|Bid||8.950 x 0|
|Ask||8.960 x 0|
|Day's Range||8.810 - 9.000|
|52 Week Range||8.370 - 18.960|
|Beta (3Y Monthly)||N/A|
|PE Ratio (TTM)||N/A|
|Earnings Date||Aug 20, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||17.65|
Aug.20 -- Eric Wen, founder and chief executive officer at Blue Lotus Capital Advisors, discusses Xiaomi’s 2Q earnings and where he sees the company heading. He speaks on “Bloomberg Daybreak: Asia.”
Aug.20 -- Xiaomi Corp.’s profit missed estimates after a slowing Chinese economy depressed smartphone demand and curbed efforts to sell more online services from games to music. Bloomberg's Selina Wang has the story.
JAKARTA/MUMBAI (Reuters) - China's Xiaomi is poised to launch a consumer lending business in India in the coming weeks, making an ambitious tilt at the booming financial services market where data privacy concerns and fierce competition present formidable challenges. Xiaomi is betting it can leverage its number one position in India's smartphone market to tap into the country's lucrative but crowded financial services sector.
(Bloomberg) -- Twitter Inc. removed hundreds of accounts linked to the Chinese government this week meant to undermine the legitimacy of Hong Kong protests. It also said it would no longer allow state media to purchase ads on its platform.What Twitter didn’t mention in its series of blog posts this week was the increasing number of Chinese officials, diplomats, media, and government agencies using the social media service to push Beijing’s political agenda abroad. Twitter employees actually help some of these people get their messages across, a practice that hasn’t been previously reported. The company provides certain officials with support, like verifying their accounts and training them on how to amplify messages, including with the use of hashtags.This is despite a ban on Twitter in China, which means most people on the mainland can’t use the service or see opposing views from abroad. Still, in the last few days, an account belonging to the Chinese ambassador to Panama took to Twitter to share videos painting Hong Kong protesters as vigilantes. He also responded to Panamanian users’ tweets about the demonstrations, which began in opposition to a bill allowing extraditions to China.China’s ambassador to the U.S. tweeted that “radical protesters” were eroding the rule of law embraced by the silentmajority of Hong Kongers. The Chinese Mission to the United Nations’ Twitter account asked protesters to “stop the violence, for a better Hong Kong,” while social media accounts of Chinese embassies in Manila, India and the Maldives shared articles from China’s state media blaming Westerners for disrupting the city. “Separatists in Hong Kong kept in close contact with foreign elements,” one story says above a photo of U.S. Vice President Mike Pence.“We know China is adept at controlling domestic information, but now they are trying to use Western platforms like Twitter to control the narrative on the international stage,” said Jacob Wallis, a senior analyst at the Australian Strategic Policy Institute’s International Cyber Policy Centre.It’s unclear if any of these diplomats were set up on the service by Twitter, but the state-backed attempt to discredit Hong Kong protesters continues to reach millions of global Twitter users. In many cases, the Chinese officials are promoting views similar to those in 936 accounts Twitter banned on Monday.The practice of supporting Chinese officials who use Twitter to spread the Communist Party agenda highlights how difficult it is for the social media company to balance its commitment to root out disinformation and allow the expression of varying opinions. It also raises concerns around why Twitter is helping Beijing make its case to a global audience when the service is banned in China, where dissenting voices are prohibited and officials sometimes detain users accessing the platform through virtual private networks.Twitter’s recent effort to curtail China’s government-directed misinformation campaigns, which provoked outrage from state media, seems at odds with continuing to welcome pro-Beijing accounts that attack Hong Kong protesters, said Wallis.“There’s a clear tension for Twitter here having seen that Beijing is willing to use the platform in deceptive and manipulative ways, whilst desiring to use the platform for state diplomacy,” Wallis said.The tweets are part of a broader campaign by China to reshape the narrative over Hong Kong, particularly in Western nations more sympathetic to the democratic aspirations of protesters. China this week also sent a 43-page letter to senior editors at foreign news outlets, including the Wall Street Journal, Reuters and Bloomberg.Twitter says it works with public officials and politicians around the world, not just in China, and that everyone deserves a voice in the public discourse, as long as they follow its rules and policies. The company has used the same argument to defend hosting tweets by U.S. President Donald Trump, which some users have questioned. Twitter has said it aims to “advance global, public conversation” and that public figures “play a critical role in that conversation because of their out-sized impact on our society,“ in a blog post last year.On Monday, Twitter said in a blog post that it would block more than 900 accounts because they appeared to be part of a “coordinated state-backed operation” to “sow political discord in Hong Kong.” Some of the accounts accessed Twitter from unblocked IP addresses within mainland China, it said, suggesting the state condoned their activities. Twitter also said it would stop accepting advertising from state-controlled media: “Any affected accounts will be free to continue to use Twitter to engage in public conversation, just not our advertising products.”Twitter’s embrace of Chinese officials on the platform also highlights how some American tech companies try to make inroads in the enormous market, despite government restrictions on their services. Facebook Inc. founder Mark Zuckerberg, for example, has repeatedly expressed a desire to enter China. Twitter oversees the China business from offices in Hong Kong and Singapore.Like Google, Facebook and other sites blocked in China, Twitter sells advertising to Chinese companies like Huawei Technologies Co. and Xiaomi Corp. that are trying to reach overseas users. Before Twitter’s policy change this week, it had also sold ad space to Chinese state media companies that used them to push the narrative that Hong Kong protests were orchestrated by foreign forces and angry mobs unrepresentative of the city’s majority.Facebook said it has trained Chinese state media entities to use its services, but declined to comment on whether it also works with government officials. “We provide a standard set of guidance and best practice training to groups around the world including governments, political parties, media outlets, and non-profits so they can manage their Facebook Pages,” the company said in a statement, noting that their guidance is publicly available online.YouTube, part of Alphabet Inc., doesn’t have a specific policy that bars state-funded media, but the company’s ad policies require government-funded channels to be labeled as such. This week, state media including the Global Times published videos about the Hong Kong demonstrations, including an interview with a police officer who said he was “critically injured by violent protesters.” The company didn’t immediately respond to requests for comment on the matter.Both Twitter and Facebook have established programs to make sure public figures around the world sign up for their sites and understand how to use them effectively. The idea is that people who have a following — athletes, actors or singers — will create interest for their other users in the website. For years, the work has extended to politics, with the social networks signing up and training political figures. For example, Facebook has embedded staff with or trained Trump; Philippines President Rodrigo Duterte, known for encouraging extrajudicial killings; and Germany’s anti-immigrant Alternative for Germany party (AfD) in how to most effectively use the platform, Bloomberg News has reported.Twitter and Facebook have implemented terms of service that ban certain practices, including bot accounts that appear to be real people and promote misinformation. But government officials and state media still have wide latitude to say what they want.“If Trump is going to use Twitter to deliver his message to the Chinese government, then it makes perfect sense China should be using this medium to send signals back,” said Samm Sacks, cybersecurity policy and China digital economy fellow at think tank New America. “But then we get into this coordinated state misinformation domain and it raises problematic questions around what is propaganda and what is misinformation.”(Updates with Facebook’s comment five paragraphs from the bottom.)\--With assistance from Mark Bergen, Kurt Wagner and Daniel Ten Kate.To contact the reporters on this story: Shelly Banjo in Hong Kong at email@example.com;Sarah Frier in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
As Xiaomi Corporation (HKG:1810) released its earnings announcement on 30 June 2019, analyst consensus outlook appear...
Google has found a committed Android One partner in Xiaomi . The Chinese electronics giant today launched in India the Mi A3 (its third Android One smartphone in recent years) as the company looks to expand its handset offering in its most important market. The Mi A3 features mid to high-end hardware modules and follows Xiaomi's tradition of punching above its price class.
(Bloomberg Opinion) -- Investors have been looking for reasons to forgive Xiaomi Corp. for its post-IPO slump. They don’t appear to have found them yet.Shares of the Chinese smartphone maker reversed a 2.1% gain to plunge as much as 5.5% in Hong Kong on Wednesday morning after the company posted second-quarter earnings. They’ve dropped 47% since the July 2018 listing. The stock had rallied 7% in three days before the announcement, spurring hopes that a bottom had been reached. That’s in doubt again.Xiaomi’s press release shows the gap in perceptions between the company and investors. Beijing-based Xiaomi proclaimed a “consensus-beating performance,” saying that adjusted net profit exceeded estimates for the first half and second quarter. That jars with the report from Bloomberg News, which said that net income of 1.96 billion yuan ($278 million) fell short of the average analyst estimate of 2.6 billion yuan. Adjusted versus non-adjusted numbers explain the discrepancy. But the broader point is that Xiaomi is convincing itself that all is good by picking data that suit its thesis, while investors shake their heads in disagreement.At the heart of the matter is Xiaomi’s business model. Since its IPO roadshow, the company has proudly boasted that it doesn’t make much profit from smartphones, instead using its base of millions of handsets with Xiaomi software installed to deliver ads and other services that provide more lucrative sources of revenue.I didn’t buy into that thesis, and since the stock’s trading debut, investors haven’t either. They want to believe in Xiaomi. But that’s difficult when the company consistently fails to deliver.The second-quarter numbers further undercut management’s long-term services strategy. Despite more people holding a Xiaomi phone in their hands, advertising revenue actually fell. Monthly active users of its MIUI interface – which is built over the underlying Android operating system – climbed 34.7% to 278.7 million in the 12 months through June 30. Ad revenue dropped 0.6% to 2.5 billion yuan. In other words, ad revenue per user is sliding. Overall internet services revenue – which includes ads and games – climbed 15.7%, again underperforming the expansion in user base.Where investors are finding good news is in the “not-for-profit” smartphone segment. The gross profit margin on handsets climbed to 8.1%, the highest in almost two years. That’s curious, given founder Lei Jun’s insistence that they won’t be a money-maker for Xiaomi. (Before the IPO, Lei pledged to limit the net margin on hardware sales to a maximum of 5% in a sign of its commitment to building a service-based business.)The reason is deceptively simple. Sales of high-end smartphones are looking strong, an indication that consumers are willing and able to pay a premium for good quality devices. Xiaomi doesn’t need to talk down to its customers by saying it will sacrifice handset profits to ensure they get a good price. Xiaomi can also stop talking down to investors by insisting that smartphone profits don’t matter. The second-quarter results show that making money on handsets isn’t incompatible with an increasing user base and happy fans.The sooner Xiaomi management admits it was wrong and embraces hardware profits, the sooner the shares are likely to recover. To contact the author of this story: Tim Culpan at firstname.lastname@example.orgTo contact the editor responsible for this story: Matthew Brooker at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Stock Code: 1810), an internet company with smartphones and smart hardware connected by an Internet of Things ("IoT") platform at its core, today announced its unaudited consolidated results for the second quarter and the six months ended 30 June 2019 ("1H2019" or "the Period"). In 1H2019, Xiaomi reported a consensus-beating performance, underpinned by its "Smartphone + AIoT" dual-engine strategy that offers operational efficiency and enhanced risk resilience.
Chinese smartphone maker Xiaomi Corp posted its slowest revenue growth as a public company, missing analysts' estimates, as it lost market share to Huawei and customers held on to their phones before a 5G refresh. Xiaomi's stock, which has nearly halved from its IPO price, was down 6% in afternoon trading on Wednesday. China's smartphone market, the world's largest, is shrinking but consumers there are rallying in support of Huawei as it battles U.S. trade restrictions.
(Bloomberg) -- Huawei Technologies Co.’s three biggest Chinese rivals, normally vicious competitors, have agreed to a rare alliance in developing smartphone technology as Huawei widens its lead in the Chinese smartphone market.Xiaomi Corp., Oppo and Vivo will introduce a protocol that allows wireless file transfers between the three brands’ phones without a third-party app. A beta version of the feature, similar to Apple Inc.’s AirDrop, will be available soon, according to press releases from Oppo and Xiaomi. Vivo also confirmed the tie-up via a Weibo post from its official account.“As top-tier brands, the file-transfer function will create a scale effect thanks to the huge user base,” Oppo said in its press release. The three companies welcomed other Android phone vendors to their partnership, it added.The united front comes at a time when Huawei has grown its China phone market share to 37%, according to second-quarter figures from research firm IDC. Vivo, Oppo and Xiaomi, the closest competitors, all lost market share in the quarter as total demand in China shrunk ahead of 5G network and device launches. Shenzhen-based Huawei is aiming for a 50% share by the end of this year, Bloomberg News reported earlier.Oppo and Vivo both track their histories to reclusive Chinese billionaire Duan Yongping, and waged a bitter battle against then-No.1 vendor Xiaomi in 2014 and 2015. The sister brands — Oppo’s supposed to be about great photography and Vivo’s founding was about being the best at audio — aggressively expanded their business in the vast rural areas of China with handsome incentives to private electronic shop owners. Their resulting growth in the rural market prompted Xiaomi co-founder Lei Jun to visit local stores in the villages of Henan province to investigate the popularity for himself. Xiaomi then stepped up marketing in lower-tiered Chinese cities in mid-2017, about a year before its high-profile public offering in Hong Kong.To contact Bloomberg News staff for this story: Gao Yuan in Beijing at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Vlad SavovFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Warren Buffett famously said, 'Volatility is far from synonymous with risk.' When we think about how risky a company...
(Bloomberg Opinion) -- It’s time for Chinese internet executives to embrace the slowdown.Heady days of 50% sales growth are over, which means they needn’t keep burning marketing money to chase revenue that isn’t there. Part of this slowdown is due to both Chinese and global economic weakness, yet much of it was the inevitable conclusion to a long and lucrative boom in the world’s hottest industry. The sooner management accepts this new reality, the sooner they can start delivering stable earnings growth. Investors have already shown impatience. The CSI Global China Internet index – a collection of 30 companies that includes Alibaba Group Holding Ltd. and Tencent Holdings Ltd. as well as lesser-known Mango Excellent Media Co. – has dropped 22% over the past year. By contrast, the Dow Jones Internet Composite Index, which tracks the likes of Amazon.com Inc. and Snap Inc., is off just 2%. A quick look at revenue for these Chinese companies tells the tale. As recently as a year ago, top-line growth surpassed 50% across the industry, spurred by massive rises at Alibaba and Xiaomi Corp. On a more balanced basis, the median growth rate was 10 to 15 basis points slower, which is still significant.And yet operating income fell far behind, dropping into a decline on a weighted basis with median growth rates in the single digits. I’ve warned about this disconnect between revenue growth and profits. The problem has been that management, and investors, became so obsessed with the top line that they lost sight of the bottom. Which is why companies spent big on marketing to ensure revenue numbers kept hitting those heady heights.The result was a negative correlation between revenue growth and operating income expansion. That’s not the way it should be. Companies should reap the rewards for selling more of their wares, not suffer for it.Now there are signs that this obsession with growth may be coming to an end. After more than a year of using marketing dollars to juice revenue, some of the more savvy management teams have reined in spending. They’re pragmatic enough to recognize that in this new, more sedate era there’s a limit to how much they can gain from chasing users.We’re in the early phases of the June-quarter earnings season, but there are already encouraging signs. NetEase Inc., the online games and content company, cut its sales and marketing budget by 22% after reducing it by 32% the prior quarter. The result is that while revenue climbed only 15%, operating profit expanded 49%. The stock was rewarded with a 13% rise over the following two days.China Literature Ltd., a provider of e-books and online publishing, by contrast reaped little reward from an 85% increase in marketing expenses for the first half, posting revenue growth of just 30% and a 15% drop in operating income. The company showed weakness in its paid-reading business while its free model has yet to be fully monetized, analyst Wei Ming of China International Capital Corp. wrote Tuesday, noting that the company faces continuing regulatory headwinds. Investors saw the folly in spending big on marketing when there are limits to driving revenue, sending the stock down as much as 19% in Hong Kong.Both Alibaba and Tencent will report earnings in coming days. Investors have come to understand that revenue growth isn’t what it used to be. If management embraces this new normal, then shares may enjoy the rewards of fiscal discipline. To contact the author of this story: Tim Culpan at firstname.lastname@example.orgTo contact the editor responsible for this story: Patrick McDowell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Xiaomi has now been India's top smartphone seller for eight straight quarters. The company has become a constant headache for Samsung in the world's second largest smartphone market as sales have slowed pretty much everywhere else in the world. Its closest rival, Samsung -- which once held the top spot in India -- shipped 9.3 million handsets in the nation during the same period, settling for a 25.3% market share.
According to a Canalys report, Apple’s (AAPL) iPhone market share has taken a hit in Europe. Canalys estimated iPhone shipments of 6.4 million units.
(Bloomberg Opinion) -- Lyft Inc.’s rocky road as a public company should be a warning for other highfliers hoping to hit it off with stock investors. It is ugly out there for the elite startup superstars. Lyft said in its second-quarter earnings report on Wednesday that the rate of revenue growth slowed less than it had forecast and that losses weren’t as bad as investors expected. Still, even the company’s slightly raised forecast for 2019 revenue growth of as much as 62% would represent a comedown from last year, when Lyft’s revenue was doubling or more year-over-year. Both Lyft and rival Uber Technologies Inc. are posting slowing growth at the same time they’re telling investors that they’re just barely scratching the surface of their potential. Lyft shares were initially higher in after-hours trading following the release of the earnings report but then retreated.(1)Questions about Lyft’s slowing growth, high losses and the general viability of on-demand transportation have pushed its share price far below the $72 at which the company sold stock in its initial public offering in March. Shares of Uber have also been underwater since its IPO. And those two are far from alone in their misery.For all the hype about the post-2008 class of high-profile, highly valued and highly disruptive technology startups, many of the biggest “unicorns” that have gone public so far have been stinking up public stock markets like a skunk waddling into a picnic. In addition to the decline in shares of Uber and Lyft, the prices for Snapchat, Dropbox Inc., Spotify Technology SA and China’s Xiaomi Corp. and Meituan Dianping are also below their IPO levels. For many of the top tier of richly valued young technology companies, the early message from public investors has been clear: If the company’s business model is a string of question marks and there are few public precedents and high losses, stock buyers are not greeting them with open arms. The lackluster performance of the unicorn elites isn’t a great setup for WeWork Cos., Postmates Inc., Didi Chuxing Inc. and others in the crop of still-private startup elite edging to go public soon, with even-bigger-than-Uber-sized doubts about their viability and wild valuations. Many more richly valued startups remain private, so it’s too soon to call the elite unicorn crop a success or failure. But if the top-flight startups are being greeted with skepticism in the midst of an unprecedented decade-long bull market for U.S. stocks, what happens when and if market conditions deteriorate? There are notable exceptions to the public investor shunning of unicorns. Investors are crazy in love with young tech companies that sell software or other products to businesses.(2) The tier of tech startups below the richly valued elites such as Uber — think Zoom Video and Stitch Fix Inc. — have typically fared better than many of the superstars. Pinterest Inc., the online scrapbook, has a familiar advertising-based business model, seems to be managing itself well and has a share price that reflects hopes rather than fears. (A familiar business model hasn’t helped the less competently managed Snap Inc. Even after a wild run-up this year, Snap shares are trading below the price at which the company went public in early 2017.) Even with the declines, there probably aren’t many regrets among the early backers of the elite unicorns. Investors who bought shares of companies such as Lyft and Snap early in their lives have made a fortune. Even stock buyers who bought at significantly higher prices soon before the IPO may feel fine about the investments because they were adding to stakes built earlier or they were making relatively small starter investments for giant investment funds.(3)This underscores why the last decade of startup investing has been so odd. It has been economically rational for investors to pour money into young companies and prod them to grow as big and fast as possible. Even when those startups aren’t home runs if they become public companies, those early backers have done fine, or far more than fine. There are few losers, then. The early backers of elite startups are in the black. Buyers of public stocks can shun the young companies if they are too speculative once they go public. It’s all good — except for the startups themselves, perhaps. They are the ones under the most pressure to figure out how to thrive far into the future. (1) Investors seemed a bit spooked by the company's early end to restrictions on insiders to sell Lyft stock. The company's shares are heavily shorted, which tends to exacerbate stock movements.(2) Slack Technologies Inc. may be trading below its first stock sale in its non-IPO earlier this year, but it has generally been greeted warmly and its stock trades at a rich multiple.(3) Some of the unicorns are still underwater compared with share sales from years ago. Dropbox's per-share price now is lower than private purchase of company shares from 2014. Uber's stock is about even with the the level of 2015 share sales. Snap stock price isn't much higher than private share transactions two and a half years ago.To contact the author of this story: Shira Ovide at firstname.lastname@example.orgTo contact the editor responsible for this story: Daniel Niemi at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shira Ovide is a Bloomberg Opinion columnist covering technology. She previously was a reporter for the Wall Street Journal.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Samsung Electronics Co. scored a victory over Sony Corp. after a major Chinese customer declared it was going with the Korean company’s camera sensors in future smartphones.On Wednesday, Xiaomi Corp. said it will turn to Samsung for a future line of its mainstream Redmi smartphones with an impressive 64-megapixel camera. That’s part of a strategic alliance under which the two companies will collaborate on developing next-generation camera technology, Xiaomi co-founder Lin Bin told reporters in Beijing.Until now, the smartphone brand had relied mainly on global leader Sony for the sensors that power its digital cameras, though it does also buy some from Samsung as well. While it’s unclear how much business Xiaomi’s decision would translate into, the move is an encouraging sign of competition for a mobile imaging sensor market that Sony has dominated in recent years. And it’s a way for Samsung -- whose smartphone sales have all but evaporated in China -- to tap the world’s biggest mobile arena by selling components instead of devices.The new tie-up adds an intriguing competitor for budget devices. Xiaomi and its partner are working on technology capable of capturing images as large as 108 megapixels, Lin told a news briefing. This is typically done by using software to stitch together multiple exposures, and there’s as yet no mobile camera sensor with such an extreme resolution. The technology will be deployed across Xiaomi phones “soon enough,” Lin added.Current top-tier Xiaomi devices, such as the Mix 3 and Mi 9, are equipped with multiple cameras with up to 48 megapixels of resolution, serviced primarily by Sony technology.To contact Bloomberg News staff for this story: Gao Yuan in Beijing at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Vlad SavovFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Chinese authorities proposed rule changes that would for the first time allow local investors to buy shares of some popular technology companies listed in Hong Kong -- including, potentially, Alibaba Group Holding Ltd.The country’s stock exchanges on Friday published draft regulations that would bring stocks with different classes of voting rights into the trading links between the mainland and the former British colony, giving onshore traders access to some of China’s hottest startups.Xiaomi Corp. and Meituan Dianping went public in Hong Kong last year, the first major tech firms to use new rules permitting weighted-voting rights, also known as dual-class shares, on the city’s bourse. Alibaba, which uses the structure and is listed in New York, is said to be readying a Hong Kong listing under the new regulations, which could raise as much as $20 billion.China’s authorities have been trying to find ways to keep the country’s tech companies at home, and last year worked on plans for depositary receipts, which were designed to let dual-class shares, not permitted on its major exchanges, trade onshore. A new trading venue, the Star market, allows the structure, though only smaller companies have so far gone public.Hong Kong Exchanges & Clearing Ltd.’s years-long push for weighted-voting rights, which are often used by tech founders to keep control of their companies even after going public, was in part premised on China-based technology firms choosing Hong Kong over the U.S. because Chinese onshore investors would easily be able to invest via the stock connect. But mainland authorities said in July 2018 that dual-class shares wouldn’t be allowed in the system, a decision that caused Xiaomi’s shares to slump.In December, the Shanghai, Shenzhen and Hong Kong exchanges said they had agreed on a “detailed arrangement” for including shares with unequal voting rights into the connect, without providing more details. The new rules were expected to begin in mid-2019, the bourses said at the time.A change would likely boost HKEX, which stands to benefit from increased trading volume. The bourse operator currently generates about 5% of its revenue from the links with stock exchanges in Shanghai and Shenzhen.Southbound trading through the connect averaged HK$387 million ($49 million) a day over the past year, according to data compiled by Bloomberg. Over the same period, the daily average turnover for Xiaomi shares was HK$743 million, while Meituan’s stock averaged HK$888 million a day since its September debut.Under Friday’s draft proposal, companies would need to meet the following criteria to be included in the stock connect:Average daily market value of at least HK$20 billion ($2.56 billion) for just over six monthsAt least HK$6 billion in total transaction value for just over six monthsBe listed in Hong Kong for at least six months and 20 trading daysThe public comment period for the plans ends on Aug. 9.(Updates with turnover data in eighth paragraph.)\--With assistance from Amanda Wang and Ludi Wang.To contact Bloomberg News staff for this story: Evelyn Yu in Shanghai at firstname.lastname@example.org;Lucille Liu in Beijing at email@example.comTo contact the editors responsible for this story: Sam Mamudi at firstname.lastname@example.org, Sharon ChenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Xiaomi, Meituan Dianping and other Hong Kong-listed companies with dual-class share structures are getting a step closer to being accessible to mainland Chinese traders.The Shanghai and Shenzhen stock exchanges on Friday began to seek public feedback on the idea of including companies with weighted-voting rights trading in the city in the stock connect programmes, they said in separate statements on their websites. Nasdaq-style Star Market must show it is more than a casinoThe move would allow mainland investors to trade shares in the likes of smartphone giant Xiaomi and online food-delivery operator Meituan through the southbound channel of the exchange links with Hong Kong. The terms of the plan was agreed earlier between the Shanghai and Shenzhen exchanges and the Hong Kong bourse, before the public consultation phase started.The Hong Kong exchange revised its listing rules in April last year, to allow companies in which founders and key managers enjoy stronger voting rights than other shareholders to list in the city for the first time. Among them were Xiaomi and Meituan, which raised a combined HK$106.8 billion (US$13.6 billion) from their initial public offerings.Still, the city's bourse is facing increasing competition from its mainland counterparts in wooing the listings of fast-growing companies from China. The Shanghai exchange launched the Science and Technology Innovation Board, or Star Market, last month, allowing unprofitable technology companies to go public for the first time. Twenty-five companies trade on the board now.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
(Bloomberg) -- Peter Thiel is a self-described contrarian. This philosophy worked well when he helped establish an online bank at a time few people trusted anything on the internet and more recently, with his bet on the ultimate long-shot presidential candidate, Donald Trump. Understanding where his latest gambit, a very public rebuke of the world’s second-largest economy, fits into this strategy is as complex as his belief system.In a pair of recent public appearances, Thiel diverged from virtually everyone in the global business community by stoking anti-China sentiment and goading the Trump administration to intensify the trade war. Thiel can take this position because, either by accident or by design, the Chinese economy is largely irrelevant to his business interests.Thiel’s network of venture capital and personal funds manages more than $7 billion and has bet on hundreds of startups. Of those, there are only three known investments in Chinese companies, according to a study by market research firm PitchBook commissioned by Bloomberg. The most recent was in a small Beijing-based biotech startup early this year. None of the companies appear to be thriving.Depending on how you look at it, Thiel’s new Chinese offensive is a bitter response to missing the investment opportunity of the decade or a brilliant long game that’s finally coming to a climax. His protectionist rhetoric, in which he accused Google of “seemingly treasonous” collaborations with the Chinese government, initially won plaudits from President Trump and could return benefits to his companies. A spokesman for Thiel declined to comment.Three of Thiel’s most promising investments—Elon Musk’s Space Exploration Technologies Corp., data mining company Palantir Technologies Inc. and border security provider Anduril Industries Inc.—rely heavily on U.S. contracts. Those deals have grown in size, and the companies now supply critical capabilities to the nation’s defense and military complex.Although federal contract approvals are supposed to be an objective process, emotional appeals and a sense of patriotism can have an effect, said Mike Hermus, a former technology chief for Homeland Security. “The people who make decisions are still human,” he said. “People can only compartmentalize so much.”Thiel didn’t always look on China with scorn. He once viewed it as an economic wonder and characterized its rise as “the most important political trend of the new millennium.” In a 2008 essay for Stanford University’s Hoover Institution, a public policy think tank, Thiel wrote: “There is no good scenario for the world in which China fails.” By 2014, his curiosity took on a dismissive tone. In his book Zero to One, he wrote that Chinese technologists simply copied ideas from the West.“There is no good scenario for the world in which China fails.”A persistent view Thiel has held is that China doesn’t make it easy for foreigners to buy a stake in the country’s prosperity. “I suspect we are underestimating China, but it may be very hard to invest,” he told economist Tyler Cowen in 2015. In the meantime, several of his peers found ways in. Yuri Milner’s DST Global and Sequoia Capital have been backing Chinese startups for a decade or more, with bets on the likes of Alibaba Group Holding Ltd., JD.com Inc. and Xiaomi Corp. that proved to be incredibly lucrative.Thiel’s picks, meanwhile, haven’t become household names on the mainland. He invested $180,000 a decade ago in a Shanghai market intelligence startup called Business Connect China, said a spokeswoman for his venture firm Founders Fund. (She disputed that Business Connect China is a Chinese company because it’s incorporated in the Cayman Islands.) According to PitchBook research, Thiel bought an undisclosed amount of stock in Beijing’s Genome Precision in 2016. And this year’s investment was in Immunochina, which has raised less than $30 million from a half-dozen backers including Thiel to develop cancer treatments.As recently as last year, Thiel was still contemplating how to break into China. He evaluated various options, including partnering with local venture firms, people familiar with the conversations said at the time. Those talks never progressed, some of those people now say. It’s essentially too late, said Helen Wong, a partner at Qiming Venture Partners. Today’s market is highly competitive and leaves little room for an outsider, she said: “China is one of the two largest tech ecosystems in the world.”The new contrarian strategy, it seems, is to turn a weak business record in China into an asset. By targeting Google with his unsubstantiated claim last month, Thiel suggested associations with Beijing should be a disqualifier for a U.S. contractor. Trump at first entertained the idea, promising in a tweet that the White House would look into Thiel’s claims of treason and calling him “a great and brilliant guy.” The sideshow appeared to temporarily take the heat off Facebook Inc., where Thiel is a board member. But Google denied the claims, and Treasury Secretary Steven Mnuchin said last week that they found no security concerns.Some in Thiel’s orbit said the venture capitalist’s concerns are authentic. “He’s a very patriotic guy,” said John Meyer, who received a grant from Thiel’s fellowship program to start a company in lieu of attending college. “If Google is building an AI office in Beijing and hiring a ton of AI engineers there, that means its working with the Chinese government in some way. He’s worried about that.”Thiel’s stance could also win him fans in Washington. The three major U.S. contractors in which he holds stakes have at times echoed Thiel’s message of American loyalty. They have a lot of money riding on federal spending.Just this year, SpaceX has won more than $350 million from the Air Force, Defense Department and NASA. Palantir, which counts Thiel as a founder and chairman, secured a contract worth more than $800 million from the Army in March and another in July from the Defense Department for $144 million.In the second agreement, which hasn’t been previously reported, Palantir will supply software to intelligence agencies and the Coast Guard over four years. This deal was particularly significant because it wasn’t open to competing bids and established Palantir as a “brand name” federal provider of defense technology, in the same league as Microsoft Corp. and Oracle Corp. The designation can set a precedent, said Meagan Metzger, who runs Washington-based Dcode accelerator, which consults with tech companies on federal contracting. “When you do a brand name contract of that size, you have to get a bunch of approvals up the chain,” she said. “That’s a huge award.”The newest addition to Thiel’s portfolio of government suppliers is digital surveillance company Anduril. Palmer Luckey, founder of the Facebook-owned virtual-reality headset Oculus, runs the business, which, like Palantir, takes its name from the lore of Thiel’s beloved childhood book series, the Lord of the Rings. Anduril is staffed by more than a dozen Palantir veterans and funded largely by Thiel’s Founders Fund.Anduril has gained significant traction inside the U.S. government in the two years since it started operating. The startup quietly took over the military’s Project Maven this year, according to a news report in the Intercept, after Google faced employee protests and abandoned the effort. Anduril also secured a $13.5 million contract with the U.S. Marine Corps to provide autonomous surveillance towers on the border and at military bases, according to documents surfaced in July by worker advocacy group Mijente.Thiel’s love of country is being embraced throughout his empire. One of the newest additions to the Founders Fund investing team, Delian Asparouhov, posted a photo July 17 to Twitter showing the office décor set to commemorate a visit from Luckey to discuss Anduril. An American flag was draped across a white board in the conference room, as he held a red, white and blue napkin emblazoned with the words, “USA all day.”To contact the author of this story: Lizette Chapman in San Francisco at email@example.comTo contact the editor responsible for this story: Mark Milian at firstname.lastname@example.org, Robin AjelloFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.