There are already 40 Chinese concept stocks facing the risk of delisting, and this is just the beginning; from R&D to construction, the world is accelerating its embrace of nuclear energy

There are already 40 Chinese concept stocks facing the risk of delisting, and this is just the beginning

In April 2020, Ruixing Coffee disclosed financial fraud. A month later, the U.S. Senate passed the Foreign Company Accountability Act, and after a series of procedures, it officially became law at the end of the year. It puts forward detailed regulations on the financial report audit of overseas companies after listing in the United States, and companies that do not meet the requirements may be delisted within three years.

After the bill was passed, the two major regulatory agencies, the U.S. Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB), successively issued detailed implementation rules. On March 11 this year, BeiGene, Yum China, Zai Lab, Shengmei Semiconductor and Chi-Med were included in the SEC’s “temporary delisting list”.

The targets of PCAOB and SEC are much more than that. Next, 18 Chinese stock companies including Baidu, iQiyi, iQiyi, and Futu were put on the temporary delisting list. This week, another 17 companies including Ideal Auto, Shell, and Luckin Coffee were added to this list, bringing the number of Chinese concept stocks “on the list” to 40.

The order of listing has nothing to do with market value, revenue, profit and other indicators, but is based on the order in which companies submit annual reports. According to the previous accounting practices of China Concept Stock, almost 200 companies will be added to the delisting risk list.

Named companies have 15 working days to file an objection with the SEC and submit an annual report that meets the requirements, otherwise they will be transferred from the “Provisional list of issuers identified under the HFCAA” to the “Conclusive list of issuers identified” under the HFCAA)”. Eleven of the 40 companies mentioned above have been transferred to the confirmed list.

Companies that have appeared on the confirmed list for three consecutive years were required to be delisted from U.S. stocks. Ideal Auto said, “As a responsible company for investors, we have been actively looking for solutions, and actively cooperated with the work related to audit papers in accordance with domestic and foreign regulatory requirements.” Shell said, “It has been actively seeking possible solutions to protect the interests of shareholders to the greatest extent. The company will continue to ensure compliance with relevant laws and regulations in China and the United States, and, if conditions permit, remain a listed company on the New York Stock Exchange. status”.





Figures 1-3 show companies still on the provisional list as of April 22. Figure 4 shows the list of companies identified.

Last year, the U.S. Senate passed a draft of the Accelerating Foreign Company Accountability Act. If it eventually becomes law, the delisting window for Chinese concept stocks will be shortened to two years.

People have longed for these Chinese stock companies to return to the Hong Kong Stock Exchange and even list on A-shares at a certain point in time. However, as we said yesterday , the average daily trading volume of the Hong Kong Stock Exchange of 100 billion Hong Kong dollars is difficult to support the Chinese concept stocks with a total market value of nearly 820 billion US dollars after the slump. Those who can benefit from it are basically those big Internet technology companies that we are familiar with.

The market generally believes that complex international relations superimpose individual events, magnifying the differences between China and the United States on audit issues. The PCAOB and VIE protocol control structures are both the products of the US financial regulators to strengthen financial compliance after the US financial fraud case “Enron Incident”. In the past two decades, they have emphasized compliance because of various All sorts of reasons were put aside, bringing unexpected prosperity that benefited Silicon Valley, Wall Street, and China’s new economy at various stages. Now those nebulous areas are illuminated by both sides, and the question is finally brought to the table.

Among them, in terms of auditing issues, the biggest long-term disagreement between Chinese and American regulators is that the PCAOB has the right to regularly check the audit records of overseas companies listed in the United States, and the SEC respects this decision. But Chinese law requires these records not only to remain in China, but also to be approved for viewing. The PCAOB went to China to inspect relevant accounting firms in 2013, and there have been pilot cases of joint inspections since then. But the trend of moving in opposite directions has been completely broken in 2020.

This year, the China Securities Regulatory Commission has repeatedly stated its position on the implementation of the Foreign Company Accountability Act:

  • The China Securities Regulatory Commission respects that foreign regulators strengthen the supervision of relevant accounting firms in order to improve the quality of financial information of listed companies, but firmly opposes the wrong practice of some forces politicizing securities supervision.
  • The China Securities Regulatory Commission has always adhered to the spirit of openness and cooperation, and is willing to solve the problems of inspection and investigation of relevant firms by the US regulatory authorities through regulatory cooperation, which is also in line with international practices.

On April 2, the China Securities Regulatory Commission, the Ministry of Finance, the State Secrecy Administration, the State Archives Administration and other ministries and commissions jointly revised the “Regulations on Strengthening the Confidentiality and Archives Management Work Related to Issuing Securities Overseas and Listing”, the largest adjustment in the draft for comments, Undoubtedly, the statement that “on-site inspections should be mainly conducted by Chinese regulatory agencies, or rely on the inspection results of Chinese regulatory agencies” has been deleted. The CSRC said the revision will guide companies to properly manage classified and sensitive information and fulfill their primary responsibility for maintaining national information security.

At the 2022 annual meeting of the Boao Forum for Asia held this week, the vice chairman of the China Securities Regulatory Commission said in response to a question from a Caijing reporter that the regulatory negotiations on Chinese stocks are progressing “very smoothly” and that he is confident that a cooperation agreement will be reached in the near future. (Gong Fangyi)

From R&D to construction, the world accelerates its embrace of nuclear energy

This week’s regular meeting of the State Council approved six new nuclear power projects, namely Sanmen Nuclear Power Phase II Units 3 and 4; Haiyang Nuclear Power Phase II Units 3 and 4; Lufeng Nuclear Power Units 5 and 6.

  • Since the restart of nuclear power project review in 2019, China has approved 11 nuclear power projects with a total of 21 nuclear power units.
  • According to the “China Nuclear Energy Development and Prospects (2021)” report released by the China Nuclear Energy Industry Association, it is estimated that China’s independent third-generation nuclear power plants are expected to be approved at a pace of 6 to 8 units per year.

The market believes that the continuous development of nuclear power projects is to promote infrastructure construction and to partially replace coal. As of December 31, 2021, China had 52 nuclear power units in operation (excluding Taiwan), a year-on-year increase of 6.12%, and the installed capacity was approximately 53.26 million kilowatts (excluding Taiwan), a year-on-year increase of 6.78%.

The pace of global nuclear power project development slowed significantly after the Fukushima nuclear accident in Japan in 2011, and the European Union’s green and clean energy plan in 2019 excluded nuclear power. However, after the prices of energy sources such as coal, crude oil and natural gas have doubled, the world has embraced nuclear power again.

  • In 2021, the Netherlands proposed that nuclear energy can effectively supplement solar energy, wind energy and geothermal energy, and plans to reduce dependence on natural gas imports and build two new nuclear power plants.
  • The research and development of new technologies is also continuing to advance. Japan’s Mitsubishi Heavy Industries has developed a miniature nuclear reactor with a height of 3 meters, a width of 4 meters and a weight of less than 40 tons, which can be packed into a 40-foot standard container and may be commercialized as soon as 2030.
  • Engine manufacturer Rolls-Royce has also started the development of small modular reactors, which are expected to be completed by mid-2024, commercial power generation by 2029, and 10 units in operation by 2035.
  • The United States is launching a $6 billion plan to save nuclear power plants on the brink of shutdown.

For more detailed information on nuclear energy and nuclear power, you can read this article in LatePost. (Gong Fangyi)

Another Internet company denied layoffs, this time Zhihu and Xiaohongshu

  • On April 21, Xiaohongshu said that the news of “20% layoffs” was not true. It was a normal staff replacement, and the number of replacements accounted for about 9% of the total number of employees.
  • The news of refuting rumors comes from “Shanghai Internet Rumors Refusal”, which is jointly sponsored by Shanghai Internet Information Office and Jiefang Daily Shangguan News.
  • On April 19, Zhihu responded to the rumor that “Zhihu’s video department will adjust and lay off more than 60% of its employees”, saying that “there is no layoff plan in the video business, and excellent talents in the video business are welcome to join.”
  • Previously, media reported that Cai Lin, the head of Zhihu’s video business, had resigned in March.
  • Since the second half of last year, a number of Internet companies have successively reported optimization news. Judging from the WeChat index, the peak began with iQiyi’s “largest layoff in history” in early December last year, and it has continued to this day. Covering Alibaba, Tencent, Baidu, Meituan, Jingdong, Kuaishou, Weibo, Station B and other major manufacturers.
  • The denials are varied. Baidu said it was “employee performance optimization”, Weibo said it was “partial organizational adjustment”, said it was “normal optimization of business segments”, Xiaomi said that “it has never been laid off since its establishment”, and Station B said that “the live broadcast business is developing normally”.
  • There was no official response from Meituan and Tencent. However, Tencent President Liu Chiping said on the earnings call last month that the overall number of employees will continue to grow this year, and he also mentioned that “sometimes the number of departing employees will be controlled.”
  • The Cyberspace Administration of China issued a document on April 8 saying that it visited 12 companies including Tencent, Alibaba and Byte. Since the second half of last year, 216,800 people have left the company, 295,900 people have been recruited, and a net increase of 79,100 employees. (Lin Guangying)

China’s road transport traffic has recovered to about 70% in the same period last year

  • Lu Ting, chief China economist at Nomura, said in a report on Wednesday that a measure of China’s road freight turnover fell 27.2 percent nationwide from April 1 to 17 from a year earlier.
  • We found that the freight rate index in the Yangtze River Delta region soared during the same period. (Gong Fangyi)


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Fully autonomous driving, Optimus Prime, brain computer… Musk’s imagination in 2022

This year, TED founder Chris Anderson (Chris Anderson) invited Musk again to give an interview on the theme “A future worth looking forward to”.

Musk detailed the new technologies being researched – Tesla’s intelligent humanoid robot Optimus, Neuralink’s brain-computer interface and Space X’s Starship, among others. We’ve fine-tuned Musk’s remarks without changing the intent to make the interview transcripts read more smoothly.

Talking about a sustainable energy economy: “The amount of electricity the world needs to be sustainable is about the equivalent of a 300 TWh battery.”

  • A fully sustainable energy economy has three elements: solar/wind, stationary battery packs, and electric vehicles.
  • The first is sustainable energy generation, mainly wind and solar, but also hydro, geothermal.
  • The second is that you need batteries to store solar and wind energy because the sun doesn’t shine all the time and the wind doesn’t blow all the time. So a lot of stationary battery packs are needed.
  • Finally, there is the need for electric vehicles, such as electric cars, electric planes, and electric boats. Electric rockets are unlikely to be built, but rocket propellants can be made using sustainable energy sources.
  • The real limiting factor for sustainability will be the production of batteries. No matter what the slowest link in the entire lithium-ion battery supply chain is, the many links from mining and refining to final battery production and assembly will be the limiting factor for sustainable development.
  • In order to achieve sustainable development, the power required for the world to achieve sustainable development is approximately equivalent to a battery with a capacity of 300 TWh. (Note: 1TWh= 1 billion KWh)

In terms of autonomous driving research and development, “to solve FSD (fully autonomous driving), we must solve real-world AI.”

  • A smart car is actually a robot with four wheels. You can think of it as a robot with four wheels.
  • There are so many problems with autonomous driving, and sometimes you think you’ve solved the problem, but in the end you’ll find that you’ve just hit a ceiling problem. If you use a graph to describe the progress, then (autonomous driving R&D) is like a series of logarithmic curves, the progress starts in a straight line, then it starts to decline, and your benefit (R&D progress) is decreasing. But to solve FSD (Fully Autonomous Driving), you have to solve real-world AI.
  • Road networks are designed to work with biological neural networks, with our brains, vision, eyes, and in order for the brains and eyes to work with computers, real-world AI and vision need to be addressed.

Optimus, Tesla’s humanoid robot, “People haven’t realized that the development potential of humanoid robots is far greater than that of cars.”

  • Existing technology has demonstrated that it is possible to make humanoid robots, but what is lacking is making robots smart enough to work in real life without explicit instructions.
  • The development of a humanoid robot is actually simpler than autonomous driving because it is not an object that travels at 60 miles per hour, instead it is designed to only travel at three, four or five miles per hour, so even if it makes mistakes , possibly embarrassing, but not life-threatening to humans.
  • A localized ROM chip must be installed on the robot. Once you or anyone gives the robot a “stop, stop” command, the robot will stop. This kind of robot cannot be remotely updated. I think it’s important to have such a safety feature.
  • This year, we’ll probably produce an interesting prototype robot, and probably within two years, we’ll have something useful out of it. Can be sold to businesses in less than ten years.
  • The cost of a humanoid robot will not be too high, and it should be lower than the cost of a car. When new things first come out, they will be more expensive, because they are new technologies and the output is low. The complexity and cost of cars are higher than that of humanoid robots. So I would expect it to cost less than a car, or to say the cost is equivalent to a cheap car.

Regarding the progress of Neuralink’s brain-computer interface, “This device has now submitted an FDA application, and it is hoped that the first human implantation will be carried out this year.”

  • Neuralink devices, much like Fitbits or Apple Watches, can implant many tiny wires into the brain that are invisible to the naked eye.
  • Products are still in the early stages, and it will take many years to have high-bandwidth neural interfaces that allow AI and humans to coexist. Probably for a long time, maybe a decade or so, we’re all just going to be dealing with brain injuries and spinal injuries.
  • In the short term, brain-computer interface is helpful for personal brain injury and spinal injury; in the long run, brain-computer interface can solve the civilization crisis brought by artificial intelligence.

About SpaceX’s Starship:

  • The holy grail of our rockets or space transportation is that they can be fully and quickly reusable. This is technology that has never been implemented. Recycling accounts for about 60% of the entire launch cost.
  • From a cost perspective, the projected cost of Starship is much lower than the actual cost of our small Folcon 1 rocket to put the same 100 tons into orbit. Starship uses methane as fuel, mainly oxygen, about 77-78% oxygen by weight. Mars has carbon dioxide and water ice, and carbon dioxide and water react to make methane and oxygen on Mars.
  • Starship is a propulsion landing with no parachutes and nothing to throw away, with a heat shield capable of going to Earth or Mars.
  • NASA is planning to use Starship to send people to the moon.
  • We’re actually integrating — integrating the engine into the booster for the first orbital flight in about a week or two. The launch site is ready. Assuming we get regulatory approval, I think we could have an orbital launch attempt within a few months.
  • We’ve built a production system for Starship and are making a lot of ships and boosters. It is currently expected to build a booster and a spacecraft about every few months, initially about every two months, and then hopefully every month by the end of this year.
  • Compared with the James Webb telescope, the size and mass of the telescope used on Starship may increase by an order of magnitude, about 100 tons and 1,000 cubic meters. (Eslyn)


Zhao Danyang, the former vice president of Kuaishou, was sentenced to seven years in prison for accepting bribes and embezzling his position.

According to the criminal judgment of the People’s Court of Haidian District, Beijing, Zhao Danyang, the former vice president of Kuaishou, was sentenced to 7 years in prison, and the amount involved in the case exceeded 7.56 million yuan. Zhao Danyang joined Kuaishou in 2015 and successively served as the head of content rating and the head of Kuaishou Research Institute. During his nearly 4 years in office, on the one hand, he took advantage of his position as the content rating director to conveniently collect 6.68 million in favors from outsourcing suppliers; on the other hand, he worked with his subordinates to create fake employee salaries, and took this part of the money as his own. It is understood that in 2020, Kuaishou had expelled Zhao Danyang in the name of internal corruption, and made a full email announcement at that time.

China Merchants Bank’s first-quarter net profit was 36.02 billion yuan, and the former president is under investigation for suspected serious violations of discipline and law.

China Merchants Bank announced today that in the first quarter of 2022, the operating income was 91.99 billion yuan, a year-on-year increase of 8.5%, and the net profit was 36.02 billion yuan, a year-on-year increase of 12.5%. At the same time, it was disclosed that Tian Huiyu, the former secretary of the party committee and president of the company, was suspected of serious violations of discipline and law, and was under review and investigation by the Central Commission for Discipline Inspection and the State Supervision Commission. Currently, the executive vice president Wang Liang is in charge of the work, and the operation and management are normal.

17 Chinese concept stock companies including Ideal, Shell, Zhihu, etc. were included in the “pre-delisting list”.

The U.S. Securities and Exchange Commission (SEC) announced the fifth batch of “pre-delisting lists”, which included 17 companies including Ideal Auto, Shell, Zhihu, Best, Luckin, Aurora Mobile, and China Foods. According to SEC rules, the company will determine whether it is included in the tentative list according to the order in which the company submits its annual report, and it will be disclosed on a rolling basis throughout the year. At present, 40 Chinese concept companies have been listed.

China CDF’s January-March revenue fell 7.45% YoY.

China’s largest duty-free company, China CDF, recorded revenue of 16.8 billion yuan from January to March, down 7.45% year-on-year, and deducted non-net profit of 2.56 billion yuan, down 9.72% year-on-year. The report mentioned that the tax-free business grew rapidly from January to February this year, but in March, affected by the spread of the epidemic and local outbreaks, the operation was greatly affected.

Gap Group expects double-digit sales declines in the first quarter.

Gap Group continued to cut its sales forecast for February-April this year, with a year-on-year decline of more than 10%, due to ongoing supply chain problems and inflation reducing consumption; the CEO of the sub-brand Old Navy will also resign this week. Old Navy is mainly for low-income consumers, accounting for more than half of the group’s revenue in fiscal 2021, but the supply chain is seriously chaotic and performance is declining. Management said it hoped that Old Navy would take advantage of the economic uncertainty and had already ramped up the level of promotions.

Gucci’s growth slowed due to store closures.

Kering Group’s revenue in the first quarter of this year increased by 21% year-on-year to $5.4 billion, more than half of which came from the Gucci brand, but Gucci’s revenue in the same period only increased by 13%. There is sufficient resilience and demand for product consumption, and there is still room for price increases for many brands. The Group’s other brands, Yves Saint Laurent and Bottega Veneta, all achieved higher-than-expected growth.

LVMH uses yeast to produce keratin fur.

LVMH is one of the few luxury companies that still uses real leather. It recently announced that it is working with the Academy to study how to use yeast cells to produce keratin and convert it into fur fibers. The goal is to produce keratin fur with a natural texture to replace plastic fur, which is neither luxurious nor environmentally friendly. Although the research is at a very early stage, LVMH believes it is important to showcase the brand’s sustainable efforts and that younger customers will find the lab’s biotech interesting.

The production of many car companies in Shanghai has gradually recovered.

According to Jiefang Daily, the relevant departments in Shanghai responded to the “resumption of work and production” issues that citizens were concerned about, saying that on April 18, SAIC Motor and Tesla started to resume work and production simultaneously, and on the 19th, SAIC Passenger Cars rolled off more than 200 complete vehicles. , Tesla has achieved nearly 600 vehicles off the assembly line, and production has steadily climbed. Before the epidemic, Tesla’s Shanghai factory had a daily output of about 2,500 vehicles.

Unemployment in Hong Kong rose to 5%.

According to the Census and Statistics Department of the Hong Kong Special Administrative Region Government, the seasonally adjusted unemployment rate in Hong Kong from January to March this year was 5%, and the underemployment rate was 3.1%, up 0.5 and 0.8 percentage points from the previous cycle (December last year to February this year) respectively; The number of unemployed rose by about 26,900 to 188,500, and the number of underemployed rose by 89,200 to 117,000. Employment fell in almost all industries, with the unemployment rate in food service activities rising 2.6% to 11%.

Ningde Times responded that “net profit of 15.93 billion yuan will not be distributed”.

CATL disclosed yesterday that its net profit for 2021 will be 15.931 billion yuan, a year-on-year increase of 185.34%. According to China Securities Journal, Ningde Times responded that no dividends will be distributed because there will be major investment plans and cash expenditures this year, and in addition, private placements are underway; after the private placements are completed, investors will be provided with reasonable investment returns.

Indonesia banned all edible oil exports from the 28th.

The President of Indonesia announced today that the export of all edible oil and its raw materials will be banned from April 28 to ensure domestic supply and stabilize prices until the shortage is alleviated. Indonesia has restricted edible oil exports since the beginning of the year. Indonesians have taken to the streets to protest food price hikes, with the government introducing cash subsidies and sending police to monitor supplies and control prices, according to media reports.

Amazon plans to open its logistics services to the outside world.

Amazon on Thursday announced the launch of a new service, “Buy with Prime,” to provide warehousing and logistics services to outside merchants; and a $1 billion fund to invest in new technologies related to logistics and supply chains. The Amazon fulfillment network has doubled in size over the past two years. Industry insiders speculate that Amazon’s expanding logistics scale may be aimed at competing with major carriers such as UPS and FedEx.

Streaming platform HBO added 3 million subscribers in the first quarter.

HBO, a newly acquired streaming platform from Warner Bros. Discovery, added nearly 3 million subscribers in the first quarter of this year, bringing its total to 76.8 million; streaming leader Netflix lost 200,000 subscribers in the same period to a total of about 220 million. Warner Bros. Discovery also plans to shut down another independent streaming platform, CNN+, by the end of April. CNN+, which launched late last month, is said to have invested hundreds of millions of dollars; as of last week, it had fewer than 10,000 daily active users.

Inflation and market volatility, British households reduce investment.

AJ Bell, the UK’s largest investment platform, said on Thursday that the rising cost of living squeezed household budgets and made households reduce investment, with a net inflow of 1.6 billion pounds in the first quarter of this year, compared with 1.8 billion pounds in the same period last year. Another survey shows that about a quarter of the British people have cut back on investments or savings; 5% are no longer paying pensions, and 8.5% have suspended investments such as stocks.

WHO calls on Pfizer to increase transparency on Paxlovid pricing.

The World Health Organization on Thursday cited new data showing that Pfizer’s oral Covid-19 drug Paxlovid could reduce the risk of hospitalization for patients by 85 percent, but called for more transparency on prices to see whether low-income countries can get enough of the drug. Paxlovid currently implements a tiered fee. A course of treatment in high-income countries is US$530, and a course of treatment in high-income countries is US$250. The transaction amount in low- and middle-income countries is not disclosed. A course of treatment (one box) in China is priced at 2,300 yuan and has been included in medical insurance.

Powerful brands are worsening working conditions for female workers in India, the report said.

Research firm BHRRC surveyed 90 female workers in 31 Indian garment factories supplying big brands such as H&M, Levi’s, AE and others, saying their workplace conditions were regressing. The report believes that the purchasing behavior of brand owners is directly related to it. For example, factories have little bargaining power in the face of big brand owners, and workers’ wages are squeezed. Female workers who work overtime also face more danger on the way home or at home. The Indian government also lacks effective supervision in this regard.

The above briefings are provided by Lin Guangying and Shi Xian

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