166.97 -1.13 (-0.67%)
Pre-Market: 5:52AM EDT
|Bid||166.39 x 1100|
|Ask||166.97 x 1400|
|Day's Range||165.78 - 168.88|
|52 Week Range||129.77 - 198.35|
|Beta (3Y Monthly)||1.85|
|PE Ratio (TTM)||48.07|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
Chinese drone-maker DJI dominates the drone market in the US. Following security concerns heard in the US Senate last week, DJI hit back at accusations with an 1800-word letter.
Carrefour, which is Europe's largest retailer, sold a majority 80% stake inits China-based business to Chinese retailer Suning, according to anannouncement made this weekend
(Bloomberg) -- Sign up for Next China, a weekly email on where the nation stands now and where it's going next.For years, companies like Oracle and International Business Machines invested heavily to build new markets in China for their industry-leading databases. Now, boosted in part by escalating U.S. tensions, one Chinese upstart is stepping in, winning over tech giants, startups and financial institutions to its enterprise software.Beijing-based PingCAP already counts more than 300 Chinese customers. Many, including food delivery giant Meituan, its bike-sharing service Mobike, video streaming site iQIYI Inc. and smartphone maker Xiaomi Corp. are migrating away from Oracle and IBM’s services toward PingCAP’s, encapsulating a nation’s resurgent desire to Buy China.PingCAP’s ascendancy comes as the U.S. cuts Huawei Technologies Co. off from key technology, sending chills through the country’s largest entities while raising questions about the security of foreign-made products. That’s a key concern as Chinese companies modernize systems in every industry from finance and manufacturing to healthcare by connecting them to the internet.“A lot of firms that used to resort to Oracle or IBM thought replacing them was a distant milestone, they never thought it would happen tomorrow,” said Huang Dongxu, PingCAP’s co-founder and chief technology officer. “But now they are looking at plan B very seriously.” IBM, which gets over a fifth of its revenue from Asia, declined to comment. Oracle, which gets about 16%, didn’t respond to requests for comment.China has long tried to replace foreign with homegrown technology, particularly in sensitive hardware -- it imports more semiconductors than oil. That imperative has birthed global names like Huawei and Oppo and even carried over into software in recent years, as Alibaba Group Holding Ltd. and Tencent Holdings Ltd. expand into cloud services. That effort has gained urgency since Washington and Beijing began to square off over technology.“China has always wanted to use domestic tech and in areas like cloud, it’s been very successful,” said Julia Pan, a Shanghai-based analyst with UOB Kay Hian. “While it wants to use Chinese chips, its technology is just not there, but when it’s mature enough, they very likely will replace overseas chips with domestic ones.”Now, a coterie of up-and-coming startups are encouraging Chinese firms to go local. Customers use PingCAP to manage databases and improve efficiency, allowing them to store and locate data on everything from online banking transactions to the location of food delivery personnel.Backed by Matrix Partners China and Morningside Venture Capital, PingCAP is competing in a sector traditionally dominated by companies such as Oracle and IBM. The market is expected to grow an average 8% annually to $63 billion globally in the seven years through 2022.The startup is one of the newest members of a cohort of open-source database providers such as PostgreSQL and SQLite that are upending the market. Researcher Gartner forecasts that 70% of new, in-house applications worldwide will be developed on open-source database management systems by 2022.PingCAP -- mashing the term for verifying a web connection, ping, and the CAP computing theorem -- was founded by three programmers whose former employer, a mobile-apps company, was acquired by Alibaba. Inspired by Google’s Cloud Spanner, which pioneered the distributed database model, the trio -- Huang, Liu Qi and Cui Qiu -- began creating an open-source database management system that would allow companies to infinitely expand their data storage by simply linking more servers to existing ones.“Think of traditional database mangers like a fixed glass container, every time you run out of storage you have to get a bigger one,” said Huang. “What our system does is that you can link as many cups together as you want.”Their idea caught on with investors and venture fund hot shots including Matrix agreed to invest about 10 million yuan ($1.4 million) in 2015. To date the company has raised more than $71 million and has about 190 employees.PingCAP is working in a space where competition is fierce -- its database TiDB currently only ranks 121 among global peers, according to database rank compiler DB-Engines, which uses mostly mentions on social media and discussion forums as key metrics. Other open-source database managers such as PostgreSQL ranks 4th and its direct competitor CockroachDB, which also focuses on distributed database systems, leads PingCAP by 30 spots. The Chinese startup also operates in a market where it’s difficult to make money -- PingCAP only has a couple dozen paying customers in China and makes about 10 million yuan in revenue a year. Their best shot is to create successes that can be later replicated on a larger scale, said Owen Chen, an analyst with Gartner. “Work with the 10% early adopters free of charge, and make money off the 90% followers later,” he said.That’s why Huang is working with big names like the Bank of Beijing and Mobike -- so it can create templates for each sector. “Only one thing is certain, data will continue exploding,” said Richard Liu, a founding partner at Morningside Venture Capital. “We have the patience to wait before they figure out the best revenue model.”PingCAP has one thing going for it: Chinese customers are increasingly willing to experiment with technology. Data supplied by some 2,000 companies -- more than 300 in-production users and 1,500 who are testing its system -- will provide PingCAP with what Matrix Partner Kevin Xiong says is akin to a supply of ammunition.“You need bullets to train someone to become a stellar marksman, and PingCAP right now has a lot of bullets,” said Xiong, who invested in the company.Huang points to how PingCAP’s database helped tide over Chinese bike-sharing giant Mobike during stressful days when user and transaction numbers exploded on a daily basis -- at its peak in 2017 the company said it handled as many as 30 million rides a day.“It was a really challenging time for us, and [open-source database] MySQL was no longer able to meet our demands given the jump in data volume,” said Li Kai, a senior tech director at Mobike. “PingCAP really helped us big time.”Huang and his team also made it easy for IT departments to jump ship. With one key stroke, companies could export their entire database on MySQL over to PingCAP’s. Some are considering moving their most sensitive data including transactions and customer info over, Huang said without disclosing names.Yu Zhenhua, an IT manager at Bank of Beijing, said China is constantly trying to enhance information security while his industry wants to lower costs as it rapidly expands. “TiDB’s service meets the demands of what we want in a distributed database manager,” Yu said in a statement posted on PingCAP’s website. A representative for the lender didn’t respond to emailed queries about its collaboration.Longer term, PingCAP wants to venture beyond China -- but there, the geopolitical spat is proving an impediment. Earlier this year, PingCAP was ready to embark on an expansion into the U.S. and said it was already in discussions for getting some prominent tech startups to use its software. Now the prospects of winning over American clients are clouded.“We’re not seeing any immediate impact on our business in the U.S. but the trade war does force us to look at the long term uncertainties of getting important U.S. clients in finance or tech to move to our platform,” Huang said.\--With assistance from Olivia Carville, Nico Grant, Lucas Shaw and Gao Yuan.To contact the reporter on this story: Lulu Yilun Chen in Hong Kong at email@example.comTo contact the editors responsible for this story: Peter Elstrom at firstname.lastname@example.org, Colum Murphy, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Over the past several years, Shanghai entrepreneur Yung Lin has built a decent business selling wrenches, screwdrivers and other tools on Amazon.com. Then President Donald Trump imposed tariffs on thousands of goods made in China, and Lin faced a difficult choice: eat the additional cost or try and pass it onto his mostly American customers. He chose to raise prices and watched sales of some products dive by as much as one third in just two weeks. Amazon.com Inc. merchants around the world are scrambling to navigate an unpredictable trade war that’s upending their proven business model of buying inexpensive goods in China and selling them at a markup in the U.S. The problem is particularly acute now as Trump weighs another $300 billion worth of tariffs, many on consumer goods.Mom and pop sellers won’t be able to wait for Trump’s decision: They have to place factory orders now and figure out pricing if they want to get their goods made in time for the lucrative Christmas shopping season, when they make as much as half their annual revenue. The most obvious solutions—raising prices, shifting production to other countries, stockpiling inventory—all have costs and complications of their own.These businesses—many of them one-person shops—are especially vulnerable because they lack big companies’ wherewithal to ride out the uncertainty as well as the negotiating power to shift tariff costs onto their suppliers. “The smaller companies have a significant problem,” says Joel Sutherland, Managing Director of the Supply Chain Management Institute at the University of San Diego. “We have an administration that says one thing today and does something else tomorrow, which poses tremendous risks.”Amazon is more insulated than the merchants in the near term but it too could take a hit if sales slow and cut into the commissions and fees the company charges merchants to use its online store. The shares were down less than 1 percent at 12:08 p.m. in New York.Much depends on whether the U.S. and China can come to terms. Trump will meet Chinese President Xi Jinping for the G20 summit in Osaka, Japan, on June 28-29, and both sides have agreed to resume trade talks after a weeks-long stalemate. But even if they hammer out an agreement, the trading relationship between the world’s two largest economies probably will never be the same.“We’re going to assume the tariffs are here to stay,” says Chuck Gregorich, who sells China-made hammocks, patio furniture and 2,000 other products on Amazon. “We can’t have this happen in a year or two and get caught with our pants down again.”Like many other importers, Gregorich tried to move up orders early last year to beat a Jan. 1 tariff hike on Chinese imports from 10% to 25%. He wound up spending an extra $400,000 on shipping only to see the tariff hike delayed. Burned once by the guessing game, Gregorich is looking to shift about 30% of his production to factories in Vietnam and elsewhere. He’s not alone. Many other Amazon merchants are considering having their goods made in India, Southeast Asia and Central America. Michael Michelini relocated to China from New York in 2007 to make Italian coffee presses and upscale bar supplies for U.S shoppers. Eight months ago he decided to move with his wife and kids to Thailand, where he’s working with a new factory to develop a line of high-end kitchenware. “Now when I think of China, I think of risk,” he says.Moving isn’t easy, however. Merchants say finding the right factory, securing raw materials and conducting product quality testing can easily eat up a year. Jerry Kavesh sells cowboys boots and hats on Amazon and recently spent months locating a factory in India that could make his products. But Kavesh discovered he would still have to import raw materials from China, negating any advantage. So as a last resort, he’s cutting his holiday inventory by about 15% and raising prices by about 12%, which he figures will spook enough customers to hurt sales.“When I hear the [U.S.] administration say just move, that's just not realistic,” says Kavesh, the chief executive officer of 3P Marketplace Solutions. “You can’t just suddenly turn all of your production over to someone new.”Even as U.S. sellers try to diversify their manufacturing base, their Chinese counterparts are looking for new customers in Europe, Japan and Australia to offset the potential hit to their U.S. business. “If you are a Chinese seller, money is money,” says Eddie Deng, a former Alibaba Group Holding Ltd. strategist who now runs an online clothing brand called Urbanic that sells Chinese-made, Western-style clothing in India. “It doesn't matter if it's from the U.S., India or the Middle East.”Amazon has said little publicly about the trade war. It wasn’t among 600 businesses including Walmart and Target that wrote the Trump administration earlier this month seeking an end to the trade war because it’s bad for U.S. shoppers. Amazon is a member of the Internet Association trade group, which signed the letter.Behind the scenes, Amazon has agreed to pay some vendors up to 10% more for products affected by tariffs, according to two people familiar with the matter. “Companies of all sizes throughout the supply chain are adjusting to increased costs resulting from new tariffs,” Amazon said in an emailed statement. “We’re working closely with vendors to make this adjustment as smooth as possible.”But that help will apply only to products Amazon buys wholesale and resells itself. The mom and pops that sell directly to consumers on Amazon’s marketplace are on their own.The hardest part is the uncertainty—the temptation to parse Trump tweets in a mostly vain effort to divine the future. “This could all be a head fake,” says Steve Simonson, who sells Chinese-made home goods and electronics and has been scouting factories in India, Vietnam and Central America. “In two months, this could all go away and all of this time and work will be wasted.”(Updates with share price. A previous version of this story corrected name of university in the fourth paragraph.)To contact the authors of this story: Shelly Banjo in Hong Kong at email@example.comSpencer Soper in Seattle at firstname.lastname@example.orgTo contact the editor responsible for this story: Robin Ajello at email@example.com, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
While Asian markets were mixed, China’s Shanghai Composite Index gained 0.21% to end on a positive note for five days in a row. However, the tech-heavy Shenzhen Component ended in the red today.
China has grown at a breathtaking pace over the last couple of decades. The growth has been led by a couple of drivers, namely higher infrastructure investments and rising exports. Now, the infrastructure and investment-led model have their own limitations.
Alibaba Group Holding (BABA) plans to open an e-commerce trade hub in Yiwu in a bid to set up a trade platform for small players in global trade.
(Bloomberg) -- Carrefour SA has agreed to sell an 80% stake in its China unit for 4.8 billion yuan ($698 million) in cash to local retailer Suning.com Co. as it rethinks its exposure in the world’s No. 2 economy after years of decline.The yielding of control comes after a long search for a partner for the French company’s struggling Chinese operations. Once the premier foreign supermarket chain locally, it failed to adjust to the onslaught of e-commerce in recent years and sales slumped.The shares rose as much as 2.9% early Monday in Paris.Carrefour will retain a 20% stake in the China business, which generated net sales of 3.6 billion euros (28.5 billion yuan) in 2018. It will also get two seats out of seven on the China unit’s Supervisory Board, according to a statement Sunday. The valuation of Carrefour’s China unit at 0.2 times its 2018 sales -- compared to an industry average of 0.8 times -- is at a “significant discount to peers likely due to poor financial results,” said Citigroup Inc. analysts led by Lydia Ling in a note Monday.“The consolidation in store network, supply chain, logistics and membership could improve efficiency and profitability for both parties,” said the Citi note.A growing number of European and American retailers are either scaling back their presence or tying up with local partners in order to stay competitive in China, where e-commerce penetration is one of the highest globally. Walmart Inc., which has a network of around 400 supermarkets, relies on JD.com Inc. for its delivery service, while Germany’s Metro AG is said to be trying to offload a majority stake in its Chinese business.“The big problem for Carrefour and other western grocery chains is that they have major challenges in their home countries and can’t afford to grow in China,” said Pascal Martin, a Hong Kong-based partner at OC&C Strategy Consultants. “In China, if you want to grow in the groceries space, you have to continue to invest capital in less developed cities.”End of an EraIt’s the end of an era for one of the first foreign brands to gain a loyal following among Chinese consumers. Carrefour entered the country in 1995, ahead of Walmart, and its massive hypermarkets where one could buy fresh pork along with a TV ushered in a new style of shopping for a country just opening up to the outside world.But it has struggled to maintain profitability as buyers moved online rapidly in recent years, a shift that’s favored home-grown giants like Alibaba Group Holding Ltd. Despite efforts to digitize its operations, and an initiative to rent out store space to local retailer Gome Retail Holdings, Carrefour’s China sales declined about 10 percent last year to 3.6 billion euros, according to the company’s annual report.Earnings before interest, tax, depreciation and amortization were 66 million euros or 516 million yuan last year. It operates 210 hypermarkets and 24 convenience stores in China currently.The transaction represents an enterprise value of 1.4 billion euros ($1.6 billion) for Carrefour China. For Nanjing-based Suning, primarily an electronics retailer, the deal will help it cut procurement and logistics costs and boost profitability, the company said in a statement Sunday. Its Shenzhen-listed shares rose as much as 6.5% in early trading on Monday as investors rewarded the retailer for closing the deal at a low price.Alibaba holds a 20% stake in Suning and the two companies are closely allied. They’ve been investing in brick-and-mortar retailers with the goal of building an empire where offline and online shopping are seamlessly integrated. Earlier this year, Suning bought 37 department stores from Wanda Group, while Alibaba paid $2.9 billion in 2017 for a 36% stake in Sun Art Retail Group Ltd., China’s biggest supermarket chain. The Carrefour deal is likely to strengthen Alibaba’s foothold in the fiercely competitive groceries market in China.The acquisition has been cleared by Carrefour’s board and is expected to close by year end, but still needs approval from the Chinese regulator, said the companies.Carrefour’s decision to retain a 20% holding shows how China remains a strategic market for global retailers. Keeping that stake will allow it to maintain a foothold in an innovative retail market, a company spokeswoman said Sunday.(Updates with shares in third paragraph.)\--With assistance from Robert Williams.To contact Bloomberg News staff for this story: Geraldine Amiel in Paris at firstname.lastname@example.org;Daniela Wei in Hong Kong at email@example.comTo contact the editors responsible for this story: Rachel Chang at firstname.lastname@example.org, Bhuma ShrivastavaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Carrefour SA, Europe's largest retailer, may be the latest Western company to pull back from China. It’s unlikely to be the last.On Monday, the hypermarket operator said it would sell 80% of its China business for 4.8 billion yuan ($699 million) in cash to Suning.com, the Chinese retailer backed by Alibaba Group Holding Ltd. Carrefour will retain a 20% stake. Over the past few years, the French company’s plans to shrink its China footprint has been one of the worst-kept secrets in banking. Though Carrefour sold the business pretty cheaply – with a valuation of 0.2 times 2018 sales, compared with the industry average of 0.84, according to Citigroup Inc. – loosening its ties to the mainland may be a smart move, whatever the price. With sales in the country flagging and losses piling up, the deal comes as China’s macroeconomic picture is also darkening.Yet the key challenge for Carrefour preceded the trade war. In recent years, online-only players such as Alibaba have been piling pressure on brick-and-mortar operations, with Tesco Plc, Best Buy Co. and Marks & Spencer Plc each announcing plans to pull back from the mainland market. Carrefour’s share of the country’s hypermarket segment fell to 4.6% last year from 8.2% in 2009, Citi writes.(1) That’s a problem in a country with one of the world’s biggest rates of e-commerce penetration. China's online retail sales reached 3.86 trillion yuan in the first five months of this year, accounting for more than one-fifth of the country's total purchases of consumer goods, according to a recent report by the Chinese Academy of Social Sciences. To make matters worse, foreign brands no longer have the cachet they once enjoyed – at least in low-end consumer goods. In a survey last year, Credit Suisse AG said that Chinese consumers preferred domestic purveyors in categories like food and drinks and home appliances. With the trade war whipping up nationalist fervor, that trend may accelerate: The bank's latest poll of shoppers 18 to 29 years old showed that 41% preferred phones made by Huawei Technologies Co., up from 28%, while interest for Apple Inc.’s products fell to 28% from 40%.For many firms, ceding control to a local partner is probably the best way forward. Carrefour appears to be borrowing a page from the playbook of McDonald’s Corp., which sold 80% of its China business in 2017 to a tie-up between state giant Citic Group Corp. and private equity firm Carlyle Group LP.Or consider Walmart Inc., which sold its e-commerce delivery site to JD.com Inc. in 2016 in exchange for a stake in the Chinese retailer. The U.S. firm now aims to open 40 of its Sam’s Club stores in China by 2020. Costco Wholesale Corp. is also betting on China’s appetite for bulk buying, with plans to open its first bricks-and-mortar store in August. Whether Costco can pull this off without a local partner remains unclear.What is clear is that Carrefour won’t be the last retailer to rethink its China strategy. Germany's Metro AG is also looking to sell its $1.5 billion Chinese business. At a time when Chinese acquisitions overseas have dried up, bankers at least can thank Western firms for managing to drum up some business from the mainland. (1) The bank citesEuromonitor International research.To contact the author of this story: Nisha Gopalan at email@example.comTo contact the editor responsible for this story: Rachel Rosenthal at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg Opinion) -- 5G networks will allow vast gobs of data to be transmitted at great speeds. And more data usually means more money for mobile carriers like Deutsche Telekom AG and AT&T Inc. But there’s a hitch. Cloud giants such as Amazon.com Inc., Alphabet Inc. and Microsoft Corp. are lurking.The new tech enables ever more computational decision-making to be carried out by powerful processors sitting in the cloud. But when even a few milliseconds of lag can be a problem – as might be the case with high-frequency trading or connected factories – it’s worth trying to slash the time it takes to reach a cloud server.That’s why the cloud giants are pushing what’s known as edge computing: where cloud functions run on servers that are physically closer to the end user, thereby cutting the distance to a computer making a given decision. They’re at the “edge” of the network. It’s a feature of the distributed cloud, where different functions are distributed across different parts of a network.For telecoms firms that could be a problem. They’re terrified of spending hundreds of billions of dollars on upgrading their networks, only to become the providers of dumb pipes exploited by technology behemoths, and miss the most profitable opportunities the investments could generate. They don’t want a repeat of WhatsApp, whose free messaging platform gobbled up carriers’ SMS revenues.The main cloud providers – Amazon Web Services, Microsoft Azure, Google Cloud and Alibaba Group Holding Ltd. – have a headstart when it comes to exploiting these opportunities. They have huge customer bases and developer ecosystems, in addition to their existing hordes of servers. In short, they have scale.It would therefore be foolish for a telco to try to build a cloud offering to rival that scale, according to Nick McQuire, head of enterprise research at CCS Insight. They seem to recognize this, and are instead trying to ensure they’re the gatekeepers for their customers’ relationships with the cloud operators. Unfortunately for the network firms, the lock they have on those relationships can be tenuous.There are different ways carriers can try to control them. Just this month, Spain’s Telefonica SA announced it would sell Google Cloud solutions globally. Alone, that’s unlikely to generate much profit. But by inserting themselves into the transaction, they hope to be in prime position to offer additional lucrative services that run on a third party’s cloud. And when it comes to small- and medium-sized enterprises, network firms’ extensive local teams can offer comprehensive solutions. It’s less scalable than what the cloud operators do, but it’s still an opportunity.Others such as France’s Orange SA think that owning the cybersecurity layer is the best way to manage the process. That encryption key ensures they control enterprise customers’ cloud access, also making it easier to sell value-added services. Both approaches are a gamble. Cloud providers have their own cybersecurity solutions, for one. Convincing customers that a carrier can do it better might be tough.Increasingly, the operators have little choice. The likes of Amazon and Google are proactive in creating demand for their products. Their customers then turn to their telecom providers and request the cloud giants’ services. That all but forces them to play along.Consider Google’s new Netflix for games, Stadia. For a subscription fee, starting in November users can access a bevy of titles running on cloud servers rather than their own computers. They’ll be able to play on a computer more than twice as powerful as Sony Corp.’s Playstation 4 console using just a cellphone, which becomes little more than a screen and a controller. And since the data is never exposed to the public internet, carriers’ importance is diminished.A carrier who can boast about Stadia’s performance on its network might use it as a tool to win customers. The best gaming experience will have no perceptible lag, so the closer Stadia’s servers are to the user, the better.Amazon and Microsoft’s gambits, which are called AWS Outposts and Azure Stack respectively, have similar placement goals. While not yet widely available, they comprise server boxes which sit on customers’ premises – factories, oil rigs or offices – and provide a hybrid of local and cloud computing.The race to the edge really does risk turning the network operators into providers of dumb pipes: enterprise customers’ data enter the network via AWS Outpost at one end, and travel to and from centralized servers without being exposed to the public internet, remaining on a private network. It raises carriers’ risk of disintermediation – that they get all but shut out of the most lucrative parts of the cloud business. Stadia is unlikely to eat the world any time soon, and Google is behind rivals Azure and AWS in many enterprise applications, which is where the real money lies. We’re in the very early days of this struggle.But edge computing could turn into something of a Trojan horse for other cloud services. Carriers have a real challenge on their hands.To contact the author of this story: Alex Webb at email@example.comTo contact the editor responsible for this story: Jennifer Ryan at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Alibaba (BABA) has expanded the role of its CFO, Maggie Wu, in a change that seems to speak volumes. Wu, who's been Alibaba’s finance chief since 2013, will take on an additional role as the head of the company’s strategic investment unit.
Alibaba (BABA) has proposed a stock split that would make its shares cheaper for small investors and generally increase the liquidity in its stock. The company wants to carry out an eight-for-one stock split, which will result in its outstanding shares increasing eight times.
China’s benchmark Shanghai Composite Index is having a good week. The index rose 2.4% on June 20 to an eight-week high. The index rose in the first half of the day and reached the day’s high.
BEIJING/HANGZHOU, China (Reuters) - In China, the sales maxim of 'know your customer' is being taken to new lengths. One of the first firms to join an Alibaba Group Holding Ltd programme that provides years of consumer shopping history, snack food chain Bestore Co Ltd plans to link facial recognition technology with the e-commerce giant's account data by the year's end. For customers opting to have their facial data in Bestore's systems, that means shop assistants will be able to check on what food they like the moment they enter one of its stores.
Facebook’s ambitious cryptocurrency project ‘Calibra’ comes as the social media behemoth continues to face scrutiny about data privacy.
(Bloomberg) -- SoftBank Group Corp. founder Masayoshi Son is trying harder than ever to convince investors of the potential for his many technology investments.At a general shareholders’ meeting in Tokyo on Wednesday, Son shared some predictions that were eye-popping even by the standards of the outspoken Japanese billionaire. The value of SoftBank’s investment portfolio could grow 33-fold to 200 trillion yen ($1.8 trillion) in 20 years, he said. That’s an annual growth rate of 19%. The numbers were so outlandish that Son had to add a caveat.“Let me be clear that this is not a business plan,” he said. “It’s a tall tale.”The gathering was SoftBank’s 39th shareholders meeting, with about 2,000 investors present. Son’s remarks drew laughs and even feigned outrage from directors. Fast Retailing Co. CEO Tadashi Yanai, who sits on SoftBank’s board and is Japan’s richest man, urged shareholders to look out for Son “or he will go out of control.”The billionaire’s projections include investments by the Vision Fund. But even bullish analysts have much more modest projections for that portfolio. Chris Lane of Sanford C. Bernstein recently estimated the net present value of the current and future funds at $50 billion to $85 billion.Son then reminded shareholders how 15 years ago at the very same auditorium he presented another seemingly improbable target -- SoftBank with 1 to 2 trillion yen in profit. At the time, the company booked over 100 billion yen in losses. Annual net income has exceeded 1 trillion yen for the past three years.Over that period of time, Son has expanded into wireless operations with the acquisition of Vodafone Group Plc’s Japan unit, acquired Sprint Corp. in the U.S. and launched the $100 billion Vision Fund to transform SoftBank into a technology investment juggernaut. Still, the company trades at a deep discount to the worth of its holdings. The total value of the conglomerate’s publicly traded shareholdings is around 21 trillion yen, while SoftBank’s market cap is roughly 10.7 trillion yen. By the company’s own estimation, there is a discount of about 50%.Son’s message to investors is that when it comes to technology, he is ahead of the curve. He was early to recognize the value of e-commerce and invest in Alibaba Group Holding Ltd. SoftBank was also first to introduce Apple Inc.’s iPhone in Japan. Now Son believes the world is on the verge of another technological shift, driven by artificial intelligence that will transform every industry. He argues that the company’s portfolio of unicorns from Uber Technologies Inc. to WeWork Cos. positions SoftBank to reap the most benefits from that disruption.“I wish I had the money to make tons of investments at the start of the internet revolution. I could see it coming,” Son said. “We started the Vision Fund at the very beginning of the AI revolution.”At least a few of the investors present took him at his word.“Son may talk big, but just look at what he has actually accomplished,” said Yasuhiro Suzuki, a SoftBank shareholder of about 20 years. “I have been to many of these meetings, but today Son seemed especially in high spirits.”Key Insights:The Vision Fund is nearing the end of its investment cycle and SoftBank is in the process of raising a second one of equal size, Son said. The two funds will be successive. SoftBank is in talks with limited partners in the first fund to renew their investments.The company is increasing staff at the fund to 1,000 people, from 415 now.To contact the reporters on this story: Pavel Alpeyev in Tokyo at email@example.com;Takahiko Hyuga in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The China internet giant has rallied ahead of the broad market this year, rising more than 21% in 2019. Citigroup says the momentum can keep growing.
On June 18, Alibaba (BABA) announced senior management changes. Alibaba seems to be gearing up for life after Jack Ma. Daniel Zhang is slated to become Alibaba’s chairman after Ma retires in September.
While the deteriorating job market could damage China's economy in the long term, Chinese stocks and ETFs are falling right now. FXI and GXC have lost nearly 8.7% and 9.7%, respectively, in the second quarter.