Caixin
May 26, 2021 09:15 AM
CX DAILY

CX Daily: Saving Peking University’s Fallen Tech Conglomerate

Restructuring /

In Depth: Saving Peking University’s fallen tech conglomerate

Peking University Founder Group Corp. (PUFG) was once the poster child for the entrepreneurial spirit that flowed from the hallowed halls of China’s elite universities in the 1980s as reform and opening-up fever gripped the country. Today, it’s become yet another example of a sprawling, debt-ridden conglomerate undergoing a court-mandated bankruptcy reorganization after years of reckless expansion built on unsustainable debt, with some corruption thrown in for good measure.

Many of the other high-profile busted corporate flushes that have been through the bankruptcy restructuring or liquidation mill were victims of massive corruption or asset stripping by their previous owners, or weak players in their sectors or in industries with poor prospects. But PUFG has a portfolio of attractive assets in growth areas.

Its future now lies in the hands of its creditors, which will need to agree to take significant losses, and a consortium led by the life insurance arm of Ping An Insurance (Group) Co. of China Ltd., one of the country’s top financial conglomerates.

Running /

In Depth: Safety standards under scrutiny after Gansu trail race tragedy

The lack of safety standards in China’s cross-country running world is under scrutiny in the aftermath of a deadly May 22 race in the country’s northwestern Gansu province, with at least 13 planned trail and road events now delayed and four canceled outright as of Tuesday.

Several participants and rescue professionals told Caixin the event was poorly organized, with things like windproof running jackets removed from the list of compulsory gear for runners, leaving them vulnerable to abrupt weather changes.

Related: Northwest province investigates race that left 21 runners dead

Race organizer put a team of temps in charge of deadly race

Opinion: Should extreme cross-country racing be suspended?

FINANCE & ECONOMY

Corruption

The cases came to light in the wake of investigations into the collapse of Baoshang Bank which was seized from private conglomerate Tomorrow Holding in May 2019. Photo: IC Photo

Corruption /

China’s graft busters reveal ‘shocking’ corruption among local regulators of failed Baoshang Bank

China’s top antigraft agency disclosed details of corruption cases involving five former banking regulators in the Inner Mongolia autonomous region who between them took more than 700 million yuan ($109 million) in bribes, mostly connected with scandal-hit Baoshang Bank Co. Ltd., a failed local lender taken over by the state in 2019.

The officials, including Xue Jining, a former head of the Inner Mongolia branch of the now-defunct China Banking Regulatory Commission (CBRC), abused their power to seek benefit for those who paid them bribes related to establishing institutions, approving new businesses and loans, project construction and personnel appointments, the Central Commission for Discipline Inspection (CCDI) said in report (link in Chinese) released on its website Tuesday.

Economy /

Wang Shuo: Why interdependence between nations is not as reliable as it seems

"I recently revisited 'Theory of International Politics,' a classic book on international relations written 40 years ago by Kenneth Waltz, in which he argues for the theory of structural realism," writes Wang Shuo, the chief editor of Caixin Media, in an article. "He writes that in an era of economic globalization, even as countries become more interdependent on one another, the competition for power will continue to be the defining factor."

"Economic issues should be handled by economic means; political issues should be handled by political means," writes Wang. "China has had success with employing this strategy in the past and it was particularly key to overcoming difficulties over more than 10 years preceding its accession to the WTO. The wisdom and experience there are worth remembering."

Bonds /

Huarong bonds lose half their value in key China funding market

China’s repo market shows just how risky China Huarong Asset Management Co. Ltd.’s bonds are perceived to be within the Chinese mainland, despite being majority-owned by the Ministry of Finance.

Borrowers putting up a Huarong Securities 2023 bond for collateral now get just 40% of the note’s face value as cash, down from 91% at the start of April, according to China Securities Depository and Clearing Corp. data.

Quick hits /

China grapples with yuan messaging amid inflation pressures

BUSINESS & TECH

huawei

A Chongqing Sokon Seres SF5 displayed in Huawei’s flagship store in Shanghai April 20.

Huawei /

Huawei vows it won’t make cars or invest in automakers

Huawei Technologies Co. Monday dismissed speculation that it wants to be China’s Tesla challenger, driving down the shares of several automakers.

The telecom equipment giant has not invested and will not invest in any auto companies, Huawei said Monday in a statement. The company also said it will not control or hold shares of any automakers.

There were reports that Huawei was discussing investing in BAIC BluePark New Energy Technology Co. Ltd., a unit of Beijing-based auto giant BAIC, and small auto maker Chongqing Sokon Industry Group Stock Co. Ltd. Chongqing Changan Automobile Co. Ltd. said in November it would partner with Huawei to develop high-end smart cars.

Related: Huawei to focus on software to lessen fallout of U.S. sanctions

Travel /

Trip.com reports first-quarter profit, but drop in revenue

Chinese online travel giant Trip.com recorded ups and downs in the first quarter of 2021 as it returned to profitability while taking a revenue hit.

In the three months through March, Trip.com registered a net profit of 1.8 billion yuan ($273 million), in contrast to a net loss of 5.4 billion yuan in the same period of last year, when the Covid-19 outbreak forced travel agencies to suspend operations, according to its latest earnings report.

Despite becoming profitable, Trip.com’s quarterly revenue fell 13% to 4.1 billion yuan, which the company said was partly due to less demand for cross-border travel as the pandemic continues to spread overseas.

Videos /

ByteDance rival Kuaishou reports 37% sales growth

Kuaishou Technology reported a 37% gain in quarterly revenue after the rival to TikTok-owner ByteDance Ltd. delved more deeply into online commerce and advertising.

Revenue surged to 17 billion yuan ($2.65 billion) for the three months ended March compared with the 16.9 billion yuan projected by China Renaissance. The net loss widened to 57.8 billion yuan from a loss of 30.5 billion yuan a year earlier as sales and marketing expenses surged to roughly 69% of revenue.

Movies /

‘Fast and Furious’ turbocharges China’s box office

China’s weekly box office topped 1 billion yuan ($156 million) outside a public holiday for the first time since January, boosted by ticket sales for the new installment of Hollywood’s “Fast and Furious” franchise.

In a promising sign of the nation’s post-pandemic rebound, China’s cinemas took in 1.36 billion yuan in the week through May 23, a rise of 132% on the previous seven days, according to the China Movie Data Information Network. Despite lukewarm reviews, “F9” raked in 876 million yuan, or nearly two-thirds of the total.

Quick hits /

Boom in Chinese firms listing in the U.S. comes to a sudden halt

Pony.ai becomes eighth firm allowed to test driverless cars in California

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Today's CX Daily was compiled and edited by Kevin Guo (xinguo@caixin.com).

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