Original link: https://www.latepost.com/news/dj_detail?id=1354
Tesla China price cuts, China-US price gap continues to widen
Inflation does not necessarily equate with price increases, at least for Tesla on October 24. Their best-selling Model 3 and Model Y entry-level models dropped 5% and 8.8%, respectively, to 265,900 yuan and 289,000 yuan (after subsidies).
After the price cut, the two models are still 6.4% and 4.7% more expensive (the domestic version) than at the beginning of the market, respectively.
Due to factors such as rising raw material prices, increased logistics costs, and subsidy adjustments, since 2021, Tesla’s domestically produced Model 3 has increased the price 5 times and Model Y has increased 4 times. Tesla’s sales were basically unaffected. Last year, the global sales were close to one million, and the Chinese market absorbed nearly half of the sales. Musk succeeded in passing upstream inflation to consumers.
During the period, Tesla’s vehicle profit margin reached a record 30.17% and 30.31% in the fourth quarter of 2021 and the first quarter of 2022. There is basically a single gear among car companies with millions of sales. Ferrari, which is more profitable than it, sells for millions of dollars a car.
As the dominant position was eroded by BYD until it overtook, Tesla issued a rare official subsidy, voluntarily giving up profits to gain the market. A study by Nikkei Asia at the beginning of the month pointed out that the price gap between China and the United States for the entry-level Model 3 model is widening. Before this price adjustment, the price of Model 3 in the Chinese market increased by 12%, while the price in the United States increased by 24% during the same period.
Taking into account the impact of exchange rates, the US price is about 1.22 times more expensive than China’s. After this price adjustment, the price difference between the US and China Model 3 is about 1.28 times. (Gong Fangyi)
Blackstone’s profit shrunk by 99%, but at least it didn’t lose money
In the financial crisis more than a decade ago, large private equity funds led by Blackstone Group were not greatly affected, thanks to the support of the central bank and the government. This time they were supported as always, but the results were less clear.
At the end of September, Blackstone’s assets under management reached a record $951 billion, one step away from the trillion-dollar target expected by CEO Schwarzman. It’s just that shareholders and investors may have mixed feelings, because under this scale, Blackstone Group’s net profit in the third quarter was only $2.3 million, only 1.6% of the net profit in the same period last year.
But what an enviable return — or at least a profit — compared to a hedge fund or other active equity fund. According to Wind data, the US Dow Jones Industrial Average, Nasdaq and S&P 500 fell 14%, 31% and 21% respectively over the year. The market value of technology companies that were once the favorite in the capital market has shrunk collectively this year. For example, Tesla fell 42%, Nvidia fell 57%, and even Apple fell 16%.
The M&A market that has made Blackstone a home may be full of opportunities this year, but the problem is that the window to exit may be closing. In the third quarter, Blackstone only sold $15 billion in assets, which shrank by half from the previous quarter. Investing in the private sector has also been favored by investors and funders for the time being, and this is the main flow of the $45 billion in funds they absorbed in the quarter. (Gong Fangyi)
China’s economy grows 3.9% in the third quarter
According to the National Bureau of Statistics, China’s GDP in the third quarter was about 30,762.7 billion yuan, a year-on-year increase of 3.9% at constant prices. Some other key economic data are as follows:
- The industrial added value in the quarter increased by 3.7% year-on-year;
- In the first three quarters, the cumulative investment in fixed assets was 5.9% year-on-year, and the cumulative investment in real estate development was -8% year-on-year;
- In the first three quarters, social zero accumulated 0.7% year-on-year, and in September, it was 2.5% year-on-year. At the end of the month, online retail sales of physical goods accounted for about 25.7%;
The General Administration of Customs also disclosed September data:
- Export value increased by 10.7% yoy in RMB and 5.7% yoy in dollar terms in September. (Gong Fangyi)
Mobile phones and computers are slow to sell, and TSMC will reduce the production of advanced technology chips
In the middle of the month, TSMC said in the earnings call that the capacity utilization rate of 7nm process chips could not continue to maintain the high point of the past three years. The market is speculating on the extent of TSMC’s production cuts. Counterpoint Research, a market research organization, took the lead in giving a prediction: by the first half of next year, the capacity utilization rate of TSMC’s 7nm and 6nm processes will drop to 80% to 90%.
The chip production cycle of the process is about 4 months, which means that it will take at least several quarters to pass from the supply reduction to the downstream. In addition to reducing production capacity, TSMC also removed a related production line in the new plant planning.
According to Counterpoint’s data, TSMC’s 7nm process is mainly used in smartphones and PC-related products. In the past three years, 7nm has been TSMC’s main source of revenue, contributing nearly 30% of its revenue, and has been maintained at full load for a long time. Until recently, headwinds in the mobile and computer markets.
Data from Canalys shows that the global smartphone market has suffered three consecutive quarters of declines, with no signs of improving demand through the first half of next year; PCs fared even worse, with the biggest drop in shipments in nearly two decades in the third quarter.
In May, TSMC also took the lead in raising prices. In July, downstream customers such as Apple and Qualcomm cut orders first. According to TSMC’s own statement, the downturn in demand is cyclical rather than structural, and the recovery will have to wait until the second half of 2023.
The rapid changes in the downstream market have also made Samsung Electronics, which has been competing with TSMC in the most advanced technology, adjust its direction. According to media reports, Samsung Electronics will expand its investment in “traditional and characteristic craftsmanship” and plans to expand its production capacity to more than double what it was in 2018 by 2027. These new production capacity will be mainly used in automotive chips, image sensors and other fields that do not require such high volume and computing power. (Qiu Hao)
Miners continue to take the lion’s share of EV profits
According to data from the Passenger Federation, China’s new energy vehicle production and sales reached a new high in September, with growth rates reaching 1.1 times and over 90% respectively, and the retail penetration rate exceeded 30%.
New energy vehicles are selling well, but power batteries, which cost 40% to 60% of the cost, are not the biggest winners. According to the financial report, the net profit of CATL in the third quarter was 9.424 billion yuan, a year-on-year increase of nearly 2 times, but the gross profit margin fell to 19.27%.
According to a batch of released and pre-disclosed three-quarter reports, most of the profits flowed to lithium miners in the upper reaches of the industry.
The net profit of China Mining Resources in the third quarter was 729 million yuan, a year-on-year increase of more than four times; Rongjie shares earned 679 million yuan in the third quarter, an increase of 4611.39%. At present, Tianqi Lithium and Ganfeng Lithium, which have only disclosed their performance forecasts, have increased their net profits by ten and five times, respectively, even at the lower limit of the forecast. The gross profit margin of these companies’ lithium mining business mostly exceeds 80%.
Driven by the strong demand in the industry, the price of lithium carbonate has soared again recently. Wind data shows that the quotation of battery-grade lithium carbonate today reached 541,000 yuan / ton, setting a new record high. Galaxy Securities predicts that with the reduction in the production of lithium salt in the salt lakes in Qinghai area after November, and the surge in demand for new energy vehicles at the end of the year, the price of lithium salt will still have a momentum of month-on-month growth.
If the downstream wants to change, there are only two paths—increasing market share and launching products with absolute bargaining power; or, mining by themselves. Ningde Times and Guoxuan Hi-Tech have already invested in the construction of lithium carbonate projects in Yichun, Jiangxi, and Tesla has also directly extended its tentacles to the upstream, and has successively reached supply agreements with many lithium miners in Australia. (Qiu Hao)
Know later丨Mobileye goes public this week, sprinting for the largest IPO of US stocks this year
There are at least 3 IPOs in A shares this week.
- Ruichen Environmental Protection: Raised 679 million yuan, mainly engaged in the research and development, design, production and sales of high-efficiency energy-saving equipment.
- Digger: Raised 591 million yuan, a mobile Internet application technology and information service provider, mainly providing value-added telecommunication services, mobile informatization services and mobile marketing services for large enterprises in various industries.
- Kangwei Century: raised 1.141 billion yuan, and its core products include molecular detection enzyme raw materials, nucleic acid preservation reagents, nucleic acid extraction and purification reagents, and molecular diagnostic kits.
US stocks have at least 2 IPOs this week.
- Materials company ASP Isotopes: Plans to issue 2 million shares at a price of $5 to $7 per share, with a maximum raise of about $14 million.
- Intel’s autonomous driving company Mobileye Global: plans to issue 41 million shares at a price of $18 to $20 per share, with a maximum fundraising of about $820 million.
OTHER NEWS
Michelle Bingcheng and Ruixing’s syrup suppliers plan to list on A-shares.
The prospectus for fresh beverages that provide raw materials such as syrups, jams and accessories for many new tea brands shows that the top five customers in the first quarter of this year are Mixue Bingcheng, World Tea, Hema Xiansheng, Guangzhou Jie Ming and Gu Ming. According to data from Zhaimen Dining Eyes, as of June this year, the penetration rate of new tea brands with more than 200 fresh beverage products in stores was 62.7%.
Affected by the successful transfer of raw material prices, Keming Foods’ third-quarter net profit increased by 121% month-on-month.
According to the financial report of Keming Foods, the first stock of noodles, the company’s net profit in the third quarter was 46.2762 million yuan, a month-on-month increase of 121.37%. In the face of rising wheat prices at the cost end, Keming Foods announced in July that it would raise product prices by about 5%.
Nai Xue’s Tea opened 69 new stores in the third quarter.
Nai Xue’s tea quarter operation announcement shows that in the third quarter, the company added 69 stores and closed 17 stores. As of the end of last month, there were a total of 973 stores, and the progress of store openings is still basically on track. The company said that due to factors such as the good response to new products, the boost from hot weather, and the low base last year, same-store sales in the past two months have recovered to close to the level of the same period last year.
Apple App Store advertising space expansion.
From October 25th, Apple will place advertisements in the two areas of “Today” in the App Store and “You may also like” at the bottom of the application details page. All advertisements have a blue background and an “Ad” icon. Currently Applicable to app stores outside of China. The latter currently only includes search ads.
Amore, a Korean makeup company, is making efforts in the US and Japanese markets.
Due to the rapid development of Chinese local brands, intensified competition, and the impact of the epidemic, Amorepacific, which owns brands such as Innisfree, Sulwhasoo, and Laneige, experienced sluggish sales in China, and its Chinese market revenue declined by double digits in the first half of the year. In this regard, Amore will focus on expanding the US and Japanese markets. Last month, Amore announced the acquisition of US skin care brand Tata Harper for about 116 million US dollars. In the Japanese market, it is aimed at young people who consume mid-range products.
Zara will launch a second-hand platform in the UK, offering repair, resale and recycling services.
Zara will launch a second-hand marketplace in the UK on 3 November, offering paid repairs, resale or recycling donations. For resale, scan the tag or internal barcode to generate Zara’s official image and apparel composition information. Previously, fast fashion giants SHEIN and H&M launched second-hand trading platforms.
Costa Cruises withdrew from the Chinese and Asian markets.
According to Caixin reports, Costa Cruises has internally notified to withdraw from the Asian market due to market environment factors. Before 2020, the number of cruise passengers in the Asia-Pacific market accounted for nearly 60% of the world, and the number of cruise passengers in China accounted for nearly half of the total in Asia.
Red Bull co-founder Dietrich Mattschitz has died of illness.
Red Bull co-founder Dietrich Mateschitz died of cancer on October 23 at the age of 78. With a marketing background, he smelled business opportunities when he was on a business trip in Thailand. In 1984, he co-founded Red Bull with Thai Chinese Xu Shubiao, with each holding 49% of the shares. He took Red Bull to the world by sponsoring global sporting events and extreme sports such as motocross and skydiving. Matt Schitz, with a net worth of $15.1 billion, is the richest man in Austria and the owner of the F1 Red Bull team.
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