Original link: https://www.latepost.com/news/dj_detail?id=1376
Real estate goes overseas, buy buy buy >> sell sell sell
Overseas real estate developers once felt that Chinese-funded developers had endless money to spend, and especially liked to buy overseas projects that were very attractive but perhaps not very useful, and even bought them at the highest premium in the industry. Today, the market is also surprised by the extent to which some of these companies are willing to take losses in order to cash out as quickly as possible.
US apartment operator Northland has acquired a 59-story Los Angeles apartment building from Greenland Holdings for $504 million. Greenland is at a discount of US$191 million (27%) to its offer a year and a half ago.
The project was originally purchased by Greenland Group from the California Teachers’ Retirement System in 2013 for a planned investment of $1 billion. During that time, Greenland successively purchased projects or established joint ventures in Australia, Spain and other places. Other Chinese-funded developers, such as SOHO China, Wanda Group, and Vanke, are also buying properties or building joint ventures in the United States.
According to MSCI Real Assets data, between 2013 and 2018, Chinese companies bought a net worth of commercial real estate in the United States alone at US$52 billion, including the acquisition of core New York real estate by some private integrated groups, such as the refresh of the then-American independent hotel in 2015. The Waldorf Astoria with the highest purchase price ($1.95 billion).
Since then, the macro and micro environments have undergone major adjustments. Since 2019, Chinese companies’ real estate investment in the United States has changed from a net inflow to a net outflow, with at least a net sale of more than $24 billion in commercial real estate in three years. Greenland Group sold two New York apartment buildings for about $315 million before selling the Los Angeles project.
Some have compared these changes to what Japanese companies did in the US in the 1980s and 1990s. At that time, Japan’s richest companies were buying properties in New York, Los Angeles, Hawaii and other places. When the crisis came, the market quickly turned around, and these companies had to “jump off the building”.
In addition to the United States this year, in London, Australia, Canada and other markets, we can also see Chinese-funded developers eager to sell projects.
At the beginning of the year, Vanke sold Ryder Court, an investment property in London, UK, and China Aoyuan sold properties in Burnaby, British Columbia, Canada. Guangzhou real estate developer R&F Properties sold the entire stake in British company R&F Properties VS for £95.7026 million. In October, R&F Real Estate redeemed the project according to the terms of the contract, and then sold it to the investment fund Flow Capital at the same price. The deal is expected to lose 40%. (Gong Fangyi)
Zuckerberg’s tough decision
On Tuesday, November 9, local time, Facebook founder Zuckerberg apologetically told employees that he had to fire 11,000 employees, or about 13% of the total workforce, because he was overly optimistic about growth and led to overstaffing.
The number of layoffs was less than previously expected. The specific layoff list will be notified to the parties on Wednesday morning local time. Details of the severance of Meta’s U.S. division include:
- Severance pay, 16 weeks of basic salary, 2 additional weeks of salary per year for seniority, no upper limit. The remaining paid vacation days in the labor contract will also be discounted and paid.
- Does not affect the restricted shareholding that was due to be granted on November 15.
- Cover the medical expenses of employees and their families for 6 months.
- Provides 3 months employment service assistance.
- Support for visas and more immigration services for employees on immigrant visas.
- Employees outside the United States receive similar severance compensation, adjusted according to local laws.
Zuckerberg said he was responsible for those decisions and previous mistakes.
In the early days of the Covid-19 outbreak, the world quickly turned to the internet, with a surge in e-commerce business driving extraordinary revenue growth. Many predict that this accelerated shift will be permanent and won’t go away even after the pandemic is over. I think so. So I decided to significantly increase our investment. Unfortunately things didn’t go the way I expected. Not only has e-commerce returned to its previous trend, the macroeconomic downturn, increased competition, and reduced ability to convert ads have caused our revenue to be much lower than I expected. I screwed up and I’m responsible for it.
In this new environment, we need to improve capital efficiency. We have shifted more resources to a few high-priority growth areas, such as our AI discovery engine, advertising and commerce platforms, and our long-term vision for the Metaverse. We cut overall business costs, including shrinking budgets, reducing allowances and shrinking real estate investments. We are restructuring the team to improve efficiency. But these measures alone did not bring our expenses in line with revenue growth, so I also made the difficult decision to let employees go.
Meta has recruited more than 27,000 employees in the first two years and added 15,344 employees in the first nine months of this year. At the end of September, the total number of employees exceeded 87,000. In the first three quarters of this year, Meta achieved an operating profit of US$22.545 billion, down 34% year-on-year. The biggest drag was the VR/AR segment, which generated losses ($9.438 billion) equivalent to 29% of advertising profits — a proportion that expanded to 39.3% in the third quarter. (Gong Fangyi intern Zeng Xing)
Nintendo benefits from yen depreciation
On November 8, Nintendo released its results for the first half of its fiscal year (from April 1 to September 30 this year). Because nearly 80% of its revenue comes from overseas markets, thanks to the depreciation of the yen, the revenue during the period was about 4.5 billion US dollars, and the net profit increased by 34.1% year-on-year to about 1.6 billion US dollars.
When the price of other electronic products such as Apple increased in Japan due to the weakening of the yen, Nintendo made it clear that it would not increase the price. However, at this financial report meeting, the official spokesman said that there will be no price increase at present, but will decide whether to increase the price according to the depreciation of the yen in the future.
Affected by the shortage of chips and other factors, the sales of Nintendo’s game console Switch in the first half of the year decreased by nearly 20% year-on-year to 6.68 million units, and Nintendo also lowered its sales forecast for Switch this fiscal year to 19 million units. As of the end of September this year, the Switch has sold 114.33 million units, making it one of the best-selling game consoles in the entire gaming industry, second only to Sony’s PS4’s 117 million units.
Game sales increased by 1.6% year-on-year to 95.41 million copies. During the period, a total of 15 game sales exceeded one million. New games released in the first half of the year saw growth, with Splatoon 3, which was released in September, selling 7.9 million copies. At present, the Switch platform game has sold a total of 917 million copies.
Nintendo raised its annual profit forecast by 18%, with net profit expected to reach 400 billion yen by March 2023, as a weaker yen helped offset weaker-than-expected Switch sales. (Intern Zeng Xing)
Disney sticks to streaming profit in 2024 as losses double
On November 8, Disney announced its third-quarter results. The year-on-year growth rate of revenue fell to single digits by 8.7% to US$20.1 billion, and net profit fell by 0.4% year-on-year, both of which were lower than expected.
Compared with historical data, Disney’s various businesses have declined. Affected by high inflation and hurricanes, the relatively stable theme park business grew by 36% year-on-year, much lower than the 70% growth rate in the second quarter. A rare bright spot was the addition of 14.6 million subscribers in the quarter, but that was the opposite — the streaming loss doubled year-over-year to $1.474 billion.
Disney started building streaming services in 2017, and Disney+ launched in November 2019. With the support of Hulu and ESPN+, Disney’s total streaming subscribers surpassed rival Netflix for the first time in the second quarter of this year. The total number of users in the third quarter was nearly 236 million, which continued to be higher than Netflix’s 223 million. But Disney’s paid revenue per user is only $6.1, less than Netflix.
Disney has yet to turn subscriber growth into profitability, and its streaming business has racked up more than $8 billion in losses. Disney, which is still in its own content cycle, is dragged down by high production costs. With the launch of Disney+ with blockbusters such as “Thor 4” this year, the loss of streaming media hit a record high, with an operating loss rate of 30%.
Management said in the conference call that the inflection point of streaming media losses has come, emphasizing the future focus on revenue and profitability rather than just user metrics. CEO Bob Chapek is sticking to expectations that the streaming business will be profitable in fiscal 2024.
Like Netflix, Disney will introduce an ad subscription version for $7.99 a month in December, increasing ad revenue while offering more choices, while Disney+ will increase the monthly fee to $10.99. By comparison, Netflix, which launched its ad-subscription version a month earlier, is priced at $6.99. (Intern Zeng Xing)
CHART OF THE DAY丨Pork prices rise for four consecutive years
According to the latest price data released by the Bureau of Statistics, pork prices rose by 51.8% year-on-year in terms of China’s CPI by category in October, rising for four consecutive months and expanding. China’s CPI rose 2.1% in the month as a whole, and food CPI rose 7%.
OTHER NEWS
Ali Zhang Yong and Jingdong Xu Lei attended the Wuzhen World Internet Conference and delivered speeches.
Both of them talked about the characteristics of the integration of the digital economy and the real economy and their respective important roles.
Zhang Yong: Alibaba will always be rooted in the real economy, actively participate in the construction of a community of shared future in cyberspace, make good use of digital technology, participate in the process of digitalization of industries in all walks of life, and serve the continuous pursuit of consumers for a better life. Based on full consensus and common belief, let us stand firm together to create a better digital future.
Xu Lei: Building a new development pattern is a systematic project and a dynamic evolution process. A new type of entity enterprise like JD.com that combines the genes and attributes of entity enterprises, digital technology and capabilities, “from entity to entity”, can deeply understand and accurately grasp the needs and pain points of the real economy, and is better at grasping the entity The key core links of enterprise transformation and upgrading will play an important role in helping to build a new development pattern.
Zhengzhou Airport Area lifted the “static control”, and the two Guangzhou districts “strengthened social epidemic prevention and control measures”.
The airport economic experimental zone where Foxconn’s Zhengzhou factory is located has been lifted from static management on the 9th. On the same day, Guangzhou announced that Liwan District will strictly control the flow of people from 9:00 on the 9th to 24:00 on the 13th, and in principle not go out unless it is necessary. Previously, Guangzhou Haizhu District implemented the same control measures from November 4th to 7th, and then extended it to 24:00 on November 11th. In the past eight days, the number of new coronavirus infections in Guangzhou has exceeded 10,000.
Analysts speculate that Apple has transferred all AirPods Pro orders to Luxshare Precision.
Tianfeng International analyst Ming-Chi Kuo added more details on Apple’s decision to cut GoerTek’s acoustics , saying that Goertek may suspend production of AirPods Pro 2 due to production problems, and Luxshare has expanded production and obtained all orders. Although Goertek strongly denies being kicked out of the “fruit chain”, those familiar with the bottom line of Apple’s supply chain management know what this adjustment means. There have been reports that “Goertek’s workers were laid off and directly pulled to Luxshare’s factory”.
SoftBank’s accelerated repurchase sparked speculation of Son’s privatization.
According to media reports, SoftBank repurchased more than $2 billion in October, more than half of the annual repurchase plan, helping its stock price rise by more than 30% that month. Masayoshi Son himself has repeatedly mentioned the privatization of SoftBank. , leading to speculation.
SHEIN piloted the Taobao model in Brazil.
“LatePost” exclusively learned that China’s largest cross-border fast fashion platform SHEIN is piloting a platform model in Brazil. Merchants can open stores directly on SHEIN just like on Taobao, and are responsible for operations and logistics. Previously, SHEIN designed and purchased products by itself. In addition, SHEIN is also trying more new models. For example, this year they also opened the world’s first long-term offline store in Tokyo, Japan, mainly for consumers to try on and check products.
Pinduoduo’s overseas version of Temu is preparing to enter Canada and Spain.
LatePost learned that Pinduoduo’s cross-border e-commerce platform Temu is preparing to launch in Canada or Spain, and the current unit price of the US station is between $20 and $25. In addition, in October Temu also opened the JIT (Just-In-Time) pre-sale mode to merchants. Sellers no longer need to stock up to the warehouse in advance, but can complete the delivery within 24 hours according to the actual sales order.
The crypto exchange war is over, and Binance will acquire FTX.
On November 9, Changpeng Zhao, founder of cryptocurrency exchange Binance, announced that it would acquire its rival FTX. Before confirming the acquisition, Binance will need to complete a full due diligence over the next few days. The FTX founder confirmed the news and stressed that its U.S. business was not included in the deal. After the acquisition news was released, the cryptocurrency market plummeted. Bitcoin and Ethereum fell by more than 10% in the past 24 hours, and FTX’s native token FTT fell by more than 70%.
It’s checkout time: Musk sells Tesla stock and pays for Twitter acquisition.
According to media reports, after completing the $44 billion acquisition of Twitter, Musk sold 19.5 million Tesla shares from November 4 to 8, worth nearly $4 billion. Musk has sold more than $19 billion worth of Tesla stock this year.
Beijing cancels the 3-year social security limit for purchasing a house in Taihu and Majuqiao areas.
On November 8, the Beijing Municipal Commission of Housing and Urban-Rural Development announced that the Taihu and Majuqiao areas of Tongzhou District will implement the commercial housing policy in the Economic Development Zone. Beijing families can own two sets of housing, and non-Beijing families can own one housing for 5 consecutive years of social security or tax payment. Set of housing, cancel the 3-year social security limit in Tongzhou. This policy applies to both new and second-hand homes. At present, Beijing’s property market policy is loosened by fine-tuning. In the first three quarters of this year, the sales area of commercial housing in Beijing decreased by 5.1% year-on-year.
FedEx’s pessimistic forecast for demand in the fourth quarter sparked market concerns.
Express delivery demand is seen as one of the economic barometers. At the Baird Global Industry Conference, FedEx CFO Michael Lenz said the market’s timing, speed and extent of the start of the reversal in air transport demand has exceeded expectations. They have reduced flight frequencies and parked some planes, and are expected to save between $2.2 billion and $2.7 billion by 2023. Stimulated by this pessimistic expectation, the U.S. stock market pared some of the gains of the day.
It is said that TSMC’s 7nm capacity utilization rate fell below 50%.
According to media reports, the 7nm capacity utilization rate of TSMC’s main process has fallen below 50%, which is worse than previously expected, and the decline is expected to intensify in the first quarter of next year. In addition to the downturn in terminal markets such as mobile phones, PCs, and servers, many of TSMC’s 7nm customers are affected by US export controls, which is also an important reason for the loosening of production capacity. For example, Nvidia’s banned A100 chip, as well as Chinese mainland customers Ziguang Zhanrui and Alibaba Pingtou have previously used TSMC’s 7nm process.
TSMC plans to invest 10 billion US dollars to build a new factory in the United States.
According to media reports, TSMC is preparing to build a new 3nm factory in Arizona, the United States, with an investment scale of 10 billion US dollars. Recently, the semiconductor market has declined seriously due to weak demand. TSMC still chooses to expand aggressively against the trend, or because of its long-term optimism on high-performance computing demand, and the US government has promised generous subsidies. This afternoon, TSMC responded that the plan for the second phase of the Arizona wafer fab pointed to by the report has not yet been determined.
Record companies want to split more of TikTok’s revenue.
According to media reports, major record companies such as Universal, Sony and Warner are negotiating with TikTok, requiring TikTok to share advertising revenue and increase the royalties paid to them. In the previous agreement, TikTok only had to pay a flat fee, rather than music platforms like Spotify paying record companies based on the number of plays. An executive at a major record label said TikTok should pay 2 to 10 times more than the existing deal.
The financing of real estate enterprises has opened up new opportunities.
The National Association of Financial Market Institutional Investors recently issued a document stating that it will continue to promote and expand bond financing support tools for private enterprises, and support private enterprises including real estate companies to issue debt financing. It is expected to support about 250 billion yuan in private enterprise bond financing. Stimulated by this news, stocks and bonds in the real estate sector rose collectively today. CICC analysis believes that this policy will help the secondary market prices of some private real estate leaders to stabilize in stages, but the specific price stabilization extent and time still depend on the amount of funds of buyers and sellers.
After “breaking up” with Kanye, Adidas once again lowered its performance expectations for this year.
Adidas lowered its revenue and profit forecast for the fourth time this year after ending a partnership with the lucrative Yeezy brand . The company expects revenue growth to fall from mid-single digits to low-single digits; net profit from continuing operations has been revised down to around 250 million euros, half its previous forecast. Adi has said that the termination of the Yeezy product line will affect the fourth-quarter revenue of 250 million euros, while last year’s sales of the series exceeded 1.7 billion euros.
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