Original link: https://www.latepost.com/news/dj_detail?id=1161
Dividends and layoffs, a new trend for Chinese companies
Some things may happen in a shorter gestation than expected, and once they start, they may develop faster than expected.
Recently, companies of different scales and industries have laid off staff, ranging from platform companies that charge commissions and advertising fees to brick-and-mortar companies that produce goods. From the perspective of company management or shareholder value, it is difficult to say what is wrong with the company doing this.
Zhihu, which is smaller in scale, has an annual income of 3 billion yuan and a net loss of 1.3 billion yuan after deducting various costs and expenses. iQIYI may not be able to last for a year when its cash on paper is at its lowest. This is still in the case of a major shareholder Baidu blood transfusion. But this is the kind of company that made its first profit in the first quarter of this year by laying off thousands of jobs.
Larger, more diverse, and profitable companies are now thinking about downsizing or cutting back. The more famous ones like Ali, Tencent, Midea, etc., have a profit of 10 billion yuan a year. They are in different industries and business models are different, but one person’s expenditure is another person’s income, and the economic chain can always connect a group of people and a group of companies in unexpected ways.
People don’t buy houses anymore, so there’s something wrong with the sales of refrigerators, air conditioners, and TV sets that are usually bought along with house renovations. These home appliance brands have less income, and may have less motivation to advertise on e-commerce platforms. The revenue growth rate of the platform is not as high as before. The management who is worried that the company may encounter a crisis will start layoffs, and the employees who have lost their jobs have no confidence to change their houses. It is very likely that there will be problems with “housing”. Consumption along with the house is also gone or reduced. Another new cycle.
At the same time, just as some of the biggest companies in the US did in the 1980s, today a group of Chinese companies are starting to ditch “hold and reinvest” in favor of “downsizing and adding money.” Management can justify itself by “maximizing shareholder value”, and most of the capital markets welcome it. Although it doesn’t look very decent.
Midea, which was caught up in layoffs, made a net profit of 28.6 billion yuan last year, and recently announced that it would distribute 11.6 billion yuan in dividends. JD.com, whose profit margin has been hovering between a few tenths and 2% for many years, also announced a special dividend arrangement of billions of yuan this quarter. In addition to direct distribution, Midea, Xiaomi, Alibaba, Tencent and other companies have prepared billions to tens of billions of yuan in cash to repurchase shares. In many cases, returning shareholders in this way is faster and more direct than issuing money directly. .
When companies are willing to develop and the market environment supports them, they build factories, buy raw materials, hire suppliers, advertise, and give money to more people. Dividends and share repurchases now are also giving money to people, but only to allow shareholders to get returns. Compared with the previous method of giving money, this time, obviously, fewer people can receive money. (Gong Fangyi)
Weibo ads are affected in the second quarter, optimistic about luxury goods and cars getting better first
- Weibo’s net revenue in the first quarter of this year was US$480 million, a year-on-year increase of 6%, of which advertising and marketing revenue was US$430 million, a year-on-year increase of 10%; compared to its peers (non-short video), the performance was not bad.
- The management said that the growth was partly due to the cooperation with the sponsors of the Winter Olympics. In addition, the advertising revenue of the game industry also increased significantly, including all marketing nodes in cooperation with Genshin Impact.
- Regarding the impact of the epidemic that the market is concerned about, the management said that the decline in brand advertising is more obvious, because most brands or agents are located in East China, and now with the fluctuation of the epidemic in many places, the impact is expected to last until June or longer.
- However, the company is optimistic about the long-term, and believes that with the easing of the epidemic, advertising in luxury goods, automobiles and other industries will rebound first, and the negative impact of offline consumption such as medical beauty may continue to the third quarter; due to the poor overall sales environment of mobile phones, future advertising will Continued pressure.
- The management also mentioned that the assessment of ROI in the first quarter of this year is more stringent, and businesses that cannot provide returns in the short term, such as 3 or 6 months, will be cut off. (Lin Guangying)
Organization adjusts with business changes, Huawei adds 3 more “corps”
- Ren Zhengfei, who often emphasizes that Huawei will soon fall, has asked the company’s employees in internal speeches for more than 20 years if they have considered “If one day, the company’s sales decline, profits decline or even go bankrupt, what should we do?”
- Geopolitical conflicts and Huawei, whose revenue fell by 250 billion yuan last year, showed how to deal with this scenario with practical actions: focusing on the Chinese market , focusing on the development of businesses that are less affected by US sanctions, such as various smart hardware, automobiles, and public cloud, The business of helping the government and traditional enterprises to transform, including energy.
- Huawei’s organizational structure has also been adjusted with the focus of its business, and the “corps” is the focus. On May 31, Huawei released the video of the third batch of “Legion” inaugural meetings, and newly established two system departments (digitalization of the manufacturing industry and public utilities), digital finance, site energy (power supply business such as base stations), machine vision ( Security business) “Legion” in three directions.
- In addition to the two batches formed in 2021, Huawei has 18 “corps”, mainly energy, transportation and logistics, security and other businesses that deal with government and corporate customers. Only two are directly related to consumers, namely sports health and security. Interactive media (music).
- It is not easy to make money by serving the government and traditional enterprises. Different regions, different industries, and even different companies in the same industry have different problems to solve. The degree of product reuse is not high, and it is difficult to have the network effect and marginal cost of the Internet industry. Decrease. Ren Zhengfei said that the “Legion” is to put scientists in basic research and experts in charge of technology, products, engineering, sales, delivery and services into a team to shorten the cycle of product advancement, reduce inter-departmental consumption, and improve efficiency.
- Unlike large companies that restructure their organizations, Huawei’s “corporation” is independent of the original BG (business unit)/BU (business line). The person in charge reports directly to the top decision-making level, and grants the transfer of various departments. The power of departmental resources, the goal is to obtain more revenue.
- At the establishment of a new batch of “Legion” activities, Huawei demonstrated some of the “Legion” growth goals: two groups related to consumers will grow by more than 40% next year; digital energy-related “Legion” revenue growth will exceed 70%; some The goal of the industry legion is to double the growth – far exceeding the growth rate of their previous BG (business unit), but the revenue share is not high. To drive Huawei back to the 20% growth rate when its revenue was nearly 860 billion in 2019, only These legions are not enough. (He Qianming)
On the first day of Shanghai’s resumption of work and production, subway passenger flow recovered by about 30%
- Today is the first day of the “full restoration of production and living order” in Shanghai. Traffic is the most intuitive indicator of the degree of recovery. Last year, 9.78 million people took the subway every day in Shanghai, and between today and evening, there were 1.68 million. Even with the evening peak, it is estimated that the total subway passenger flow is only about 30% of the daily rate. According to statistics from the Shanghai Public Security Bureau, the traffic flow in the morning peak is about 60% of that before the epidemic, and more vehicles have broken down—maybe they have not been on the road for two months, the vehicles have some problems, and the drivers are not familiar with them.
- However, the recovery of planes and trains in and out of Shanghai will be slower. According to Fei Changzhun, the number of flights returning to normal Shanghai has not increased significantly, and the average daily flight volume in the past three days has been around 40. The three railway stations in Shanghai have all resumed operation today, but the frequency has not been fully restored. The railway department said that it is now implementing “1 map per day” and will open additional lines in three stages on the 1st, 10th, and 20th. . According to The Paper, the waiting room at Hongqiao Railway Station was basically full, and about half of the merchants were open.
- People are starting to walk back to office buildings. The Jing’an Kerry Center in Puxi is allowed to return to work by 50% today. Some employees of the company received a notice from their superiors at 11:30 last night that they would be working in the office today. The Shanghai Center in Lujiazui, Pudong, has prepared coffee and egg tarts for everyone returning to work.
- With the reopening of office buildings, Meituan delivered 210% more coffee than last week. On the Ele.me platform, the online takeaway business rate of Shanghai Xiaodian has recovered by nearly 40%. After cooking at home for two months and eating enough carrots, people can order barbecue, crayfish, and snail noodles again.
- Express delivery has recovered 80 to 90%. According to “The Paper”, the resumption rate, courier arrival rate, and the number of processed pieces of Shanghai outlets such as Zhongtong, Shentong, and YTO have recovered by more than 80 to 90%. Cainiao said yesterday that Shanghai’s delivery volume has returned to pre-epidemic levels. (Wang Yuqing)
It is no longer a market stimulated only by policies, and the national subsidy for new energy vehicles will stop in 2022
- On May 30, the Ministry of Finance mentioned in an answer to a reporter’s question that at the end of 2021, it will issue a notice together with relevant departments to clarify that the subsidy policy for the purchase of new energy vehicles will be terminated on December 31, 2022. In fact, the suspension of subsidies was announced at the end of last year, but in this round of the epidemic, the market is guessing whether the subsidies will be extended. The conclusion is now clear.
- The end of this time is the state subsidy. According to the current plan, individuals who buy pure electric vehicles will receive a subsidy of 9,100 yuan per vehicle with a cruising range of 300 to 400 kilometers, a subsidy of 12,600 yuan for vehicles with a cruising range of 400 kilometers or more, and a subsidy of 4,800 yuan for plug-in hybrid models; the subsidies are issued to car companies, which are then reflected in in price. In addition, there are subsidies for passenger cars and public transportation, which will be cancelled from next year.
- As for the local purchase subsidy, it was cancelled as early as March 2019. The industry believes that this may be because local subsidies are often linked to the protection of local enterprises, which is not conducive to the promotion of high-quality products.
- The effect of subsidies is obvious. China began to subsidize new energy vehicles in 2009. As of 2018, the total expenditure of the central and local governments was nearly 210 billion yuan. During the period, the annual sales of passenger vehicles increased from 0 to 1.01 million units, and the compound growth rate from 2016 to 2018 reached 78%. In 2019, subsidies fell sharply by more than 50%, and the growth rate slowed to single digits in the following two years.
- But subsidies also distort the market to some extent. For example, Dongfeng received a subsidy of 2.9 billion in 2017, with a net profit of only 200 million, which is almost non-viable. In addition, car companies are also accustomed to follow policies to determine products. Some people believe that subsidies affect the direction of batteries. In 2017, subsidies put forward requirements for cruising range, energy density, etc., and the market share of ternary lithium batteries with better performance increased. In 2020 After the annual subsidy fell, the lower-cost lithium iron phosphate battery began to pick up.
- In 2021, with the improvement of the industrial chain, Tesla, Wei Xiaoli and other car companies have begun to deliver steadily, and the new energy vehicle consumption market is rapidly maturing. The annual sales of passenger vehicles is 2.988 million, an increase of 169% year-on-year, and the penetration rate reaches 14.8 %. The market believes that in the future, support for new energy vehicles will shift from subsidizing car companies to subsidizing upstream such as battery technology and charging and swapping infrastructure. (Lin Guangying)
WM Motor applied for listing in Hong Kong, with sales of less than 100,000 units in 4 years
- On June 1, WM Motor submitted a prospectus to the Hong Kong Stock Exchange and will be listed on the main board. According to the prospectus, since the first model was launched in September 2018, WM Motor has sold 83,495 vehicles. The sales in 2019-2021 were 12,799, 21,937 and 44,152 respectively. The year-on-year growth rates were 71.4% and 101.3% respectively.
- As a new force in car manufacturing, WM Motor’s car sales are lagging behind.
- According to public data, the annual sales of Weilai, Ideal and Xiaopeng were 91,000, 90,000 and 98,000 respectively last year, more than double that of Weimar.
- In the second echelon, Nezha and Leapao also grew faster than WM Motor last year. Last year, Nezha’s sales increased by 361.7% year-on-year to 69,674 units, and Leapmotor delivered a total of 43,748 electric vehicles, a year-on-year increase of 443.5%.
- The reasons for the poor sales of WM Motor may be related to the company’s product quality, sales model, lower R&D investment, and the loss of executives.
- Different from the direct store sales model of “Weixiaoli”, WM Motor adopts the traditional dealer sales model, and the produced automobiles are wholesaled to dealers for retail. This sales model is conducive to car companies to obtain stable wholesale income, but it is easy to accumulate inventory. Previously, a number of Weimar dealers mentioned to LatePost that there had been a backlog of 2-3 months of inventory cars.
- Weimar is also continuing to reduce investment in research and development. According to the prospectus, WM Motor has R&D centers in Chengdu, Shanghai and Wenzhou. In the past three years, R&D investment was 893 million yuan, 992 million yuan and 981 million yuan respectively, accounting for 50.7%, 37.1% and 20.7% of the revenue in the same period respectively. .
- In addition, we have previously reported that in the first half of last year alone, Weimar has left three executives , namely CTO Yan Feng, chief retail officer Tang Junying, and chief growth officer Wang Xin. (Eslyn)
CHART OF THE DAY
- On the first day of June, five new electric vehicle brands including Wei Xiaoli released their transcripts, and the deliveries in May all improved significantly from the previous month.
- The orders with the most deliveries are: Ideal 11,496 vehicles, 176% MoM; Nezha 11,009 vehicles, MoM 25%; Xiaopeng 10,125 vehicles, MoM 12%; Leaprun 10,069 vehicles, MoM 11%; NIO 7,024 vehicles, MoM 38%.
- Among them, the delivery volume of ideal and zero-run has exceeded the level in March. Leaprun was least affected by the epidemic in April; ideally, it was at the bottom and rebounded the fastest in April.
- Xiaopeng and Weilai recovered slowly, and their deliveries in May were 34% and 30% less than in March, respectively. However, they all said that they have a lot of orders in hand and are speeding up production.
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OTHER NEWS
Apple moved some iPad production lines from China to Vietnam.
According to media reports, Apple moved some iPad production lines from China to Vietnam for the first time after several months of disruption to Apple’s supply chain due to the lockdown in Shanghai and surrounding areas. However, the transfer is planned, and in 2020 Apple intends to use this to minimize the impact of trade frictions.
Nezha’s May deliveries were up 25% month-on-month, 8.5% lower than March.
Nezha Automobile took the lead in releasing the report card today. A total of 11,009 units were delivered in May, a year-on-year increase of 144%. The deliveries in March and April were 12,026 units and 8,813 units respectively. Compared with Wei Xiaoli, Nezha was less affected by the epidemic in April, and the year-on-year growth rate of delivery still reached 120%. Nezha mainly focuses on low-cost electric vehicles ranging from 70,000 to 200,000. It currently has factories in Tongxiang, Zhejiang and Yichun, Jiangxi. The Nanning factory in Guangxi is expected to be put into operation this year. The three factories have a combined maximum annual output of 500,000 vehicles.
Tencent adjusts the salary evaluation method, and promotion does not necessarily mean a salary increase.
Tencent issued an internal email last night saying that in the company’s salary adjustment in July this year, it will no longer raise the salary of employees who have been promoted by rank. The email stated that a promotion is a recognition of ability, and a promotion does not necessarily mean a salary increase, because the company hopes that employees can convert their abilities into performance. Salary adjustment will be evaluated based on various factors such as performance contribution, ability improvement, and salary competitiveness. In order to strengthen the link between compensation incentives and performance, Tencent also postponed this year’s annual compensation review from June to July to obtain the full performance of employees in the first half of the year.
The sales of the top 100 real estate companies in the first five months were more than half lower than the same period last year.
According to CRER Research, a subsidiary of E-House Enterprise Group, the overall trading performance of the top 100 real estate companies from January to May this year fell by 52.3% year-on-year, of which May fell by 59.4%, and the decline was expanding. Data from the China Index Academy also showed that the sales of the top 100 real estate companies in the first five months fell by 50.7% compared with last year. At present, there are only 3 real estate companies (Country Garden, Vanke, Poly Development) with sales of over 100 billion yuan this year, compared with 15 last year. As of the end of May, most housing companies had not achieved 30% of their sales targets for this year, and half had achieved less than 25%.
State Council: Support platform companies to list at home and abroad in compliance with laws and regulations.
A few days ago, the State Council mentioned the need to implement measures to support the legal and compliant domestic and overseas listing of platform companies, and also pointed out specific measures for Taiwan to support the regulated and healthy development of the platform economy, give full play to the role of the platform economy in stabilizing employment, and stabilize platform companies. development expectations.
According to a survey by the Japan Chamber of Commerce, about half of Japanese companies in Beijing work entirely from home.
From May 19th to 23rd, the Japan Chamber of Commerce in China visited 85 companies in China – about 15% of the total number of member companies, of which 82 were located in Beijing, showing that 51% of companies had to implement “completely work from home”, 41% of businesses are “partially or mostly working from home,” and 6% have suspended some operations. In terms of logistics, 11% said it was fully sufficient, 29% said that the supply was more than 70%, and 32% said it was only half or less.
Foxconn’s parent company said the impact of the outbreak in China was less than expected.
Hon Hai raised its outlook for the second quarter and the full year this week, saying that the impact of the outbreak in China on the company was less severe than previously expected. Major factories have been operating at normal levels under closed-loop management, and product development has continued as usual. Hon Hai’s revenue in April was about 16.7 billion US dollars, a decrease of 4.1% from the previous month, and the performance in April and May was better than expected. According to the official website, Foxconn has more than 40 industrial parks in mainland China, which are located in the Pearl River Delta, Yangtze River Delta, Bohai Rim, and central and western regions. The main parks are located in Shenzhen, Zhengzhou, Chengdu, Taiyuan, Kunshan and Yantai.
The May Caixin China Manufacturing PMI was 48.1%.
In May, the Caixin China Manufacturing PMI recorded 48.1%, up 2.1 percentage points from the previous month, and was in the contraction range (less than 50%) for three consecutive months. Price drops. Compared with the official May PMI (49.6%) released yesterday, the overall trend is consistent, but the value is lower. This is partly because the Caixin PMI survey is more geared towards SMEs, although the sample size is small at only 500. The official manufacturing PMI statistics are mainly for medium and large enterprises.
Canalys said that China’s PC shipments stabilized in the first quarter and may start to decline in the second quarter.
According to market research firm Canalys, China’s PC (desktop, notebook, workstation) shipments fell 1% year-on-year to 11.7 million units in the first quarter of this year, the first drop since the second quarter of 2020. Among them, desktops fell 11% to 3.9 million units, while notebooks increased 6% to 7.7 million units. The analysis mentioned that the epidemic will affect demand from the second quarter, especially small and medium-sized enterprises; in addition, as the government tightens the budget, public sector procurement will also decrease, but the education sector is still expected to grow.
With iPhone and iPad, Safari is the second browser used by 1 billion people in the world.
Research data from the Atlas VPN team shows that the total number of users of the Safari browser on various terminals has reached 1.006 billion, making it the second browser in the world with more than 1 billion users. Number one is Chrome with 3.379 billion users. Safari’s advantages are on mobile phones and tablets, with a market share of 25% and 38%; on the computer side, the market share is about 10%, which is similar to Edge and Firefox, which also reflects the iPhone, iPad and MacBook series in their respective markets. penetration. At present, only Chrome and Safari can achieve a market share of more than 10% in both mobile phone and computer browsers.
The proportion of independent directors of Ant Group has risen to 50%.
According to Caijing, Ant Group has newly hired Ms. Yang Xiaolei and Ms. Shi Meilun as independent directors, and the number of independent directors has reached 4, accounting for half of the board seats. Ms. Yang Xiaolei was a former partner of King & Wood Mallesons. Ms. Shi Meilun is currently the Chairman of Hong Kong Exchanges and Clearing Limited, and serves in the China Securities Regulatory Commission and the International Federation of Stock Exchanges. Among the other two independent directors, Ms. Hao Quan has an international financial background, and Professor Huang Yiping is an economist at Peking University. After this change, Ant’s board of directors consists of 2 executive directors (Jing Xiandong, Ni Xingjun), 2 non-executive directors (Cai Chongxin, Cheng Li) and 4 independent directors.
SpaceX has produced the first Starlink II satellite.
Elon Musk said that SpaceX has produced the first Starlink second-generation satellite. It weighs about 1.25 tons, which is 4.8 times that of the first generation satellite. Musk said that the data processing power of the second generation is an order of magnitude higher than that of the first generation. However, because the second-generation satellite is too heavy, the Falcon 9 rocket that launched Starlink before can no longer carry it, and will be carried by Starship in the future. At present, the first generation of Starlink has launched about 2,300 satellites, and a total of 42,000 satellites are planned to be launched in the first and second generation.
Prada is going to sell its own NFT.
Prada said its limited edition Timecapsule, which will be released this Thursday, will come with an NFT, limited to 100 pieces. Consumers who have purchased the series in the past can also get an NFT. These NFT holders can enjoy exclusive benefits and experiences in the “Prada Crypted” Discord community. NFTs can also be traded on the secondary market. Some commentators believe that the core strategy of Prada NFT is to motivate consumers and increase loyalty. This is the first time Prada has released its own NFT. In January this year, it cooperated with Adidas on an NFT project.
U.S. regulators speed up their antitrust investigation of Amazon.
The U.S. Federal Trade Commission (FTC) has revised its antitrust investigation of Amazon after restructuring its investigation team and re-interviewing potential witnesses, adding some new information about Amazon’s March acquisition of MGM Studios, according to media reports. question. Since 2019, the agency has been focusing on antitrust issues in Amazon’s retail and cloud computing businesses. Since the agency’s report on Amazon’s antitrust investigation was made public in October 2020, until last summer, there were no new breakthroughs in the investigation. The case is currently being taken over by former U.S. Justice Department prosecutor John Newman. The FTC declined to comment on the restructuring of the investigation team, and Amazon did not respond.
Salesforce’s revenue rose 24% in the first quarter as demand for software remained strong.
In the three months ended April 30, business software vendor Salesforce posted revenue of $7.41 billion, up from $5.96 billion in the same period a year earlier and beating analysts’ expectations. While inflation and economic concerns have made consumers and companies more cautious about spending, Salesforce said demand for expanded and improved software tools remained strong as companies began working from home due to the pandemic. Although Salesforce lowered its sales forecast for the year due to the uncertain macroeconomic environment, the company’s shares rose more than 7% after the results.
Panasonic’s new battery samples began to be delivered to Tesla, with mass production next year.
According to media reports, Panasonic Holdings, which supplies batteries to Tesla, has now shipped samples of new 4680 large cylindrical lithium-ion batteries to Tesla. The new battery is five times the size of existing batteries and is expected to help Tesla reduce production costs and increase range. Panasonic said it will expand its vehicle battery production capacity three to four times by 2028, mainly in the North American market. The new battery will be mass-produced in March next year and supplied to Tesla next year.
Android’s Kindle app removes in-app purchases for e-books.
In an email to customers, Amazon mentioned that users will not be able to rent or buy e-books on the Kindle software on Android, nor will they be able to pay for Kindle Unlimited subscriptions. Amazon said the move was to “comply with the latest Google Play Store policies.”
Microsoft has disclosed a vulnerability that allows remote control based on a user’s installed application.
Microsoft announced a serious system vulnerability the day before yesterday. When an application such as Word uses the URL protocol to call MSDT, an attacker can borrow the application’s permissions to run any code, such as installing programs, viewing files, deleting data, and so on. There have been no reports of widespread attacks using this vulnerability. Microsoft hasn’t released a patch yet, but it advises users to avoid the impact by disabling the MSDT URL protocol.
Text | Gong Fangyi He Ganming Lin Guangying Intern Wang Yuqing Intern Yi Silin
Editor | Gong Fangyi
The title picture comes from the movie “Wall Street”
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