In the first quarter, the investment of US dollar funds in China fell by 70%
In the first quarter of various uncertainties, the scale of private equity and venture capital in China shrank significantly compared with the same period last year. According to the data of Zero2IPO Research Center, the number and amount of investment decreased by 27.1% and 47.1% respectively, reflecting the importance of venture capital to emerging markets. Speculation and worries about the market outlook. in:
- There were 1,923 people’s investments involving 150.94 billion yuan, down 21.7% and 26% year-on-year.
- There were 232 foreign currency investments involving 45.88 billion yuan, down 55.1% and 72.7% year-on-year.
The lack of a good start may be related to the advance of investment and financing nodes. Zero2IPO’s statistics show that in 2021, foreign currency investment will exceed 510 billion yuan, a year-on-year increase of 61.5%, while RMB investment in the same period will be about 910 billion yuan, a year-on-year increase of 59.8%.
But it is also mixed with discussions on the structural differences between the private and state-run economies. In 2018, China was also one of the countries with the highest returns on venture capital in the world. Although Chinese private companies will account for about 48% of the total market capitalization of China’s listed companies in 2021 in terms of market capitalization — up from 8% in 2010 — the glory days are over for many dollar funds.
Pressure is coming from both sides of the Pacific. First, it spread from the primary market to the secondary market. As listing in the US is no longer the first choice for companies, and the average daily trading volume of Hong Kong stocks is more than 100 billion Hong Kong dollars, it is not enough to accept so many Chinese companies, and the Federal Reserve exceeds expectations. The interest rate hike has led to the end of the ultra-low financing interest rate environment, and various subjective and objective factors are intertwined, which in turn further aggravates the anxiety of the primary market.
At the beginning of this week, Zero2IPO Research Center released the equity investment fund raising report for the first quarter of 2022, showing that while RMB fundraising increased by 11.6% year-on-year to 377.7 billion yuan, foreign currency funds disclosed that the raised amount was about 31.51 billion yuan, a year-on-year decrease of 6.26 billion yuan. %. The report said:
The tightening supervision over the listing of Chinese concept stocks in the United States has led to the risk of blocking the exit of foreign currency funds with overseas structures. In the context of slowing capital return, institutions are generally more cautious. Therefore, the number and scale of newly raised foreign currency funds have been reduced.
Larger financings include Gaorong Capital’s US$6 Fund (US$1.85 billion), Tiger Global Private Equity Fund (US$1.122 billion), Blackstone Asia Acquisition Fund II (US$790 million), and Huaxing New Economy Fund’s US$4 Fund ($250 million), Weilai Capital’s second US dollar fund ($226 million), etc.
In February of this year, China’s Guangming Daily published an article saying that “the door to opening is getting wider and wider”, and several industry authorities have also calmed market sentiment on different occasions. In March, the Financial Stability and Development Committee of the State Council held a special meeting to study the current economic situation and capital market issues, involving hot topics such as the risk of Chinese stocks and platform economic governance.
When talking about the risks of Chinese stocks, the senior management said that “currently, the regulatory agencies of China and the United States have maintained good communication, have made positive progress, and are working on forming a specific cooperation plan.” Previously, the “Foreign Company Accountability Act” in the United States has affected the listing of Chinese-funded companies. (Gong Fangyi)
China pilots pension reform
- China issued the “Opinions on Promoting the Development of Individual Pensions” on April 21, the main contents include:
- Establish personal pension accounts through the personal pension information management service platform and implement the personal account system.
- The payment is entirely borne by the participants and is fully accumulated.
- Fund accounts can be designated or opened by participants in commercial banks that meet the regulations, or can be designated by other financial product sales agencies that meet the regulations.
- Account funds can be used to purchase financial products at qualified financial institutions or sales channels entrusted by them in compliance with laws and regulations.
- The individual pension fund account is closed for operation, and its rights and interests belong to the participants, and cannot be withdrawn in advance unless otherwise specified.
- The scope of individual pension participation is “workers who participate in the basic pension insurance for urban employees or basic pension insurance for urban and rural residents within China”, and the upper limit of the payment level is 12,000 yuan per person per year.
- Some cities will implement it on a trial basis for one year, and then gradually roll it out.
- There are about 450 million residents in China who participate in the urban basic pension insurance and 540 million residents who participate in the urban and rural residents’ pension insurance. The pension of these people adopts the nominal account system. Individual monthly contributions are coordinated by the government and then paid to pensioners.
- China’s pension system was established in 1991. At that time, the “Decision on the Reform of the Pension Insurance System for Enterprise Employees” mentioned that a system combining basic pension insurance with enterprise supplementary pension insurance and individual savings pension insurance for employees was gradually established.
- Among them, the basic old-age insurance is the “pension” that is most often referred to now, or the “first pillar of the pension” in the industry.
- Supplementary pension insurance (including enterprise annuity and occupational annuity), known as the second pillar.
- Personal pensions (including personal savings pension insurance and commercial pension insurance, etc.) are called the third pillar.
- According to statistics from Changjiang Securities, as of the end of 2020, China’s pension balance was 9.35 trillion yuan. The first, second, and third pillar pensions accounted for 62.13%, 37.86%, and 0.006%, respectively. “The first pillar is dominant, the second pillar is relatively low, and the third pillar is almost absent.”
- As a comparison, the three pillars in the United States account for about 8.19%, 54.11% and 37.7% respectively (including the famous 401k plan, 2019 data).
- As a second comparison, the three pillars in Sweden account for about 44%, 48% and 8% respectively (2019 data).
- In 2021, China’s population over the age of 65 will account for more than 14%, although it is only similar to the level of the United States in 2012 (13.56%), South Korea in 2016 (13.34%), and Japan in 1994 (13.78%). But the absolute number of the elderly population ranks first in the world. (Gong Fangyi)
Tesla’s gross profit hits record high, supply chain issues still lingering suspense
- In the first quarter of this year, Tesla’s total revenue was $18.76 billion, 310,000 vehicles were delivered, and the gross profit margin of the vehicle was 32.9%.
- Model 3/Y deliveries were 295,000. Model S/X delivered 15,000 units.
- Cash flow from operating activities amounted to $4 billion.
- Musk used “only 1 million units sold” to describe Tesla’s production capacity last year, and his goal was 20 million units per year. The supply chain issue is still the biggest suspense.
- Tesla management said that it encountered multiple supply disruptions in the first quarter, the order volume continued to be backlogged, and the cost per vehicle increased. The Shanghai plant, which lost about a month of capacity, is now “recovering with limited capacity.”
- As the Austin and Berlin plants have just started ramping up capacity. Tesla expects production and deliveries to be affected in the second quarter as well. The best case may be close to the first quarter, maybe even lower.
- But both CFO Zachary Kirkhorn and CEO Musk are confident that deliveries will increase by 50% year-over-year this year, “actually maybe 60% more than last year, we’ll wait and see,” Musk said.
- Regarding the price increase, Musk said that the increase in prices when the company’s profitability is at a record does not seem reasonable, but it is a decision based on a combination of factors such as order backlogs, deliveries, and potential logistics and supplier cost increases.
- Potential production bottlenecks for Tesla are chips and the Chinese supply chain. Battery reserves are already “excessive”. (Gong Fangyi)
FMCG giants transfer the pressure of raw material price increases to consumers
- Nestle, the world’s largest food producer, raised prices by an average of 5.2% from January to March this year, while Procter & Gamble, the largest daily necessities company, raised prices by an average of 5% in the same period, due to widespread inflationary pressures.
- However, the price increase did not affect sales. Procter & Gamble’s sales in the first quarter increased by 3% year-on-year, and sales increased by 7% year-on-year to $19.38 billion; Nestle’s shipments also increased, with sales of $23.4 billion in the first quarter, an organic increase of 7.6% year-on-year (excluding foreign exchange gains and losses, etc.).
- Nestlé said that consumer demand is stable, and because costs are still rising sharply, prices will continue to rise in the future, and profit margins are expected to remain stable this year. Procter & Gamble also said that consumers are not sensitive to price increases.
- Heineken also benefited from higher prices, helping to boost revenue per hectoliter by 18.3%. Heineken said the price of barley has doubled from a year ago, the price of aluminum has risen by 50%, and the cost of food and energy is still rising, and may increase in the future.
- Heineken, however, expressed concern that inflationary pressures are expected to hit households’ disposable income in the second half of the year, with beer consumption likely to decline as people have to spend more on essentials. (Lin Guangying)
China’s personal income tax fell by 51.26% year-on-year in March
- According to data from the Ministry of Finance, China’s personal income tax in March was 60.2 billion yuan, a year-on-year decrease of 51.26%.
- The accumulated personal income tax in the first quarter was 464.5 billion yuan, a year-on-year increase of 16.5%.
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OTHER NEWS
Hong Kong stock investors have no confidence in Zhihu, and the quotation before listing fell 21.71%.
Zhihu, which is scheduled to be listed in Hong Kong on the 22nd, had previously received 4,524 subscriptions for new shares, and the winning rate for the first lot (100 shares) was 100%. During the pre-IPO trading session (usually from 16:15 to 18:30 the day before the IPO), Zhihu fell 21.72% to HK$25.1, with a first-hand loss of HK$696.
Lululemon membership goes live, offering community events and fitness classes.
Lululemon will launch a membership program in the second half of the year. Free members can participate in community activities and purchase exclusive goods; paid members of $39 per month can also use its fitness platform Mirror to enjoy cooperative gym classes. The management said to build a community and allow users to integrate into the brand’s lifestyle. Lululemon aims to double annual sales to $12.5 billion by 2026. Nike’s latest quarter revenue was $10.9 billion.
eBay UK offers up to 40% off big-name defective items.
eBay UK has launched the “Imperfects” platform, dedicated to selling brand new factory defective items, covering hundreds of luxury and high street brands, including Gucci, Prada, Saint Laurent, Nike, Fila and more. eBay says these items have only minor flaws, such as wear or loose fittings, but are not up to factory standards, and sell for as low as 40% off the original price, with the flaws clearly noted, and returnable within 30 days. The aim is to reduce fashion waste.
Xigua Video sued Tencent for infringement, claiming 8 million.
Watermelon Video sued Tencent for infringement due to a large number of pirated full films of “My Hometown and Me” and “My Parents and Me” uploaded on WeChat public accounts. The complaint alleges that Xigua Video enjoys the exclusive rights to the two films, but Tencent failed to take effective action to prevent the dissemination of the infringing video after receiving the rights warning and infringement complaint notice from Xigua Video, causing economic losses to Xigua Video. It is required to pay 8 million yuan in compensation. At present, the court has filed a case and has not yet held a hearing.
Meituan co-founder Wang Huiwen reduced his holdings in Meituan.
According to information disclosed by the Hong Kong Stock Exchange, Meituan co-founder Wang Huiwen reduced his holdings by a total of 748,800 shares on April 13 and 14. Based on the average price of two reductions of HK$155 per share, he cashed out more than 116 million yuan. The shareholding ratio decreased from 0.37% to 0.35%. Meituan Hong Kong shares fell 4.9% today to close at HK$137.8 per share.
China’s largest offshore crude oil developer CNOOC A shares rose 27.69% on the first day of listing.
On the 21st, CNOOC opened the A-share market at 12.96 yuan/share, and then the stock price rose to 15.5 yuan/share, an increase of 43.98% compared with the IPO issue price of 10.8 yuan/share, reaching the 44% increase limit on the first day of listing of A-share new shares. This triggers the temporary stop mechanism. Trading resumed at 10 o’clock and closed at 13.79 yuan/share that day, up 27.69% from the issue price. CNOOC was previously listed on the Hong Kong stock market, and the Hong Kong stock price on the same day was HK$10.86 (approximately RMB 8.93) per share. The A shares traded at a 54.4% premium to the Hong Kong shares.
Didi shuts down its Japanese food delivery business and will focus on travel.
According to media reports, DiDi Food will shut down its Japanese food delivery service on May 25, which was launched in April 2020 and has now expanded to nine cities; but due to fierce competition from leading food delivery platforms such as Uber , is still relying on burning money to acquire users. SoftBank did not invest in Didi Food, but in Uber. Didi said it will focus on Japan’s taxi dispatch business in the future.
As of 24:00 yesterday, Shanghai had treated 139 severe cases and 20 critical cases in hospital.
The Shanghai epidemic prevention and control press conference on the 21st mentioned that the elderly with underlying diseases are at high risk of severe illness after infection. As of 24:00 on the 20th, 139 severe patients and 20 critically ill patients had been treated in designated medical institutions in Shanghai. On the 20th, 8 new local deaths were reported, and the direct cause of death was underlying diseases; the average age was 77.5 years old, 2 cases had been vaccinated, and 6 cases had not been vaccinated.
In Hong Kong, cinemas, libraries, theme parks and other public places reopened today.
The Hong Kong region will ease social distancing restrictions in stages starting on the 21st. The first phase will reopen public places such as gyms, cinemas, libraries, theme parks that have been closed for more than four months, extend the closing time of restaurants from 18:00 to 22:00, and increase the limit on the number of people dining from 2 to 4, etc. etc.; however, swimming pools, beaches, bars, etc. remain closed; masks must be worn on all public transport and public places.
Shop tenants in Hong Kong seek rent relief.
Shop tenants in Hong Kong are negotiating with landlords to seek rent reductions, based on the upcoming “no rent reminder order” – landlords are not allowed to urge rents during a three-month grace period, and can be exempted if they are willing to reduce rents; to protect victims of the epidemic Affected retailers. Opponents believe that small property owners and real estate developers are also facing income pressure. According to reports, some landlords had to cut rents by 30%, and those that were more affected, such as luxury goods merchants, even halved rents, but according to March data, about 62% of mall owners did not reduce rents.
The CDC is asking for an appeal against the removal of the mask mandate.
The U.S. Centers for Disease Control and Prevention (CDC) said on Wednesday that it had asked the Justice Department to appeal the decision to lift the mask mandate. On Monday, a U.S. District Court ruled that it is illegal to mandate that people wear masks on public transportation. The CDC believes that wearing a mask is a necessary condition to protect public health and does not exceed the CDC’s statutory authority. The Justice Department has filed a notice of appeal, but did not say whether it would seek an emergency order to restore the mask requirement.
Boeing may resume 787 deliveries in the second half of the year.
According to media reports, Boeing has notified major airline customers and parts suppliers that deliveries of the 787 Dreamliner will resume in the second half of 2022. Boeing declined to comment, saying the FAA would decide when to deliver, which the FAA said would depend on safety. Boeing has suspended 787 deliveries for nearly a year due to structural flaws in the production structure. In February, the FAA removed Boeing’s ability to self-certify the 787, and each 787 will be subject to a final FAA review.
Moderna is applying for a Covid-19 vaccine for children aged 6 months to 5 years old.
Moderna plans to submit an application before the end of the month to inject the mRNA new crown vaccine for children aged 6 months to 5 years; Moderna said that in the clinical trial mainly based on Omicron infection, the effectiveness of two vaccinations on the prevention of infection in children aged 2-5 years was completed. About 38%, 6 months to 2 years old children, the effective rate is 44%. In February this year, Pfizer also submitted the same application, but the approval has not been approved due to insufficient clinical data.
Japanese companies plan to monitor the condition of the elderly at home through electricity and gas usage.
Japan’s Iwatani Industry plans to launch a home-based elderly service, which uses AI technology to analyze electricity consumption and gas usage, infer the elderly’s frequency of going out, eating habits, whether they have a bath, etc., so as to judge their living conditions and give diet, exercise, etc. and other suggestions. Continued use of electricity, for example, may mean that older people are more at home, less socially connected, and at increased risk of dementia. Expect the service to charge several hundred yen (less than 50 yuan) per month. Similar public services have been launched in China, such as Jiangsu’s “Xiaojiang Jiahu”, Qingtian’s “Gas Safety All-in-One Smart Defense”, and Shanghai’s smart water meter project.
The judge refused to silence Musk.
A judge on Wednesday rejected a Tesla shareholder gag order against Musk in an attempt to prevent Musk from discussing a lawsuit over alleged fraud over his 18-year Twitter tweet about taking Tesla private shareholder. The judge found the gag order was too broad to try to prevent Musk from discussing the case with anyone; it also failed to prove that the discussions would pose a real danger or serious threat. But the judge also agreed that Musk’s tweets were false news.
The above briefings are provided by Lin Guangying, Gong Fangyi, and intern Yi Silin
This article is reprinted from: https://www.latepost.com/news/dj_detail?id=1114
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