Original link: https://www.latepost.com/news/dj_detail?id=1773
Microsoft, Google to further invest in AI
In the second quarter, the main businesses of Microsoft and Google were stable, especially Google, whose core search advertising revenue accelerated growth, and it seems that the market was not taken away by rivals including Bing through artificial intelligence, as outside speculation.
At the performance meetings of the two companies, from their respective management to analysts, almost a dozen people only cared about how artificial intelligence can drive the company and how the company views investment in artificial intelligence.
- Microsoft’s revenue in the second quarter was US$39.4 billion, with a gross profit margin of 70%; Azure and other cloud computing revenue increased by 26% year-on-year, compared with 40% in the same period last year;
- Alphabet’s revenue in the second quarter was US$74.6 billion, with a gross profit margin of 57%; advertising revenue was US$58.1 billion, a year-on-year increase of 3%.
The growth rate of Microsoft’s enterprise and cloud computing business has slowed down to varying degrees, especially the revenue from Azure and other cloud services. This is also the most disappointing part of the quarterly earnings report that has excited Wall Street for several months. But on the other hand, when customers reduce IT spending, Microsoft’s revenue continues to grow and the rate of decline is limited, which is also one of the signs of stabilization.
Microsoft CEO Nadella advised people to be more patient:
On a company-wide basis, our enterprise business revenue growth will continue to be driven by Microsoft Cloud and will once again exceed growth in our consumer business. But even with strong demand and leadership, our AI growth will be incremental… We want to be able to help customers build their AIGC applications on top of Azure AI, and accelerate if you will. Those are the two things we ask them to identify where they can get the most productivity leverage, and then we even help them do those things with our own resources.
In order to speed up these efforts, Microsoft has made it clear that it will speed up investment in cloud computing infrastructure, and it is expected that capital expenditures will increase quarter by quarter throughout the year.
Google’s performance is beyond market expectations. Benefiting from the recovery of the retail industry, Google search and other advertising revenue increased by 5% to $42.6 billion, and YouTube advertising revenue also returned to growth year-on-year to $7.7 billion, driven by brand advertising.
Regarding the combination of main business and artificial intelligence, Philipp Schindler, Google’s chief business officer, put it very bluntly:
We’ve said long ago that the key is to reach the right customer with the right idea at the right time. So later this year, the automated creation system (which is already generating titles and descriptions for search ads) will start enabling AIGC.
CEO Pichai mentioned the opportunity of Google Cloud in the field of artificial intelligence:
In the second quarter, Google Cloud revenue reached US$8 billion, an increase of 28%, and an operating profit of US$395 million… More than 70% of artificial intelligence unicorns are Google Cloud customers, including Cohere, Jasper, Typeface, etc. We offer the broadest selection of AI supercomputers, including Google TPUs and Nvidia GPUs. And, recently we launched the A3 AI supercomputer based on Nvidia H100…
Ruth Porat, current CFO and soon-to-be president, mentioned the need to expand capital spending:
We do expect to increase the level of technology infrastructure investment, and we can see this part of the growth in the second half of 2023. Consistent with our previous comments, we expect higher capex this year and then continue to grow into 2024. The main driver of all of this is the opportunity to support AI that we see across the company. As the pace of innovation accelerates, we just want to make sure we’re in a good position.
What happened to the cities that loosened property market restrictions before?
When talking about the real estate market at the Political Bureau meeting of the CPC Central Committee held on July 24, it was clearly stated for the first time that real estate policies should be adjusted and optimized in a timely manner to adapt to the new situation of major changes in the relationship between supply and demand in China’s real estate market.
According to the National Bureau of Statistics, in June this year, the prices of new houses in 70 cities across the country stopped rising and turned down. This was the first time that prices of new houses turned down after rising for four consecutive months; prices of second-hand houses fell for two consecutive months. In addition, second-hand housing in first-tier cities began to lead the decline, with an overall decrease of 0.7% month-on-month, exceeding the decline in second- and third-tier cities.
Lian Ping, chairman of the China Chief Economist Forum, believes that housing policies are expected to increase support on the demand side, and some eligible first-tier and key second-tier cities may cancel or moderately cancel restrictive home purchase policies to activate housing demand.
Since 2022, several cities have adjusted their policies on purchase restrictions, loan restrictions, and sales restrictions. According to the statistics of Crane Research Center:
- In the first half of the year, purchase restrictions were relaxed in 14 cities including Guangzhou, Changsha, Xiamen, and Wuhan;
- More than 10 cities including Hunan Province and Qingdao and Hefei loosened loan restrictions; 7 cities including Shenzhen, Changzhou and Wuxi relaxed price restrictions;
- Cities such as Zhengzhou, Xiamen, and Qingdao relax sales restrictions;
- Some first-tier cities are also trying to optimize purchase restrictions by increasing the number of housing purchase quotas for multi-children families and relaxing the settlement of talents.
But for those cities where the real estate market is already oversupplied, the boost effect of these measures on the property market is not obvious.
In June 2022, Guangzhou updated its purchase restriction policy. Foreigners are allowed to stop paying or make up social security payments for no more than 3 months when purchasing a house.
However, according to statistics released by the National Bureau of Statistics in December 2022, first- and second-hand house prices in Guangzhou have fallen for five consecutive months. In terms of new house sales prices, among the four first-tier cities, Guangzhou’s house price index once again led the decline. In December, house prices fell by 0.4% from the previous month. . In terms of second-hand housing, the price of second-hand housing in Guangzhou fell by 0.6% month-on-month.
In the first half of this year, purchase restrictions were gradually lifted in many areas of Hangzhou: a house can be purchased only after one month of registration or social security payment, and married families can purchase two houses without the time limit for settlement. In effect, the price of new houses in Hangzhou rose by 0.4% month-on-month and 4.5% year-on-year in June, but in the second-hand housing market, which is more testing the actual value of the market, prices fell by 0.6% month-on-month and 2.4% year-on-year.
In 2022, Chengdu’s fine-tuning of the property market’s loosening policy will run through almost the whole year, focusing on talent purchases, provident fund withdrawals, self-owned housing rental purchase qualifications, multi-child purchase qualifications, parents’ eligibility to settle down and purchase houses, and second-hand housing transfers with mortgages.
As a result, from January to May 2022, the transaction volume of the primary and second-hand markets in Chengdu both declined by more than 40% year-on-year. From June to December, the year-on-year growth of second-hand housing turned from negative to positive, and the year-on-year decline of new housing was significantly narrowed. The good market resilience is also due to the inflow of a large number of industrial populations to continue to provide sufficient demand support for the real estate market. (Intern Chen Yutong)
“Fortune” China’s top 500 threshold increased, Top 10 increased by 40%, Top 100 doubled
“Fortune” magazine recently released the list of China’s top 500 enterprises in 2023. This time, a group of new companies such as State Grid, Huawei, TSMC, and Hon Hai Precision Industry, the parent company of Foxconn, etc. have been added, and the statistical caliber has been changed to US dollars, and the overall strength has also improved.
The total annual revenue of all companies on the list exceeds 15 trillion US dollars (generally calculated in the previous year). Calculated according to the exchange rate at the beginning of this year, the total revenue exceeds 100 trillion yuan, an increase of more than 60% compared with last year’s list. However, net profit only increased by about 5%, and the overall net profit margin fell to 4.8%.
Compared with last year, the threshold for the top ten this year has increased by about 40% to 1.2 trillion yuan, the threshold for the top 100 has nearly doubled to 285 billion yuan, but the threshold for the top 500 has only slightly increased by less than 4%. The gap between the top ten and the bottom ten widened from 62 times last year to 85 times.
Two private companies entered the top ten, Foxconn parent company Hon Hai Precision (5) and Ping An Insurance (9), and the other 8 were State Grid, PetroChina, Sinopec, China State Construction, ICBC, CCB, Agricultural Bank of China, and Sinochem .
There are 3 private enterprises in the top 20 and 10 private enterprises in the top 50. The number is the same as last year, but the composition has changed.
JD.com fell out of the top 10, Alibaba fell out of the top 20, and Country Garden, Greenland, Vanke, and Xiaomi fell out of the top 50. Hengli Group, Amer International, and Rongsheng Holdings entered the top 50, with businesses covering real estate, energy and chemical industry, non-ferrous metals, and financial investment.
From the perspective of industry distribution, the most obvious changes compared with 2019 are that the number of real estate companies on the list has dropped from 52 to 35, the number of Internet services has increased from 8 to 15, and the number of automobile and other industries has not changed much.
However, “Fortune” specifically mentioned new energy. CATL’s revenue last year increased by 1.4 times year-on-year, BYD nearly doubled, Xiaopeng made the list for the first time this year, and NIO and Ideal are still on the list. Among the 15 car companies on the list, 7 auto companies, including SAIC and Jiangling, experienced a decline in revenue. In addition, thanks to the soaring lithium price last year, the net profit margins of three lithium battery companies, including Tianqi and Ganfeng, ranked among the top five. (Lin Guangying)
LVMH China rebounds, U.S. slips slightly
LVMH maintains solid growth. In the first half of this year, revenue increased by 15% year-on-year to 42.2 billion euros, and net profit increased by 30% to 8.5 billion euros. Among them, sales in the second quarter increased by 17% year-on-year, and the growth rate was the same as that in the first quarter.
In terms of regions, sales growth in Europe, Japan, and the United States all slowed down in the second quarter. Europe and Japan increased by 19% and 29% respectively, while the United States decreased by 1% year-on-year. In the United States, sales of entry-level products, e-commerce, and second-tier cities all declined.
Management explained that wealthy Americans tend to shop overseas because of the stronger dollar, while consumers who stay at home tend to face greater economic pressure. According to Boston Consulting Group, the wealthiest 5% of consumers “only” contribute about 40% of luxury spending.
Sales in Asia (excluding Japan) in the second quarter increased by 34% year-on-year. The management said it was “very satisfied” with the rebound in the Chinese market, and mentioned that it did not plan to raise prices for the time being, so as not to weaken the growth momentum. A recent survey also showed that Chinese consumers are viewing luxury goods as financial tools.
With the recovery of the Chinese market, the relative contribution of the Asian region (excluding Japan) to the group’s revenue in the first half of the year rose to 34%, but it was still slightly lower than the 35% in 2021. The US share fell to 24%, back to 2019 levels. (Lin Guangying)
Free internet service, expensive energy consumption
According to Google’s recently released 2023 environmental report, the company will consume 5.6 billion gallons (approximately 21.2 billion liters) in 2022, which is equivalent to the water of 37 golf courses. Most of that — 5.2 billion gallons — goes to the company’s data centers, which use 20 percent more water than in 2021.
These figures serve as a reminder that the environmental costs of running large data centers are far greater than most assume. Since data centers typically require a lot of water to cool, their water consumption is likely to continue to rise as Google and all the other tech companies involved in the AI race ramp up building new data centers.
Most of the water Google currently consumes is “potable” . The company also takes “local water stress” into account when using water, with 82% of its freshwater drawn by 2022 from areas with less water stress, the report said. For the remaining 18%, Google said it was “exploring new partnerships and opportunities” to improve watershed health, but it could face growing resistance as more places face water scarcity .
Almost every large Internet company is burdened with heavy resource costs, especially in data centers. Google is not the only company that consumes a lot of water. Meta also has a data center in Arizona. The company will use more than 2.6 million cubic meters of water in 2022, mainly for the data center. The Llama 2” requires a lot of water to train.
In addition, the data center is also an electric tiger. The U.S. Environmental Protection Agency reported that in 2011, data center energy consumption accounted for 2% of the total U.S. power grid. In 2021, the power consumption of my country’s data centers will exceed 210 billion kwh, while the power consumption of Shanghai in 2020 will only be 157.596 billion kwh. By 2025, my country’s data center power consumption is expected to grow to nearly 400 billion kWh.
Free Internet services require a lot of energy to support them. Doing a Google search for a keyword consumes 0.0003 kilowatt-hours of electricity each time, roughly equal to the power consumption of a 60-watt light bulb for 17 seconds. Every time consumers shop online, every time they scan Weibo, every time they watch videos, the servers in the data center are calculating our needs, while consuming electricity and relying on water resources for cooling.
In order to avoid the costs and risks brought about by the massive consumption of resources, technology companies are also trying new cooling methods. In 2020, Alibaba Cloud announced the deployment of the world’s largest submerged liquid-cooled server cluster, which dissipates heat by “soaking the servers in water”. Earlier, Microsoft also put its data center in the sea, using seawater to save costs for cooling. (Intern Chen Yutong)
The IPO has been known for a long time丨The core vehicle energy supplier Weimax raised more than 500 million yuan when it went public, and rose nearly 5% on the first day
A total of 3 companies listed on A shares today:
- Weimax: a core vehicle energy supplier, actually raised 1.836 billion yuan, with a total market value of 20.892 billion yuan, an increase of 4.95% on the first day.
- Junyi Digital: a smart city solution provider, actually raised 878 million yuan, with a total market value of 5.199 billion yuan, an increase of 34.70% on the first day.
- Shengbang Security: a supplier of network security products, actually raised 672 million yuan, with a total market value of 4.147 billion yuan, an increase of 37.84% on the first day. (Intern Lin Hongsheng)
OTHER NEWS
Volkswagen announced the purchase of a US$700 million stake in Xiaopeng, intending to jointly develop two electric models.
On July 26, Volkswagen announced that it would invest USD 700 million in Xiaopeng Motors and sign a long-term technical cooperation framework agreement to jointly develop electric vehicles in China. The two companies plan to launch at least two pure electric vehicles, which will be on the market as early as 2026. In this way, Volkswagen will have four vehicle partners in China. In addition, Volkswagen’s Audi and SAIC Motor signed a strategic memorandum of understanding that the cooperation will cover high-end electric vehicles, starting with models that Audi has not yet sold in the Chinese market. The vehicles will be equipped with state-of-the-art software and hardware, VW said in a statement.
In 2022, the actual expenditure of the central “three public” funds will be reduced by nearly half compared with the budgeted figure.
On July 25, 102 central departments released their final accounts to the public. According to statistics from the Ministry of Finance, in 2022, the central government’s “three public” funds and financial allocations will total 2.824 billion yuan, a decrease of 2.476 billion yuan from the budgeted figure. Among them, the expenses for going abroad (border) on business were 294 million yuan, a decrease of 370 million yuan; the purchase and operation expenses of official vehicles were 2.472 billion yuan, a decrease of 1.889 billion yuan; the official reception expenses were 58 million yuan, a decrease of 217 million yuan.
This year, China has 10 more counties with a GDP of 100 billion yuan.
The “2023 Top 100 Counties in China” report released by CCID Consulting on July 25 shows that among the top 100 counties in the country this year, there are 54 counties with a GDP exceeding 100 billion, an increase of 10 compared with last year. Jiangsu still takes the top four places, namely Kunshan, Jiangyin, Zhangjiang Port and Changshu. Most of the pillar industries are electronics manufacturing, textiles and chemicals. The four county-level cities under the jurisdiction of Suzhou all rank in the top six. The GDP of Kunshan, the county-level city ranked first, exceeded 500 billion yuan for the first time last year, more than most prefecture-level cities and some provincial capitals in the country.
The box office of many films exceeded 100 million yuan, and the box office hit a new high in July this year.
As of 17:00 on July 25, the total box office (including pre-sales) in July exceeded 7 billion yuan, a record high for the same period of the year. Among them, 7 films have grossed over 100 million yuan, and “The Missing Her”, “In the Octagonal Cage” and “Thirty Thousand Miles of Chang’an” are among the top three. The previous July box office record was set in 2018. The blockbusters of the month included “I’m Not the God of Medicine”, “The Richest Man in Xihong City”, “Jurassic World 2”, “The Incredibles 2”, etc., with a total box office of 6.953 billion yuan.
The global aviation industry recovered, and Boeing’s second-quarter results exceeded expectations.
In the second quarter of this year, Boeing’s revenue, profit and free cash flow all exceeded expectations. Sales increased by nearly 20% year-on-year to US$19.8 billion, thanks to the fact that the number of airline flights has almost recovered to that before the epidemic. Boeing has missed Wall Street expectations in 14 of the past 17 quarters. Boeing shares rose 4.2% shortly after the results were released.
Samsung released a new flagship phone with a folding screen.
At 8 pm on July 26, Samsung held a new product launch conference in Seoul, announcing two new folding screen flagship phones, Z Flip 5 and Z Fold 5. Both phones focus on thinness and lightness, and abandon the traditional U-shaped hinge, adopting a new drop-shaped hinge design, which can largely solve the “crease” problem that Samsung’s folding screen phones have been criticized for. In addition, compared with the previous generation, the screen size of Flip 5 has been greatly improved.
New Oriental’s revenue growth in the most recent fiscal quarter exceeded expectations, mainly relying on overseas study consultation and adult test preparation.
On the evening of July 26, New Oriental announced its results for the fourth quarter and full year of fiscal 2023 as of the end of May. The financial report shows that New Oriental’s revenue in the fourth quarter of fiscal year 2023 increased by more than 60% year-on-year to US$860 million, and its net profit achieved US$29 million, which was a loss compared with last year. The growth in the fourth fiscal quarter was mainly from the overseas test preparation and overseas study consulting business, as well as the adult test preparation business.
The Shanghai Consumer Protection Committee named and criticized Miaoya Camera for not supporting refunds.
On July 26, the Shanghai Municipal Consumer Protection Committee issued a document stating that Miaoya Camera does not support refunds and is suspected of violating consumers’ fair trade rights. Miaoya Camera issued an announcement on the official Weibo in response, saying that if the generation of the digital avatar fails due to technical problems, you can get a refund and regenerate it again for free; for glasses and other accessories that may not be recognized, Miaoya will optimize the algorithm and solve it as soon as possible question. However, for the recharge of virtual currency, Miao Ya Camera said that virtual currency and cash can only be transferred in one direction at present, and the recharge agreement has been clearly stipulated, and refunds are currently not supported.
The Fed is expected to announce an interest rate hike to 5.50%, or the last rate hike this round.
The Federal Reserve is expected to raise the federal funds rate by 25 basis points to the target range of 5.25%-5.50% in the early hours of July 27th, Beijing time, which is the highest since February 2002. Earlier, Bernanke, former chairman of the Federal Reserve, said that the Fed’s rate hike “may be the last rate hike in the current tightening policy.”
Nissan raised its revenue and profit guidance amid lower costs and a weaker yen.
On July 26, Nissan Motor issued an official statement announcing that it would increase its annual sales target by March next year from 12.4 trillion yen to 12.6 trillion yen (approximately 640 billion yuan), and its operating profit target from 520 billion yen The yen was revised up to 550 billion yen (about 28 billion yuan), citing cost cutting and yen depreciation. However, the decline of Nissan’s position in the Chinese market in recent years has also attracted the attention of executives. The company’s CEO Makoto Uchida said that Nissan needs to change the way it does business in China. It has reached an agreement with local partners to sell new product lines earlier than originally planned. .
Alphabet Chief Financial Officer Ruth Porat will be promoted to president and chief investment officer.
Alphabet announced on July 25 that CFO Ruth Porat (Ruth Porat), who single-handedly promoted Google’s transformation into a holding company, will be promoted to the president and investment officer of Alphabet and Google, effective September 1 this year. She will be in charge of Alphabet’s non-core subsidiaries, including self-driving company Waymo and life sciences company Verily.
Driven by AI demand, SK Hynix expects to double its sales of high-end DRAM chips this year.
SK Hynix is a South Korean memory chip maker that provides DRAM (Dynamic Random Access Memory) chips to technology companies such as Apple and Nvidia. Originally because of the weakness of the macro environment and consumer electronics, the industry has fallen to the bottom. SK Hynix’s revenue in the second quarter also halved from the same period last year, but it still greatly exceeded market expectations, mainly because the hot AI chips pushed up the demand for new high-bandwidth memory (HBM). The company said sales of its high-end DRAM chips will more than double this year.
Rising prices, unabated demand, Aston Martin’s second-quarter revenue beat expectations.
The British supercar brand Aston Martin’s second-quarter sales increased by 23% year-on-year to 380 million pounds, exceeding market expectations, and its stock price rose 6%. Revenue growth came from a combination of price increases and strong demand for new vehicles. In the first half of this year, the average selling price of Aston Martin rose by 14% year-on-year to 212,000 pounds. In addition, company CEO Amedeo Felisa said that the demand for the new model “Valour” (limited to 110 units worldwide) launched to celebrate the brand’s 110th anniversary is “unprecedented”.
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