Original link: https://www.latepost.com/news/dj_detail?id=1276
After Meituan, Tencent also holds more than 650 billion yuan in stocks
Once again, Tencent showed its market power — in a form it didn’t want to see.
On August 16, Meituan’s share price plummeted by 9%, and its market value hovered around HK$1 trillion, mainly due to market rumors that Tencent intends to liquidate about 150 billion yuan worth of Meituan shares. By the end of 2021, Tencent held a 17.04% stake in Meituan.
- Tencent declined to comment for this story.
- Tencent released its financial report on Wednesday (August 17) and is currently in a period of silence.
- 36 Krypton said that it has learned from sources close to Tencent that Tencent currently has no plans to sell shares of Meituan.
Tencent invested in Dianping in 2014. The latter merged with Meituan in 2015. Tencent not only became a shareholder of the new company, but also participated in subsequent strategic financing, pre-IPO financing, IPO cornerstone investment and fixed increase in the past two years.
Investors are responsible for their own decisions. Meituan’s stock price is now only one-third of the highs, but twice the lows, and it is not known whether the management of the two companies will comment on the matter in subsequent quarterly earnings conference calls.
Today’s market reaction to the rumors of Meituan will make people have to pay attention to the associated risks of Tencent’s foreign investment. As of the end of the first quarter of this year, Tencent’s equity investment, long-term investment, and short-term investment totaled more than 800 billion yuan. According to incomplete statistics from “Waidian Caijing”, one of the important public market investments is worth at least 327.9 billion yuan, including:
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The “3Q war” with Qihoo 360 in 2010 was one of the opportunities for Tencent to change its diversification strategy, from turning itself into a one-stop Internet platform to partnering with external companies to create a “borderless, shared Internet.” new ecology”. In 2011, Tencent established an industry win-win fund. The fund later invested in Didi.
In 2014, Tencent accelerated its foreign investment. In addition to acquiring 20% of Dianping, it also acquired 15% of JD.com (and subscribed for an additional 5% after JD.com’s listing), and acquired 19.9% of 58.com (later increased to 25%).
Most of the social networking and network services used by Chinese people and the games played by almost global mobile game players are invested by Tencent. In addition to the companies mentioned above, there are Kuaishou, Pinduoduo, Bilibili, EPIC Games, Activision Blizzard, etc.
Before the rumors of selling Meituan shares, Tencent had already begun to shrink its investment. They significantly reduced the number of primary market investments. In the part of listed companies, Tencent reduced its holdings in JD.com this year (from 16.9% to 2.3%) and “small Tencent in Southeast Asia”. Donghai Group (Sea). (Gong Fangyi)
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‘The Big Short’ Wants to Use Prisons to Fight Recession
The famous “big short” Michael Burry emptied almost all of his stocks including Apple, Google, and Facebook during the second quarter of this year, leaving only Geo Group, a private prison operating company.
- Michael Burry manages Scion, an asset management firm of around $300 million. In the second quarter, the fund increased its holdings of Geo Group by 501,360 shares. It’s worth about $3.85 million at current stock prices.
- He himself made a name for himself by successfully predicting and profiting from the 2008 financial crisis. For more than a year, he has been expressing his views on the bubble of U.S. stocks on social platforms, and last week he used the Fibonacci sequence to demonstrate the downside risk of the index.
- But this time it was pointed out that Michael Burry is selling at the bottom, with Google and Meta both rebounding 9% since July.
“Big Short” The Geo Group, one of the world’s largest private prison companies, manages more than 100 prisons and mental nursing homes, corresponding to about 100,000 beds. It has operations in North America, Australia and South Africa. The U.S. business accounts for 90 percent of the company’s total revenue.
- The current market value of GEO Group is less than US$1 billion, and its stock price has fallen by 80% from its historical high. In the past four years, its revenue has fallen by an average of 2% per year.
- However, the cash flow of GEO Group is very stable, the net profit in 2021 is less than half of that in 2018, but the net cash flow from operating activities is flat. (Gong Fangyi)
TSMC’s past in Jiang Shangyi’s eyes
Recently, Jiang Shangyi’s interview record with CHM in the United States was released in March this year, in which he reviewed his early years of schooling and job hunting experience, and the important nodes and reasons why TSMC’s chip foundry business surpassed Intel’s and embarked on a dominant position.
Jiang Shangyi is a key figure in TSMC. In 1997, 51-year-old Jiang Shangyi joined TSMC in charge of R&D. His work directly reported to Zhang Zhongmou. At that time, TSMC’s technology had no global status; at the end of 2013, Jiang Shangyi retired from TSMC.
Starting from the “0.25 micron project” as the leader, and later to the 0.18 micron process and 0.13 micron process, TSMC became the world’s first fab to achieve copper interconnection and “low k” production, laying a solid technical foundation for TSMC.
In the early days of Apple’s dominant smartphone era, TSMC gradually surpassed and replaced Samsung, and now almost monopolizes Apple’s chip production.
According to Jiang Shangyi’s description, he was born in Chongqing in 1946 and moved to Taiwan with his father in 1948. At that time, competition was fierce due to lack of resources, and his growth was filled with long studies. Later, he studied electrical engineering at National Taiwan University, a prestigious university in Taiwan, China, and continued his studies at Princeton University and Stanford University. Before joining TSMC, Jiang Shangyi worked at ITT, Texas Instruments and HP Labs.
In his view, one of the keys to TSMC’s success is the team’s 24-hour uninterrupted work.
Q: What is the real answer?
Jiang: I think it is culture. Asians have gone through tougher times, so they have a higher desire to earn money and are willing to sacrifice their private lives for financial security.
Jiang: In the United States, if the factory equipment is broken, you need to wait until the next day’s working hours before someone will come to repair it. But at TSMC, even at 2:00 in the morning, as long as I made a phone call, the equipment engineer came immediately without complaint, and his family would not complain.
- Uninterrupted work is just one of the conditions for success.
- Policy, international relations, geopolitics, financial environment and other conditions are also indispensable.
In 2014, Apple released the A8 chip, and TSMC has taken over most of Apple’s chips. Since the iPhone 7, TSMC has almost monopolized the production of all Apple chips. Jiang Shangyi believes that this has an important relationship with TSMC’s layout on advanced packaging.
- In 2009, Jiang Shangyi and Chairman Zhang Zhongmou, who returned to TSMC after retirement, emphasized the study of advanced packaging technology and tried to overcome the bottleneck faced by packaging technology.
- After investing 400 engineers and $100 million in equipment, silicon interposer technology was developed, but neither Nvidia nor Xilinx adopted it in large numbers because it was too expensive.
- Later cost cuts, from silicon interposer technology to first-generation CoWoS technology, and finally to InFO’s second-generation technology, TSMC’s advanced packaging has won Apple’s favor.
After Jiang Shangyi retired from TSMC for the second time in 2013, he served as an independent director of SMIC in 2016. Jiang Shangyi said in the interview that he joined SMIC for two reasons. One was that he was always passive in the process of growing up, making him want to decide the future by himself; the other was that Qiu Ciyun, an old colleague of TSMC and former SMIC CEO, invited him help.
After resigning as an independent director of SMIC in 2019, he transferred to Wuhan Hongxin as the CEO, and soon Wuhan Hongxin broke out of financial problems. Jiang Shangyi once again served as SMIC’s vice chairman and executive director at the end of 2020, but resigned less than a year later and left SMIC in 2021. (Intern Zeng Xing)
The impact of power curtailment continues, and many companies respond
Since the beginning of July, the power load of the smelting industry has been greatly reduced in Sichuan Province. On August 15, the power curtailment was upgraded to suspend production for 6 days for all industrial power users (including whitelisted key guaranteed enterprises). Up to now, 14 companies have announced relevant power curtailment and production suspension matters and their impact.
- Lutianhua said that in response to the power cut in Sichuan, production was suspended for 6 days. It is expected that the output of urea will decrease by about 35,000 tons, the output of methanol will decrease by about 10,000 tons, and the company’s net profit is expected to decrease by about 30 million yuan.
- Chuanheng Co., Ltd. said that Chuanheng Ecology, a subsidiary of Shifang City, Sichuan Province, temporarily suspends production from August 15 to August 20, which will not have a material adverse effect on operating results.
- Tianyuan Co., Ltd. announced that it will temporarily suspend production for a week from August 15. Affected by this power cut and production reduction, it is expected to reduce the net profit by about 30 million yuan.
- Hongda Co., Ltd. said that the company’s headquarters non-ferrous production base and phosphorus chemical production base, as well as its subsidiary Sichuan Mianzhu Chuanrun Chemical, have temporarily suspended production since August 15, which is expected to reduce the output of zinc alloys by about 10,000 tons and phosphorus chemical products by about 4,000 tons. tons, and the output of synthetic ammonia is 2,000 tons. At present, the inventory of related products is relatively sufficient, and there will be no major adverse impact for the time being.
- The three subsidiaries of Sichuan Jinding have all stopped production on August 14. Power curtailment and production shutdown will reduce Sichuan Jinding limestone output by about 280,000 tons, calcium oxide output by about 20,000 tons, and net profit is expected to decrease by about 4.49 million yuan.
- BOE announced that the company has a total of four semiconductor display production lines in Sichuan Province, which will not have a significant adverse impact on the company’s overall operating performance after assessment.
- Xuguang Electronics disclosed that the output is expected to decrease by 48,000 pieces, the output value will decrease by 31.5 million yuan, and the estimated net profit will decrease by about 5 million yuan.
- Tianao Electronics said that except for the temporary shutdown of the production line in Tianao Industrial Park, the company is in normal production.
- Two wholly-owned subsidiaries of Zongheng Co., Ltd. temporarily cut off electricity and suspend production, which partially delayed the construction progress and the time of putting into use of the “Dapeng UAV Manufacturing Base” project of Zongheng Pengfei’s fundraising project.
In 2021, there was also a large-scale power cut. The difference between this year’s power cut and last year is that last year’s tight supply and demand of thermal coal led to high coal prices, resulting in insufficient power supply. This year, the supply and demand of thermal coal is relatively sufficient, the ratio of long-term associations has increased, and coal prices have increased. Control is good, so this year’s power curtailment has little to do with coal.
- In addition, since July, the output of the Three Gorges has dropped significantly, and this year is more likely to be a period of power cuts in provinces with a large proportion of hydropower. On August 16, the State Grid reported that it will play the role of large power grid resource allocation, organize cross-regional and cross-provincial mutual assistance, and maximize power supply in Sichuan and Chongqing. (Intern Zeng Xing)
Note: Domestic thermal coal inventory (Jingtang Port). Click to see larger picture
a16z makes largest single investment in WeWork founder
WeWork founder Adam Neumann has set up a new company Flow, and a16z invested about $350 million in this new enterprise. The New York Times said that this is the largest investment by a16z in a round of financing for the company. Bringing Flow’s market cap to over $1 billion.
Flow is expected to officially start operations by 2023. a16z mentioned that Flow plans to provide community-style housing services for remote workers, and it is unclear whether Flow will provide residents with the option of renting before buying. Flow has purchased 3,000 apartments in Miami, Fort Lauderdale, Atlanta and Nashville.
- This isn’t Neumann’s first foray into residential real estate, having launched WeLive, a co-living space in New York and Virginia, which was the subject of a New York City survey in 2019.
Neumann’s ideals are linked to “real estate” and “jobs”. Neumann has claimed to revolutionize the way humans work, and his co-working company WeWork was once seen by investor SoftBank as its next “Alibaba.” But after a shortage of funds, management problems, a failed IPO, and a dispute with SoftBank, Neumann was swept out of the company with $480 million in cash. WeWork’s current valuation has shrunk by 90% from its heyday.
a16z has invested in companies including Skype, Twitter, Roblox, Coinbase, the largest Crypto exchange in the United States, and Opensea, an NFT trading platform.
- Regarding the investment motivation, founder Anderson talked about the current real estate crisis on the official website, and said that Adam Neumann can completely change the industry by introducing communities and brands into commercial real estate. He hopes to see entrepreneurs learn from past failures. .
- But some critics say Anderson’s concerns about the housing crisis are hypocritical, as he fears a housing shortage while opposing developers building new housing in his luxury neighborhood. (intern Xue Yujie)
What transactions did the institutions with the most money do in the second quarter?
Agencies’ 13F reports present their different options in the face of economic turmoil. According to the regulations of the US Securities and Exchange Commission, institutions that manage more than 100 million US dollars of equity assets must disclose their equity holdings and the whereabouts of their funds. Therefore, investors often use the 13F report as their “investment vane”.
Ali, as one of the Chinese concept stocks with the largest market value, the best liquidity, and the founder is the most familiar to foreign investors, the investment institutions’ views on it represent to a certain extent the overall view of the Chinese concept stocks. At present, it seems that, affected by a series of factors such as the easing of the industry policy cycle and the higher-than-expected revenue in the second quarter, Ali’s stock price has risen by nearly 20% from the lowest point in March this year, and they have regained the favor of investment institutions.
- Jinglin increased its position in Alibaba by 936,000 shares in the second quarter, and its stock market value at the end of the second quarter was US$140 million.
- HHLR, a subsidiary of Hillhouse, added 1.89 million shares of Alibaba in the second quarter.
- BlackRock added 58,000 shares of Alibaba in the second quarter, an increase of 1%.
Tiger Global, which is betting on tech companies, opted to shrink. As of the end of the second quarter, Tiger Global’s U.S. stock holdings were US$11.85 billion, more than half of the previous report. The tech-heavy Nasdaq Composite fell 30% in the first half of the year, sending Global Tiger’s flagship fund down 50% in the first half of the year.
- Tiger Global Fund liquidated U.S. stock broker Robinhood in the second quarter, reducing its Microsoft holdings by 29.5% to 5.16 million shares.
- In terms of Chinese concept stocks, Tiger Global reduced its holdings of JD.com by 18.25 million shares in the second quarter, and the market value of its holdings dropped to US$1.96 billion. Xiaopeng, Ideal and Pinduoduo were also reduced.
Buffett’s Berkshire opted to increase investments. According to Berkshire Hathaway, it bought about $6.2 billion worth of stock in the second quarter. Berkshire increased its investment in energy stocks, buying 22.18 million shares of Occidental Petroleum in the second quarter, with a market value of $9.3 billion.
- Berkshire increased its holdings of Apple, Occidental Petroleum, Chevron, Activision Blizzard and other companies in the second quarter, and reduced its holdings of General Motors, Verizon, United Bank, Kroger and other companies. (intern Xue Yujie)
OTHER NEWS
Dongpeng Beverage’s net profit in the first half of the year was 755 million yuan, and the increase in raw material prices caused the profit to shrink.
In the first half of the year, Dongpeng Beverage’s revenue was 4.291 billion yuan, a year-on-year increase of 16.54%, and its net profit was 755 million yuan, a year-on-year increase of 11.66%. Both revenue and net profit growth slowed down. The core market Guangdong revenue increased by nearly 40% year-on-year, and the national regional revenue increased by 60% year-on-year. The financial report said that the increase in the purchase price of raw material polyester chips and white sugar led to a decline in gross profit margins.
The net profit of Pinwo Foods in the first half of the year decreased by 64.89% year-on-year.
Pinwo Food’s revenue in the first half of the year was 740 million yuan, a year-on-year increase of 7.48%. Eighty percent of revenue comes from dairy products, and Deya Dairy’s revenue in the first half of the year increased by nearly 10 percent to 583 million yuan. Net profit decreased by 64.89% YoY to RMB 15.538 million. Mainly due to the increase in sales staff and promotional activities, selling expenses increased by approximately 40% year-on-year.
Wufangzhai will be listed on the A-share market in early September.
Wufangzhai has submitted a prospectus on August 15, and is expected to be listed on A-shares in early September. The main production base of Wufangzhai is located in Jiaxing City, Zhejiang Province. The sales area is mainly concentrated in East China. Zongzi is the main category of Wufangzhai, accounting for over 70% of the revenue. In the first half of the year, both revenue and net profit fell by more than 15% year-on-year, mainly because the epidemic repeatedly affected production and sales. Wufangzhai’s IPO plans to raise 1.056 billion yuan for the construction of production bases.
Tencent Magic Nucleus has stopped selling digital collections, and users can choose to keep holding them or refund them.
Tencent Magic Core announced that it will make business adjustments based on the company’s focus on core strategies. From August 16, 2022, Magic Core will stop the distribution of digital collections, and all users who have purchased digital collections through its platform can choose to continue to hold or initiate a refund application. According to Tencent insiders, this business adjustment does not involve layoffs of team members.
Ore trading giant BHP Billiton expects steady growth in Chinese bulk demand.
BHP Billiton’s latest financial report showed that its annual net profit was US$30.9 billion, the highest ever. CEO Mike Henry said China is expected to become a steady source of commodity demand in the coming year as policy support is gradually put in place. The Chinese market typically accounts for more than 60% of its revenue. BHP Billiton plans to expand production in its highest-earning iron ore unit to 330 million tonnes a year and continues to evaluate various plans to boost copper and nickel output.
Huzhou encourages state-owned enterprises to acquire unsalable housing from difficult housing companies.
On August 15, the Housing and Urban-Rural Development Bureau of Huzhou City, Zhejiang Province issued a new policy for the real estate market, encouraging state-owned enterprises to purchase unsalable houses from difficult real estate enterprises as a guarantee for resettlement houses. In 2009, Beijing encouraged companies to convert slow-moving commercial housing into rental housing. In 2015, the Ministry of Housing and Urban-Rural Development announced that cities and counties could use qualified commercial housing as shantytown resettlement housing and public rental housing.
Xiamen confirmed that the local new crown epidemic was infected with the BA.2.76 variant.
- On August 15, 530 new cases were confirmed in the mainland, including 426 in Hainan and 26 in Tibet; 1,838 new asymptomatic infections were reported in the mainland, including 785 in Hainan, 629 in Tibet, and 248 in Xinjiang.
- Hainan added “426+785” and Sanya added “291+492”.
- According to a press conference on the prevention and control of the new coronary pneumonia epidemic in Hainan Province, the proportion of cases found in the society is continuing to decline, and half of the planned number of isolation rooms in the province has been completed.
- Tibet has added “26+629”, and the global silent management time in Shigatse will be extended to 13:00 on August 21.
- The virus type of this outbreak in Xiamen, Fujian was Omicron variant BA.2.76.
- The confirmed rate of children under the age of 3 in Hong Kong SAR has increased from 1.5% earlier to about 1.8% currently.
Foxconn said the six-day shutdown of the Chengdu plant would have little impact on the company’s operations.
Analyst Ming-Chi Kuo said that the temporary power cuts in Sichuan may affect the iPad assembly plants of Foxconn in Chengdu and Compal in Chongqing, and if a similar incident occurs in the next few months, it may affect Apple’s new product shipments in the peak season. Foxconn responded that the 6-day suspension of production at the Chengdu plant would have little impact on the company. Foxconn’s Chengdu campus is an assembly plant for Apple watches, tablets, and laptops. On August 15, all industrial power users in Sichuan suspended production for 6 days.
The weak mobile phone market caused Sunny Optical’s net profit to drop by nearly half in the first half of the year.
Sunny Optical achieved revenue of 16.972 billion yuan in the first half of the year, down 14.4% year-on-year. Mobile phone lenses and mobile phone camera modules are the largest sources of revenue for Sunny Optical. In the first half of the year, the proportion of mobile phone business dropped from more than 80% in the past to 75%, and mobile phone business revenue fell by nearly 20% year-on-year. According to IDC data, global mobile phone shipments in the first half of the year fell by nearly 10% year-on-year.
Tencent Music’s revenue in the second quarter was 6.91 billion yuan, down 13.8%.
Tencent Music’s revenue in the second quarter was lower than market expectations, with a net profit of 856 million yuan, a year-on-year increase of 3.5%. Revenues from social entertainment services and other businesses, which account for nearly 60%, dropped by more than 20%, and the paying users of these businesses dropped by nearly 30%. The revenue of online music services, which accounted for 40% of the total, is composed of music subscription revenue and advertising revenue, which declined slightly. The number of paying users in this part of the business increased by 24.9%, which led to an increase in music subscription revenue.
Alibaba liquidated TouchPal Technology in the second quarter, reducing its holdings of Best Huitong by four-fifths.
According to the shareholding information disclosed by Alibaba in the second quarter, it reduced its holdings of Best Huitong by four-fifths in the second quarter, and currently holds 2 million shares of Best Huitong, valued at US$2.36 million. During the reporting period, Ali cleared TouchPal Technology, and the value of TouchPal Technology held in the previous quarter was US$539,000. TouchPal Technology was established in 2008, and its main products are applications such as TouchPal input method. Ali once reduced its holdings in TouchPal Technology in the first quarter of 2020.
Biden plans to sign the 2022 Inflation Reduction Act on Aug. 16.
The bill involves climate change, medical insurance, tax reform and other aspects. The bill will increase government spending by $430 billion, of which more than 80% will be spent on climate change. The goal is to reduce carbon emissions by 40% by 2030; more than 10% of spending to lower the price of prescription drugs. This bill is actually a “skinny” version of Biden’s original “Rebuild a Better Future” bill, which had a total size of $3.5 trillion.
Text | Gong Fangyi, intern Zeng Xing, and intern Xue Yujie
Editor | Gong Fangyi
The title picture comes from the movie “The Big Short”
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