7/6/2021 Financial News: Ping An To Take Majority Stake In New Founder Group, UK’s Largest Chip Maker To Be Acquired By Chinese-Owned Nexperia 

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1.Ping An to Become New Founder Group’s Controlling Shareholder

On July 5, Ping An Insurance Group announced that according to the reorganization plan of Founder Group approved by the court, Ping An Life, a subsidiary of Ping An Insurance Group, will take a majority stake in the proposed New Founder Group and become its controlling shareholder.

Founder Group has struggled with corporate debt. As of the end of the third quarter of 2019, the company’s total assets were 365.712 billion yuan, total liabilities were 302.951 billion yuan, and the debt-to-asset ratio reached 82.84%. Ping An Insurance Group, the leading insurance company in the country, is also under great pressure. Its stock price has been falling, and its major shareholders have massively reduced their holdings and cashed out billions.

2.UK’s Largest Chip Maker to be Acquired by Chinese-Owned Nexperia 

On July 5, Communist China’s Wingtech Technology issued an announcement that the company’s wholly-owned Dutch chip maker Nexperia and the parent company of U.K.’s largest chip producer Newport Wafer Fab (NWF) NEPTUNE 6LIMITED (referred to as “NEPTUNE”) and its shareholders signed an acquisition agreement. After the completion of this transaction, Nexperia will hold 100% equity of NEPTUNE and hold 100% equity of NWF through NEPTUNE. Wingtech also stated that this transaction does not need to be submitted to the board of directors and shareholders meeting. The relevant agreements are still in the process of implementation, and there are still uncertainties.

Established in 2006, Wingtech is the largest Chinese mobile phone ODM manufacturer. It acquired Nexperia in 2018 and obtained a 100% shareholding in Nexperia in 2020.

3.Bailout of Suning.com by State Funds, Alibaba, and Other Companies

On July 5, Suning.com Co. announced that a group of investors including Nanjing Xinxing Retail Development Fund, Huatai Asset Management, Alibaba, Haier, Midea, TCL, Xiaomi and other industry investors will take a 16.96% stake in the company. According to the deal, each share was priced at 5.59 yuan, close to the price the stock was trading at before it was halted June 16. After the transaction, none of the major holders will have a controlling stake.

In addition, Suning.com also released its latest financial performance. The expected loss in the first half of this year is between 2.5 billion and 3.2 billion yuan, compared with 170-million-yuan loss in the same period last year. Its sales revenue in the second quarter is expected to decline by more than 30% year-over-year, leading to significant decline in gross profit.

4.Sinking Shares of US-Listed Chinese Companies

34 Chinese companies raised over $12 billion in the US in the first half of 2021, compared with 18 listings that raised $2.8 billion in the same period last year. However, about 70% of these companies have traded below their IPO price because of the growing regulatory scrutiny from both Beijing and Washington. For example, the ride-hailing company Didi Chuxing witnessed the plunge of its shares on Friday upon the announcement by Communist China’s cyber security regulator about its investigation of the company. In addition, smaller IPO deals performed badly. MissFresh, a grocery delivery company backed by Tencent, is being traded 34% below its June IPO price. Chinese companies are facing crackdowns from both governments.

5.Second-Hand Housing Transactions in Shenzhen Fell Over 70% YOY in June

Data indicate that, in June, the number of Shenzhen’s second-hand real estate transactions fell below 3,000, a year-on-year decrease of more than 70% compared with 10,594 transactions in the same period last year. Based on the National Bureau of Statistics data, Shenzhen’s second-hand housing price index fell 0.1% from May, the first drop since July 2019.

It is expected that the monthly turnover of 5,000-8,000 second-hand units is the norm with 5,000 units often considered the “prosperity and decline threshold” of the Shenzhen real estate market. Second-hand housing transactions in Shenzhen has continued to decline. The transaction volume has been below 5,000 units for three consecutive months, and in June it fell even further to below 3,000 units.

6.Yuan Strengthened 82 Pips to 6.4613 Against USD

According to the China Foreign Exchange Trading System, the central parity rate of the RMB strengthened 82 pips to 6.4613 against the US dollar on July 6. On the same day, the onshore RMB opened down more than 10 points against the US dollar to 6.4619. The offshore RMB fluctuated around 6.46 against the US dollar. As of 9:46 a.m., the onshore and offshore RMB exchange rates against the US dollar were 6.4609 and 6.4629 respectively.

7.Means of Production Prices Mostly Went Up in Communist China

Data recently released by the National Bureau of Statistics indicated that, among the market prices of 50 major goods in circulation in 9 major categories in late June 2021, the prices of 29 products increased, 20 products’ prices fell, and 1 product’s price remained the same compared with prices in mid-June. Specifically, the products with the largest price declines are mainly associated with ferrous and non-ferrous metals. The steepest price increase occurred to coal and some chemical products. For example, prices of coking coal, anthracite, and pure benzene rose by 4.4%, 3.4%, and 6.3% respectively.

Among these 50 goods monitored by the government, the chemical product pure benzene (petroleum benzene, industrial grade) rose by 6.3% to 8181.4 yuan/ton. The price of rebar fell by 3.8% to 4883.9 yuan/ton.

8.Decreased Chinese Auto Sales in June

According to the statistics of the China Association of Automobile Manufacturers (CAAM), the sales volume of the automobile industry in June 2021 is estimated to be 1.926 million, a month-on-month decrease of 9.5% and a year-on-year decrease of 16.3%. In terms of vehicle models, passenger car sales dropped 14.9% year-on-year, and commercial vehicle sales decreased by 20.8% year-on-year. From January to June, the cumulative sales in the automobile industry are estimated to be 12.801 million, a year-on-year increase of 24.8%. Passenger vehicle sales went up 26.2%, and commercial vehicle sales increased by 20.0% from the same period last year.

By【G Translators- Financial Team】
Author: Kate

Disclaimer: This article only represents the author’s view. Gnews is not responsible for any legal risks.

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