China Business Digest: Beijing Reports Two More New Covid-19 Cases; Segway Owner to Sell China’s First CDRs

Stocks in Hong Kong and on the Chinese mainland largely shrug off the Thursday plunge in U.S. markets. Electric scooter maker Segway-Ninebot will become the first overseas-registered company with variable-interest entity (VIE) structure to sell CDRs on China’s A-share market. Chinese vaccine developer Sinovac Biotech Ltd. agrees with a drugmaker in Brazil to conduct the final phase of human testing of a Covid-19 vaccine. Meanwhile, Beijing reports two new cases of Covid-19 Friday, less than 24 hours after the city reported its first new case in nearly two months.

— By Mo Yelin (yelinmo@caixin.com)

** TOP STORIES OF THE DAY

China stocks shrug off U.S. market plunge

Stocks in Hong Kong and on the Chinese mainland largely shrugged off a plunge in U.S. markets that saw the Dow Jones drop by nearly 7% on Thursday, its worst day since mid-March, and the Nasdaq tumble 5.3%. The Shanghai Composite Index closed down 0.04% on Friday, while the Hang Seng Index closed down 0.73%.

China to ease listing rules for Nasdaq-like board this year

The Chinese regulator will set rules for so-called registration-based initial public offerings on the ChiNext exchange by the end of June, and implement them this year, according to a statement by the State Council on Thursday. The proposal, first announced in April, could cut the review period for listing from years to months, and would scrap limits on price moves for the first five trading days.

Vietnam to resume flights to Guangzhou, Taiwan, Seoul and Tokyo

Vietnam said on Thursday it is preparing to resume international flights to the Chinese mainland, Taiwan, South Korea, Japan and Laos in a bid to sustain growth, with the first flights set for early July, Nikkei Asian Review reported, citing anonymous sources.

First China-built DRAM chip reaches market

China’s first domestically built DRAM memory chips, developed by ChangXin Memory Technologies Inc., have reached the market in a step forward for the country’s long-pursued effort to enter a lucrative sector dominated by foreigners. Several memory devices powered by ChangXin’s DRAM chips have appeared on the domestic market since May, Caixin has learned.

Segway owner Ninebot to sell China’s first CDRs on STAR market

Electric scooter maker Segway-Ninebot won approval Friday for an initial public offering (IPO) on China’s new Nasdaq-style high-tech STAR Market with a plan to raise more than 2 billion yuan ($293 million). Registered in the Cayman Islands, the Beijing-based company will become the first foreign-registered enterprise with a variable-interest entity (VIE) structure to sell Chinese Depository Receipts (CDRs) on China’s A-share market.

Chinese vaccine maker inks deal in Brazil for final testing

China’s leading coronavirus vaccine developer Sinovac Biotech Ltd. signed an agreement with a drugmaker in Brazil to conduct the final phase of a three-part human testing of a vaccine it developed against the Covid-19 virus.

** OTHER STORIES MAKING THE HEADLINES

• The China-backed Asian Infrastructure Investment Bank debuted its first panda bonds worth 3 billion yuan ($425 million) on China’s interbank market Thursday to support member countries’ efforts to control the Covid-19 pandemic. Panda bonds are yuan-denominated bonds sold by non-Chinese issuers in China.

• On Thursday, the Shenzhen government announced (link in Chinese) a new subsidy of up to 40,000 yuan ($5,662) for each new-energy vehicle (NEV) purchased by individual buyers in the city. The amount is in addition to central government subsidies, as the city tries to boost NEV sales that have been dampened by the virus and a rollback in central government subsidies.

• Real estate giant Evergrande’s health unit has agreed to buy (link in Chinese) out the remaining 17.6% stake it doesn’t already own in Swedish NEV-technology maker NEVS for $380 million, as part of the parent company’s ongoing drive to diversify beyond real estate.

• Students at the Harbin Institute of Technology and Harbin Engineering University have been barred from using MATLAB, a common computer code, following the university's inclusion on a U.S. government blacklist earlier last month.

• China’s central bank has vowed to crack down on payment services providers which channel funds for illegal cross-border gambling, and fix regulatory loopholes used by the scandal-ridden industry.

• Ding Lei, CEO of NetEase, one of China’s largest gaming companies, is the latest business mogul to join the e-commerce livestreaming trend. His livestream brought in sales of more than 72 million yuan of goods (link in Chinese), from 16 million viewers.

• Beijing Sound Environmental Engineering Co. Ltd. has failed to make part of a bond principal repayment that was due on Monday, due to tight liquidity created by higher operating costs, tighter regulation and lost sales during the coronavirus. The defaulted bond had been a debt swap rolled over from an earlier bond, a first for China’s onshore bond market. Such swaps are a common debt restructuring technique in offshore markets, but have just started to take off on the Chinese mainland.

• Chinese video streamer iQiyi has poached an executive from its U.S. rival Netflix to oversee the company’s overseas business, as it looks to expand beyond China.

• Xiong Guosen, former head of the Hunan Securities Regulatory Bureau, was sentenced to 12 years in prison after a four-year investigation on bribery and insider trading charges, Caixin learned from people familiar with the case.

** ON THE CORONAVIRUS

• As of Friday afternoon Beijing time, the number of coronavirus infections globally surpassed 7.5 million, with the death toll passing 421,000, according to data compiled by Johns Hopkins University.

• Tokyo lifted the city’s virus alert and moved into the next and final phase of its reopening roadmap as the Japanese capital continued its recovery from the pandemic, Bloomberg reported.

• On Thursday, the Chinese mainland reported seven new coronavirus cases with symptoms (link in Chinese), six of those imported, according to official data. No new deaths were reported. The mainland added one new asymptomatic case on the same day.

On Friday, two new cases of Covid-19 were reported in the city of Beijing. The two are colleagues who work in the suburb of Fengtai, the local government said Friday, a day after the city reported its first new case of the virus in nearly two months.

** LOOKING AHEAD

June 15: Release of China’s investment, industrial output, and retail sales data

Contact reporter Mo Yelin (yelinmo@caixin.com) and editor Yang Ge (geyang@caixin.com)

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