China Business Digest: Walmart Joins Microsoft Bid for TikTok; Huawei Buys More in Japan Amid U.S. Sanctions
Walmart joined Microsoft in bidding to buy TikTok, and the video platform’s CEO Kevin Mayer resigned. Chinese EV maker Xpeng raised $1.5 billion in U.S. IPO. Meanwhile, Huawei’s Japanese procurement jumped 50% last year as the U.S. tightened trade restriction on the company. China’s first personal bankruptcy legislation is set to take effect next March. And a Tianjin-backed developer’s debt woes deepened.
— By Timmy Shen (email@example.com) and Han Wei (firstname.lastname@example.org)
** TOP STORIES OF THE DAY
Walmart joins Microsoft in pursuit of TikTok
Walmart Inc. said it is teaming up with Microsoft Corp. in a joint bid to acquire TikTok, a surprise move that signals the retail giant’s desire to tap online platforms and reach younger shoppers. CNBC reported Thursday that TikTok is nearing an agreement that could be announced as soon as next week.
Tianjin-backed developer defaults on $31 million due bondholders
The debt woes of Tianjin Real Estate Group, a developer backed by the government of northeast China’s port city Tianjin, deepened after it defaulted on 215.8 million yuan ($31.3 million) due Wednesday to bondholders. It was the company’s first default on public debt amid a long-running struggle to sort out a restructuring plan.
Xpeng raises $1.5 Billion in expanded U.S. IPO
Chinese electric-car startup Xpeng Inc. raised about $1.5 billion in a U.S. initial public offering, expanding the size of its share sale and pricing the shares above a marketed range. The company was valued in the offering at $10.8 billion based on the outstanding shares listed in its filings. Xpeng began trading Thursday on the New York Stock Exchange under the ticker symbol XPEV. Its American depositary shares closed at $21.22 in New York trading Thursday after rising as much as 67% from the offering price of $15.
Kevin Mayer resigns as CEO of embattled TikTok
Former Disney executive Kevin Mayer has resigned as chief executive of TikTok less than three months after taking the top position at the embattled video-sharing app that has come under attack from U.S. President Donald Trump.
Huawei’s Japanese procurement jumps 50% amid U.S. restrictions
Huawei Technologies Co. Ltd. revealed Wednesday that procurement from Japanese suppliers grew by more than 50% last year while the U.S. tightened trade restrictions on the Chinese telecom-equipment maker. Jeff Wang, chairman of the Tokyo-based subsidiary Huawei Japan, credited the gain to Japan’s “extremely important role in global supply chains.” (Nikkei Asian Review)
Xiaomi posts strong second-quarter results
Smartphone maker Xiaomi Corp. posted 3.1% year-on-year revenue growth in the second quarter and a 129.8% jump in profit, its latest quarterly results showed. But its adjusted net profit shrank 7.2% year-on-year to 3.4 billion yuan.
In world first, Hong Kong team proves coronavirus reinfection is possible
Hong Kong researchers have published the world’s first confirmed account of a person being infected twice with the novel coronavirus, adding evidence to a growing number of anecdotal claims of Covid-19 reinfection.
Ant Group shows solid growth as it marches to possible record IPO
Ant Group’s prospectuses show the company — whose crown jewel is the Alipay online payments service — plans to sell at least 10% of its enlarged shares in a pair of listings in Hong Kong and Shanghai. Multiple sources told Caixin the company would like to raise about $30 billion. (Read the full story here.)
Alibaba halts India investment plan
Alibaba Group Holding Ltd. has put on hold its plan to invest in Indian companies for at least six months, as political tension rises between China and India, Reuters reported citing sources. (Reuters)
Banks let loose with loans to manufacturers
Chinese lenders have already issued 1.6 trillion yuan ($232 billion) in new manufacturing loans over the first seven months of this year, more than they did in all of 2019, a senior banking official said.
** OTHER STORIES MAKING THE HEADLINES
Finance & Economy
• Major Chinese industrial companies’ profits in July grew 19.6% year-on-year (link in Chinese), compared to 11.5% growth in June, according to data from the National Bureau of Statistics.
• Wang Xuefeng, a former head of the Shanxi provincial branch of the China Development Bank, one of the nation’s three policy lenders, has been placed under investigation by anticorruption agencies on suspicion of serious violations of law and Communist Party discipline.
• China’s first personal bankruptcy legislation will take effect in Shenzhen on March 1 next year, and residents who have lived in the city and participated in the city’s social insurance program for three consecutive years will be able to apply for bankruptcy restructuring or liquidation, or conciliation.
• Recent price fluctuations in China’s grain market are temporary and the country can maintain self-sufficiency in grain supply, an official of the agriculture ministry said on Wednesday in response to concerns about food security.
Business & Tech
• U.S. companies operating in China have expressed alarm at President Trump’s imminent WeChat ban, saying they fear it will blunt their competitive edge and hit their revenues, according to a survey released by the American Chamber of Commerce in Shanghai.
• Nasdaq-listed BlueCity Holdings Ltd., the operator of China’s largest gay dating app Blued, has announced the purchase of Lesdo, a popular Chinese lesbian dating platform.
• Volkswagen AG plans to roll out its first fleet of self-driving test cars in Hefei, an eastern Chinese city that’s emerging as a hot spot for the nation’s electric-vehicle ambitions.
• Video-streaming platform Bilibili Inc.’s total net revenues grew 70% year-on-year in the second quarter.
• Chinese electric-vehicle startup Byton Ltd. has applied to register a new tech company as part of ongoing efforts to resume its China operations, which stopped in July because it couldn’t pay bills.
** ON THE CORONAVIRUS
• Singapore will offer Covid-19 tests for China-bound travelers before departure to align with Chinese requirements to contain imported cases. (Bloomberg)
• On Wednesday, the Chinese mainland reported eight new Covid-19 cases with symptoms (link in Chinese), all imported cases, according to China’s top health body.
• As of Thursday afternoon Beijing time, the number of coronavirus infections globally reached over 24.2 million, with the death toll surpassing 826,000, according to data compiled by Johns Hopkins University.
** AND FINALLY
Screenshots from closed circuit video footage of a bank director slapping a new recruit for refusing a toast at a company dinner have been viewed more than hundreds of millions of times on Weibo and given rise to thousands of personal stories detailing workplace culture-related incidents.
The China Banking Association, a self-regulatory industry body, said (link in Chinese) on Thursday that such bad drinking culture has long existed and is hard to stop but banks should make efforts to regulate such behavior.
** LOOKING AHEAD
Aug. 28: BYD and ZTE to report their latest financial results
Sept. 1: Release of Caixin China manufacturing PMI
Sept. 3: Release of Caixin China services PMI
Contact reporter Timmy Shen (email@example.com) and editor Yang Ge (firstname.lastname@example.org)
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