Original link: https://www.latepost.com/news/dj_detail?id=1142
Tencent’s revenue growth is zero, but it’s actually not that bad
Although everyone knows that the market is not good, when the growth rate of China’s most valuable Internet company drops to zero, it is still a big shock.
From January to March this year, Tencent’s revenue increased by 0.01% to about 135.471 billion yuan. The local gaming business is underperforming, people are spending more time at home, and Tencent’s revenue has fallen by 1%. Internet advertising revenue fell by nearly 20%, reflecting the decrease in demand for Internet services and e-commerce advertising. Originally, online education was also a major customer for advertising, but now the industry is basically gone.
The core revenue stream appears to have been greatly affected. Combined with rising labor costs and foreign investment losses, Tencent’s profit fell sharply in the first quarter. Its net profit margin dropped from 26% in the same period last year to 19%. The current net profit was about 26.3 billion yuan, a year-on-year decrease of 24%.
Yesterday, Xu Lei, CEO of Jingdong Group, said that this round of epidemic is a “double kill” for online and offline companies. Looking at Tencent’s financial report seems to confirm this view again.
But unlike some other companies, some of Tencent’s revenue is not reflected in the two most eye-catching metrics of “revenue” and “profit.” At the end of the first quarter, the balance of their accounting subject “deferred income – current liabilities” rose by 10% month-on-month to 96.925 billion yuan.
These revenue streams mainly come from games, finance and enterprises, and online advertising departments that have signed contracts but have not yet been recognized.
For example, a user recharges 100 yuan in Tencent’s products and only consumes 10 yuan. Tencent actually received 100 yuan, but only recorded 10 yuan in revenue – the remaining 90 yuan was counted as “deferred revenue.”
At the same time, Tencent added 3,442 employees quarter-on-quarter in the first quarter, and the income of these people has become a cost to Tencent. Deferred revenue will become Tencent’s revenue sooner or later, but it was not recorded in this quarter, so Tencent experienced zero growth for the first time since its listing.
On May 16, Ma Huateng said in Tencent’s annual sustainability report, “Tencent is facing a new stage where challenges and development coexist. For the future, we should do these difficult and correct things, and promote the society with long-term determination. Co-creation, creating sustainable social value.” After the environment has changed, the words of entrepreneurs are similar.
SpaceX is valued at $125 billion, equivalent to half of Ali
- According to media reports, SpaceX is selling shares on the secondary market at $70 per share, which means its valuation reaches $125 billion, surpassing fintech giant Stripe ($115 billion) to become the most valuable startup in the United States .
- Alibaba is currently valued at about $241 billion.
- This valuation is the third highest in the world. The top two are Douyin Group (ByteDance) and Ant Group.
- Douyin Group’s revenue reached US$58 billion last year, and the latest rumored valuation has reached US$400 billion;
- Ant’s valuation in 2020 was as high as US$300 billion, and after the downward revision last year, it is still about US$200 billion.
- But SpaceX may be the world’s most valuable industrial startup. It develops and manufactures rocket engines, spacecraft, and satellites by itself, develops various aviation software, and has its own rocket test sites and launch sites. Its revenue sources include commercial launches, space cargo, commercial space manned, Internet broadband (Starlink), and more.
- According to institutional data, in the first half of 2021, SpaceX’s share of the global commercial launch market exceeded 50%; taking Falcon 9 as an example, the price of a single launch is US$67 million and the load is US$5,500 per kilogram;
- SpaceX has helped NASA transport supplies to the International Space Station since 2008, and previously charged about $152 million per trip;
- Starlink is said to have 250,000 users now, and the basic broadband service charges $110 per month, and the premium service costs $500 per month;
- SpaceX also completed its first commercial spaceflight crew last month, with four civilian astronauts spending 16 days in space for a reported $50 million per ticket.
- According to the report, SpaceX is selling existing stock this time, and the price has increased by 25% since the financing in October last year. Market speculation Musk may be one of the sellers trying to raise funds for the $44 billion acquisition of Twitter.
Omicron BA.2.12.1 Accelerates infection in the United States, and China has it too
- On the 16th, Chinese officials reported the first domestic case of BA.2.12.1 of the Omicron subtype strain. It was an entry quarantine person who entered Guangzhou on April 23 and was detected on April 30.
- At present, most domestic cases are infected with BA.2 . BA.2.12.1, which evolved from it, was first detected in the UK on March 23 and is estimated to be 23% to 27% more contagious than BA.2, according to the New York Department of Health.
- According to the US Centers for Disease Control and Prevention (CDC), 99.9% of the new crown cases in the United States last week were infected with the Omicron strain. Among them, the proportion of BA.2.12.1 cases rose from 0.4% to 47.5% in two months, and BA.2 The proportion fell from 76% at the peak to 50.9%.
- The data show that BA.2.12.1 appears to be better able to evade the body’s immune mechanisms, including vaccination and antibodies acquired from natural infection. Many patients who have been infected with Omicron are still reinfected with the new virus. This is related to the mutation position of the strain.
- There is no significant difference between the severe rate and BA.2. The CDC states that vaccination is still effective in reducing severe illness rates.
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OTHER NEWS
Over 70% of the housing prices in second- and third-tier cities fell month-on-month in April.
According to the National Bureau of Statistics, among the 70 large and medium-sized cities in April, 47 and 50 cities saw a month-on-month decrease in the sales prices of new commercial housing and second-hand housing, respectively, compared with 38 and 45 in the previous year; 56, the former values are 29 and 47. The overall housing prices in the first-tier cities have risen year-on-month, among which the price of new houses in Shenzhen has fallen and the price of second-hand houses has risen. The prices of second-hand and newly-built houses in second- and third-tier cities fell month-on-month, with the decline remaining the same as or expanding from the previous month.
From May 20, the number of COVID-19 tests required for travelers from the U.S. to China has been reduced from four to three.
According to the announcement of the Chinese embassy in the United States, from May 20th, travelers from the United States to China will no longer require nucleic acid testing on the 7th day before the trip, IgM antibody testing and self-health monitoring requirements on the 7th day before the trip. 2 nucleic acid tests at different designated institutions 48 hours before boarding, one of which must be completed within 24 hours before boarding; an antigen test must also be completed at designated institutions within 12 hours before boarding. The announcement stated that the adjustment is an arrangement made by integrating multiple factors such as the epidemic situation and the characteristics of virus mutation.
Reduced discounts and increased direct sales, Burberry’s annual operating profit increased by 32% year-on-year.
In the fiscal year ended April 2, Burberry’s revenue was 2.83 billion pounds, a year-on-year increase of 23%; adjusted operating profit was 523 million pounds, a year-on-year increase of 32%. The company is expected to continue reducing discounts and third-party distribution in order to shape higher-end brands. Management said that future performance depends on the impact of the epidemic and the recovery of consumption in mainland China; about 40% of the sales network in China is currently disrupted, but it is expected that demand will recover quickly once the situation improves.
Rising costs, Zara cancels free express returns in the UK.
Following Uniqlo and Next, Zara has also begun to charge British consumers for online shopping returns. Express returns are charged at £1.95 per order, and store returns are still free. The industry believes that this is a general trend – with rising freight and labor costs, coupled with consumers’ increasing preference for online shopping and returns, brand profits have declined. Encouraging store returns can not only reduce costs and speed up the sale of returned items, but also attract people back to the store.
Infineon said it had an order backlog of 37 billion euros, 3.3 times its revenue in the previous fiscal year.
Infineon, a major German chip maker, said that despite many uncertainties such as inflation, epidemics, and geographical conflicts, the current chip demand still far exceeds the supply. The company’s backlog of orders in the first quarter of this year has increased to 37 billion euros, an increase of 6 billion euros from the end of last year, which has far exceeded normal production capacity; more than half of them are automotive-related products, and about 75% will be delivered in the next year. Infineon posted revenue of EUR 11.06 billion in the last fiscal year (ending 30 September 2021).
Electric vehicle subsidies, which expire at the end of this year, may be extended again.
According to media reports, relevant authorities are negotiating with car companies to extend the electric vehicle subsidy that will expire in 2023, including reducing the purchase tax rate originally scheduled to start in 2023 from 10% to 5%. China began subsidizing electric vehicles in 2009, and gradually declined since 2017. It was originally planned to be completely withdrawn by the end of 2020, but it was extended for another two years due to the epidemic. The report said that by the end of last year, about 100 billion yuan had been spent on related subsidies.
In April, Douyin and its overseas version of TikTok ranked first in the world in downloads.
According to Sensor Tower, the downloads of Douyin and its overseas version of TikTok exceeded 62 million in April (only the App Store and Google Play are counted), a year-on-year increase of 6.1%, ranking first in the global (non-game) mobile application download list; Audio downloads accounted for 12.3%, and Indonesian TikTok downloads accounted for 10.7%. Facebook ranked second with 56 million, an increase of 8.9% year-on-year, and India had the largest number of downloads, accounting for about 25.9%. The last three are Instagram, WhatsApp, and Telegram.
Netflix laid off 150 employees, or about 1.36% of its workforce.
According to media reports, Netflix admitted to layoffs of about 150 people, most of which are in the United States. The layoffs are not due to poor personal performance, but changes in the company’s business needs. Netflix lost 200,000 subscribers in the first quarter of this year and predicted a loss in the second quarter. Internally, it has repeatedly warned against excessive recruitment and spending. Tech companies including Meta, Amazon, Uber, Robinhood, etc. have recently announced that they will shrink hiring or lay off staff.
Apple is requiring employees to wear masks again and shelving plans to arrive at work three days a week.
According to media reports, as the number of new crown cases climbs again, Apple requires employees to wear masks again in public areas, including Silicon Valley offices and about 100 US stores, and recommends that customers wear masks as well. Apple has also postponed its weekly Wednesday work schedule that was scheduled to take effect on May 23, although it still requires two days a week to be present.
Senior talent is in short supply, and major American companies are vying for interns.
A survey in the United States collected data from more than 200 large companies, showing that the number of internships in various industries this year increased by 22.6% compared with last year. The fastest growth was in the technology and finance industries, with an increase of 138% and 31% respectively; the two also had the highest proportion of positive conversions, with 56% of interns in the technology industry turning full-time, and 52% in the financial industry. In order to lock in talent, some companies even issue letters of appointment to juniors. The median monthly salary of interns at the top hedge fund Citadel is more than $14,000, but the acceptance rate is only 0.8%.
Goldman Sachs, JPMorgan Chase advised Twitter on acquisitions worth $133 million.
According to the latest disclosure documents, Goldman Sachs and JPMorgan Chase provided advisory services on the $44 billion acquisition, and Twitter has paid $20 million to it, and will pay another $113 million after the transaction is completed. Twitter released the records of its transaction negotiations with Musk yesterday, showing that Musk did not ask for more non-public information at the time, nor did he mention the issue of fake accounts; and Twitter had previously said that “5% of spam accounts” was speculation, Could be wrong.
The IRS is cash-strapped, with only 2% of wealthy Americans undergoing tax audits in 2019.
The latest report shows that in 2019, the tax audit rate for those earning more than $5 million was only 2%, down from 16% in 2010; however, it was still higher than the overall audit rate (0.2%). The decline was mainly due to insufficient funding of the IRS and a reduction in staffing to 1973 levels. The report pointed out that low audit rates are not conducive to people reporting truthfully. In March, the IRS said it would hire 10,000 employees to process 20 million outstanding tax returns.
The repeated epidemics and soaring import prices have setback Japan’s economic recovery.
After excluding price factors, Japan’s first-quarter GDP fell by 0.2% month-on-month, or 1% annualized. Among them, personal consumption was flat month-on-month, residential investment decreased by 1.1%, and government spending increased by 0.6%. The analysis believes that the epidemic has repeatedly hindered the recovery of consumption, and the surge in import prices has inhibited trade and business investment. Last year, Japan’s GDP grew by 2.1% year-on-year, the first positive growth in three years, but it has not returned to pre-pandemic levels.
Concerned about the outlook, Japanese household savings increased by 1.5 times a year.
According to the Bank of Japan, total household savings in Japan rose to 50 trillion yen by the end of 2021, compared with 20 trillion yen a year earlier. The central bank’s original assumption was that high savings would alleviate the problem of rising prices and boost personal consumption after the epidemic eased; but the reality is that with the repeated epidemics and worries about the future, several rounds of cash subsidies issued by the government have flowed into savings. , as of the end of March, Japanese household savings has risen to 55 trillion yen.
Text | Gong Fangyi Lin Guangying
Editor | Gong Fangyi
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