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By Bloomberg / Jul 20, 2019 05:45 AM / Business & Tech

Photo: VCG

Photo: VCG

Toyota Motor Corp. and BYD Co. agreed to jointly develop electric vehicles in China, the latest in a series of deals between a major global automaker and Chinese manufacturer.

The two companies will work together on electric sedans and sport-utility vehicles with the goal of introducing them during 2020-2025, they said Friday in a statement. The partnership also includes the development of batteries for the vehicles, they said.

The partnership underscores Toyota’s ambitions to use electric vehicles to break into China, the market where the company remains a laggard. The carmaker is seeking to narrow the gap with rivals including Volkswagen AG and General Motors Co. in the next decade, which has fueled a global race to secure battery supplies. This week, Toyota announced a deal to buy batteries from Contemporary Amperex Technology Co. Ltd., China’s largest EV battery maker.

After years of focusing on hybrid and fuel-cell technology, Toyota is embracing all-electric cars. The maker of the Prius is now forecasting annual sales of 5.5 million EVs globally in 2025, after moving up its prior target by five years.

In 2008, BYD became the first company to sell mass-produced plug-in hybrid vehicles. BYD’s sales of EVs have been ranked No. 1 in the world since 2015.

Other global automakers working with Chinese manufacturers include Volkswagen and Ford Motor Co. VW is working with Anhui Jianghuai Automobile Co., while Ford has teamed up with Anhui Zotye Automobile Co. Renault SA this week said it will invest $144 million in a venture with Jiangling Motors Corp. to develop EVs in China.

Related: CATL, Toyota Team Up for New-Energy Vehicle Batteries


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By Matthew Walsh / Jul 20, 2019 05:37 AM / Business & Tech

Photo: VCG

Photo: VCG

Novartis International AG won approval in China to sell its multiple sclerosis (MS) drug Gilenya, Reuters reports, deepening the Swiss pharmaceutical giant's business ties to the huge Chinese health care market and promising to shake up the treatment of what has traditionally been a poorly managed disease there.

MS is the most common autoimmune disease affecting the central nervous system. Around 30,000 people in China live with the condition, according to state news agency Xinhua. That compares with nearly 1 million people in the U.S. suffering the disease, according to a study by the National MS Society.

However, low awareness of MS in China means that the actual number of people with the disease may be significantly higher. In May, Chinese doctors urged both health-care professionals and the general public to learn more about the disease, adding that 95% of people knew nothing about MS before they were diagnosed.

MS occurs when the body’s immune system attacks the fatty sheaths around the nerves, disrupting their ability to send messages to one another. As MS progresses, it causes muscle and cognitive problems and can lead to lasting disabilities.

Although there is no one-size-fits-all cure, a number of treatments can significantly slow the progression of MS. China has long been playing catch-up with Western countries in rolling out such treatments, however, and comparatively few are yet available there.

One such drug, teriflunomide — sold under the trademark Aubagio — was approved by the U.S. Food and Drug Administration in 2012 but gained approval in China only last year.

Gilenya sales earned Novartis $825 million during the second quarter, making it the company’s second-largest source of revenue, Reuters said, adding that the drug has been available in the United States for almost a decade but is now being challenged by generic rivals, spurring Novartis’s push into other markets.

Related: In Depth: Why China’s Drug Review Revamp Is Stalling

Contact reporter Matthew Walsh (matthewwalsh@caixin.com)

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By Matthew Walsh / Jul 19, 2019 06:18 PM / Business & Tech

Photo: VCG

Photo: VCG

China’s e-commerce colossus Alibaba has partnered with Sinopharm, one of the country’s major drug companies, to dispense over-the-counter (OTC) medicines.

Customers at Shanghai-based outlets of Freshippo — Alibaba’s brick-and-mortar retail store, also known as Hema — can now purchase around 120 different medicines through self-service vending machines, allowing them to treat colds, coughs, and other common ailments. The drugs are also available through Freshippo’s smartphone app.

The two companies plan to extend the service nationwide, according to a statement posted to Freshippo’s official public account on WeChat, China’s ubiquitous social messaging app.

Alibaba and Sinopharm’s matchup comes at a time when Chinese health care companies are increasingly turning to e-commerce models to satisfy customer demand.

Online platform JD.com, for example, is partnering with drug stores in major Chinese cities to offer 24-hour OTC medicine delivery services, while food delivery and lifestyle app Meituan also allows delivery staff to purchase OTCs users ordered online from local pharmacies.

Zhao Runhua contributed reporting.

Contact reporter Matthew Walsh (matthewwalsh@caixin.com)

Related: Alibaba Wants a Hema Supermarket in Every Big Chinese City

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By David Kirton and Li Liuxi / Jul 19, 2019 06:07 PM / Business & Tech

Photo: VCG

Photo: VCG

China’s Ministry of Industry and Information Technology (MIIT) is weighing up whether to give more targeted support to developers of core hydrogen car technologies in a bid to pave the road to a greener transport future without racking up a hefty bill, according to domestic media.

Several Chinese cities and automakers have jumped on the hydrogen-powered car bandwagon in recent months, expecting that they might hitch a ride on the back of generous subsidy support like that which powered China to a poll position in electric vehicles over the last decade.

Yet the turbocharged development came at a heavy cost, which the government is trying to avoid this time around, the Shanghai Securities Daily reported Thursday. Instead of blanket subsidy support, it is looking into whether it can spur the hydrogen car industry’s development better by focusing on “core components,” that will bring costs down, the report said.

Hydrogen-powered vehicles are regarded as a promising future technology because their batteries emit only water vapor, in contrast to pollution-emitting traditional combustion vehicles. Their batteries also produce more energy for their weight compared to the lithium-ion batteries that currently drive the electric vehicle industry, making them particularly promising for long-distance vehicles such as buses and trucks.

Yet so far higher production costs have hindered their development, in part because of the cost of platinum, a key component, as well as a lack of support infrastructure for vehicles, and the complexity of storing hydrogen, which is highly volatile.

Contact Reporter David Kirton (davidkirton@caixin.com)

Related: Shanghai Scales Up Hydrogen-Powered Car Development

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By Zhao Runhua / Jul 19, 2019 05:28 PM / Business & Tech

Photo: VCG

Photo: VCG

It’s been a big week for BMW’s China unit.

After the German carmaker announced that it is extending its collaboration with high-precision map producer NavInfo, the company is now teaming up with Chinese internet giant Tencent to use big data to research and develop autonomous driving technologies.

That’s the takeaway from a Friday press release by Tencent, which says that the online behemoth will supply BMW with development platforms and tools, ensuring that all data generated and processed during the project meet national safety requirements.

In the same announcement, Tencent also outlined its high-precision mapmaking technology for use in autonomous driving. Although multiple foreign outlets reported that the two companies will also jointly set up a computing center in China for autonomous driving, Tencent made no mention of such a project.

BMW and Tencent are already collaborating in other fields, such as in-car entertainment.  

Related: In Depth: China Races Early Into the 5G Era

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By Peng Yanfeng and Isabelle Li / Jul 19, 2019 03:47 PM / Business & Tech

Photo: VCG

Photo: VCG

Japan Display Inc. (JDI), a major panel-maker and Apple supplier, is in advanced fundraising negotiations with Chinese investors, including Harvest Fund Management and electronics-maker TCL Corp., Caixin has learned through multiple sources familiar with the matter.

The Japanese company has struggled to remain afloat after it failed to follow an industry shift towards organic light-emitting diode (OLED) displays. JDI reported a loss of $2.3 billion in 2018, up from $260 million the year before.

Harvest Tech, the fund firm’s technology investment arm, last week sent delegates to Tokyo for a new round of negotiations with JDI, sources confirmed to Caixin.

“The trip to Tokyo was led by the chairman as well as the general manager of Harvest Tech,” said one person with close ties to the investment firm, adding that the two parties are maintaining a dialogue regarding the price and conditions of the potential deal.

TCL, whose interest in JDI dates back several years, also remains in the conversations, though the company did not have a seat at the table last week. Also a major panel-maker, TCL hopes to become a controlling stakeholder of JDI through another investment, sources told Caixin.

Read the full story on Caixin later today.

Contact reporter Isabelle Li (liyi@caixin.com)

Related: Taiwan’s TDK Withdraws From Bailout of Troubled Japanese Apple Screen Supplier

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By Wen Simin and Timmy Shen / Jul 19, 2019 03:34 PM / Economy

Photo: VCG

Photo: VCG

Vietnam’s container throughput surpassed Hong Kong’s in the first half of this year, possibly in part due to trade diversion amid the trade war between China and the U.S.

In the first half of 2019, Hong Kong saw a container throughput of 9.06 million twenty-foot equivalent units (TEUs), down 8.1% year-on-year, according to government data from the Hong Kong Maritime and Port Board.

In the same period, Vietnam recorded 9.1 million TEUs in container throughput, up 3% year-on-year, official data from the Vietnam Maritime Administration show.

“As tit-for-tat tariff hikes between the US and China increase, so does the cost of importing from each other,” Nomura economists said in a report. “However, there is a silver lining: the two countries diverting imports away from each other potentially benefits industries in different economies.”

“Vietnam is by far the largest beneficiary,” they said, adding that orders due to trade diversion were worth nearly 8% of the country’s gross domestic product in the year through the first quarter of this year.

Read the full story later on Caixin Global.

Contact reporter Timmy Shen (hongmingshen@caixin.com)

Related: China’s Exports and Imports Drop in June in Wake of New U.S. Tariffs

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By Ren Qiuyu / Jul 19, 2019 02:05 PM / Environment

Photo: VCG

Photo: VCG

They’re short, wriggly, and chomping through swaths of China’s farmland.

Since it was first recorded in the country in January, the fall armyworm moth — an invasive species that has previously decimated crops in Africa and southern Asia — has spread to multiple Chinese provinces and autonomous regions.

The moth larvae feed voraciously on a number of crop plants, particularly corn, and then pupate in the soil below. Adult specimens can fly up to 100 kilometers per night, allowing them to spread rapidly.

While Chinese farmers are mostly dealing with the invasions by liberally spraying their crops with pesticides, an alternative approach might help the authorities better control the insects’ spread: high-temperature lamps that attract, trap, and kill them under cover of night.

In a photo essay, Caixin reporter Chen Liang visits southwestern China’s Yunnan province to examine how researchers from the Chinese Academy of Agricultural Sciences are using the lamps to monitor the fall armyworm invasion in the small town where the moth was first found.

Read the full story on Caixin later today.

Contact reporter Ren Qiuyu (qiuyuren@caixin.com)

Related: Frost, Fever, and Worms Sow Inflation in China’s Supermarkets

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By Matthew Walsh / Jul 19, 2019 10:59 AM / Business & Tech

Photo: VCG

Photo: VCG

Google has abandoned plans to launch a filtered version of its search engine in China, according to a company executive.

The tech behemoth’s vice president of public policy, Karan Bhatia, said at a U.S. Senate Judiciary Committee hearing Tuesday that the controversial project, nicknamed Dragonfly, had been “terminated.”

Bhatia’s words marked the first time Google had publicly confirmed Dragonfly’s cancellation, according to Buzzfeed News, which reported the comments. A Google spokesperson later confirmed to the website that the company was in no way pursuing a China-specific version of its search engine.

Initial reports about Dragonfly last summer prompted both a global backlash and a mutinous reaction among certain Google employees, some of whom circulated a petition demanding that the company clarify its aims in returning to the tightly controlled Chinese search market. In December, Google announced that the project had been shelved.

Contact reporter Matthew Walsh (matthewwalsh@caixin.com)

Related: Google Shelves China Search Engine Plan

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By Tanner Brown / Jul 19, 2019 10:17 AM / Business & Tech

Photo: VCG

Photo: VCG

Volvo Cars is stepping up cost-cutting in a bid to reverse a drop in profit as the Chinese-owned company succumbs to pricing pressure from competitors and trade friction that has unsettled global auto manufacturers.

The Swedish carmaker owned by China’s Zhejiang Geely Holding Group Co. aims to reduce costs by 2 billion kronor ($210 million) after first-half operating profit dropped 30%, according to a statement Thursday.

“There are headwinds in most car markets, and combined with tariff costs, that is obvious in our margins,” Chief Executive Officer Hakan Samuelsson said in a phone interview. “We saw this coming a number of months ago and started additional cost actions.”

Volvo Cars has been one of the bright spots of the car industry since it was bought by Geely and revamped its lineup. While it’s selling more cars than ever, the latest results show the group isn’t immune to emerging challenges. Volvo has already unveiled a plan to withhold staff bonuses after profitability declined for the first time since 2012, and margins have continued to deteriorate. The results follow a profit warning last week from German rival Daimler AG as well as Geely Automobile Holdings Ltd.


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By Wu Yujian and Han Wei / Jul 19, 2019 05:58 AM / Business & Tech

Chen Jin. Photo: VCG

Chen Jin. Photo: VCG

China's first internet-only insurer, ZhongAn Online P&C Insurance Co. Ltd., said Thursday its general manager and joint CEO Chen Jin resigned.

Chen stepped down from the posts because of “personal work arrangement,” the Hong Kong-listed company said. He will remain as ZhongAn’s executive director, chairman of the company’s Investment Strategy Committee and president of the Fintech Research Institute, ZhongAn said.

ZhongAn’s board named Deputy General Manager and joint CEO Jiang Xing to assume Chen’s duties, the company said. The appointment is subject to approval by the top banking and insurance regulator.

Jiang, 42, joined ZhongAn in 2014. He previously held senior positions in e-commerce giant Alibaba Group and its affiliate Ant Financial Services Group.

Backed by Alibaba and its rival Tencent Holdings, ZhongAn is China’s largest online insurer. It debuted on the Hong Kong stock exchange in 2017, raising $1.5 billion in the city’s largest-ever fintech company listing.

But the company has reported widening losses, reaching 1.8 billion yuan ($262 million) last year from a deficit of 996 million yuan the previous year. Analysts attributed to the losses to the company’s increasing investment in technology research and development.

Related: Controversial Answer to China’s Health Insurance Needs


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By Han Wei and Zhang Yu / Jul 19, 2019 05:52 AM / Finance

Photo: VCG

Photo: VCG

AssetMark Financial Holdings Inc., a California-based unit of Chinese brokerage Huatai Securities, made a strong public debut Thursday in New York, opening at $25.45 after being priced at $22 a share in a $275 million listing.

Traded under the ticker symbol AMK, the wealth management and technology provider rose more than 20% by 12:30 p.m. AssetMark finished the day at $27.04.

AssetMark priced its initial public offering late Thursday at $22, above its marketed range of $19 to $21.

AssetMark offered 12.5 million shares, including 6,250,000 shares by the company and 6,250,000 shares by Huatai, on the New York Stock Exchange. Huatai will remain as controlling shareholder after the listing.

Proceeds of the offering will be used to pay down debt and for working capital, AssetMark said in its IPO filings. JPMorgan, Goldman Sachs, Credit Suisse, Huatai Securities (USA), BMO, Raymond James and William Blair are underwriters on the deal.

Huatai acquired AssetMark in 2016 for $768 million as its first overseas asset purchase. The Chinese broker recently stepped up efforts to expand abroad with a $1.5 billion sale of stock via the Shanghai-London Stock Connect program, making it the first jointly listed London-Shanghai stock.

Related: Huatai U.K.-China Link Debut May Spur More Cross-Border Listings


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By Quan Yue and Denise Jia / Jul 19, 2019 05:40 AM / Finance

Photo: VCG

Photo: VCG

Donghai Securities Co. Ltd., a brokerage listed on China’s over-the-counter market, confirmed Thursday that its chairman was “assisting authorities with an investigation” and resigned.

The company said it received a phone call late Tuesday from the public security department of Jiangsu province, where the brokerage is located, saying that Zhu Kemin, chairman of Donghai, is cooperating with an investigation.

Zhu, a former government official who previously held various positions in local governments, the Ministry of Finance and the top securities regulator, submitted his resignation to the board effective Tuesday, the company said. Zhu doesn’t hold any shares of the company.

Donghai Securities didn’t disclose on what matter Zhu is being investigated, but the company received three regulatory penalties this year for lack of risk control in its overseas subsidiaries, inadequately qualified personnel and misuse of funds.

Donghai Securities’ largest shareholder is state-owned Changzhou Investment Group Co., with a 21.59% stake.

The board named director Chen Yaoting as interim chairman for no more than six months. Chen is a vice president of Changzhou Investment Group.

Related: Private Equity Boss Faces Life in Jail After Bilking Investors
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By Shen Xinyue and Tang Ziyi / Jul 18, 2019 05:41 PM / Business & Tech

Photo: VCG

Photo: VCG

Kweichow Moutai, the world’s most valuable liquor company, reported its slowest six-month sales growth in three years as the distiller pivots to a direct-sales strategy in a bid to root out graft.

According to the company’s financial report released Wednesday, Moutai’s profit grew 26.6% year-on-year to 20 billion yuan ($2.9 billion) in the first half of 2019, while total revenue also rose 18.2% to 39.5 billion yuan.

The figures illustrate a slowdown compared with the same period last year, when profit and revenue were respectively 40% and 38% higher than the first six months of 2017.

In fact, the purveyor of several varieties of throat-burning booze posted the slowest revenue growth across the first six months of any year since 2016, according to Bloomberg.

The disappointing sales performance comes as Moutai revamps its deeply corrupt distribution channels, according to a report by Shanghai-based Orient Securities. Since 2018, the company has banned 536 intermediaries from selling its flagship liquor — one-fourth of all dealers once authorized to do so. Ninety-nine were culled in the first half of 2019 alone, according to the financial report.

Contact reporter Tang Ziyi (ziyitang@caixin.com)

Related: In Depth: Graft Underpins Distribution at World’s Most Valuable Liquor Company

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By Zhao Runhua / Jul 18, 2019 05:10 PM / Business & Tech

Photo: VCG

Photo: VCG

After reports the wider company is seeking $2 billion from investors, China’s dominant ride-hailing company Didi Chuxing has held a press conference to convince the public of the safety of its Hitch carpool service a year after two women were murdered by their drivers in separate incidents.

During a Thursday media briefing for Hitch — the first of its kind since the service was suspended after the second killing in August — senior Didi executives outlined new safety features.

The company, which did not give a timeline for resuming the service, said a future version of Hitch will not allow drivers to select which passengers they want to pick up, and will limit both the area in which drivers operate and the number of ride-hailing requests they can accept each day.

"Safety will be Hitch’s only key performance indicator moving forward," Didi CEO Cheng Wei told reporters.

The company said any future relaunch would only take place after a test run, but did not give further details.

Didi president Liu Qing said the new safety system might impact the user experience but was nonetheless necessary. 

The outrage that followed the murders sparked a Chinese government investigation and industry-wide safety inspections.

Contact reporter Zhao Runhua (runhuazhao@caixin.com)

Related: China Regulator Slams Didi Over Safety as Startup Pledges Fixes
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By Cheng Siwei and Guo Yingzhe / Jul 18, 2019 03:34 PM / Economy

Photo: VCG

Photo: VCG

As tax and fee cuts hit China’s fiscal revenue growth, some of the country’s governments are reporting higher-than-usual revenues from nontax sources — including the sale of state-owned assets and sucking up more profits from state-owned enterprises (SOEs).

Southwest China’s Guangxi Zhuang autonomous region, for example, beefed up its revenues by selling off idle assets such as factories and land, Sun Liangquan, a regional finance official, told Caixin earlier this month.

Additionally, the central government collected 168.5 billion yuan ($24.5 billion) more from SOEs profits in the first half of 2019 than during the equivalent period last year, accounting for 62% of the country’s nontax revenue growth, Liu Jinyun, an official at the Ministry of Finance, said at a Tuesday press conference.

Despite an uptick in June, year-on-year growth in China’s fiscal revenue has slowed in recent months as tax cuts have taken effect and downward pressure on economic growth has risen. Some provincial-level governments even suffered a decline in fiscal revenue.

In March, Beijing promised to slash taxes and fees by nearly 2 trillion yuan this year, compared with cuts of 1.3 trillion yuan last year.

Read the full story later today on Caixin Global.

Contact reporter Guo Yingzhe (yingzheguo@caixin.com)

Related: In Depth: China’s Whopping Tax and Fee Cut Package Surprised Even Insiders

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By Tianyu M. Fang / Jul 18, 2019 02:45 PM / Business & Tech

Photo: IC Photo

Photo: IC Photo

Google has removed around 60 apps developed by the Shanghai-based, U.S.-listed software firm CooTek from its Play store and banned the company from its advertising platform, Google Admob, for allegedly engaging in alleged malicious ad practices.

CooTek, whose products include the popular TouchPal Chinese-language keyboard and is listed on the New York Stock Exchange, denies the allegations but confirmed Wednesday in a press release that its apps have been “temporarily disabled” by Google’s platforms.

The move will not affect current users of CooTek’s apps, versions of which will remain available on Chinese app markets, the company added.

“CooTek remains committed to upholding the highest standards in the industry and complying with Google Play developer policies,” the company’s press release said. A spokesperson told Caixin that the company has been negotiating with Google but has not yet received any feedback.

This isn’t the first time Google has taken action against developers with ties to China. Do Global — a developer partly owned by Baidu Inc. — and Cheetah Mobile were both hit with similar bans in April and November, respectively.

Related: Tencent Presses Chinese App Stores for Bigger Cut of Game Sales

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By Zhao Runhua / Jul 18, 2019 12:12 PM / Business & Tech

Photo: VCG

Photo: VCG

China is mulling a plan to replace the country’s zip codes with unique location data generated by three-dimensional mapping technology, in the hope of lowering delivery costs and speeding up the development of automated delivery services.

According to developers at Peking University and the State Post Bureau — the agency that regulates China Post — the country plans to develop a system that extends existing two-dimensional geospatial technology into the 3D realm. Similar systems are already used in military and aeronautical circles, but have yet to achieve widespread civil use in China.

The new system aims to generate two codes for each geographic location: a complex code for the purposes of high-precision location and machine calculation, and a simpler code for daily use, the project’s Peking University team said, adding that the two codes will help to unify and standardize the location systems of China’s main courier companies.

Individuals and institutions will then be able to use their identity documents to apply for multiple location codes, to which packages can be delivered. This will leave little use for China’s six-digit postal codes, which have been used for nearly four decades, developers said.

At a Tuesday seminar, the director of the State Post Bureau’s research center, Zeng Junshan, described the geographic data generated by China’s some 180 million daily deliveries as a “national resource” that will soon be integrated into a public database.

Contact reporter Zhao Runhua (runhuazhao@caixin.com)

Related: SF Express Approved to Fly Drones to Deliver Goods

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By Bloomberg / Jul 18, 2019 10:12 AM / Business & Tech

Photo: Bloomberg

Photo: Bloomberg

All eyes will be on Taiwan Semiconductor Manufacturing Co.’s outlook after the world’s largest contract chip manufacturer suffered its worst sales drop in nearly eight years.

Analysts expect the company’s third-quarter estimates — due today after the close of trading — to point to a revival after it took a hit from slowing demand amid U.S.-China trade tensions. At stake is the stock’s $35 billion rebound in market value since a January low.

Apple Inc.’s ramp up of iPhone manufacturing and a new product cycle from Advanced Micro Devices Inc. are seen by Bank of America Merrill Lynch analysts to lift sales, which would also be boosted if President Donald Trump loosens trade restrictions on key customer Huawei Technologies Co.

Analysts have forecast sales in the period to grow 15% from a quarter earlier, according to the average of 22 estimates compiled by Bloomberg. The company’s shares are up 12% this year, despite being whipsawed as the trade war escalated. They edged 0.6% higher Thursday morning.

“The company’s second-half outlook looks to be improving, and third-quarter guidance will probably be strong given that some of the lingering uncertainty has started to fade,” said John Tsai, portfolio manager at Eastspring Investments Ltd. in Singapore. The trade spat between Japan and South Korea may also help TSMC, as Samsung Electronics Co. customers such as Qualcomm Inc. may seek to diversify, he added.

TSMC saw sales drop 4.5% year-on-year in the first half, its worst performance since 2011. The company was grappling with the impact of a slowing global smartphone market and efforts by its biggest customer Apple to move beyond hardware. Then the trade war escalated into the U.S. blacklisting Huawei, TSMC’s second-largest customer.

Yet its leading position in advanced technology, especially in 5G and artificial intelligence, helped it secure revenue. Chip orders for crypto mining are also expected to help TSMC’s third-quarter sales, according to Morgan Stanley, which recently lifted its target price on the stock by 9%.

TSMC investors will also receive a NT$207 billion ($6.7 billion) dividend payout Thursday, according to stock exchange and company statements. The company is aiming for a dividend per share of at least NT$10 to lure value investors, something Bank of America Merrill Lynch analysts Robin Cheng and Mike Yang see as possible in 2020. They argue that rising free cash flow justifies a re-rating of the stock.

Related: A Look at the Three Semiconductor Firms Applying to the New High-Tech Board
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By Han Wei / Jul 18, 2019 05:17 AM / Economy

Photo: VCG

Photo: VCG

The American housing market is facing a sharp drop in demand from foreign investors led by Chinese homebuyers, CNBC reported, citing data from the National Association of Realtors.

The dollar volume of houses purchased by foreign buyers from April 2018 through March 2019 dropped 36% from the previous year, according to the report.

Both the number of transactions and purchase prices have dropped. Overseas homebuyers bought 183,100 properties in the U.S. with a total value of about $77.9 billion during the period, down from 266,800 valued at $121 billion a year earlier, according to the report.

The slowing sales partly reflect weakening demand from Chinese, the leading foreign buyers for seven consecutive years in U.S. housing market. Purchases by Chinese declined 56% between April 2018 and March 2019 from a year earlier, the biggest percentage drop for all foreign buyers, data from National Association of Realtors showed.

Analysts attributed the pullback by foreign buyers in the U.S. housing market to weakening global growth, tighter capital controls in China, a strengthening U.S. dollar, low inventory, and growing tensions between China and the U.S., according to the report.


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