from the year before.

The sizable net loss of 10.9 billion yuan ($1.6 billion) in 2018 dwarfed the 250 million yuan lost in 2017, according to internal financial documents obtained by Chinese tech news site 36Kr. The report also said Didi spent an astonishing 1.13 billion yuan on driver subsidies in 2018. Didi did not respond to Caixin's request for comment.

Didi had a rough year in 2018, with the company facing public anger and tighter government oversight after drivers killed passengers in two separate cases last year. (Caixin)

2. Biotech Startup Slashes Hong Kong IPO by 23%

Suzhou-based CStone Pharmaceuticals has scaled back its fundraising target by 23% as it moves to become the first pre-profit pharmaceutical startup to list in Hong Kong this year.

The biotech firm plans to raise as much as HK$2.39 billion (US$304 million) in an initial public offering in Hong Kong, down from a previous plan to raise HK$3.1 billion, the company said Wednesday.

CStone downsized its IPO target after a lukewarm year for money-losing biotech startups in Hong Kong. According to its prospectus, it will offer 186 million shares at a price between HK$11.10 and HK$12.80. It is set to announce the pricing Feb. 20 and make its debut a week later. (Caixin)

3. China-U.S. Team Creates Doctor-Rivaling AI System

Researchers in China and the U.S. have designed a machine to diagnose sick people based on their doctors’ notes — with an accuracy that rivals its human counterparts.

They say the system, a type of neural network, could help physicians make differential diagnoses — or decide between two or more diseases with similar symptoms — as well as prioritize patients for treatment in emergency rooms.

The research team, led by Kang Zhang of the University of California San Diego, published its work this week in Nature Medicine. (Caixin)

4. Film and TV Stars Top Contributors to Zhejiang City’s Tax Revenue

Dongyang city in Zhejiang province, a major film production hub, has shed light on tax payments by some of China’s biggest entertainment players with the release of 2018 tax data last week.

Three studios owned by A-list celebrities topped tax payments in Dongyang last year. The studio of singer Lay Zhang paid 19 million yuan ($2.8 million) in taxes, followed by the studios owned by actresses Yang Mi and Jing Tian. Huayi Brothers Media Corp., one of China’s biggest film companies, was also among the largest taxpayers in Dongyang.

Dongyang is home to Hengdian World Studios, which claims to be the world's largest outdoor movie and television lot. The city’s tax collections drew attention after authorities launched a crackdown on tax payment loopholes that allow some of the country’s highest-paid movie stars to minimize tax payments. (Caixin)

5. Rakuten CEO Shunned Huawei Gear Over Security Concerns

Japanese e-commerce giant Rakuten Inc. has avoided using Huawei Technologies Co.’s equipment to build out its network due to security concerns, the company’s CEO Hiroshi Mikitani told Bloomberg.

Mikitani said he had spoken to the Japanese government about whether Rakuten could use Chinese network equipment. While the government told Mikitani he was free to use Huawei equipment, the CEO said he “sensed the potential risks.” Huawei currently faces growing international pressure from governments concerned that its equipment poses a security risk.

Rakuten ultimately bought antenna hardware from Finnish telecommunications provider Nokia Oyj, although the Japanese company plans to build its own network in the future. (Bloomberg)

6. Small-Towners and Elderly People Found to be the Latest Users of Mobile Payments Abroad

Older people and residents of smaller Chinese cities are increasingly using mobile payment apps while on holidays abroad, according to separate reports released by industry giants Alipay and WeChat Pay earlier this week.

The number of users born in the 1960s who made payments abroad during this year’s holiday grew 130% from the previous year, according to Alipay, while a fourth-tier city in Zhejiang province saw its residents’ overseas Alipay payments grow the fastest with a year-on-year increase of 55% during the recent holiday week, double the growth among users from major metropolises like Beijing, Shanghai and Guangzhou.

Meanwhile, Wechat Pay’s data showed migrant workers were bringing their cashless habits home to smaller cities as they returned to their family homes to celebrate the new year. (Caixin)

Compiled by Isabelle Li

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