Feb 03, 2021 09:43 AM

CX Daily: Luckin-Tainted Former Car Rental Superstar to Drive Off Hong Kong Exchange

Rental car /

Luckin-tainted former car rental superstar to drive off Hong Kong exchange

The end of the road as a listed company is just around the corner for Car Inc., an auto rental specialist that once hoped to make big bucks by tapping a growing hunger for mobility from China’s booming middle class.

The company was once a high-flyer that attracted the likes of former U.S. giant Hertz and top-tier private equity firm Warburg Pincus LLC as investors. But its hoped-for growth story ultimately stalled, and its reputation sank further last year when its name got sucked into the massive accounting scandal surrounding Starbucks Corp. challenger Luckin Coffee Inc.

This week Car Inc. moved a step closer to delisting from the Hong Kong Stock Exchange with its Monday publication of a timetable to privatize under a plan first floated in November. Under that plan, private equity firm MBK Partners offered to purchase all of the company’s shares for HK$4 ($0.52) apiece — a more than 20% premium over the stock’s price the previous five trading days but still less than half the HK$8.50 price from the company’s 2014 IPO.



Cash-strapped property developer China Fortune said it couldn’t come up with the cash to make its debt payments due to the current economic and industry conditions coupled with the impact of the Covid-19 epidemic. Photo: VCG

Defaults /

Developer China Fortune defaults on 5.3 billion yuan of debt

China Fortune Land Development Co. Ltd. and its subsidiaries defaulted on billions of yuan of debt as the property developer struggled to scrape together cash amid a tightening regulatory environment.

The Shanghai-listed company said it failed to pay 5.3 billion yuan ($813.5 million) of principal and interest on debts that include bank and trust loans, though not bonds, according to a company filing (link in Chinese) released late Monday.

China Fortune said it couldn’t come up with the cash to make the debt payments due to current economic and industry conditions coupled with the impact of the Covid-19 epidemic. It said it was trying to raise money and reached a consensus with some financial institutions on a repayment delay.

China-U.S. /

China’s top diplomat urges U.S. to abandon Trump’s ‘misguided policies’

The new U.S. government should abandon “misguided policies” that view China as a “strategic competitor or adversary” and work with Beijing to restore bilateral relations to a “predictable and constructive” track, China’s highest ranking diplomat urged Tuesday.

Yang Jiechi, a Communist Party Politburo member and foreign affairs director of its Central Committee, told a National Committee on U.S.-China Relations virtual event that former U.S. President Donald Trump’s administration adopted “misguided policies against China, plunging the relationship into its most difficult period since the establishment of diplomatic ties.”

Yang’s remarks came two weeks after U.S. President Joe Biden took office on Jan. 20. He has been the highest ranking Chinese official to speak on the U.S.-China relationship since Biden’s inauguration.

Banking /

HSBC doubles down on China with new Greater Bay Area office

HSBC Holdings Plc will establish an office to spearhead its strategy in China’s fast-growing Greater Bay Area, stepping up its bet on the world’s second-largest economy.

Daniel Chan, currently head of business banking at HSBC in Hong Kong, was named head of the unit, which will oversee the strategy to “capture opportunities” in Guangdong, Hong Kong and Macau, the London-based lender said Monday in a statement.

Bird flu /

H5N8 bird flu found in wild swans at Beijing’s Old Summer Palace

Beijing reported Monday an outbreak of the highly contagious H5N8 bird flu in wild swans at a tourist spot in the Chinese capital, according to the Ministry of Agriculture and Rural Affairs.

The outbreak was detected at the Old Summer Palace (圆明园) in Beijing's northeastern Haidian district. The site is home to 15 of the wild birds, three of which have died of the infection so far.

China has reported a total of three bird flu outbreaks since November, including one in the eastern province of Shandong in January and another in the northern province of Shanxi two months earlier. There have been no cases of H5N8 being transmitted from wild birds to humans since the first bird flu outbreak in 2014.

Quick hits /

Fall in capital inputs pushes Caixin New Economy Index lower

Taiwan says surpluses, not foreign exchange moves, landed it on U.S. watchlist



Kumquat growers in Guangzhou offer plants online through livestreaming.

Flowers /

In Depth: China’s flower growers suffer amid Lunar New Year pandemic resurgence

Before every Lunar New Year, residents of the southern city of Guangzhou follow the tradition of shopping for plants and flowers at a fair on downtown streets. But not this year as the city canceled the fair amid a resurgence of the Covid-19 pandemic.

This has been devastating for the region’s flower growers. In his 2.5-acre greenhouse, Li Wenxing said he felt a chill looking at his 120,000 blooming orchids. Orders for the holiday season account for 90% of his annual sales. Usually at this time, he should already have sold half of his orchids. But with this year’s holiday coming Feb. 12, he’s sold only about one sixth of the crop.

Flower growers like Li are explored selling flowers online, but the result is not promising as the costs of packaging and logistics eat into profits. And shopping for plants and flowers at the fair with families and friends is a festive activity, an experience online flower shopping lacks, said Huang Xiangfu, president of the Guangzhou Flower Industry Association.

Tesla /

Tesla China apologizes to China’s State Grid after charging accident

Tesla Inc. apologized to State Grid Corp. of China after a viral video appeared to show a company employee blaming the power system for damage to a Chinese consumer’s Tesla Model 3, the top-selling electric car in China.

The owner of the car in Nanchang in southeast China’s Jiangxi Province told local press that his new Model 3 wouldn’t run after charging the battery at a supercharger station, saying that a series of errors appeared on the power display.

In a video secretly recorded and posted online by a reporter, a Tesla employee is shown telling the vehicle owner that a current overload in the national grid damaged the vehicle’s inverter. In an electric car, the inverter changes the battery’s DC electricity to AC to power the vehicle’s motor. The staff member denied that Tesla was responsible for the damage.

Hypermarket /

China hypermarket leader’s profits slide as it looks to embrace group-buying

Alibaba-backed hypermarket operator Sun Art Retail Group Ltd. posted a 5% drop in profits during 2020 on flat revenue growth and said it aimed to bridge the gap between brick-and-mortar and online shopping by embracing the community group-buying phenomenon that has gained ground in China since the pandemic lockdowns.

Sun Art reported revenue growth barely budged during 2020, with a mere 0.1% rise to 95.5 billion yuan ($14.7 billion), leading to a 5.4% year-on-year profit slide to 24.3 billion yuan. Sun Art is China’s market leader in brick-and-mortar hypermarkets, with 14.1% of the market, followed by rivals China Resources and Yonghui, in which Tencent owns a 5% stake, according to market research firm Euromonitor International.

Airlines /

HNA-backed Hong Kong Airlines in danger of getting wings clipped

Embattled Hong Kong Airlines Ltd. (HKA) may again face the risk of losing its flying license due to financial concerns, a little more than a year after getting a reprieve from the local aviation authority.

The 14-year-old airline’s dilemma has emerged as the low-cost carrier’s major stakeholder, the once high-flying conglomerate HNA Group Co. Ltd., is dealing with its own financial problems.

HKA is just the latest business pushed to the brink of crisis by HNA Group’s struggles under a mountain of debt incurred during its early global spending spree that at its peak boosted total assets to 1.2 trillion yuan ($186 billion).

Quick hits /

Fast-fading Huawei holds onto smartphone crown — in China

China, EU hold first climate dialogue ahead of U.N. biodiversity talks

China state auditors decry environmental lapses, hinting at five-year plan shift

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