Category: Uncategorized

「What’s News In China」

On April 7, TAL Education 好未来 (NASDAQ: TAL) announced it discovered “certain employee wrongdoing” in its “routine internal auditing process.” TAL says the employee of question could wrongly inflate “Light Class” 轻课 sales by forging contracts and other documentations. For the fiscal year 2020 ended February 29, 2020, “Light Class” sales accounted for approximately 3% to 4% of the Company’s total estimated revenues.  // Press Release | 36kr

Last week, Guangdong Restaurant Association published an open letter to Meituan, saying that Meituan delivery has a market share of 60 to 90 per cent in Guangdong province… charges up to 26 per cent commission for newly-opened catering merchants. Meituan (HKG: 3690) on April 10 replies that more than 80 per cent of businesses on its platform pay a commission of between 10 per cent to 20 per cent. And it only earns ¥0.02 per delivery order (profit) in 2019Q4. // Sina | SCMP

China’s three biggest telecoms carriers join forces to introduce 5G-based messaging service 5G消息, introducing 5G-based rich communication services (RCS), competing with existing apps like Tencent’s WeChat. It will also allow organizations and firms to directly provide services to and communicate with users. // technode | White Paper

On April 10, Blackstone Chairman and CEO Schwartzman went on live with audience in China, with Hillhouse’s Lei Zhang and Vanke Liang Yu. Schwartzman brought his new book. The live-streaming is on Bytedance’s Toutiao and Douyin. // Sina | 36kr

Source: 36kr

「News of the Week」New York State Curve Flattening, Stock Market Up

On Tuesday (April 7), Gov. Andrew Cuomo projected that the state is reaching a plateau in coronavirus hospitalizations due to strict social distancing measures.

“To the extent that we see a flattening or a possible plateau, that’s because of what we’re doing and we have to keep doing it,” Mr. Cuomo said. (WSJ)

three day hospitalizations
Source: Cuomo press conference, Axios

The S&P 500 on Thursday (April 9) closed out its best four-day streak since 1974, up 11.9% (Dow up 12%). (CNBC)

CH 20200409_dow_best_weeks_close.png

「What’s News In China」

Yuanfudao 猿辅导 raised $1 billion led by Tencent and Hillhouse in a round valued at $7.8 billion. Offering online courses and homework plans to students, Yuanfudao ranked first in China in-app purchases in the education category between January and mid-March, according to mobile app performance tracker App Annie. // Reuters | 36kr

Tencent controlled Huya (NASDAQ: HUYA) by exercising its option, purchasing 16.5 million of Huya’s Class B ordinary shares from JOYY Inc. (NASDAQ: YY) for approximately $262.6 million. Tencent has became the largest shareholder of Huya, increasing its voting power in Huya to 50.1% on a fully-diluted basis, or 50.9% calculated based on the total issued and outstanding shares of Huya, and will consolidate financial statements of Huya. Tencent has already been the top shareholder of Douyu (NASDAQ: DOYU). With its investments in Kuaishou and Bilibili, Tencent has gained a near monopoly in game streaming. // Huya | 36kr

On April 6, Wolfpack, on its short selling research website, issued a report on iQiyi (NASDAQ: IQ) and estimates that “IQ inflated its 2019 revenue by approximately RMB 8-13 billion, or 27%-44%… by overstating its user numbers by approximately 42%-60%.” // Wolfpack

「Video of the Week」Queen Elizabeth Coronavirus Speech

Transcript:

I am speaking to you at what I know is an increasingly challenging time. A time of disruption in the life of our country: a disruption that has brought grief to some, financial difficulties to many, and enormous changes to the daily lives of us all.

I want to thank everyone on the NHS front line, as well as care workers and those carrying out essential roles, who selflessly continue their day-to-day duties outside the home in support of us all. I am sure the nation will join me in assuring you that what you do is appreciated and every hour of your hard work brings us closer to a return to more normal times.

I also want to thank those of you who are staying at home, thereby helping to protect the vulnerable and sparing many families the pain already felt by those who have lost loved ones. Together we are tackling this disease, and I want to reassure you that if we remain united and resolute, then we will overcome it.

I hope in the years to come everyone will be able to take pride in how they responded to this challenge. And those who come after us will say the Britons of this generation were as strong as any. That the attributes of self-discipline, of quiet good-humoured resolve and of fellow-feeling still characterise this country. The pride in who we are is not a part of our past, it defines our present and our future.

The moments when the United Kingdom has come together to applaud its care and essential workers will be remembered as an expression of our national spirit; and its symbol will be the rainbows drawn by children.

Across the Commonwealth and around the world, we have seen heart-warming stories of people coming together to help others, be it through delivering food parcels and medicines, checking on neighbours, or converting businesses to help the relief effort.

And though self-isolating may at times be hard, many people of all faiths, and of none, are discovering that it presents an opportunity to slow down, pause and reflect, in prayer or meditation.

It reminds me of the very first broadcast I made, in 1940, helped by my sister. We, as children, spoke from here at Windsor to children who had been evacuated from their homes and sent away for their own safety. Today, once again, many will feel a painful sense of separation from their loved ones. But now, as then, we know, deep down, that it is the right thing to do.

While we have faced challenges before, this one is different. This time we join with all nations across the globe in a common endeavour, using the great advances of science and our instinctive compassion to heal. We will succeed – and that success will belong to every one of us.

We should take comfort that while we may have more still to endure, better days will return: we will be with our friends again; we will be with our families again; we will meet again.

But for now, I send my thanks and warmest good wishes to you all.

Source: telegraph.co.uk

「News of the Week」Luckin Coffee Fraud

On April 2, the company’s board announced that a preliminary investigation indicates that the “aggregate sales amount associated with the fabricated transactions from the second quarter of 2019 to the fourth quarter of 2019 amount to around RMB2.2 billion ($314 million).” Luckin’s stock price crashed.

Luckin Coffee Press Release

WSJ – Luckin, Rival to Starbucks in China, Says Employees Fabricated 2019 Sales; Stock Plummets

FT – Luckin Coffee apologises for alleged fraud

TechCrunch – Luckin Coffee’s board initiates investigation into $300M potential fraud

WSJ – Ernst & Young Says It First Found Accounting Issues at Luckin

Dots to connect: more scrutiny for US-listed Chinese companies, investigations into underwriters / lawyers / equity research analysts / auditors, trust issues, the need for Citron & short-sellers, fundamental value of this coffee chain business, internal governance for corporates in China, etc.

「What’s News In China」

On May 24, Hubei Province besides Wuhan City would end the lockdown starting on May 25. The city of Wuhan, where the virus was first detected in December, is to remain locked down until April 8. // Time | Gov.cn

ANTA (HKG: 2020) reported its 2019 financial results, revenue growing 40.8% to ¥34 billion. Its FILA brand grows 73.9% in revenue, reaching ¥14.8 billion or 43.5% of the total revenue. // ANTA Presentation | prnewswire