Caixin
Aug 21, 2020 11:48 PM
CHINA BUSINESS DIGEST

China Business Digest: Ant Group Expected to File for HK IPO Next Week; Hong Kong Offers Free Covid-19 Test to Everyone

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China is suspending a legal cooperation agreement between Hong Kong and the U.S. Meanwhile, China’s Three Gorges Dam is coping with the worst flooding since its construction. Ant Group is expected to file its Hong Kong IPO application as early as next week after China’s securities regulator completes a pro forma review. Saudi Aramco suspended a deal to build a $10 billion refinery complex in northeast China.

— By Guo Yingzhe (yingzheguo@caixin.com)

** TOP STORIES OF THE DAY

China to suspend legal cooperation agreement between Hong Kong, U.S.

China will suspend an agreement on mutual legal assistance in criminal matters between Hong Kong and the U.S., foreign ministry spokesperson Zhao Lijian said Thursday.

The move comes after Washington said it was suspending or terminating three bilateral agreements with Hong Kong covering the surrender of fugitive offenders, the transfer of sentenced convicts, and reciprocal tax exemptions for international operation of ships.

Ant Group is expected to file blockbuster HK IPO application next week

China’s securities regulator said it received Ant Group’s Hong Kong initial public offering documents to start a pro forma review, indicating that the fintech arm of Chinese e-commerce giant Alibaba Group Holding could file its IPO application with the Hong Kong exchange as soon as next week.

Saudi Aramco suspends $10 billion China oil refinery venture

Saudi Arabia’s state oil company suspended a deal to build a $10 billion refining and petrochemicals complex in China, Bloomberg reported citing people familiar with the matter, as the company slashes spending in response to low oil prices. The uncertain market outlook was behind the decision, they said.

China PBOC’s fund to become Huishang Bank’s second-largest shareholder

A fund managed by China’s central bank will inject 8.89 billion yuan ($1.28 billion) into Huishang Bank, becoming the commercial bank’s second-largest shareholder. Huishang Bank said its board approved a plan to issue as many as 1.56 billion shares to Deposit Insurance Fund at 5.703 yuan a share.

Hotpot billionaire couple tops Forbes list of Singapore’s richest

Haidilao founder Zhang Yong has topped the list of Singapore’s richest again this year. His wife Shu Ping, who co-founded Haidilao International Holding Ltd. hotpot restaurant chain, is listed together with him. Of the country’s top 10 richest in 2020, three places go to naturalized Singapore citizens from China. (The Straits Times & Caixin)

PBOC declares mission accomplished in battle to secure credit for small businesses

A Chinese central bank official said the monetary authority currently has no plan to enlarge the scale of a program designed to channel as much as 440 billion yuan ($63.6 billion) of funds to regional banks so that they could provide new loans and roll over maturing loans to small businesses, as the economy is returning to normal. (Read the full story.)

Foreign drug giants undercut by up to 95% in China bidding

Global drugmakers from Merck & Co. Inc. to Novartis AG lost another slice of their lucrative China business, as domestic competitors undercut them with bids more than 95% lower to supply treatments to public hospitals. (Bloomberg)

Three Gorges Dam faces worst flooding ever

One of the world’s largest water engineering projects, the Three Gorges Dam, encountered the worst flooding since the filling of its reservoir in 2003, according to (link in Chinese) the Ministry of Water Resources on Thursday, as the reservoir saw 75,000 cubic meters per second of water flowing in from the Yangtze River.

China to lower cap on private lending rates

China’s top court has significantly lowered (link in Chinese) a legally protected interest rate ceiling for loans offered by individuals and companies without a lending license.

Since Thursday, the ceiling on annual private lending rates has been lowered from 24% to a rate equal to four times the one-year national loan prime rate (LPR), the current benchmark of bank loans with the same maturity. The latest published one-year LPR was 3.85%.

BMW joint-venture partner’s bonds plunge

A sell-off in bonds issued by Brilliance Auto Group Holdings Co. Ltd. is reflecting investor concerns over the state-owned carmaker’s growing financial strain, after it agreed to sell down its stake in its lucrative joint venture to partner BMW AG. (Read the full story.)

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** OTHER STORIES MAKING THE HEADLINES

Economy & Finance

U.S. President Donald Trump threatened Thursday that if he’s reelected, he’ll impose tariffs on U.S. companies that refuse to move jobs back to the country from overseas. (Bloomberg)

• China’s top securities regulator has received (link in Chinese) Ant Group Co. Ltd.’s application for an overseas IPO. The financial giant is looking to raise around $30 billion via concurrent IPOs in Hong Kong and Shanghai, Caixin previously reported.

• The U.S. has proposed separating a key international framework for data protection from the Asia-Pacific Economic Cooperation forum in its growing rift with China on technology. (Nikkei Asian Review)

Business & Tech

• Chinese customs bureaucracy during the global pandemic is pushing up iron ore prices, as mandatory virus checks for ship crews force the commodity to languish on vessels waiting for clearance. (Read the full story.)

• China’s food delivery platform Meituan Dianping reported that second-quarter sales climbed 8.9% to 24.7 billion yuan ($3.6 billion), beating analysts’ estimates of 23.6 billion yuan. (Read the full story.)

• Chinese e-commerce site Pinduoduo reported mixed second-quarter results Friday with a narrower net loss as revenue missed estimates. It reported revenue of 12.2 billion yuan ($1.76 billion) for the quarter ended in June, up 67% year-on-year but lower than Wall Street estimates. The net loss for the quarter narrowed to 77 million yuan under non-GAAP standards. (Read the full story.)

• Nasdaq-listed Kandi Technologies Group Inc., a lesser-known Chinese budget electric carmaker, is exploring establishing an electric and off-road vehicle plant in North America. (Read the full story.)

• Chinese e-commerce giant Alibaba Group Holding Ltd. offered reassurances that its presence in the U.S. is benign, in a bid to remove itself from Trump’s crosshairs. (Bloomberg)

• Beijing’s drive for semiconductor self-sufficiency has propelled another money-losing company onto China’s stock market, with VeriSilicon Microelectronics Shanghai Co. Ltd. trading at over triple its offering price Thursday after listing earlier this week. (Read the full story.)

** ON THE CORONAVIRUS

• The Chinese mainland reported (link in Chinese) 22 new symptomatic Covid-19 infections on Thursday, up from seven a day earlier. All of the new cases were imported. The mainland also added 23 asymptomatic cases.

• Hong Kong will offer free coronavirus tests to residents starting Sept. 1 (link in Chinese), leader Carrie Lam said Friday. The testing program, which will last as long as two weeks, will allow every Hong Kong resident to be tested on a voluntary basis. Beijing will provide laboratory equipment, testing kits and staff.

• As of Friday evening Beijing time, the number of global coronavirus infections had surpassed 22.7 million, with a death toll over 794,000, according to data compiled by Johns Hopkins University.

 Read more 
Caixin’s coverage of the new coronavirus

** AND FINALLY

The Three Gorges Dam on Thursday encountered the largest surge of floodwater since the filling of its reservoir in 2003, according to local authorities. Eleven sluice gates have since been opened to discharge the floodwater.

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Eleven of the Three Gorges Dam’s sluice gates were opened Thursday to discharge floodwater in Yichang, Central China’s Hubei province.

** LOOKING AHEAD

Release of second-quarter financial results:

Aug. 26: Bilibili and Xiaomi

Aug. 28: BYD and ZTE

Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editors Yang Ge (geyang@caixin.com) and Gavin Cross (gavincross@caixin.com)

 Read more 
China Business Digest: China, U.S. to Talk in Coming Days; Alibaba Quarterly Earnings Beat Estimates

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