|Bid||24.550 x 0|
|Ask||24.600 x 0|
|Day's Range||24.050 - 24.900|
|52 Week Range||9.830 - 35.900|
|Beta (5Y Monthly)||1.43|
|PE Ratio (TTM)||N/A|
|Earnings Date||Mar 24, 2021|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||17.65|
(Bloomberg) -- Zhang Yiming built ByteDance Ltd. into the world’s most valuable private company via a string of blockbuster apps like TikTok that challenged Facebook and other incumbents on their own turf. His latest target: Alibaba.The 38-year-old AI coding genius, searching for ByteDance’s next big act, has set his sights on China’s $1.7 trillion e-commerce arena. The co-founder has hired thousands of staff and roped in big-name sponsors like Xiaomi Corp. impresario Lei Jun to drive what he calls his next “major breakthrough” into global business -- selling stuff to consumers via its addictive short videos and livestreams. That endeavor will test not just Zhang’s magic touch with app creation and ByteDance’s AI wizardry, but also investor reception ahead of one of the tech world’s most hotly anticipated IPOs.His startup is already starting to make waves in an industry long controlled by Jack Ma’s Alibaba Group Holding Ltd. and JD.com Inc. It sold about $26 billion worth of make-up, clothing and other merchandise in 2020, achieving in its maiden year what Alibaba’s Taobao took six years to accomplish. It’s shooting for more than $185 billion by 2022. Douyin, TikTok’s Chinese twin, is expected to contribute more than half of the firm’s $40 billion domestic ad sales this year, driven in part by e-commerce.“Short video platforms have so much traffic that they can basically do any business,” said Shawn Yang, managing director of Blue Lotus Capital Advisors. “Douyin is not only in ads, but also live-streaming, e-commerce, local life services and search. This has a lot of room for imagination.”A burgeoning e-commerce business could help the firm surpass its $250 billion valuation when it goes public, countering concerns around Beijing’s crackdown on the country’s internet behemoths. Preparations are said to be underway for a listing that would be one of the world’s most anticipated debuts. The startup is working with advisers on the offering and is choosing between Hong Kong and U.S. as the listing venue, people familiar with the matter have said. While ByteDance won’t handle sales or merchandise itself, it hopes to sell more ads to merchants, boost traffic and take a cut of business.Read more: ByteDance Is Said to Kick Off IPO Preparations for China AssetsThe internet giant is a late entrant to China’s social commerce scene, where influencers tout products to fans like a Gen-Z version of the Home Shopping Network. The format, pioneered by Alibaba as a marketing tool in 2016, developed a life of its own last year when Covid-19 spurred demand for at-home entertainment. Last year, Alibaba’s Taobao Live generated over 400 billion yuan ($62 billion) of gross merchandise value and Kuaishou Technology’s social platforms hosted 381 billion yuan of transactions, more than double Douyin’s.ByteDance is counting on its artificial intelligence-driven, interest-based recommendations to help its e-commerce business catch up. In a splashy coming-out party for the one-year-old business last month, executives explained that the company intends to replicate its success with using AI algorithms to feed users content in online shopping. By scrolling an endless stream of social content, now connected with physical goods more than ever, Douyin users won’t be able to resist their impulse to buy, they said.It’s “sort of similar to shopping on the street,” Bob Kang, Douyin’s 35-year-old e-commerce chief, told an audience of hundreds at the Guangzhou event. “As people get richer, they don’t go to shopping malls or boutique stores with specific things in mind, they just buy if they see something they like.”Kang, a former Baidu Inc. engineer who was poached by ByteDance in 2017, is one of a slew of fast-rising young lieutenants tasked by Zhang to break new ground for the company. He was previously the tech lead for ByteDance’s Helo app, one of India’s most-used social platforms for sharing content like videos -- until the South Asian nation shut it down along with dozens of Chinese apps last June on national security grounds.Since Kang took over as e-commerce head, Douyin has banned live-streamers from selling items listed on third-party sites and invited them to open their own in-app stores, preventing rivals like Alibaba and JD.com Inc. from profiting off its traffic. He grew a team of customer support staff from just one hundred to about 1,900 to fight counterfeits and is hiring for more than 900 other positions to support the business. ByteDance also has an online matchmaking system that helps connect merchants with influencers and their agencies, and it’s set up physical bases to house live streamers and merchandise, similar to what Alibaba does.The initiative gained traction from celebrity endorsers like Lei, the Xiaomi founder who has hosted livestreams promoting his Mi TVs and smartphones. Luo Yonghao, a once high-flying entrepreneur who had sought to challenge Apple Inc. with his smartphone business, is another top influencer, shifting more than $17 million of merchandise in his first-ever livestream on the platform.Smaller merchants are following their lead, like Zhou Huang, who set up a Douyin storefront for her jewelry business in October, bypassing conventional platforms like Alibaba’s Taobao. Instead of stumping up hefty fees to platform operators for traffic, she’s managed to amass a fan base of about 20,000 by creating videos that offer practical tips like how to choose the right size when buying a bracelet online.“It’s challenging for brand new merchants like me to attract customers on Taobao,” says Huang, whose Douyin store broke even after just three months. “Sometimes, people come to our store not for shopping, but for entertainment. But once we have enough visitors, we can make a sale.”ByteDance is lending a hand. In Foshan, Huang and 200 other jewelry sellers are coached on everything from registering a store and marketing to shooting quality videos. Around-the-clock technical assistance is available: Huang says that whenever her livestream channel goes down, ByteDance technicians immediately come to the rescue.Huang is one of about 1 million creators who have generated e-commerce sales on Douyin as of January, drawn to the platform’s 600 million-plus daily users. The platform -- which brings in commission fees from merchants as a new revenue stream -- aims to have more than a thousand brands this year join the likes of Suning.com Co. in setting up stores on Douyin, and that number could increase fivefold by 2022, the company predicted in an internal memo. GMV may grow to as much as 600 billion yuan this year before doubling to 1.2 trillion yuan in 2022.Read more: Leaked ByteDance Memo Shows Blockbuster Revenue Projections ByteDance’s ambitions aren’t limited to Alibaba. The firm has also started to let users book hotels and restaurants through Douyin, offering lifestyle services similar to super-apps like Meituan and Tencent’s WeChat.Douyin’s e-commerce foray in China may offer a roadmap for TikTok, which has begun testing the waters in online shopping through tie-ups with WalMart Inc. and Canadian e-commerce firm Shopify Inc. Back in December, Zhang told global employees that e-commerce, when combined with live-streaming and short videos, offers an even bigger opportunity outside China, according to attendees who asked not to be identified. The company has also been quietly building a team of engineers in Singapore to grow TikTok’s nascent e-commerce operations.ByteDance’s push into online shopping comes as its other businesses face headwinds. To grow video gaming, ByteDance has been buying development studios but churning out blockbuster hits like Tencent Holdings Ltd.’s Honor of Kings could take years and China has previously cracked down on the industry in fits and starts. In online tutoring, regulators have sought to rein in excess marketing and competition is fierce against a slew of deep-pocketed startups like Alibaba-backed Zuoyebang.In April, Zhang’s firm was one of 34 corporations ordered by the antitrust watchdog to conduct internal investigations and rectify excesses. And though its payment service has only just gotten off the ground, ByteDance and its peers were slapped with wide-ranging restrictions on their fast-growing financial operations following a meeting with regulators including the central bank last month.But the same scrutiny could help the TikTok owner make inroads into China e-commerce, the largest online marketplace in the world. Alibaba has held off rivals JD.com and Pinduoduo Inc. over the past decade allegedly through practices like forcing merchants into exclusive arrangements. Regulators have since levied a record $2.8 billion fine on Jack Ma’s flagship firm and made eradicating “pick one from two” one of the main goals of its antitrust campaign, creating room for up-and-comers like ByteDance.For now, the biggest and most immediate boost from ByteDance’s expansion into e-commerce is in advertising revenue, which still accounts for the bulk of its earnings. As the number of merchants on Douyin increases, so has their marketing spending within the platform. The firm projects that e-commerce may surpass gaming to become the biggest contributor to ad sales. At rival Kuaishou, merchants contributed about 20%, the company said in March.“It’s more about getting greater share of advertising spending from brands that would otherwise be spending money on platforms like Alibaba,” said Michael Norris, a senior analyst with Shanghai-based market research firm AgencyChina. “This is where the threat to Alibaba comes from.(Adds details on potential listing venue in fifth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- China is shaping up to be the first real test of Big Tech’s ambitions in the world of carmaking, with giants from Huawei Technologies Co. to Baidu Inc. plowing almost $19 billion into electric and self-driving vehicle ventures widely seen as the future of transport.While Apple Inc. has long had plans for its own car and Alphabet Inc. has Waymo, its autonomous driving unit, the size -- and speed -- of the move by China’s tech titans puts them at the vanguard of that broader push. The lure is an industry that’s becoming increasingly high tech as it pivots away from the combustion engine, with sensors and operating systems making cars more like computers, and the prospect of autonomy re-envisioning how people use will them.As the world’s biggest market for new-energy cars, China is a key battlefield. Established automakers like Volkswagen AG and General Motors Co. are already slogging it out with local upstarts such as market darling Nio Inc. and Xpeng Inc. Over the past three months, Huawei, smartphone giant Xiaomi Corp., Baidu -- which runs China’s top search engine and a mapping app -- and even Apple’s Taiwanese manufacturing partner Foxconn have joined the fray, forging tie-ups and unveiling their own carmaking plans.Nowhere was that more on display than at last month’s Shanghai Auto Show, which has become one of the world’s premier events for showcasing the hottest new trends in the automotive sector. Visitors queued for hours to access the pavilions of Huawei and Baidu, thronging their displays and snapping pictures of sensor systems, high-tech dashboards and model vehicles. But despite the intense interest, the era of the new car is a hyper-competitive one in China, and tech giants have a lot to prove.“There’s a big element of faith in the tech companies’ bets,” said Stephen Dyer, managing director of consultancy AlixPartners in Shanghai and a former Ford Motor Co. executive. “This is a matter of creating something new that doesn’t exist now. That’s where the element of faith comes into play.”Huawei has been at the fore, recently announcing plans to invest $1 billion in EVs and its own self-driving technology, which it claims has “already surpassed” electric car pioneer Tesla Inc. in some aspects.The Shenzhen-based company, better known for its mobile-phone networks and being the subject of crippling U.S. sanctions, has unveiled its first car developed with BAIC BluePark Mew Energy Technology Co. The mid-sized Arcfox S sedan uses HI, or Huawei Inside, an intelligent automotive software package that enables it to run on autonomous driving mode in city areas for more than 1,000 kilometers (620 miles) without human intervention. Delivery is slated to start in the fourth quarter.Huawei’s auto show display attracted larger crowds than nearby China Evergrande New Energy Vehicle Group Ltd., an EV upstart that took one of the biggest stands to showcase nine models despite the fact it hasn’t sold a car under its own brand. As well as the Arcfox S sedan, a Seres SF5 coupe equipped with Huawei Inside was on display, along with Huawei’s HiFin Intelligent Antenna Solution, a new generation in-vehicle communication system plus 4D-imaging radar that’s used to monitor roads and traffic.One of the biggest challenges for new entrants to the automotive sector is how capital and resource intensive it is to make cars. How tech companies negotiate that will be key, and potentially provide opportunities for established players in the sector, with Huawei repeatedly saying its plan is not to produce its own vehicles. Rather, it’s partnering with three Chinese automakers -- BAIC Motor Corp., Chongqing Changan Automobile Co., and Guangzhou Automobile Group Co. -- to make self-driving cars that will carry its name as a sub-brand.Guangzhou Auto will jointly build a “truly unmanned car” that will be produced in 2024, President Feng Xingya said last month. The carmaker will also cooperate with Huawei on big data, smart cockpits, and hardware and electronic chips, Feng said.“China adds 30 million cars each year and the number is growing,” Huawei Deputy Chairman Eric Xu said in April. “Even if we don’t tap the market outside of China, if we can earn an average 10,000 yuan ($1,550) from each car sold in China, that’s already a very big business.”Apple appears to be considering a similar route, talking at one point with carmakers including Hyundai Motor Co. before discussions fizzled. Unlike China’s tech giants, Apple is keeping its plans largely secret. The company lost a key manager overseeing its self-driving car program in February and it’s unclear what impact that may have had on Apple’s progress on delivering a commercially viable car.The rise of smart vehicles and autonomous driving throws up a raft of possibilities for tech companies, not least access to data such as real-time insight into popular destinations and the routes taken to get there. On top of that, for some there’s the opportunity to charge for tech add-ons and system improvements, essentially treating the vehicle like a piece of computer hardware that constantly gets its software updated.“They will definitely focus on being intelligent,” said Yale Zhang, managing director of Shanghai-based consultancy Autoforesight Co. “Making a good electrified car is a ‘pass,’ while making a good intelligent car will make an ‘A-grade.’ That’s what these tech giants are good at. Their main revenue will not be from selling the car but finding other ways to earn post-sale, such as over-the-air system upgrades or software subscriptions.”Big Tech in China Is Eyeing EVs for a Reason: Hyperdrive DailyFirst MoversBaidu -- which started investing in robo-taxi technology as early as 2013 and funded Chinese EV startup WM Motors -- now plans to spend $7.7 billion over the next five years developing smart-car technology via its newly established unit Jidu Auto. The division aims to launch its first model in three years, followed by new releases every 12 to 18 months, Chief Executive Officer Xia Yiping said.“The core value of cars in the future will be how intelligent they are,” Xia said, echoing a familiar refrain. “The earlier a company plans, the more control of self-developed technologies it gains, the more advanced technology it has, the more power it will own in the market.”Jidu has a core team of about 100 staff, and will expand to as many as 3,000 personnel by the end of next year, including up to 500 software engineers, he said. The first batch of cars will be based on Zhejiang Geely Holding Group Co.’s pure EV manufacturing structure, while Jidu will collaborate with Baidu’s autonomous-driving unit Apollo, with a special focus on smart cars and the mass production of autonomous driving features. The unit will embark on its next fundraising round soon, with further investment expected from Baidu and external investors.Chinese smartphone maker Xiaomi has also announced plans to invest about $10 billion over the next decade to manufacture electric cars, though hasn’t disclosed much detail or given a timeframe for deliveries. Billionaire co-founder Lei Jun in March announced his intention to lead a new standalone division and spearhead the drive into EVs, in what he called his final major startup endeavor.“We have deep pockets for this project,” Lei, who is also Xiaomi’s chief executive officer, said when unveiling the plan. “I’m fully aware of the risks of the car-making industry. I’m also aware the project will take at least three-to-five years with tens of billions of investment.”While China’s tech giants may be late to the game and entering unfamiliar territory, that could play to their advantage, said Dyer of AlixPartners.“This isn’t an industry where you have to be the first-mover to win,” he said. “In fact, in the auto industry, the first mover typically never wins. It’s always the follower who wins. Because when you are the first mover, you’re the one paying to learn through all the mistakes.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Navitas Semiconductor, a maker of power chips, has agreed to go public through a merger with Live Oak Acquisition Corp. II, a blank-check firm, according to a person with knowledge of the matter.The transaction, which could be announced as soon as this week, is set to value the combined entity at about $1 billion, said the person. That includes a so-called private investment in public equity, or PIPE, of about $145 million, the person said.A Live Oak representative declined to comment. A Navitas representative didn’t immediately respond to a request for comment.Live Oak raised $253 million in a December initial public offering. The SPAC is led by CEO Richard J. Hendrix.El Segundo, California-based Navitas, led by CEO Gene Sheridan, works with customers including Lenovo Group Ltd., LG Electronics Inc., Dell Technologies Inc. and Xiaomi Corp., its website shows. Its technology is used in mobile chargers, flat-screen televisions and data centers. Navitas specializes in gallium nitride, or GaN, semiconductor technology which it says runs up to 20 times faster than silicon, enabling more power and speedier charging.(Updates with technology, Xiaomi in fifth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.