Jul 03, 2020 11:11 PM

China Business Digest: Services PMI Notches Biggest Expansion in a Decade; Citic Securities, CSC Financial Again Deny Merger Report


Services activity in China expanded at the quickest pace in more than a decade in June as domestic and overseas demand recovered. China’s securities regulator issued new rules Wednesday on refinancing on China’s new Nasdaq-style high-tech STAR Market. Two of China’s biggest brokers denied a merger report for the second time in less than three months. Wahaha is considering a $1 billion IPO in Hong Kong.

By Mo Yelin (


Caixin Services PMI shows largest expansion in a decade

The Caixin China General Services Business Activity Index, which gives an independent snapshot of operating conditions in the services sector, rose to 58.4 in June from 55 the previous month, the fourth monthly increase in a row. The reading was the highest since April 2010. A number above 50 indicates an expansion in activity, while a figure below that points to a contraction.

Lu Zhengyao to remain chairman of scandal-plagued Luckin

Luckin Coffee Inc. said Lu Zhengyao will remain chairman after an effort by the company’s board to oust him didn’t gain enough support. The proposal to remove Lu from the coffee chain he founded wasn’t approved by the necessary two-thirds of directors present at a special meeting late Thursday.

China issues new rules on refinancing on STAR market

China’s securities regulator issued new rules (link in Chinese) Wednesday on refinancing on China’s new Nasdaq-style high-tech STAR Market. The rules apply to offerings of stocks, convertible bonds and depositary receipts. The funds raised shall be invested in scientific and technology innovation and can’t be used to cover losses and nonproduction expenditures.

Shares of Citic Securities, CSC Financial surge on merger news

Two of China’s biggest brokers denied for the second time in less than three months a report that they may merge after the news pushed up the two companies’ stocks. Citing people familiar with the matter, Bloomberg reported Thursday that Citic Group, the parent of China’s largest broker Citic Securities Co., will buy a stake in No. 2 CSC Financial Co. from state-controlled shareholder Central Huijin Investment Ltd., making it the largest shareholder and paving the way for potentially creating an $82 billion powerhouse.

China beverage giant Wahaha said to mull $1 billion IPO

Hangzhou Wahaha Group Co., one of China’s biggest beverage makers, is weighing an initial public offering that could raise more than $1 billion, according to people with knowledge of the matter. A listing could come as soon as next year.

China car sales rise for third month as pandemic eases

Sales of passenger cars such as sedans and SUVs, as well as commercial vehicles, increased 11% in China during the month of June from a year earlier to 2.28 million, the China Association of Automobile Manufacturers said Thursday, citing preliminary figures. This is the third straight month the industry recorded sales growth.

Intel resumes supplying chips to leading Chinese server-maker

Global tech giant Intel Corp. has resumed supplying chips to leading Chinese server-maker Inspur, a source at Inspur told Caixin. The resumption comes just two days after Intel stopped supplying the Chinese company while making unspecified adjustments to comply with relevant U.S. laws, a person at Intel previously told Caixin. The suspension was far shorter than a disruption of up to two weeks previously anticipated by the person at Intel.

Daimler buys 3% stake in Chinese battery cell producer

German luxury carmaker Daimler AG will pay 510 million yuan ($72 million) to take 3% in battery cell manufacturer Farasis Energy (Ganzhou) Co. Ltd., the Chinese company said (link in Chinese) Friday. As part of the deal, Farasis will supply batteries for the German company’s premium Mercedes-Benz brand, and build a carbon-neutral battery cell plant in Bitterfeld-Wolfen, in eastern Germany.

Digest stock


• Tunghsu Group Co. Ltd., a Chinese maker of electronic display panels, swung from an annual profit of 1.2 billion yuan ($172 million) in 2018 to a loss of 31 billion yuan last year, raising questions about whether the debt-ridden company cooked its books.

• During the first five months of this year, the value of China’s exports through e-commerce platforms managed 12% growth despite the global coronavirus pandemic, said Gao Feng, a spokesperson for China’s commerce ministry on Thursday. The figure was down sharply from 60% growth for all of 2019.

• Sony Corp. is weighing a bid for Leyou Technologies Holdings Ltd., Bloomberg reported, citing people familiar with the matter, paving the way for an intensified bidding war for the Hong Kong-listed gaming company.

• While U.S. shippers sent sizable orders of wheat, corn, cotton, pork and other agriculture products to China in May, China will need to pick up the pace of purchasing to meet its trade-deal pledges, Bloomberg reported, citing data tracked by the Peterson Institute for International Economics.

• New York-listed Nio Inc. closed up 18% Thursday after the Chinese electric-car maker reported June sales that beat market expectation. Nio said (link in Chinese) it delivered 3,740 vehicles, a monthly record and a 179% increase year-on-year.

JD Digits, the fintech unit of China’s third-largest e-commerce group Inc., is preparing a listing on the STAR Market in Shanghai later this year with an expected market value set between 150 billion yuan to 200 billion yuan.

Chengdu Rural Commercial Bank Co. Ltd. has named a new party chief and nominated its next president as it looks to revive its operations under the control of the Chengdu government after its past controlling shareholder, once-highflying financial giant Anbang Insurance Group Co. Ltd., sold its stake in the bank to the city.

• TuSimple, a self-driving truck firm splitting its operations between China and the U.S., has laid out a plan to build an autonomous freight network that will stretch out across 48 U.S. states by 2024.

• Chinese mainland stock markets are bouncing back after months of poor performance amid the coronavirus pandemic. Combined daily turnover of the Shenzhen and Shanghai stock exchanges on Thursday passed the 1 trillion yuan mark for the first time since early March.

• Beijing unveiled its lineup of top national security officials in Hong Kong Friday, three days after it enacted a sweeping National Security Law for the special administrative region.


• The Chinese mainland reported (link in Chinese) five new coronavirus cases with symptoms on Thursday, including two local cases in Beijing. The other three cases were all imported from abroad.

• As of Friday afternoon Beijing time, the number of coronavirus infections globally surpassed 10.8 million, with the death toll passing 521,000, according to data compiled by Johns Hopkins University.

• The U.S. recorded 52,843 new cases during the 24 hours from 11 a.m. Wednesday to 11 a.m. Thursday, according to the Johns Hopkins data, marking the second time the number of daily new infections exceeded 50,000. The U.S. reported a record daily total of 56,877 new cases over the previous 24 hours.


July 9: Release of China’s CPI and PPI data

** Finally

The Wuhan bookstore Beyond Book Story closed one of its most well-known locations Wednesday. Once voted Wuhan’s most beautiful bookstore, the soon-to-be-closed store held a sale for customers who wanted to make one last purchase there.


The bookstore, once voted “the most beautiful bookstore” online because of its architectural design, was a popular hangout for Wuhan residents.


Contact reporter Mo Yelin ( and editor Yang Ge (

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