Original link: https://www.latepost.com/news/dj_detail?id=1634
Who is the big winner in the US banking crisis?
During the bank run crisis in the U.S. a century ago, JP Morgan directed the bankers to find ways to satisfy depositors’ withdrawal requests, and survived the run crisis without any risk. A hundred years later, JPMorgan Chase Bank with his name written on the door will soon become the big winner of the current US banking crisis—perhaps none of them.
This week, the Federal Deposit Insurance Corporation (FDIC) and California regulators reached an agreement with JPMorgan to close First Republic, which has more than $200 billion in total assets, and sell its $93.5 billion in customer deposits and most of its assets to JPMorgan. Headquartered in San Francisco, First Republic Bank is slightly larger in assets than the bankrupt Silicon Valley Bank and is the 14th largest commercial bank in the United States.
Within two months, JPMorgan had gone from adviser on the sale of First Republic to depositor and finally to buyer. JPMorgan Chase also reached a loss-sharing agreement with federal regulators to reduce the impact of First Republic’s bad debts on JPMorgan Chase.
During the Silicon Valley Bank crisis, JPMorgan Chase once wrote a memo telling employees not to rob Silicon Valley Bank’s clients, and Wall Street bankers would not reject Silicon Valley venture capitalists who took the initiative to find them. Faced with these desperate prospects, JPMorgan simply gave employees a crash course in new clients. According to The Information, a Silicon Valley technology media, JPMorgan is currently screening thousands of new client lists to determine whether to follow up.
For JPMorgan Chase, the hundreds of billions of dollars of deposits and credits are only book benefits, and more importantly, they use it to gain crucial high-net-worth contacts in Silicon Valley and potential various IPO opportunities. This is a key battle for them to compete with Morgan Stanley and Goldman Sachs for Silicon Valley clients.
Last year, JPMorgan Chase earned US$128 billion in revenue and US$37 billion in profits. While Silicon Valley banks were passively expanding, JPMorgan Chase’s asset size shrank by 2%, allowing it to use more sufficient capital to deal with potential crises, and even benefit from short-term volatility.
In the 2008 financial crisis, JPMorgan Chase also survived the crisis safely and expanded its investment and commercial banking business through acquisitions. At that time, they acquired Bear Stearns, the fifth largest investment bank in the United States, and Washington Mutual Bank. Among them, the bankruptcy scale of the latter still ranks first among American commercial banks. (Gong Fangyi)
“May Day” tourism revenue is the same as in 2019
The backlog of tourism demand for more than half a year will be released in this year’s “May 1st”. As we previously expected, the number of tourists nationwide reached 274 million, which is 119.09% of the same period in 2019 on a comparable basis. The overall tourism revenue reached 148.056 billion yuan, flat compared to the same period in 2019.
This set of data is better than the 240 million trips and 120 billion yuan in tourism revenue predicted by the China Tourism Academy before the festival. According to data from the Ministry of Communications, the average daily passenger volume of civil aviation, railways, and highways all exceeded that of the same period in 2019. People’s travel radius has also expanded a lot, and more people in the circle of friends are targeting overseas. Ctrip said that the average travel radius of its users was 1.25 times that of the same period last year.
Many popular attractions reproduce the crowded scene:
- Huangshan: “May Day” received a total of 117,800 tourists, an average daily increase of 4.9% compared with 2019;
- Mount Emei: “May Day” received 174,300 tourists, an average daily increase of 56.72% compared with 2019;
- Wuzhen: The number of tourists received in a single day in the first three days of “May Day” exceeded 100,000, an average daily increase of more than 60% compared with 2019;
- Suzhou: The single-day passenger flow of the subway is 2.294 million person-times, breaking the historical record;
- Hainan: Holiday flight movements and passenger throughput of the three airports in the province increased by 22% and 26% respectively compared with 2019.
Some data also show that the recovery of consumption does not match the enthusiasm we see on social media. For example, in Zibo, which is recently famous for its barbecue, the local train station is expected to send 38,000 passengers per day between April 29 and May 3, which is actually only a 23% increase over the same period in 2019. During the holiday period this year, the national per capita tourism expenditure was about 540 yuan, recovering to 89% of the same period in 2019.
Moreover, the tourism industry has experienced a differentiation trend similar to that of commodity retailing. While the national per capita tourism expenditure is not as good as that of the same period in 2019, according to the research report of CICC, the average daily domestic flight volume during the holidays has increased by 15% compared with 2019, and the price of one-way air tickets including tax is 1.39 times that of 2019 (1211 yuan). The number of first-class and first-class orders reached 1.8 times that of the same period in 2019.
The reason why the trend has become complicated is that, on the one hand, people have generally raised their awareness of crisis. According to data from the central bank, Chinese individuals added 9.9 trillion yuan in savings in the first quarter of this year. Make the slope steeper. On the other hand, it is related to the contraction of supply. Since 2020, the official service industry PMI has only been above the dry-boom line for a few months. (Gong Fangyi’s interns Chang Junfei and Fu Xiaoyu also contributed)
Didi announces its first annual report after delisting, revenue declines but losses narrow
On April 29, Didi announced its first annual report after delisting. The data shows that Didi will achieve an operating income of 140.8 billion yuan and a net loss of 23.8 billion yuan in 2022, a year-on-year decrease of 19% and a year-on-year loss of 51.8%, respectively. The revenue performance of the three major businesses, namely China travel, international business and other businesses, last year was as follows:
- China Travel, with revenue of 125.9 billion yuan, a year-on-year decrease of 22%, has 411 million annual active users and 19 million annual active drivers;
- International business, with revenue of 5.9 billion yuan, a year-on-year increase of 62%, and an average daily order completion of 6.6 million in March 2023;
- For other businesses, the revenue was 9 billion yuan, a year-on-year decrease of 7%, and the average daily order completion in March 2023 was 10.2 million.
According to Didi’s annual report, China’s travel business includes China’s online car-hailing, taxis, driver-on-demand and ride-hailing services, international business includes online car-hailing and food delivery, and other businesses include bike-sharing, intra-city freight, autonomous driving and financial services.
Among them, Didi China Travel’s online car-hailing business adopts the gross method to calculate income, and the income includes the fees paid to drivers; while overseas, Didi adopts the net method for accounting, and Didi acts as an agent. It is the net commission income after deducting the driver’s income, and the accounting method is basically the same as that of Uber.
Almost all Chinese Internet companies cut costs last year, and Didi was no exception. Its gross profit margin increased to 17.75% from 9.76% last year, and its sales expense ratio dropped from 9.76% to 6.93%. This helped Didi narrow its operating loss ratio from 11.03% to 9.07% (adjusted EBITA).
According to data from the Ministry of Communications, a total of 716 million online car-hailing orders were generated nationwide in March this year, a year-on-year increase of 32.94% (8.38% in the first quarter). In March 2023, Didi China’s travel business completed an average of 28.2 million orders per day, a year-on-year increase of 42% in March 2022. For reference, the previous Didi prospectus showed that in the first quarter of 2021, the average daily transaction of Chinese business was 25 million times.
Manufacturing PMI fell below the dry-boom line in April
According to the National Bureau of Statistics, the manufacturing PMI, non-manufacturing PMI, and composite PMI recorded 49.2%, 56.4%, and 54.4% respectively in April, down 2.7, 1.8, and 2.6 percentage points from the previous month, respectively.
The official PMI index is obtained from a questionnaire survey of 3,200 manufacturing companies and 4,300 non-manufacturing companies. The critical point is 50%. If it is higher than this value, it means that the economy as a whole has expanded compared with the previous month, and if it is lower, it means that it has contracted.
Regarding the unexpected drop in manufacturing prosperity in April, the Bureau of Statistics said that it was mainly affected by the high base caused by insufficient market demand and the rapid recovery of the manufacturing industry in the first quarter. From January to March this year, the manufacturing PMI continued to be in the expansion range, of which the new order index recorded 50.9%, 54.1%, and 53.6% respectively, and dropped 4.8 percentage points to 48.8% in April.
New export orders also fell 2.8 percentage points to 47.6%, ending two consecutive months of expansion. Hongta Securities pointed out that most of the domestic manufacturing industry is related to exports. It may have been partially supported by a backlog of orders before, and exports exceeded expectations, but actual overseas demand is still declining. Some manufacturing companies are now destocking because their previous expectations were too optimistic.
The Caixin PMI, which mainly counts the prosperity of small and medium-sized manufacturing enterprises, also read 0.5 percentage points below the critical point in April. Among them, new export orders rose to the expansion range, and the employment index shrank to the low point of the year. Some businesses have no new hires, and some have laid off workers to control costs.
A number of brokerage research reports mentioned that the rebound effect after the epidemic has weakened at this stage, and the next economic data trend will reflect more of the current situation. The Politburo meeting in April mentioned that “the endogenous driving force of my country’s economy is not yet strong, and the demand is still insufficient.” Reflected in the manufacturing industry, under the general trend of outflow of export orders, the improvement depends on new competitive industries such as new energy and the expansion of domestic demand.
In April, the service industry continued to be at a relatively high level of prosperity. Among them, the transportation, accommodation, culture, sports and entertainment industries closely related to residents’ travel and consumption were all higher than 60%. In addition, mainly supported by infrastructure, the construction PMI recorded 63.9%, which was the second highest in the past five years, down from the previous month. (Lin Guangying)
Weilai and Xiaopeng fell behind in April
At the beginning of this month, several newly established independent new energy car companies successively announced their sales in April. Except for Weilai, which is in the model iteration period, and Cyrus (Wenjie), which has just released production and sales data, the sales of each company in April increased month-on-month.
BYD and GAC Aian continued to be the top two in sales. Among them, BYD delivered nearly 210,000 new energy passenger vehicles in the month, and GAC Aian delivered 41,000. According to the calculation of the overall sales of the month by the Passenger Federation (500,000 vehicles) , the combined market share of the two is more than half.
The most eye-catching performance among the new forces is still the ideal. In April, Lixiang delivered a total of 25,700 new cars, a month-on-month increase of 23%. Ideal has ranked first in the sales of new forces for four consecutive months, and its sales have exceeded 20,000 for two consecutive months. Ideal L7 sold more than 10,000 in the first full delivery month (delivery began on March 11). Its cumulative sales have also surpassed that of Weilai, reaching 335,600 vehicles.
Weilai’s sales fell 36% month-on-month to 6,658 vehicles in the month. The company said that the poor sales were mainly affected by product switching. After the Shanghai Auto Show this year, Weilai began a large-scale iteration of new and old products. Among them, EC7 will be delivered on April 28, and the new ET7 and ES6 will be delivered in the middle and late this month.
Among other brands, Xiaopeng delivered a total of 7,079 new cars in April, a slight increase of 1% month-on-month, and a year-on-year decline of more than 20%; the delivery of Nezha, which focuses on low prices, increased by nearly 10% month-on-month to 11,000 vehicles in April; Over 40% to 8,726 vehicles; Jikrypton increased by more than 20% month-on-month to 8,101 vehicles, and the cumulative delivery volume exceeded 100,000; Cyrus (Wenjie) fell nearly 20% month-on-month to 2,953 vehicles. (Qiu Hao)
Starbucks returns to growth in China
In the fiscal quarter ended April 2, 2023, Starbucks’ global revenue increased by 14% year-on-year to US$8.7 billion, and its net profit increased by about one-third, both exceeding market expectations. Same-store sales in the same period increased by 11% year-on-year, and customer unit price increased by 4%. Mainly driven by the US and Chinese markets.
Among them, same-store sales in China increased by 3% year-on-year, and same-store transaction volume increased by 4%, which was the first increase in same-store sales since the fiscal quarter ended June 27, 2021. Among them, the growth rate in March reached 30%.
Digital channel sales increased by 4% year-on-year, accounting for 47%. The single-quarter revenue of the special star food delivery business increased by 21% year-on-year, accounting for 23% of total sales. Last month, Starbucks also cooperated with Gaode Maps to launch the “pick up along the street” service in some stores in Beijing and Shanghai. Consumers in the car can place orders online and pick up offline at the Starbucks stores passing by the navigation route.
The number of stores in China also increased to 6,200, and the net increase of 153 stores in a single quarter was twice that of the previous quarter. Starbucks stated that it will accelerate the opening of new stores in China in the second half of the year. “We will rely on our market-leading combination of store types to meet customers’ needs for reconnecting with others.” In September last year, Starbucks announced that the number of stores in China would reach 9,000 by 2025.
At the same time, executives also reminded investors at the performance meeting that the growth rate of weekly sales is slowing down. “We will continue to face uncertainties in this fiscal year, such as changes in customer behavior in the post-epidemic period, the pace of international travel recovery, etc.” Starbucks expects China’s full-year same-store sales to achieve mid-single-digit growth. The company’s shares fell nearly 10 percent in early trading the next day following the news. (Intern Meng Xiaohan)
Qualcomm plans to rely on mergers and acquisitions to reduce dependence on mobile phones
How sluggish is the smartphone market? Listen to Qualcomm’s earnings conference call.
In the fiscal quarter ended March 26, the world’s largest mobile phone chip designer’s sales fell 17% year-on-year to US$9.28 billion, and net profit fell by more than 40% to US$1.7 billion. The company expects revenue of $8.1 billion to $8.9 billion next quarter, well below analysts’ average estimate of $9.25 billion. Qualcomm’s stock price fell more than 7% as a result.
China is still Qualcomm’s largest regional market, and the level of demand directly affects Qualcomm’s expectations for the future. “According to common sense and overall expectations, the Chinese market will rebound, but we haven’t seen any signs of it.” Qualcomm CEO An Meng said on the earnings call.
Anmon said that the destocking of mobile phone manufacturers may continue for another two quarters. Qualcomm CFO Akash Palkhiwala hinted that Apple’s procurement of components has also been greatly reduced (Apple currently mainly buys modem chips from Qualcomm and develops processor chips by itself), although he pointed out that this is not a comment on iPhone demand.
Qualcomm relies heavily on the smartphone market. The handheld hardware business (Handset), which includes mobile phone chips, accounted for 66% of its revenue in the last quarter. In addition, the mobile network technology licensing fee (Licensing) charged to mobile phone manufacturers also accounted for 14% of the company’s revenue. .
Semiconductor is a typical industry where the strong will always be strong. Leading companies earn most of the profits, and then use large sums of cash to invest in production expansion and technology research and development to continue to expand their competitive advantages. However, iterations of downstream applications often reshape the competitive landscape. Intel, the number one player in the chip field in the early years, gave up its share a little bit in the tide of the mobile era replacing the PC era.
Qualcomm was a beneficiary of the change of the last era, and now it must be wary of following in Intel’s footsteps. Anmon said the company is considering accelerating diversification acquisitions to sell more chips for cars, networking, computing and wearable devices and reduce reliance on smartphones. (Qiu Hao)
Star Wars Day: MAY THE 4TH BE WITH YOU
Every year, May 4th is named “Star Wars Day” by Star Wars fans around the world. Because the English of this day (May the 4th be with you) is homophonic to the classic line “May the force be with you” (May the force be with you) in the “Star Wars” series.
The earliest record of this slogan was on May 4, 1979, when Margaret Thatcher was elected Prime Minister of the United Kingdom, the British Conservative Party published a blessing advertisement in the newspaper, “May the Fourth Be with You, Maggie. Congratulations.” (May the number four be with you, Maggie. Congratulations).
The anniversary was not originally created by “Star Wars” officials, but fans around the world spontaneously chose to celebrate on this day. In 2019, the California Legislature officially recognized May 4th as “Star Wars Day” to celebrate the upcoming opening of the “Star Wars” themed area in Disneyland (it is reported that it will increase local taxes by $14 million a year and create 6,000 multiple jobs).
The first “Star Wars” movie was released in 1977, and six more have been released since then, making it one of the most popular movies in the world. But after 2005, there was no new film for a long time. Until 2012, Disney acquired Lucasfilm, the copyright owner of “Star Wars” for US$4.05 billion, and announced that it would continue to shoot new “Star Wars” movies.
Released in 2015, “Star Wars 7: The Force Awakens” surpassed “Avatar” in North America to become the box office champion in North American film history at that time, with a global box office of 2 billion U.S. dollars. “Old Cannon”. However, the box office and word-of-mouth of the “Star Wars” series continued to decline afterwards. The global box office of “Star Wars 9” broadcast in 2019 was only US$1 billion, and China’s less than 200 million yuan, with a score of 6.2 on Douban.
However, the “Star Wars” series still has historical accumulation and cultural foundation in the West. This year’s Star Wars Day, Disney’s streaming media platform Disney+ will launch a number of “Star Wars” IP new works and peripheral products, including the Emmy-nominated short film collection “Star Wars: Vision” Volume II, animation for children “Star Wars: The Young Jedi”, a special animation co-branded with “The Simpsons”, etc.
Lego has also released “Star Wars” models many times. The commemorative Millennium Falcon spacecraft launched in 2017 is one of Lego’s largest models, consisting of 7,500 Lego bricks. This year’s “Star Wars Day” will introduce seven new “Star Wars” series models, the most expensive one is priced at $ 239.99. A half-month offline event will also be held in China. (Intern Meng Xiaohan)
CHART OF THE DAY丨 Ruixing expects to achieve the goal of 10,000 stores ahead of schedule
Ruixing added 1,137 stores in the first quarter of this year, nearly 60% of which were franchise stores. As of the end of March, the total number of stores was 9351, nearly one-third of which were franchisees. The management stated that it expects to achieve the “10,000 store target” ahead of schedule in the first half of the year, and mentioned that there are still many locations that meet the requirements for opening stores, regardless of whether they are first-tier, second-tier or low-tier cities. The market is far from saturated, and they will maintain a strong competitiveness for opening stores Rhythm.
While opening new stores, the same-store sales of Ruixing’s self-operated stores (opened for more than one year) continued to increase. In the first quarter of this year, it increased by 29.6% year-on-year, and its total revenue increased by 85% to 4.43 billion yuan during the same period. This means that the new store does not divert too much passenger flow from the old store, mainly to open up new markets.
At the end of last year, Ruixing restarted the recruitment of franchisees in 41 cities in 9 provinces, and expanded to 80 cities in 15 provinces at the end of January this year, providing support such as zero franchise fee and 20 yuan discount for new users. Some low-tier cities are also accelerating the opening of stores. For example, Shaoguan, a small fourth-tier city in Guangdong, currently has 8 Luckin stores, distributed in four districts and counties. During the Spring Festival this year, the news that Ruixing in the county seat made 900 orders a day and queued for two hours spread across social media.
In April 2021, Ruixing also attracted attention on social media when they launched a raw coconut latte, which was sold out immediately. The coconut cloud latte, which was launched a year later, sold 4.95 million cups a week. In the fourth quarter of last year, the raw cheese latte was launched, with sales of 6.59 million cups in the first week. Behind the explosive models are new product development, marketing, and supply chain capabilities. They all have economies of scale, with unit costs diluting as the market expands. Ruixing itself does not rely on store space and services.
Many coffee brands plan to expand downward. Starbucks plans to open 9,000 stores by 2025, Tim Hortons plans to open 2,600 stores by 2026, Cudi Coffee will open 10,000 stores by 2025, Lucky Coffee opened 1,521 new stores last year, and has 1,805 stores as of the beginning of this year. Their unit prices range from a few yuan to tens of yuan, and the actual price of a single cup of Ruixing is around 16 yuan.
OTHER NEWS
Eleven departments jointly issued a document clarifying that medical beauty is a medical activity.
On May 4, 11 departments including the State Administration for Market Regulation, the Ministry of Public Security, the Ministry of Commerce, the National Health Commission, the General Administration of Customs, and the Cyberspace Administration of China jointly issued a document, clearly stipulating that medical beauty services are medical activities, and the practice must obtain the “Medical Institution “Practice License” or “Clinic Record Voucher”, the relevant license or record must be disclosed on the website of the health administration department or other methods that are convenient for the public to inquire. The document also proposes a series of regulatory measures, including: strengthening access, joint spot checks, strengthening the connection between law enforcement and criminal justice, increasing the disposal of “medical entrustment” and “medicine entrustment”, and strictly prohibiting personnel without corresponding qualifications or medical knowledge from engaging in medical aesthetic diagnosis and treatment consultation , or publish professional content in the medical field such as medical beauty science, and it is strictly forbidden to train personnel without medical qualifications, etc.
Private consumption increased, and Hong Kong’s GDP grew by 2.7% year-on-year in the first quarter of this year.
In the first quarter of this year, Hong Kong’s GDP grew by 2.7% year-on-year in real terms, reversing the downward trend for four consecutive quarters, and increased by 5.3% from the fourth quarter of last year, significantly higher than the forecast of 3%. Among them, private consumption expenditure increased by 12.5% year-on-year, which was significantly faster than the 1.7% increase in the previous quarter. Total exports of goods decreased by 18.7% year-on-year, narrowing from the 24.9% decline in the previous quarter. Chief Executive Lee Ka-chao said that 760,000 tourists entered Hong Kong last weekend, and more than 40% came from the mainland. It is estimated that more than 600,000 mainland tourists will visit Hong Kong during the “May Day” holiday.
The price of all Tesla Model 3/Y series in China has increased by 2,000 yuan.
On May 2, Tesla raised the price of entry-level models in China, the United States, Japan, Canada and other countries. The Chinese market rose the most (2,000 yuan). The starting prices of Model 3 and Model Y came to 231,900 yuan and 263,990 yuan, respectively. ten thousand yuan. However, because there have been several rounds of price cuts before, the prices of Tesla’s current models are still significantly lower than at the beginning of the year. Market analysis believes that Tesla’s price increase is more to restore profit margins and appease investors. Judging from Tesla’s current inventory and order status, its price increase momentum is insufficient, and it may continue to cut prices in the future.
Chinese airlines are allowed to add 4 new China-US flights.
The U.S. Department of Transportation has approved Chinese airlines to add 4 direct passenger flights between China and the United States, and Chinese airlines will operate up to 12 flights between China and the United States every week. After the increase in the number of flights, the number of flights operated by Chinese and American airlines will be equal, that is, each will fly 12 flights per week. Increase. According to aviation data company Ishka Global, the number of scheduled flights between China and the United States in March was only 6% of the same period in 2019. Although the number of flights between China and the United States has increased, it is still far less than the average of more than 300 in the week before the epidemic. At present, the average price of air tickets from Beijing to Los Angeles continues to remain above 10,000 yuan.
Porsche announced that the price of new models will increase by more than 4%, but the Chinese market will not rise.
In the first quarter of this year, Porsche’s revenue increased by more than 25% year-on-year to 10.1 billion euros. China is still the largest single market, and its deliveries in the quarter increased by 20% year-on-year to 21,400 vehicles. The company’s CFO Lutz Meschke said in the earnings conference call that it plans to increase the price of new European and American models by 4% to 8% in the second half of the year, but the Chinese market is not included for the time being. He also said that Porsche’s electric cars would cost 10% to 15% more than their gas counterparts.
GAC will give free fuel license plates to Guangzhou residents who purchase cars, provided that they purchase GAC Group vehicles.
GAC Group recently launched a new discount. From now until June 30, eligible consumers who purchase GAC fuel vehicles will directly receive a Guangdong A blue card. In April, the average auction price for blue cards in Guangzhou was about 18,000 yuan, and the latest auction prices in Shanghai and Shenzhen were 92,000 yuan and 53,000 yuan, respectively. In addition, Guangzhou introduced a new policy of “trading old for new” at the end of March, and can also receive a subsidy of 10,000 yuan for the replacement of designated models of fuel vehicles. Many models of the local car company GAC are listed.
During the “May 1st” period in Jiading District, Shanghai, a new car purchase subsidy campaign was also launched, with subsidies ranging from 10,000 yuan to 20,000 yuan for individual consumers to purchase designated brand new energy vehicles and fuel vehicles. The subsidy is mainly for local car companies in Shanghai. In addition to SAIC and Roewe, there are also Volvo and NIO. The former has its Asia-Pacific headquarters in Jiading, and the latter has the world’s largest delivery center in Jiading.
The threshold for using the housing provident fund for families with many children has been adjusted in many places.
Shanghai announced that starting from May 1, families with many children who meet the housing provident fund lease withdrawal regulations can withdraw housing provident funds according to the actual rent expenditure; families with many children who meet the city’s housing provident fund loan regulations to purchase their first house, the maximum loan limit There is a 20% increase on the basis. Hangzhou, Zhejiang, Wuhu, Anhui, and Nanning, Guangxi have also announced similar policies to increase the housing provident fund for families with many children. In addition, since May 23, Anhui has supported the withdrawal of the housing provident fund from the accounts of the person and the spouse to pay the down payment for the purchase of a house.
AMD’s revenue fell 9% amid weakness in the PC market.
AMD’s revenue in the first quarter fell by 9% to US$5.35 billion, with a net loss of US$139 million, compared with a net profit of US$786 million in the same period last year. The company’s stock price fell more than 6% after hours. The biggest decline among the various businesses was the client department covering PC chips, and its revenue fell by more than 60% compared with the same period last year. However, the company’s CEO Su Zifeng said that the company’s PC business and the entire industry have bottomed out in the first quarter, and they are confident in the growth in the second half of the year.
Fighting in Sudan could jeopardize coke and chocolate supplies.
As Sudan’s import and export trade has stagnated due to the armed conflict, people are worried that the supply of gum arabic, which is mainly produced in the country, will be stopped, which will lead to shortages of various consumer products such as cola, chewing gum, and chocolate. Gum Arabic is commonly used as a stabilizer and thickener in a variety of foods and currently 80% of the supply comes from Sudan. Short-term supplies of gum arabic are not in danger yet, as major downstream beverage and confectionary makers usually have six to 12 months of stocks on hand, though prices have soared, traders said.
Estee Lauder’s net sales decline narrowed in the first quarter, and the recovery in the Asia-Pacific region was slower than expected.
Estee Lauder’s net sales in the first quarter of this year fell 12% year-on-year to US$3.75 billion, narrowing the decline. Net profit dropped sharply YoY to RMB 156 million. Net sales in the Asia-Pacific region declined slightly, but organic sales increased by 7%, returning to positive growth, mainly driven by the Chinese market. However, the management reminded at the performance meeting that although sales in China returned to double-digit growth in February and March, they also saw a decline in tourism retail sales in Hainan. Consumption pull is limited. Due to the slower-than-expected growth in the Asia-Pacific region, Estee Lauder adjusted the annual sales growth forecast to about 11%, and the stock price closed down 17% that day.
Yum China’s restaurant profit margin was 20.3% in the first quarter, the quarterly peak since 2017.
In the first quarter of this year, Yum China’s total revenue was US$2.92 billion, its operating profit was US$416 million, and its restaurant profit margin reached 20.3%, a record high in a single quarter since 2017. Margin growth was helped by higher same-store sales, higher productivity, improved operating efficiency and temporary subsidies, but was also impacted by higher promotional costs and wage costs. Yum China’s same-store sales increased by 8%, and its KFC and Pizza Hut same-store sales increased by 8% and 7% year-on-year respectively, with a net increase of 233 stores.
Baidu’s LinearDesign algorithm paper is online, and it has previously announced commercial cooperation with pharmaceutical companies.
The mRNA sequence design algorithm LinearDesign developed by Baidu was published in the main issue of “Nature”. At present, people can artificially synthesize mRNA to guide cells in the body to independently produce proteins that can exert medicinal effects. The new crown mRNA vaccine is based on this principle. Unlike existing algorithms, LinearDesign optimizes the stability of mRNA structure on the basis of improving protein production efficiency. In theory, it can provide better initial design sequences for related academic research and drug development, thereby speeding up the research and development process and reducing costs. According to Baidu’s official website, they will sign a licensing agreement with Sanofi in 2021.
Pfizer’s non-new crown business revenue in the first quarter increased by 5% year-on-year.
Pfizer’s sales in the first quarter were US$18.28 billion and net profit was US$5.540 billion, both down nearly 30% year-on-year, but exceeding market expectations. Among them, new crown-related sales were only US$7.1 billion, a decrease of US$10 billion compared with the same period last year. Excluding the new crown products, Pfizer’s revenue in the first quarter increased by 5% year-on-year. Pfizer also said it will launch 19 vaccines and treatments, including the RSV vaccine, in the next 18 months, and expects revenue growth of 7%-9% this year.
Turing Award winner Jeffrey Hinton has left Google to unfettered warnings about the potential dangers of AI.
Geoffrey Hinton, known as the “Godfather of AI”, has announced that he has resigned from his job at Google in order to be free to talk about artificial intelligence and warn the world of its potential threats. Hinton said that artificial intelligence is coming sooner than he thought, and has some regrets about his life’s work, including the issue of AI replacing jobs and the proliferation of false information. Jeffrey Hinton has a long history of pioneering work in the field of neural networks, laying the groundwork for the development of AI. In 2018, Jeffrey Hinton won the Turing Award for his outstanding contributions to AI deep learning.
The US private sector added 296,000 jobs in April.
U.S. private sector payrolls increased by about 296,000 in April, the highest monthly gain since July 2022. According to payroll management firm ADP, the industries with the most U.S. hiring in April were leisure and hospitality (154,000), education and health services (69,000) and construction (53,000). Banking and manufacturing lost 28,000 and 38,000 jobs, respectively. The U.S. labor market has added more than 800,000 jobs so far this year.
Google promotes passwordless sign-in across the board.
Google users can use the Passkeys function on their personal accounts since May 3. After creating Passkeys, users no longer need to enter a password or send a verification code to their mobile phone for two-step verification when logging in. The Passkeys function allows users to replace traditional Google account passwords with existing PIN codes, fingerprints, facial recognition, etc. on mobile phones, tablets, and other devices. Google, Apple, and Microsoft announced last year on World Password Day (the first Thursday in May each year) to build a passwordless login system within a year to provide a better user experience.
Airbnb is rolling out new features in hopes of offering cheaper listings and better service.
Airbnb will add more than 50 new features such as Airbnb Rooms and Host Passport. Airbnb Rooms will help users rent cheaper private rooms. It has more than 1 million rooms with an average price of $67 per night. Users will know the total price before tax including platform service fees, cleaning fees, etc. . The Host Passport function will provide potential tenants with specific information about the host and the listing, including details such as whether the bedroom has a separate door lock. The average price of Airbnb’s listings has risen by 36% since 2019. CEO Brian Chesky said that Airbnb is losing users, and landlords and users hope to get better services after paying more costs.
Kraft Heinz’s gross profit margin increased by about 1.3 percentage points in the first quarter, and it raised its full-year profit forecast.
Kraft Heinz’s revenue in the first quarter of this year increased by 7.3% to US$6.49 billion, benefiting from the reduction in raw material cost pressure, and its gross profit margin increased by about 1.3 percentage points to 32.8%. Kraft Heinz decided to raise its full-year profit forecast due to rising product prices, stable consumer demand and slowing growth in raw material costs. Kraft Heinz will continue to drive growth this year with price increases, despite reduced cost pressures on raw materials such as vegetable oils, wheat and dairy products.
The United States raised interest rates by 25 basis points, and this round of interest rate hikes may be suspended.
The Federal Reserve announced that it will increase the target range of the federal funds rate by 25 basis points. Fed Chairman Powell said that we feel that we are getting closer to the target, and may even be reached. This rate hike is the third rate hike this year and the tenth rate hike since the start of the rate hike last year. The benchmark federal funds rate rose to a range of 5%-5.25% in this round of interest rate hikes, a cumulative increase of 5%, the highest level in 16 years. In the May policy resolution document, the wording “the Committee expects some additional interest rate hikes may be appropriate” was deleted, which some analysts believe suggests that this round of interest rate hikes may be suspended.
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