Weekly Business Roundup #1

Apr 14, 2024

Douyin, in a strategic move to enhance its payment services, has agreed to purchase a payment license from Union Mobile Financial (UMF) for RMB 1.4 billion (approximately $750 million). This acquisition is aimed at broadening Douyin's payment capabilities, specifically in facilitating offline bank card payments, marking a significant advancement in its financial services since acquiring Wuhan Hezhong Yibao and its third-party payment license in 2014.
EHang (NASDAQ: EH) has achieved a significant milestone with its EH216-S unmanned autonomous passenger aircraft, receiving a production certificate from the Civil Aviation Administration of China. This certification distinguishes the EH216-S as the first electric vertical takeoff and landing (eVTOL) aircraft globally to secure all major aviation credentials for manned flight, setting the stage for large-scale commercial operations and establishing EHang as a leader in the emerging eVTOL market.

Tuesday, April 9

Alibaba Cloud, a subsidiary of Alibaba Group (NYSE: BABA), has announced a price reduction of up to 59% on its main products in international markets. This decision, influenced by the growing demand for AI technologies, is part of Alibaba Cloud’s strategy to attract customers for the development of large language models and AI-based applications. This announcement follows Alibaba chairman Joe Tsai's discussion on the potential impact of US chip restrictions on Alibaba's cloud and computing capabilities.

Alibaba Group (NYSE: BABA) celebrated the anniversary of its significant restructuring, with founder Jack Ma praising the company’s strategic focus shift towards efficiency, leadership, and technological adaptation, especially in AI. Joseph Tsai highlighted the transition towards core e-commerce and cloud computing services, reflecting on the strategic pivot that has been central to Alibaba's ongoing transformation.
Blizzard Entertainment and NetEase (NASDAQ: NTES) have renewed their partnership to continue offering Blizzard's popular gaming titles in China. This 15-year agreement not only reestablishes the collaboration between Blizzard and NetEase but also includes a new agreement facilitating the release of NetEase-developed games on the Xbox platform. This partnership renewal underscores the strategic importance of the Chinese market for Blizzard and signifies a strong cooperative relationship with NetEase. Pre-registration for the Chinese server of World of Warcraft has surpassed two million accounts, as reported by the official World of Warcraft Weibo account.
JD.com (NASDAQ: JD) announced an investment of 1 billion CNY (approximately 138 million USD) to enhance its short-video content segment. This move aims to support content creators in producing diverse and engaging short videos, highlighting JD.com’s strategic focus on integrating short-video content to enrich user experience and content variety.

According to the National Bureau of Statistics (NBS), China's Consumer Price Index (CPI) saw a marginal increase of 0.1% year-over-year in March, with a month-over-month decrease of 1%. The stability in the cumulative CPI from January to March, compared to the same period last year, reflects a stable inflation environment amidst evolving economic conditions.

Recent revisions from Wall Street on China's GDP growth forecast for 2024 include:
- Goldman Sachs revised from 4.8% to 5.0%.
- Citi Group adjusted from 4.6% to 5.0%.
- UBS updated from approximately 4.4% to 5.0%.
- Morgan Stanley increased from 4.2% to 4.8%.
China's government has released new guidelines aimed at improving the transparency and risk management of the country's stock market. These guidelines, issued by the national cabinet, are designed to enhance the quality of China’s capital market by increasing oversight. This initiative follows recent comments from President Xi, who emphasized the need to prevent major financial risks and urged financial regulators to be clear about their duties.

Historically, ‘‘State Council’s Nine-Point Guidelines’’ were only issued twice in 2004 and 2014. Following these earlier guidelines, the CSI 300 Index, which tracks the top 300 stocks in the market, increased by more than five times and two times, respectively.