|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||46.00 - 46.32|
|52 Week Range||31.54 - 51.24|
|Beta (3Y Monthly)||1.27|
|PE Ratio (TTM)||34.12|
|Forward Dividend & Yield||0.26 (0.55%)|
|1y Target Est||56.40|
(Bloomberg Opinion) -- Since the U.K. decided more than three years ago to leave the European Union, the nation's savviest investors have succeeded by putting their money where Brexit matters least.Uncertainty about the date of Britain’s departure (now pushed back to Oct. 31) and the terms of the divorce has meant purging the U.K. from their holdings or limiting them to investments traditionally impervious to man-made and natural disasters. Over 38 months, British sterling depreciated 16 percent, the worst shrinkage for any similar period in 8 years. The pound remains the poorest performer in the actively-traded foreign exchange market and inferior to the No. 3 euro.Europe's strongest major economy in the 21st century became a shadow of its former self, reversing two decades preceding the June 23, 2016 referendum when the U.K. outperformed the European Union in growth and investment. London's stock and bond markets similarly languished as laggards to world benchmarks, after beating them consistently in the 20 years prior to the decision to leave the EU, according to data compiled by Bloomberg.“If I give myself some credit, I would say that we acted reasonably fast liquidating U.K. shares” in 2016, said Ben Rogoff, whose Polar Capital Technology Trust PLC has been the most consistent winner out of the 212 British global funds with at least 1 billion pounds this year and during the past three years. His team's 114 percent total return (income plus appreciation) was 22 percentage points better than the Dow Jones World Technology Index, mostly because 68% of the fund is invested in the U.S., two-thirds of that in California companies, according to data compiled by Bloomberg. “It's all about the Internet and where do you get exposed to the Internet? The U.S. and China,” Rogoff said last month during an interview at Bloomberg in London.While Rogoff reduced his holdings of three California tech powers during the past year — Cupertino-based Apple Inc., Menlo Park-based Facebook and Santa Clara-based Advanced Micro Devices — he acquired more shares in Hong Kong-based Tencent Holdings Ltd, Hangzhou-based Alibaba Group Holding Ltd, South Korea's Samsung Electronics Co. and Tokyo-based Yahoo Japan Corp., according to data compiled by Bloomberg.The 46-year-old graduate of St. Catherine's College, Oxford, became the lead manager of the trust in 2006, “and at that time,” he said, “the U.K. weighting might have been 5% to 10%, so if you had already been backing away to the door, it's a lot easier to escape than if you built a career around being an expert in U.K. equities.” Since the Brexit referendum, he said, “There's just been a complete buyers' strike of U.K. equities.”Proof of such disdain comes with the crisis this year at the LF Woodford Equity Income Fund, Britain's most-prized investment when it was launched by star money manager Neil Woodford in 2014. The celebrated stock picker became even more prominent with his contrarian bullish stance on Brexit. The fund plummeted 31% during the past two years by holding a combination of large and small U.K. companies and has frozen redemptions indefinitely.“It's symptomatic of a broader problem,” Bank of England Governor Mark Carney told reporters earlier this month. “Our sense is that the financial-stability risks are increasing.”One U.K. investor who’s successfully resisted the trend away from domestic stocks is Nick Train, who manages Finsbury Growth & Income Trust. It returned 61% the past three years — more than twice the FTSE All-Share Index benchmark — as the most consistent one- and three-year performer among the 129 U.K.-based funds investing mostly in domestic stocks or bonds, according to data compiled by Bloomberg. Unlike Woodford, who doubled down on the British economy writ large, Train, a 60-year-old graduate of Queen’s College, Oxford, dramatically increased his holdings in consumer staples. These are the companies that make such essentials as food, beverages and household goods and can resist business cycles because their products always are in demand.Train, who declined to be interviewed, increased the consumer staples weighting relative to the benchmark to 27% from 23% in 2015 and he enhanced his holdings of Deerfield, Illinois-based Mondelez International Inc., which manufactures and markets packaged food products, and London-based Diageo PLC, the world's largest producer of spirits and beer, according to data compiled by Bloomberg.That's likely to be a safe bet as no one is counting on the British economy rebounding significantly from near the bottom of the EU while the uncertainty created by Brexit persists. “If you take a long view, then this may well be a great time to be investing in U.K. equity,” said Rogoff. “Thankfully, I don't have to make that binary call because there are very few U.K. companies I'm frankly interested in.”\--With assistance from Shin Pei, Richard Dunsford-White, Kateryna Hrynchak and Suzy Waite.To contact the author of this story: Matthew A. Winkler at email@example.comTo contact the editor responsible for this story: Jonathan Landman at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Matthew A. Winkler is a Bloomberg Opinion columnist. He is the editor-in-chief emeritus of Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
China still has a lot of headroom to add more Internet and mobile payments users, as a recent report highlights.
Generation Z, born after the year 2000, has grown up in a world dominated by the cloud czars, where cynicism about technology motives and actions is pervasive, and where protecting your identity rather than publicizing it is the norm.Source: Shutterstock It's a vast new market that Snap (NASDAQ:SNAP) thinks it can win with new features and augmented reality.Wall Street has been buying this argument, and loving the growth, in 2019. Shares that traded at under $6 in January are now trading at over $15. The market cap is up to $21.1 billion and CEO Evan Spiegel, once considered Facebook (NASDAQ:FB) road kill, now has a net worth of $3.5 billion.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Dependable Dividend Stocks to Buy But the shares are still below their post-IPO high, below their February 2018 peak. Snap is still a minnow next to Facebook, let alone Chinese giants like Tencent Holdings (OTCMKTS:TCEHY). Does this move have legs? The Bull Case for SNAP StockSnap's growth is once again in overdrive. After bringing in $1.18 billion of 2018 revenue, the company brought in $320 million in the first quarter and is expected to report over $350 million for the June quarter on July 23, albeit with an 8 cent per share loss. If it can keep that up for the rest of the year, Snap could bring in $1.52 billion for all of 2019, a growth rate of nearly 29%.Snap is getting new respect from developers for Scan, an augmented reality platform that can be used to create .gifs on the fly, solve math problems from pictures, and become the heart of a new gaming system.Previous AR platforms lacked the community and daily use to interest Wall Street. Snap is also rolling out a new ad platform to monetize Scan. It says it is now used by 90% of 13-24 year-olds, which is more than Facebook reaches with either its main platform or Instagram.Snap's earlier features, like self-erasing messages, were quickly copied by Facebook. The hope is it can innovate its way away from the larger company. Goldman Sachs (NYSE:GS) recently put Snap back on its buy list. Analysts are also enjoying a new gender swap filter that can let users disguise themselves to friends. The Bear Case for SNAP StockThere can be a downside to anything.Stalkers could use the gender swap filter to cozy up to victims. The AR platform could also be misused. Snap is still focused on making money from advertising built on personal information, which is why many turned away from Facebook and even Alphabet's (NASDAQ:GOOGL, NASDAQ:GOOG) Google.Snap has gone from being cheap to being overvalued, cynics say, arguing bulls are getting ahead of themselves. They note that Twitter (NASDAQ:TWTR) generates three times Snap's revenue from a smaller user base. They say paying more than 10 times expected 2019 revenue for a money-losing company near the end of a recovery is, at best, speculative. Even some who are bullish on Snap are now suggesting option strategies to limit risk. The Bottom LineSnap is more than fully valued.If you're going to put money into it, you are going to have to watch that money closely. A negative earnings report, or a single bad headline, can still send Snap crashing to Earth.If you got into Snap at its lows, a hard fall still leaves you with an attractive acquisition target, at a price higher than what you paid. But even in that case, the take-out would not be at a premium to the current price.What you're left with is a trade, a speculation for young investors who might lose their stake but will at least learn a lesson from it. If you make this old man look foolish with your fat profits, you can buy me dinner.Dana Blankenhorn is a financial and technology journalist. He is the author of the mystery thriller, The Reluctant Detective Finds Her Family, available at the Amazon Kindle store. Write him at email@example.com or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this article. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Dependable Dividend Stocks to Buy * 10 Stocks Driving the Market to All-Time Highs (And Why) * 7 Short Squeeze Stocks With Big Upside Potential The post Snap Stock: The Youth Market is Back appeared first on InvestorPlace.
(Bloomberg) -- Netease Inc. is planning an initial public offering in the U.S. of its Youdao arm that could raise at least $300 million, people familiar with the matter said, propelling its expansion into a crowded online education arena.The company is working with Morgan Stanley and Citigroup Inc. on the share sale with a goal to list as early as in the third quarter, said the people, asking not to be identified as the information is private. A deal could value Youdao at about $2 billion, one of the people said. The firm could file confidentially as soon as in coming weeks, according to another person.Netease -- Tencent Holdings Ltd.’s closest competitor in the world’s biggest mobile gaming market -- is delving deeper into adjacent sectors from e-commerce to media content. Its Youdao arm, founded in 2006, explored several business models before settling on becoming an internet education platform about five years ago. It now offers everything from online dictionaries to math courses and prep classes for important certification-tests.The company completed its first round of financing in April last year at a post-money valuation of $1.12 billion, according to its website. Deliberations are at a preliminary stage and details of the share sale including fundraising size and timeline could still change, the people said. Representatives for Netease, Morgan Stanley and Citi declined to comment.Netease is trying to court investors during a volatile time for capital-raising, roiled by U.S.-Chinese trade tensions and worries about a global downturn. But it wants to grab a bigger slice of a market that’s projected to boom in coming years, and make headway against rivals from New Oriental Education & Technology Group to VIPKid and iTutorGroup. Online revenue from children at nurseries and students attending kindergartens up to high school, also known as the K-12 group, could rise 38% a year though 2022, Bloomberg Intelligence cites iResearch as saying.“Revenue contribution from online courses will likely increase for reputable tuition providers as more students from lower-tiered Chinese cities pay for access,” Bloomberg Intelligence analysts Catherine Lim and Sheng Tan Zhu wrote Monday. “New digital teaching technology may raise the learning efficiency of online students and increase their academic performance, fueling stronger demand.”\--With assistance from Zheping Huang.To contact the reporters on this story: Lulu Yilun Chen in Hong Kong at firstname.lastname@example.org;Crystal Tse in Hong Kong at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org;Fion Li at email@example.comFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
UBTech, a maker of humanoid robots backed by Chinese technology group Tencent, is readying an initial public offering in what would be a rare coup for China’s markets, which have struggled to attract large tech listings. It turned profitable last year, according to chief brand officer Michael Tam, and two months ago changed its corporate structure.
Can the former payments monopoly in China regain lost ground against the payment systems of Alibaba and Tencent?
Nio (NYSE:NIO) is on fire. Since late June, Nio stock has risen by close to 65%. This offers welcome relief to NIO shareholders who have seen little else but decline since the stock launched its IPO in 2018.Source: Shutterstock Still, despite the improved sentiment, production remains low, and losses continue to mount. The better-than-expected sales numbers may stoke optimism. However, the conditions that turned NIO into a penny stock remain in place. NIO Benefits From a Dramatic TurnaroundNio stock saw nothing but pain from March to June. A spike in the stock price took NIO briefly past the $10 per share mark in early March. However, a "greater than anticipated" slowdown cited in their earnings report took the Nio stock price down by more than 20% in a single day and more than 11.5% in the following trading session. From there, NIO saw a steady slide, falling to below $2.50 per share by last June.InvestorPlace - Stock Market News, Stock Advice & Trading TipsOver the last two weeks, sentiment has shifted dramatically. The latest surge in the stock came when the company reported a "greater than anticipated" number of deliveries. As a result, the stock has risen substantially from the $2.50 per share range where it traded in late June. Now, with the Nio stock price hovering close to $4 per share, many wonder if now is the time to buy NIO.In fairness, some optimism has returned to the market. Its much larger American counterpart Tesla (NASDAQ:TSLA) has risen by more than 30% since early June. The China Passenger Car Association also reported a 4.9% increase in sales. This is the first such increase in about one year. The Rally in Nio Stock Is Unlikely to HoldHowever, none of this changes the fact that analysts project nothing but losses for the foreseeable future. Yes, I did not see the surge in Nio stock coming recently. However, I predicted NIO would tread water, but little else. I stand by that sentiment.For one, it remains a small player. Our own Tezcan Gecgil points out that Chinese companies produced 254,000 electric vehicles (EVs) in the first quarter of 2019. Nio produced just under 4,000 of those cars.Gecgil makes good points that may ensure its survival. The company has backing from the likes of Baidu (NASDAQ:BIDU) and Tencent (OTCMKTS:TCEHY). It also remains true that pollution guidelines in places such as Beijing and Shanghai make it challenging to obtain licensing for non-electric vehicles.However, judging by the company's financial statements, that survival could come at a high cost to holders of Nio stock. Nio lost just over ¥2.65 billion renminbi ($390 million) in the previous quarter alone. Its ¥7.45 billion renminbi ($1.08 billion) in cash will not last long at that rate. Moreover, with ¥9.25 billion renminbi ($1.35 billion) in short and long-term debt, they have little room left to borrow.Hence, its backers will probably want more stock in return for funding. While the increased stock price helps with fundraising, the stock dilution will hurt current shareholders. The Bottom Line on Nio StockDespite the optimism surrounding Nio stock, Nio remains a troubled company struggling to survive. Indeed, improved sales bode well for the company. The suffocating pollution in China's large cities also helps drive sales in the EV industry.However, despite a slight uptick in sales, Nio stock will likely post losses for years to come. Moreover, with cash levels likely to fall, and debt burdens becoming increasingly heavy, the company will probably have to issue more stock to stay in business.Given the push for cleaner energy, EVs are likely here to stay. However, to earn investment returns in this industry, established car companies and even Tesla stock offer safer options. With better choices out there, and the risk that the latest move amounts to a dead cat bounce, I see no reason to buy Nio stock.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell for an Economic Slowdown * 7 Marijuana Penny Stocks That I May Buy * 7 of The Best Schwab ETFs for Low Fees The post Investors Should Not Expect Nio Stock to Keep Cruising Higher appeared first on InvestorPlace.
In China, the uncertainty around trade and dynamics with the U.S. adds to challenges that private-sector companies have been feeling since early 2018.
Since reaching nearly $200 in early May, Alibaba (NYSE:BABA) stock has come under pressure. But over the past few weeks, Alibaba stock has seen notable improvement.Source: Shutterstock The reason: There was a relaxation of tensions in the trade war between the U.S. and China. President Trump agreed to hold off on any new tariffs and he loosened restrictions on selling technology to Chinese powerhouse, Huawei.So there was good reason for a rally. In fact, for the year so far, the BABA stock price has risen about 24%. This is actually in-line with the kinds of returns for the past few years.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut of course, the main question now is: What's in store for Alibaba stock going forward? Well, besides the improvement with the trade situation, there are other major catalysts that should help with BABA stock. So let's take a look at three: China Ecommerce PowerhouseAs seen with Amazon (NASDAQ:AMZN) in the U.S., the dominance of the ecommerce market is a mega advantage. It allows for the collection of massive amounts of data and provides a platform for launching new services. * 7 of The Best Schwab ETFs for Low Fees And yes, when it comes to BABA, the company is essentially the Amazon of China … but with a much more profitable model. The company operates a high-margin digital marketplace that connects buyers and sellers.Keep in mind that the scale is enormous, dwarfing the U.S. market. BABA has 721 million mobile monthly active users (MAUs), up 104 million on a year-over-year basis.To get a sense of how large the opportunity, here's what BABA Executive Vice Chairman, Joseph Tsai, said during the fourth-quarter earnings call: "The middle class in China has reached critical mass of over 300 million, almost as large as the entire U.S. population. The middle class will double in the next 10 years, especially from the lesser developed Chinese cities. While total Chinese domestic consumption is $5.5 trillion today, consumption from these third-, fourth-, and fifth-tier cities, with a combined population of 500 million people, will triple from $2.3 trillion to nearly $7 trillion in the next 10 years."The company has also been aggressive in building on-demand services, such as for food delivery. Part of the strategy has been to partner with companies like Starbucks (NASDAQ:SBUX). Such efforts will certainly be a big help in providing more convenience and stronger connections with customers. Cloud And AIAgain, BABA has borrowed from the Amazon playbook by making an aggressive move into the cloud industry. This may actually turn out to be the biggest growth driver. In fact, BABA's cloud business is already the largest not only in China, but the whole Asia Pacific region.During the latest quarter, revenues in the segment spiked by 76% to $1.15 billion. To keep up the growth, BABA has been rapidly innovating the cloud platform by adding new services for blockchain, cybersecurity, database systems and AI.Note that BABA has also been leveraging these technologies across its own properties. For example, Tmall Genie is an AI-powered smart speaker. Then there is the Amap app, which is China's largest mobile provider of mapping, navigation and traffic information. Financials And ValuationThe valuation on BABA stock is fairly reasonable. Consider that the forward price-to-earnings multiple is 19X. By comparison, JD.com (NASDAQ:JD) trades at 29X - and is growing at a much slower pace. For example, BABA reported revenues that jumped a sizzling 51% to $13.9 billion during the latest quarter.And with the resources, BABA has been making smart investments. Perhaps the most significant is Alipay, which has become one of the largest payment networks in China along with Tencent's (OTCMKTS:TCEHY) WeChat.Tom Taulli is the author of the upcoming book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy on College Students' Radars * 7 Retail Stocks to Buy for the Second Half of 2019 * The S&P 500's 5 Best Highest-Yielding Dividend Stocks The post 3 Reasons Alibaba Stock Will Continue to Rise appeared first on InvestorPlace.
(Bloomberg) -- Tencent Holdings Ltd. is pressing China’s top smartphone vendors and app stores to boost the cut of revenue it gets from games sold through their platforms, people familiar with the matter said, stepping up efforts to claw back profits as its business slows.The social media giant is seeking as much as 70% of the sales generated from its games, up from just 50% now, said the people, who requested anonymity discussing private negotiations. That would bring Tencent’s portion in line with the proportion shared with game publishers on other platforms, including Apple Inc.’s iOS store and Google Play, which each keep 30% of revenue that comes from apps. Negotiations vary from platform to platform, and Tencent may not be asking as much from each app store operator, the people said.Tencent is keen to shore up its bottom line as growth in China, the world’s No. 2 economy, decelerates, sapping consumer spending on entertainment and hurting advertising. The company’s gaming division -- its largest -- was battered in 2018 by a series of regulatory crackdowns and in May, Tencent reported the smallest increase in sales since going public in 2004.At the same time, Tencent has gained leverage in negotiations because the pipeline of new games has shrunk, the result of Beijing’s clampdown on what it views as gaming addiction among youths. Fewer than 5,000 new games will be approved this year, versus more than 8,500 in 2017, Asia-focused gaming researcher Niko Partners estimates.Tencent “is likely to gain stronger bargaining power against its distribution channels,” Citigroup analysts led by Alicia Yap wrote in a research note this week.The social media titan initiated talks in recent weeks with most of the country’s largest app stores, run by leading smartphone makers such as Oppo, Lenovo Group Ltd. and Xiaomi Corp., as well as internet outfits such as Baidu Inc. and 360, the people said. Tencent is focusing on only a subset of its games at present, they added. But if the 70-30 split becomes the standard, that could translate into billions of dollars of additional revenue annually.Tencent dominates the market thanks to its all-purpose WeChat app, which serves more than a billion people, and a development machine that consistently cranks out hits such as Honour of Kings and Peacekeeper Elite. Now, the company is taking advantage of its heft -- its closest rival is the much smaller NetEase Inc. -- to pressure app distributors to cough up more revenue, the people said.P.H. Cheung, a spokesman for Tencent, didn’t immediately respond to an email and text query on the company’s plans, which were previously reported by gaming industry media outlet Gamelook. Baidu and Oppo declined to comment.Those negotiations are by no means all one-sided. If anything, Tencent may have to work hard to change the status quo. The country’s four biggest smartphone names -- Oppo, Vivo, Huawei Technologies Co. and Xiaomi -- run app stores for their users that together account for about 40% of market share.Among the new titles Tencent wants a bigger revenue cut on is role-playing mainstay JX Online 3, developed by China’s Kingsoft Corp., and Crazyracing Kartrider, a mobile remake of a popular title from South Korea’s Nexon Co., one person said. As of now, neither title is available on stores operated by Oppo and Vivo, suggesting those two device-makers have yet to agree to Tencent’s proposal.App developers and publishers compete to get games listed on those stores, whose operators host in-game payments for things such as virtual goods, character skins and power-ups. In return, developers get a cut of that revenue. Unlike in the U.S. and Europe, where a 70-30 split is common, revenue-sharing varies hugely across different Chinese stores but is commonly pegged at 50%. Furthermore, that cut is usually negotiated directly with each of the stores, sometimes on a game-by-game basis.What’s in the app stores’ favor is the sheer volume of competition. While Google Play is blocked in China, there are approximately 400 Android app stores, though many have an extremely small number of mobile users. The country’s app stores focus especially heavily on games because that’s where the money is -- many don’t even levy a cut of revenue at all on non-gaming apps.\--With assistance from Lulu Yilun Chen.To contact Bloomberg News staff for this story: Zheping Huang in Hong Kong at firstname.lastname@example.org;Gao Yuan in Beijing at email@example.comTo contact the editors responsible for this story: Tom Giles at firstname.lastname@example.org, Edwin Chan, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
This morning, US index futures surged after Federal Reserve Chair Jerome Powell’s testimony raised the possibility of a near-term cut in interest rates.
(Bloomberg) -- Meicai, a Chinese startup that connects vegetable farmers with restaurants, is seeking at least $500 million in funding to try and grab a larger slice of a fragmented food sourcing market, people familiar with the matter said.The company is looking to achieve a valuation of between $10 billion and $12 billion, one of the people said. The figures are preliminary and subject to change based on market conditions, the people added, asking not to be identified as the details are private. Meicai said in a statement it doesn’t have specific fundraising targets at this moment.Meicai, which means “beautiful vegetable,” raised about $800 million in 2018 for a post-money valuation of $7 billion. It’s one of a crop of Chinese food and grocery delivery startups attracting capital from investors targeting a market that e-commerce hasn’t yet fully penetrated.Fresh produce-sourcing has become a heated battlefield between startups like Meicai and on-demand services leader Meituan, which is counting on the segment to drive growth and anchor a food and restaurant management business. Groceries firm Beijing Missfresh Ecommerce Co. is planning to raise between $300 million to $500 million at a valuation of at least $3 billion, Bloomberg News reported this week.Beijing-based Meicai counts Tiger Global Management, Hillhouse Capital, GGV Capital, Genesis Capital and China Media Capital among its backers. It’s also said to be part of an investment group considering a takeover of German food wholesaler Metro AG’s Chinese business.Founded in 2014 by rocket scientist Liu Chuanjun, Meicai has set a goal of sourcing produce for about 10 million small- to medium-sized restaurants across the country. Using a smartphone app, its customers can order specialties such as bok choy and Sichuan peppercorns directly from farms, disrupting traditional wholesaling by cutting out middlemen. As of the end of 2017, Meicai served close to a 100 cities and revenue had surpassed 10 billion yuan ($1.5 billion).Liu was born in a rural part of Shandong province, often helping his family maintain their corn field growing up. As one of the few people in his village to make it to university, he studied astrophysics at the Chinese Academy of Sciences and worked on rocket projects including China’s Shenzhou spacecraft, according to the company.His startup operates in a fertile field. Food delivery giants Meituan and Alibaba Group Holding Ltd.’s Ele.me are only scratching the surface because takeaway accounts for just 20% of what people eat in China, Harry Man, a partner with Matrix Partners China, told the RISE tech conference in Hong Kong on Tuesday. The remaining 80% is consumed at home, he said.“So who’s serving them, delivering fresh products to them -- vegetables, fruits, meat, seafood and everything -- is going to be a market multiple times bigger than takeout delivery,” he said. “Every single VC is looking at the market to see whether somebody can be able to knock it out and become the next mega unicorn in the market.”’(An earlier version of the story was corrected to remove references to Tencent as a backer)(Updates with Meicai’s statement in the second paragraph.)\--With assistance from Colum Murphy.To contact the reporter on this story: Lulu Yilun Chen in Hong Kong at email@example.comTo contact the editors responsible for this story: Tom Giles at firstname.lastname@example.org, Colum Murphy, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Maoyan Entertainment , China's leading movie-ticketing platform, said it would boost investment in the domestic film industry and deepen its partnership with Tencent Holdings Ltd , as it works to halt a downturn at cinemas. To reverse the trend, cinemas are pinning hopes on domestic movies, Chief Executive Zheng Zhihao told Reuters.
(Bloomberg) -- China’s largest technology companies are gunning for YouTube’s biggest stars.The Qingteng Club, a group affiliated with social media and gaming giant Tencent Holdings Ltd., will host executives and celebrities from the Chinese and U.S. online video industries at a private event in California this week, according to attendees. The event, dubbed the East-West Forum, will take place at an Anaheim hotel down the street from VidCon, a convention for fans of online influencers.Tencent, owner of the all-purpose Chinese app WeChat, is trying to encourage more U.S. social-media stars to do business in the world’s No. 2 economy. The opening panel of the event is titled “How Tencent could help your influencers’ businesses in China.” They have an edge over YouTube in tapping the burgeoning market: The Google-owned video service is blocked in the country.The resurgent interest in American content coincides with a period of intense competition in the world’s largest online arena. The popularity of Douyin, China’s equivalent of TikTok, has shaken China’s technology industry, and companies like e-commerce giant Alibaba Group Holding Ltd., search leader Baidu Inc. and Tencent have been forced to defend their turf.Tencent, whose WeChat messaging service is used by a billion-plus people, has previously blocked links to Douyin. And IQiyi, a Netflix-style streaming service controlled by Baidu, is working on a competing app.“East-West Forum is an exclusive event that brings leaders in tech and entertainment industry together from east and west to meet, to learn more about each other and build potential collaborations,” according to a statement by the Mars Summit, an organization helping to host the event.Fan GatheringSome of the biggest names in Chinese social media are descending upon California this week as tensions with Washington run high over the Asian country’s technological ascendancy.Executives from TikTok, owned by Bytedance Ltd., Tencent and Baidu are all speaking on panels at this year’s VidCon, which started as an event for people who post videos on YouTube to meet with fans. Celebrities sign autographs and host panels, while executives give keynote speeches. The convention has since expanded to include online platforms such as Amazon.com Inc.’s Twitch, Facebook, Instagram and Twitter.The East-West Forum will also bring together executives from Tencent, the founders of Chinese startups RED and Bilibili Inc., and online influencers Jordi and Azzy. It’s also expected to attract U.S. media executives from Fine Brothers Entertainment, which operates some of the most popular channels on YouTube.“There is a very large, very senior delegation of Chinese executives at VidCon,” said Jasper Donat, a media executive and producer based in Hong Kong. “The fact that that’s happening is pretty big. It’s been hard to get a lot of China into America in recent years, and they are here in force.”To contact the reporter on this story: Lucas Shaw in Los Angeles at email@example.comTo contact the editors responsible for this story: Nick Turner at firstname.lastname@example.org, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Ride-hailing giant Go-Jek has secured an investment from Siam Commercial Bank Pcl, the Thai lender that counts King Maha Vajiralongkorn as its biggest shareholder, according to people familiar with the matter.It’s unclear how much Thailand’s biggest bank is investing in Go-Jek, the people said, who asked not to be identified because the matter is private. Their partnership will help Indonesia’s most valuable technology startup bolster its financial services, while Siam Commercial is counting on online growth to help increase revenue, they added.Southeast Asia’s banks are increasingly teaming up with technology firms that are getting onto their turf, offering financial services from digital payments to consumer loans. Thailand’s Kasikornbank Pcl has invested $50 million in Go-Jek’s rival, Grab, and the pair intend to establish a co-branded mobile wallet.Established over a century ago by royal charter, Siam Commercial Bank is Thailand’s oldest homegrown lender. It’s the latest to join Go-Jek’s ongoing series-F round, a term denoting late-stage financing.The startup has already raised over $1 billion as of the round’s first close, Bloomberg reported in February. Alphabet Inc.’s Google, JD.com Inc. and Tencent Holdings Ltd. invested alongside Provident Capital. This week, Go-Jek announced additional investment from Mitsubishi Motors Corp., Mitsubishi Corp. and Mitsubishi UFJ Lease & Finance Co. as part of the series F financing.Go-Jek, which debuted its app for hailing motorbike taxis in Jakarta in 2015, is expanding beyond Indonesia to cater to consumers across Southeast Asia, aiming to popularize an all-purpose consumer app similar to Tencent’s WeChat in China. It is valued at $10 billion according to CB Insights, and hosts more than 20 on-demand services on its platform from food delivery to cab-hailing.Representatives of the bank and Go-Jek declined to comment.To contact the reporters on this story: Yoolim Lee in Singapore at email@example.com;Anuchit Nguyen in Bangkok at firstname.lastname@example.orgTo contact the editors responsible for this story: Divya Balji at email@example.com, ;Tom Giles at firstname.lastname@example.org, Edwin Chan, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- When Walmart Inc. paid $16 billion for control of India’s e-commerce pioneer Flipkart Online Services Pvt. last year, the American retail giant got a little-noticed digital payments subsidiary as part of the deal. Now the business is emerging as one of the country’s top startups, a surprise benefit for Walmart from its largest-ever acquisition.Flipkart’s board recently authorized the PhonePe Pvt Ltd. unit to become a new entity and explore raising $1 billion from outside investors at a valuation of as much as $10 billion, according to people familiar with the matter, asking not to be named because the discussions are private. The funding may close in the next couple of months, although the talks are not finalized and terms could still change, they said. The unit would then become independent with a distinct investor base, although Walmart-owned Flipkart would remain a shareholder. Walmart and Flipkart didn’t respond to emails seeking comment.PhonePe -- which means “on the phone” in Hindi and is pronounced “phone pay” -- has grown into one of India’s leading digital payments companies. Its volume and value of transactions have roughly quadrupled over the past year as the country’s consumers adopt the technology to transfer money digitally to businesses and each other. PhonePe is gaining ground on Paytm, which leads the field and is backed by Warren Buffett.PhonePe is an “underappreciated asset,” Edward Yruma, an analyst from KeyBanc Capital Markets, wrote in a recent research note. He estimated the business may be worth $14 billion to $15 billion, separate from Flipkart’s e-commerce operation.The startup was founded in December 2015 by three friends who left Flipkart to get it off the ground. Within a year, Flipkart founders Binny Bansal and Sachin Bansal decided to acquire PhonePe, realizing that solving payments friction would make it easier for consumers to buy online. Less than a year later, the Indian government made the unprecedented move to ban large banknotes to curb corruption and boost digital transactions. With this “demonetization,” Paytm, PhonePe and other fledgling services flourished.Cheap smartphones and cut-rate wireless data plans have brought millions of Indians online in the years since, boosting the whole industry. In June, the PhonePe app reached 290 million transactions with an aggregate value of $85 billion, compared with 71 million transactions at $22 billion a year earlier, according to the company.The service gained momentum by offering an array of services, including mutual funds, movie tickets and airline bookings. Earlier this year, it began using Bollywood star Aamir Khan in its advertising.“Globally, hardly any privately held fintech company has reached PhonePe’s scale on both sides of the network so rapidly,” Sameer Nigam, PhonePe’s co-founder and chief executive officer, said in a statement, pointing to its 150 million plus customers and more than 5 million merchants. “That’s why the strong investor interest.”Walmart debated for months whether to keep funding the payments business internally or whether to separate the operation so it could raise outside funds. After plowing nearly $300 million into PhonePe, the U.S. retailer opted for the latter course. Alibaba Group Holding Ltd. made a similar decision when it split off its Alipay business, helping growth by allowing it to work with a broader range of merchants.Walmart is still grappling with whether to bring in strategic or financial investors, according to one of the people familiar. While a strategic investor would likely be better for growth, senior Walmart executives are concerned that such backers typically want more voting rights, the person said. Walmart wants to use the lessons from PhonePe in other operations around the globe.Also unresolved are the future roles for Flipkart’s outside investors. Tiger Global Management and Tencent Holdings Ltd. each hold board seats and equity stakes of about 5%, while Walmart holds about 80%. The board will have to navigate the companies’ varied interests before any deal can be finalized.The new funding is aimed at helping PhonePe’s growth. The company plans to delve deep into the country’s heartland, where rivals have yet to expand, with the goal of reaching profitability, one person said.The market has vast potential. Digital payments in India are projected to reach $1 trillion by 2023 from about $200 billion now, said Credit Suisse Group AG. Beyond PhonePe and Paytm, Google Pay, Amazon Pay and the soon-to-launch WhatsApp payments service will compete for customers. They’re taking advantage of India’s Unified Payment Interface, a technology backbone that includes 140 of the country’s banks and digital payments companies.“The market is getting bigger and fintech startups are becoming innovative,” said Kunal Pande, partner, advisory services at KPMG. “The accelerated growth in many fintech areas is attracting investor interest.”To contact the reporter on this story: Saritha Rai in Bangalore at email@example.comTo contact the editors responsible for this story: Peter Elstrom at firstname.lastname@example.org, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
While a lot of investors have been hesitant towards betting on Chinese stocks because of the mixed bag of emotions the trade war has brought,
Today I'd like to discuss the outlook for Nio (NYSE:NIO), a closely followed stock in China's expanding luxury automotive sector. On Sep. 12, 2018, Nio stock went public in the U.S. as an American Depositary Receipt (ADR) at an opening price of $6.Source: Shutterstock At the time Nio stock was widely touted as the Tesla (NASDAQ:TSLA) of China. After reaching an all-time high of $13.80 in two days following its listing, Nio stock has been on the decline for the past 10 months.Many of our readers are now wondering whether July may offer a good entry point into NIO shares, which are currently trading around $3.2. Here is a candid look at the the prospects for Nio stock so that potential investors may decide if the shares should belong in their long-term portfolio.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Nio Is a Relatively Young CompanyThe Shanghai, China-based company develops, manufactures, and sells premium semi-autonomous electric vehicles (EVs) to luxury buyers in China. It was founded in 2014 and currently has office in China as well as the U.S., the U.K. and Germany.The initial backers of Nio included Baidu (NASDAQ:BIDU), Tencent (OTCMKTS:TCEHY), and Xiaomi Corp as well as Singapore Government's sovereign wealth fund, Temasek Holdings.The group initially focused on research and development (R&D) activities, but went into mass manufacturing in March 2017. Its first volume-manufactured seven-seater SUV vehicle -- the ES8 -- was sold in China in June 2018. At the time it was compared to Tesla's Model X.Prior to its IPO, NIO stock reported revenues of only $6.7 million for the six months ended June 30, 2018, and no revenues in 2017. In other words, the car manufacturer was awash in red ink, a fact that would have made the company ineligible to list in a Chinese stock exchange.As part of rather lengthy and strict listing requirements, Chinese stock exchanges would have required Nio to have been profitable over the three years prior to the proposed IPO date. In other words, Nio could have not listed in China and possibly chose the U.S. due to easier listing requirements for ADRs.In hindsight, investors who bought Nio stock since its IPO may now be wondering whether the company completed the IPO way too early in its history. Instead should the company have focused on building market share and raising cash through venture capital? Chinese Booming EV Market Is EvolvingChina is now the largest EV market in the world. With a population of 1.4 billion, the country has an important pollution problem in big cities.As part of its efforts to decrease pollution levels, in 2010, the Chinese government started introducing a range of subsidies to promote the sales of electric cars.In 2016, Chinese companies manufactured 375,000 electric cars, accounting for a 43% of the global EV market. Q1 2019 numbers from the country showed that the quarterly sales numbers for passenger vehicles reached 254,000 cars, an increase of 118% year-on-year (YoY).Tax incentives, various fee exemptions and other subsidies granted by the Chinese government have fuelled this market growth that has led to increased consumer demand.In addition, especially the inexpensive EV models enable Chinese consumers to easily obtain a vehicle plate which is otherwise extremely difficult to get in some cities such as Beijing and Shanghai. It is expected that by 2025 electric cars will have 50% market share in China.When we look back at the Nio IPO, it is easy to see why many investors would have regarded investing in the NIO stock as also participating in the future growth of the EV market in China.Let us now fast forward to 2019. As the industry has grown, the landscape in China has also become more competitive. There are currently over 500 Chinese EV manufacturers.Yet as the Chinese economy cools off especially amid the U.S.-China trade wars, analysts are wondering how many of these companies can actually survive, especially now that governmental subsidies are being cut down considerably.The government has also announced that foreign manufacturers now will be able to produce cars as wholly-owned foreign entities in China. Therefore companies such as Tesla, Audi, or General Motors (NYSE:GM) will not need to enter into a joint venture with a local manufacturer any more.Nonetheless, these foreign manufacturers are still likely to rely on the distribution networks of local companies.As of September 2018, China had 403 million drivers and 322 million motor vehicles in total (including 235 million cars). However, car sales in China declined last year; it was first contraction of the industry in over two decadesIn the next few years, hundreds of Chinese EV manufacturers will likely compete aggressively among themselves, possibly pushing profit margins down for all of them, including Nio. How Nio Stock Makes MoneyAt present, Nio sells exclusively in China. In addition to the ES8, the company has two other vehicles, the EP9 (two-seater sports car) and the ES6 (five-seater SUV).Nio cars are equipped with a standalone artificial intelligence ("AI") system called the NOMI. The company also offers various car charging and power solutions.It is important to highlight that management has been working hard to make the Nio brand more than a car manufacturer, but rather a life-style concept. For example, its showrooms also feature members-only areas, Nio Houses, that act as upscale social clubs. Nio management is aiming to appeal to the changing demographics of the Chinese car buyers who are more tech-savy and want more from the dealership experience.In addition, the group uses social media actively to engage with current and prospective customers. It also has an app with over 800,000 users as well as a virtual currency.On May 28, Nio reported Q1 2019 results and Wall Street was not impressed. The manufacturer's Q1 sales of $228.8 million had dropped 54.6% sequentially from Q4. Its gross margin was negative 13.4%, compared with positive 0.4% in Q4 2018.Management's May 2019 monthly delivery update early last month also drove home the concerns for "the challenging macroeconomic and Chinese auto market backdrop."Furthermore, Nio has recently had to recall 5,000 ES8 SUVs due to battery fires.And the group's quarterly cash burn of about $600 million is not likely to decrease in the next quarter. The issue of cash is one of the most important questions regarding Nio's fundamental story.Although the car company is going through cash at an alarming rate, Nio posted a smaller-than-expected Q1 loss. Its net loss stood at $373 million vs. what analysts had expected to be $472 million.On a final note that may excite investors, the ES6, which in effect is a smaller and cheaper version of the ES8, has begun delivery several weeks ago. Could this new vehicle also provide a much-needed sales spark for Nio in the coming months? So Should You Buy Nio Stock?Nio's Chinese name, Weilai, literally means Blue Sky Coming. Yet Nio's listing at the Big Board has failed to provide excitement and the stock has shed almost its 50% of its value since its September 2018 debut price. Those investors who have bought into NIO shares at about $13 have literally been feeling the blues.I am of the camp that Nio stock's price weakness since the IPO is a clear reflection of investor sentiment and major fundamental worries, especially regarding a young company with unproven management completing a rather premature exchange listing in a third country, i.e., the U.S., where it sells no cars.However, I do not expect that the major investors, such as Tencent, as well as the Chinese government will allow the company to go bust. For example, it is likely that Tencent may have plans to integrate its own voice assistant Xiaowei into Nio cars so that it can offer Tencent services in car displays for shopping or entertainment.Furthermore, Nio management has recently announced that the group will soon form a joint venture with Beijing E-Town International Investment and Development Co. Ltd which will invest about $1.5 billion in this new entity. Is the Chinese government in effect bailing out Nio?Although the details of the new JV is not known, I believe that it is an important step to help the company to reach a more viable point in its history.For example, China is also investing in the development of autonomous, or driverless, vehicles. A report by McKinsey highlights that China will lead the autonomous car market in the years to come. Could the Chinese government be encouraging Nio to develop the AI capabilities in Nio cars to address this market?In light of the recent cash injection by the Chinese government, it is likely that NIO shares have already seen a low for 2019. Nonetheless, investors should be wary of high expectations for the company.Daily volatility of Nio stock is high. Any headline news regarding the U.S.-China trade wars as well as sales or earnings figures from Tesla will affect the short-term price in Nio shares, too. In other words what is good for China or Tesla may also be good for Nio and vice versa.Potential NIO investors may consider hedging their stock purchases with, for example, Nov. 15 ATM covered calls. A similar (and continuous) hedge may also help current Nio shareholders, who do not yet think the Nio stock price will likely improve soon, recover some of their losses over time.Investors who are interested in buying into Chinese or clear energy companies, but do not want to commit all their capital to a single stock such as Nio may also consider investing in various exchange-traded Funds (ETFs) that have NIO as a holding, including iShares MSCI China ETF (NASDAQ:MCHI), Global X MSCI China Consumer Discretionary ETF (NYSEARCA:CHIQ), Invesco WilderHill Clean Energy ETF (NYSEARCA:PBW), or iShares Core MSCI Emerging Markets ETF (NYSEARCA:IEMG).As of this writing, the author did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Best Stocks for 2019: A Volatile First Half * 7 Simple Ways for Young Investors to Invest Their First $1,000 * 6 Stocks to Buy Based on Insider Buying The post Even as It Struggles, Nio Stock Shows Promise for the Future appeared first on InvestorPlace.
Jul.10 -- Zheng Zhihao, chief executive officer of Maoyan Entertainment, China’s top online movie ticketing platform, talks about the company's deal with Tencent Holdings Ltd. Maoyan said Tuesday it will cooperate with the Chinese social media giant’s various businesses including Tencent Investment, Pictures, Tencent Music Entertainment and Video. Zheng speaks on "Bloomberg Markets' Asia."