Caixin
Sep 07, 2020 08:16 PM
CHINA BUSINESS DIGEST

China Business Digest: Chipmaking Giant SMIC Denies Military Links; Ant Addresses Ownership Concerns as IPO Looms

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Ant Group answers regulator inquiries regarding links with Alibaba in preparation for its blockbuster listing. A Chinese biotech company said it has vaccinated 90% of staff and their families before completion of large-scale clinical trials. China’s foreign trade booked a mixed performance in August, with goods exports growing while imports shrank. Meanwhile, contract chip manufacturer SMIC denied claims it is linked to the Chinese military, and China successfully launched and landed an experimental reusable spacecraft.

— By Guo Yingzhe (yingzheguo@caixin.com) and Han Wei (weihan@caixin.com)

** TOP STORIES OF THE DAY

Ant addresses ownership concerns in step toward IPO

Ant Group outlined its ownership structure to address concerns over connections with Alibaba Group as the internet finance giant moved closer to its blockbuster concurrent listings in Shanghai and Hong Kong. Ant is majority-controlled by Jack Ma, co-founder and retired chairman of Alibaba Group Holding Ltd., while Alibaba has no control over the company with a 32.65% stake. Ant is independent from Alibaba in terms of ownership, business and financials, Ant said Monday in filings with the Shanghai Stock Exchange.

Chinese chipmaker denies military links as U.S. eyes ban

The Chinese mainland’s biggest contract chip manufacturer, Semiconductor Manufacturing International Corp. (SMIC), denied claims it has links with the China’s military. Reuters reported last week that the U.S. government is considering adding the firm to its trade blacklist.

“The Company is in complete shock and perplexity to the news,” SMIC said in a Saturday statement. It said it was “open to sincere and transparent communication” with U.S. government agencies to resolve what it called “potential misunderstandings.”

SMIC’s stock closed down 22.9% in Hong Kong on Monday.

Troubled Anxin Trust faces $219 million debt claim by state fund

Financially troubled Anxin Trust Co. Ltd. faces debt claims for 1.49 billion yuan ($219 million) from China Trust Protection Fund Co. Ltd., a state-backed trust-industry bailout fund. The fund demanded that a district court in Beijing order the sale of Anxin collateral to repay the debts.

Sinovac gives its Covid-19 vaccine to thousands of employees

Thousands of employees of Sinovac Biotech Ltd. and their families have been injected with the company’s experimental Covid-19 vaccine outside of clinical trials under a controversial program allowing emergency use of vaccines that are still under development.

Exports grew while imports shrank in August

Chinese exports of goods increased by 9.5% year-on-year to $235.3 billion last month, up from 7.2% growth in July, according to data (link in Chinese) from the General Administration of Customs released on Monday. The reading beat the median forecast of a 6% rise in a Caixin survey (link in Chinese) of economists.

Meanwhile, imports fell 2.1% year-on-year to $176.3 billion in August, a steeper decline than the previous month’s drop of 1.4%. Economists polled by Caixin had expected imports to grow by 0.8%.

Private equity firm accused of bilking investors out of Ant Group stake

With Ant Group Co. Ltd. preparing for what could be the largest IPO in history, Chinese private equity firm Primavera Capital Group has been accused of cheating a group of investors out of possibly millions of dollars by selling their stake in the fintech superstar to its chairman’s brother and sister at a cut-rate price. (Read our in-depth story.)

China expands access to duty-free shopping

While the Covid-19 pandemic has disrupted global travels and shuttered shops, it hasn’t changed many Chinese shoppers’ strong appetite for luxury imported goods. Now policymakers plan to tap into this huge unmet demand by facilitating duty-free shopping in Hainan, part of a broader strategy to develop the southern province into a world class free-trade port. (Read the cover story.)

Chinese logistics giants seek secondary listings in Hong Kong

New York-listed Chinese express delivery company ZTO Express (Cayman) Inc. and its hometown rival Best Inc. are seeking secondary listings in Hong Kong, sources familiar with the issue told Caixin. (Read the full story.)

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** OTHER STORIES MAKING HEADLINES

Economy & Finance

• China’s financial regulators plan to cap the interest rates Ant Group can charge borrowers on quick consumer loans, a move that could curb the financial technology giant’s biggest revenue driver as it prepares for a mega IPO. (Bloomberg)

• Retail shares of Chinese bottled water producer Nongfu Spring Co. Ltd. were oversubscribed by more than 1,100 times in its high-flying IPO, locking in a record HK$677.7 billion ($87.4 billion) in funds for subscription. The company is scheduled to list in Hong Kong on Tuesday.

Business & Tech

• Despite losing the Indian market and U.S. President Donald Trump’s threat to ban the app, ByteDance Ltd.-owned TikTok was still the world’s highest-earning non-game app in August. (Read the full story.)

• Hong Kong-listed China Feihe Ltd., one of China’s leading infant formula makers, will purchase one of its suppliers, YuanShengTai Dairy Farm Ltd. for about HK$3 billion, marking the latest step towards consolidation of China’s diary industry. (Read the full story.)

China Evergrande Group kicked off a nationwide sales promotion with a 30% price cut on all household properties, part of the developer’s effort to boost sales and meet its target of cutting debt by nearly a half. (Bloomberg)

General

• China’s homegrown nuclear technology took a significant step forward as a Hualong One reactor began loading fuel for the first time. (Bloomberg)

• The third Chinese company in less than a week, Shenzhen Changfang Group Co. Ltd., said a major holder accidentally sold its shares, increasing speculation that insiders may be testing the market before they offload their stakes. (Bloomberg)

• China’ experimental reusable spacecraft successfully landed Sunday after a two-day in-orbit operation, according to state-owned Xinhua News Agency, marking an “important breakthrough” in the country’s reusable spacecraft research.

** ON THE CORONAVIRUS

• On Sunday, the Chinese mainland reported 12 new symptomatic Covid-19 cases (link in Chinese), all imported. It also reported 17 asymptomatic cases, also all imported.

 Read more 
Caixin’s coverage of the new coronavirus

• As of Monday evening Beijing time, the number of coronavirus infections globally surpassed 27.1 million, with the death toll at more than 889,000, according to data compiled by Johns Hopkins University.

** AND FINALLY

The 2020 China International Fair for Trade in Services kicked off Friday, offering visitors a look at a cavalcade of high-tech applications like service robots. It is the first international trade fair China has held since the coronavirus outbreak began in December.

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A man on Sunday tries out an intelligent throat swab sampling robot, which was developed during the Covid-19 pandemic, at the 2020 China International Fair for Trade in Services (CIFTIS) in Beijing.

** LOOKING AHEAD

Sept. 9: Release of China’s CPI and PPI data for August

 

Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editors Flynn Murphy (flynnmurphy@caixin.com) and Gavin Cross (gavincross@caixin.com)

 Read more 
China Business Digest: Li Ka-shing Plans to Sell $7.3 Billion of Mainland Properties; China Fines Five Financial Companies $47 Million for Misconduct

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