11/19/2021 Financial News In China: Alibaba Plunged 11% With Disappointing Growth Outlooks; CBIRC Relaxes Bond Rating Requirements For Insurance Capital Investment

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1. Alibaba Plunged 11% With Disappointing Growth Outlooks

Alibaba Group posted its fiscal year 2022 Q2 earnings outlooks, with revenue of RMB 200.69 billion for the quarter, up by 29% YoY; operating profit of RMB 15.006 billion, up by 10% YoY; and adjusted net profit of RMB 28.52 billion, down by 39% YoY. After the disappointing results announced, Alibaba’s U.S. stock price tumbled and closed down by 11.13%. As of September 30, 2021, the number of global annual active consumers among the Alibaba ecosystem reached approximately 1.24 billion, an increase of approximately 62 million year-over-year. 953 million are from the Chinese market and 285 million are from overseas. It is worth noting that Alibaba’s Q2 earnings report for fiscal year 2022 indirectly disclosed Ant’s financial profile that net profit growth slowed in the first half of the year and overseas investment IPOs pushed up book profits.

2.CBIRC Relaxes Bond Rating Requirements For Insurance Capital Investment

China Banking Regulatory Commission issued a document on Friday to adjust the credit rating requirements for insurance funds to invest in bonds. The notice published on the official website of the CBRC points out that if the comprehensive solvency ratio of an insurance company is 200% (or over) at the end of the last quarter and has (or the trustee has) credit risk management capability, the external credit rating requirement for the invested non-financial corporate (company) bonds will be abolished. If an insurance company has a comprehensive solvency ratio of 120% (inclusive) or more at the end of last quarter and has (or the trustee has) credit risk management capability, the main body and debts of the invested non-financial enterprise (company) bonds shall have a credit rating of BBB (inclusive) or equivalent to BBB or above as rated by domestic credit rating agencies.

The document “Interim Measures for Investment in Bonds by Insurance Funds” issued by the CIRC in 2012, is stipulated that both secured and unsecured non-financial enterprise (company) bonds invested by insurance capital shall have a long-term credit rating of AA or equivalent to AA or above as rated by domestic credit rating agencies.

3.Overseas Anti-Monopoly Compliance Guideline Released

The CCP General Administration of Market Regulation released Guidelines on Anti-Monopoly Compliance for Enterprises Operating Abroad on November 18,2021. The guidelines stated that the aims are to encourage enterprises to cultivate a compliance culture of fair competition; to establish and strengthen their overseas Anti-Monopoly compliance management system; to enhance their awareness of overseas Anti-Monopoly compliance management; to improve their overseas antitrust compliance management and to prevent overseas Anti-Monopoly legal risks, ensuring their sustainable and healthy development.

4.SAFE Releases Data on Foreign Exchange

As shown in the statistics of the State Administration of Foreign Exchange (SAFE) in October 2021, in the US dollar terms, the amount of foreign exchange settlement and sales by banks was USD 186.2 billion and USD 169.6 billion, respectively, with a surplus of USD 16.5 billion. During January to October 2021, the accumulative amount of foreign exchange settlement and sales by banks was USD 2046.0 billion and USD 1849.5 billion, respectively, with an accumulative surplus of USD 196.5 billion. The amount of cross-border receipts and payments by non-banking sectors was USD 454.6 billion and USD 419.8 billion, respectively, with a surplus of USD 34.8 billion. During January to October 2021, the accumulative amount of cross-border receipts and payments by non-banking sectors was USD 4858.0 billion and USD 4588.4 billion, respectively, with an accumulative surplus of USD 269.6 billion. 

5. Weibo Approved for HK IPO

Weibo passed its IPO hearing on Nov. 18, with Goldman Sachs, Credit Suisse, CITIC Lyon Securities and CICC as joint sponsors, according to HKEx listing documents. Weibo’s net quarterly revenue for the third quarter was US$607 million, up by 30% year-over-year, while operating profit for the third quarter was US$213 million, up by 32% year-over-year, and net profit attributable to Weibo shareholders was US$182 million (RMB1.16 billion), according to the company’s financial results. Weibo said the funds raised will be used to expand its user base and increase user engagement, as well as improve Weibo’s content ecosystem; research and development to enhance Weibo’s user experience and real estate capabilities; selectively pursue strategic alliances, investments and acquisitions; and for working capital and general corporate purposes.

6.Country Garden Services Will Sell 150 Million Shares At 53.35 HKD Each To Raise 8 Billion

Country Garden Services Group announced its plan to raise HK$8 billion through a share sale on the evening of Nov. 18. The company’s shares were suspended from trading earlier on Thursday. The proposed placement is to sell 150 million shares at a price of HK$53.35 per share, a 9.5% discount to Wednesday’s closing price of HK$58.95, to raise a total of HK$8.002 billion. The fund will be used for future acquisition opportunities and new business development. Country Garden Services has been a frequent buyer in the past years. According to a research report released by the CMI Institute, Country Garden Services involved in 63 property business mergers and acquisitions transactions in the past 10 months this year. The transaction amount totaled 31.5 billion yuan and Country Garden Services is spending more than 19 billion yuan on acquisitions this year.

7.JD Q3 Adjusted Net Income Falls

Jingdong Group reported on Thursday that its non-GAAP net income for the third quarter declined more than 10% year-over-year, beating market expectations, while revenue rose more than 20% year-over-year, driven by online shopping demand. Commenting on the impact of the macro environment, Xu Lei, president of Jingdong Group, pointed out that the macro consumption environment was relatively weak and the upstream supply chain was tight in the second half of the year, and the shortage in the supply chain, such as chip components, was expected to continue into the first half of next year.

8.Tesla China Raise Model 3 RWD Price By 15,000 Yuan

Tesla China said on Friday that the price of its domestic Model 3 RWD was raised by 15,000 yuan to 250,900 yuan, while the price of domestic Model 3 Performance version did not change. Tesla China’s website shows that the range of Model 3 RWD has increased from the original 468 kilometers (NEDC) to 556 kilometers (CLTC) and the 0-100-kilometer acceleration has dropped from 5.6 seconds to 6.1 seconds. The Model 3 RWD is currently expected to be delivered in the first quarter of next year. On October 27, Tesla China’s official website showed that the prices of its MODEL S long-range and MODEL X long-range models in China were raised by 30,000 yuan.

【G Translators- Financial Team】
Author: Apple

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

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