Blog – Page 38 – shiqiv.com

Uber Card vs. Chase Sapphire Reserve (CSR)

Let’s compare the long-term value here.

Dining & Travel is 3.0x points for CSR and a $1.5x value per 100 points -> essentially a 4.5% reward.

Uber Card is 4% on dining and 3% on Travel.

The difference in annual fees are totally different: CSR is $150 ($450 fees minus $300 travel credit) while Uber Card is -$50. (YES, Negative 50 – Uber Card reimburses $50 each year for any subscription e.g. amazon prime while has $0 annul fee).

Assuming a person spends $5,000 per year in travel and dines for $20,000 per year (around $55 per day), then:

CSR will earn 1.5% premium on travel, so $75 more benefits than Uber Card.

And 0.5% premium on dining, so $100 more benefits than Uber Card.

Uber Card wins as the effective saving in annual fee is $200 while the incremental benefit CSR brings is only $175 with our assumptions.

What’s Up In Beer

An shrinking industry with huge impacts

Also – a report on beer that includes 2011-2016 beer consumption growth by country.

So ~200,000,000,000 liters divided by world population of 7,500,000,000 = 26.67 liters per person annually.

Say a can of beer is 330 ml – then each person is consuming ~80 cans per year.

That is a larger than I expected.

Although beer still needs to compete with wines, spirits and others for total alcohol consumption, it is still the no.1 source of alcohol (worldwide, but varies by country) – the impacts on everyday life are huge!

A better graphic illustration of alcohol consumption can be found here. A few screenshots are listed below.

Trends: to more premium options & to craft beer

Source: brewersassociation.org, R.S. Weinberg, Beer Marketer’s Insights, and the Brewers Association

In the US, craft beers is a growing sector while the overall beer sales is declining in 2018.

And the number of brewpubs is growing rapidly in recent years in the US.

And stories have been told, for example, Corono has been very popular and growing fast in China.

On a conference call following the release of Q1 2018 results yesterday, Carlos Brito told analysts that AB InBev’s more expensive offerings are doing “very well” in China. He singled out Corona, which became the number one imported beer in China in the three-month period. The brand “[is] growing very rapidly”, Brito added. A-B InBev boasts around a 20% market share in the country, with strength coming from its premium and super-premium brands. [just-drinks.com]

And sales of Budweiser in China overtook those in America in the first half of 2018. [beveragedaily.com]

Corona’s parent company Modelo was acquired by AB InBev in 2012 for $20 billion at an enterprise value to EBITDA multiple of 15.4 times.

一个非主流消费观（2）

上一篇说到通过asset转换的方式，可以把消费的属性改变。

对于体验类型的“消费”，也有相关的理论。

出去玩儿不是消费

这个逻辑的核心在于 – 一般来说，出去玩儿或者其它体验无法像买东西那样变成asset。一个小票或者票根，完全不能达到类似的效果。

解决的办法直到这个十年才算基本形成 – 照片/视频 + 社交媒体。

看上去十分简单和日常，但确实潜移默化地改变着人们的消费观念。一顿饭拍了照再发个朋友圈，就以另一种形式被保存了下来（不仅存在了朋友圈里，也存在了看到的人的印象里）。这可以说是一种intangible asset。

通常来说，食物通过外观（或者背景环境）也可以判断出价位，因此这样的intangible asset也有价值高低之分。标出餐厅名称或者地点可以更加透明地给intangible asset定价。

同时，拍得好不好可以很大程度地影响这个intangible asset的价值 – higher variation than in a bag。

所以近年来愈加流行的说法是没拍照等于没吃。某种程度上就是因为，如果只是吃，就是直接expense掉了。

养成了这样的习惯后会带来一个潜在的改变，即不愿意吃那种发不了社交媒体的。

吃只是体验型消费中的一类。

旅行会产生另一大类更高价值的intangible asset，也往往有更大variation，可能更容易更经常有大于成本的情况，直接带来equity上的gain。

另一个需要考虑的因素是社交媒体的广度。同样的旅行，follower更多的人发出来往往产生更高价值的intangible asset。由此可以带来的后续value，有些可以很直接（比如受邀去体验新开业酒店？）。

「News of the Week」WeWork to withdraw its IPO

WSJ – WeWork Still Needs Cash After Pulling IPO

Dots to connect: valuation of startups, business model of burning money, Softbank’s strategy, similar companies in shared economy, corporate governance, etc.

「Video of the Week」David Rubenstein Interview With John Rogers of Ariel Investments

一个非主流的消费观

觉得有一套消费理念很有趣，用两篇blog来梳理一下

买东西 = 把钱换种方式存起来

买东西不等于传统意义上的消费，或者花掉。比如买一个包，那只是把cash变成了另一种asset。更好理解的是买个房子，假设全款100w买的，那就是cash减去100w，同时fixed asset加了一栏100w的房屋。

按此来推算，打八折买一个1w的包，cash减去8000块，asset的包那栏要加上1w，这是瞬间赚了2000！（equity部分净增加2000）。

这样计算的另一个问题是需要考虑deprecation，即折旧。用得快的化妆品即使先变成了asset也很快被减值。但类似包这样的asset，只要不扔，折旧是很小的。使用者可以在心里给asset安排一个使用寿命，如果每年使用次数很少，甚至不用，实际上每年几乎可以没有“减值”的感觉。一个实际使用1年的asset可以在使用者心中拉成10年。

这样的消费理念计价时不需要完全参考成本。事实上，现在越来越多的例子是asset有一个浮动的market price（非label price/price tag），当消费者逐渐接受，那asset value是要随时根据市场做调整。典型例子，yeezy和AJ。在这样的市场下，depreciation短期内远不如market price的波动明显，那鞋在market里涨价就是赚。

A Fundamental Pitfall In Sports

So human beings won’t evolve fast within 20-50 years, without any genetic engineering.

As we are reaching our limits, it would be very hard to break any records – for those sports that measures speed, height, strength, etc.

But that is what we are all expecting (as audience) and what keeps the sports industry exciting and growing.

So those sports have become increasingly dependent on “outside helps” – including those (e.g. certain drugs) banned by the overseeing committee.

Therefore, there will be increasingly possible that future sports will be driven more by technology development and the supervising body will be more “tolerant”.

What is more, there is always a blurring line between “allowed medication” and “forbidden techniques”.

I will be very interested to see how this conflict/problem will be solved/mitigated.

5G And Glass

Why glass matters in the future?

Source: Qualcomm, IHS 5G economic impact study

5G is the buzzword that nearly every industry is talking about. Higher download speed, AR/VR, autonomous driving, industrial IoT – 5G is the future, powering the global economy over $12 trillion by 2035, according to an IHS study.

5G physics

With 5G, we are marching into new radio frequencies, subdivided into Sub-6 (<6 GHz) and mmWave (a wavelength range of 10 mm at 30 GHz decreasing to 1 mm at 300 GHz).

4G radio waves ranging from 700 MHz to about 2.5 GHz range from roughly 40 to 12 cm in length. In contrast, a 5G NR wave at 28 GHz are just 1 cm long. And that’s the lowest end of the mmWave frequencies; 60 GHz signals are just 5 mm in length. [edn.com]

mmWave…

doesn’t penetrate walls!

This is perhaps the most common issue cited with upcoming 5G networks and it’s true to some extent. Most building materials, such as cement and brick, attenuate and reflect very high-frequency signals with a big enough loss you’re unlikely to receive a very useful signal moving from inside to outside. Even the air produces signal loss, which limits frequencies above 28GHz to about a kilometer anyway. Wood and glass attenuate high-frequency signals to a smaller degree, so you’ll likely still be able to use 5G mmWave next to a window. [androidauthority]

cant’t get through hands..
doesn’t work well when it rains..

Corning Gorrilla

https://players.brightcove.net/c54a08de-3d27-4a61-b362-8c3251c67445

Apple included glass back since 2017 models.

Industry Progress

AT&T has introduced its 5G+ service in December 2018 with 12 cities: Atlanta, Charlotte, N.C., Dallas, Houston, Indianapolis, Jacksonville, Fla., Louisville, Ky., Oklahoma City, New Orleans, Raleigh, N.C., San Antonio and Waco, Texas.

And later added 7 cities to that list in April 2019 – Austin, Los Angeles, Nashville, Orlando, San Diego, San Francisco, and San Jose, with Las Vegas the 20th in June and New York City the 21st in August.

Fundings Behind ForwardX

ForwardX is a startup making the world’s first smart luggage that can follow the owner – like autonomous driving.

Besides its 2C products, it is also making smart warehouse robotics.

Funding

Seed: December 2016, $1 million
Series A: May 2018. $10 million, led by CDH and Eastern Bell Capital
Series B: March 2019, RMB 100 million, led by RiverHill Fund

Market Sizing

To B: warehouse robotics, global market size $6-10 billion
To C: global luggage market $18 billion

In 2018, the total global revenue of Samsonite amounted to $3.8 billion while Tumi sales is 760 million (20% of global revenue)

Backgrounds of VC Investors

Eastern Bell Capital, Series A lead

Focus

Logistics
Supply Chain
Retail and Branding
Data & AI

Chairman of IC: Zhiming Mei, co-founder and CEO of GLP, one of the largest logistics real estate companies

GLP was spun out of the former Asian business of the world’s biggest industrial real estate operator Prologis, with GIC as the largest shareholder (36.8%), shortly after 2008 financial crisis
GLP owns and manages logistics facilities such as warehouses, controlling 55 per cent share of China’s industry of modern logistics facilities
Largest customers: Amazon, Best Logistics, JD.com
GLP was taken private in 2017 for $11.6 billion, led by Vanke (21.4%), HOPU (21.3%), Hillhouse (21.2%), Management (21.2%), Bank of China Investment (21.2%)
GLP delisted in 2018

- In the interim, the company entered the European market with its US$2.8-billion deal to acquire the Gazeley platform from Brookfield.
- GLP had entered the US market via another entity-level transaction in 2015, acquiring the IndCor business from the Blackstone Group for US$8.1 billion. The investment is in 117 million square feet of logistics space across 36 US markets that is 90 percent leased. The deal sees GLP commit 55 percent of the equity of the investment initially, funded via a combination of cash and a short-term credit facility, with GIC accounting for the other 45 percent.
- In Jan 2018, GLP said it had received approval from the China Securities Regulatory Commission to issue up to US$1.8 billion of Belt & Road bonds on the Shenzhen Stock Exchange. The bonds are used to finance projects related to the One Belt One Road initiative that seeks to connect Asia and Europe over land and sea. Proceeds will be used to repay existing debt related to the financing of GLP’s Gazeley acquisition.

In June 2018, it was reported that Blackstone Group LP is buying U.S. industrial warehouse properties from Singapore-based logistics provider GLP for $18.7 billion.
- Blackstone said the overall transaction totaled 179 million square feet of urban logistics assets, nearly doubling the size of its U.S. industrial footprint.

RiverHill Fund, Series B lead

One line is probably enough – Founded by Simon Xie, co-founder of Alibaba.

It is easy to see the 2B potential of ForwardX – be ready for its mass robotics in 3-5 years.

Series F-5: Other Business Developments of Fosun Tourism Group

Vigor

In November 2012, Fosun Group acquired a 20 percent stake in Taiwan’s pastry maker Vigor Kobo for 77 million yuan ($12.26 million).

It was transferred to the Fosun Tourism Group in April 2018 (then 18.68% equity interests in Vigor Kobo Co., Ltd) at a consideration of HKD19,319,787 which was mutually agreed by both parties based on the quoted market price of Vigor.

Thomas Cook

In March 2015, Thomas Cook, one of the world’s leading global leisure travel groups and Fosun entered into a strategic partnership, in which Fosun to become a long term shareholder in Thomas Cook; Fosun has agreed to invest £91.8m for the issue of 73,135,777 new Thomas Cook ordinary shares, representing 5% of the Company’s existing issued ordinary share capital, and intends over time to purchase further Thomas Cook shares on the open market with a view to increasing its shareholding in Thomas Cook up to approximately 10% of the enlarged issued ordinary share capital.

In June 2015, Thomas Cook and Fosun said they are to launch their China JV (called Kuyi, 51% owned by Fosun and 49% by Thomas Cook).

On June, 2018, Fosun Tourism Group acquired 82,546,172 ordinary shares of Thomas Cook, representing approximately 5.37% equity interest in Thomas Cook, from Fosun International for a consideration of GBP89,562,597, which was determined based on the closing price of 25 June 2018.

Fosun Tourism Group later purchased additional shares of Thomas Cook and held in total 6.04% of the equity interest in Thomas Cook as of November 2018.

In June 2019, it was reported that Fosun is in talk to acquire Thomas Cook.

Shanghai Fanyou

In January 2016, Shanghai Fanyou acquired 100% of the equity interests in Beijing Xiuping at a total consideration of RMB1,230,000.

On 28 February 2017, Fosun Tourism Group acquired the entire equity interest in Shanghai Fanyou via Shanghai FTD at a consideration of RMB31,017,100, which was determined based on an independent valuation report of Shanghai Fanyou as of 31 July 2016 and fully settled on 11 May 2018.

Shanghai Miniversity, a company jointly owned by Fanyou (70%) and Mattel (30%), was established to focus on the provision of learning and playing club for children under the Miniversity brand, and our first Miniversity club was opened in February 2018 within Atlantis Sanya.

Atlantis Sanya

Atlantis Sanya is owned by Fosun Tourism Group, and managed by Kerzner, except for Tang Residence. Kerzner is a world-renowned manager of premium properties.

As remuneration for Kerzner ’s services, in respect of each operating year, we pay Kerzner (i) a base management fee in an amount equal to a percentage of gross revenue for such operating year; (ii) a marketing fee in an amount equal to a percentage of gross revenue for such operating year; and (iii) provided that the results of operation of such operating year meet certain thresholds, an incentive management fee in an amount equal to a percentage of the gross operating profit threshold plus a percentage of the gross operating profit in excess of the threshold.

In 2014, Hainan Atlantis commenced construction of Atlantis Sanya. Atlantis Sanya had its soft opening in February 2018 and officially opened in April 2018.

Planned tourism destination projects – Lijiang

Fosun Tourism Group plans to establish, manage and operate a tourism destination with a total GFA of approximately 350,000 square meters in Baisha town in Lijiang city, Yunnan province in southwestern China (the “Lijiang Project”).

The construction of the Lijiang Project is expected to be completed in stages starting from either late 2020 or early 2021 and achieve full completion in the following two to three years. The estimated cost expected to be incurred in the next few years for the Lijiang Project is approximately RMB2.4 billion, the majority of which is expected to be construction costs.

Planned tourism destination projects – Taicang

Fosun Tourism Group has entered into agreements on and fully paid up the prices of RMB2,245.0 million for the acquisitions of land use rights of land parcels of over 483,000 square meters in total in Taicang city, Jiangsu province in east-central China and plan to establish, manage and operate a tourism destination in Taicang city (the “Taicang Project”) .

The estimated cost to be incurred in the next few years for the Taicang Project is approximately RMB7.7 billion, the majority of which is expected to be construction costs.