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Trump working with President Xi to help restart China's ZTE
May 13, 2018 6:04 pm|Comments (0)

WASHINGTON (Reuters) – U.S. President Donald Trump said in a tweet on Sunday that he has asked the Commerce Department to help Chinese technology company ZTE Corp “get back into business, fast,” a concession to Beijing ahead of high-stakes trade talks that will take place this week.

FILE PHOTO: A ZTE smart phone is pictured in this illustration taken April 17, 2018. REUTERS/Carlo Allegri/Illustration/File Photo

ZTE, one of the world’s largest telecom equipment makers, suspended its main operations after the U.S. Commerce Department banned American supplies to its business.

Trump’s offer to help comes as Chinese and U.S. officials prepare for talks in Washington with China’s top trade official Liu He to resolve an escalating trade dispute between the world’s two largest economies.

Trump’s reversal will likely have a significant impact on ZTE’s U.S. suppliers such as Qualcomm Inc and Intel Corp. U.S. companies are banned from exporting goods to ZTE, making it difficult for the phonemaker to manufacture new products or update older ones.

“Too many jobs in China lost. Commerce Department has been instructed to get it done!” Trump wrote on Twitter, saying he is working with Chinese President Xi Jinping on a solution.

The ban is the result of ZTE’s failure to comply with an agreement with the U.S. government after it pleaded guilty last year to conspiring to violate U.S. sanctions by illegally shipping U.S. goods and technology to Iran, the Commerce Department said.

American companies are estimated to provide 25 percent to 30 percent of the components used in ZTE’s equipment, which includes smartphones and gear to build telecommunications networks.

The Commerce Department did not immediately respond to a request for comment on Sunday.

Reporting by Valerie Volcovici and Chris Sanders, additional reporting by Karen Freifield; Editing by Lisa Shumaker

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In concession, Trump says will help China's ZTE 'get back into business'
May 13, 2018 6:02 pm|Comments (0)

WASHINGTON (Reuters) – U.S. President Donald Trump said in a tweet on Sunday that he has asked the Commerce Department to help Chinese technology company ZTE Corp “get back into business, fast,” a concession to Beijing ahead of high-stakes trade talks that will take place this week.

FILE PHOTO: A ZTE smart phone is pictured in this illustration taken April 17, 2018. REUTERS/Carlo Allegri/Illustration/File Photo

ZTE, one of the world’s largest telecom equipment makers, suspended its main operations after the U.S. Commerce Department banned American supplies to its business.

Trump’s offer to help comes as Chinese and U.S. officials prepare for talks in Washington with China’s top trade official Liu He to resolve an escalating trade dispute between the world’s two largest economies.

Trump’s reversal will likely have a significant impact on ZTE’s U.S. suppliers such as Qualcomm Inc and Intel Corp. U.S. companies are banned from exporting goods to ZTE, making it difficult for the phonemaker to manufacture new products or update older ones.

“Too many jobs in China lost. Commerce Department has been instructed to get it done!” Trump wrote on Twitter, saying he is working with Chinese President Xi Jinping on a solution.

The ban is the result of ZTE’s failure to comply with an agreement with the U.S. government after it pleaded guilty last year to conspiring to violate U.S. sanctions by illegally shipping U.S. goods and technology to Iran, the Commerce Department said.

American companies are estimated to provide 25 percent to 30 percent of the components used in ZTE’s equipment, which includes smartphones and gear to build telecommunications networks.

The Commerce Department did not immediately respond to a request for comment on Sunday.

Reporting by Valerie Volcovici and Chris Sanders, additional reporting by Karen Freifield; Editing by Lisa Shumaker

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China's Leshi questioned by bourse over trade suspension risk
May 9, 2018 6:00 am|Comments (0)

HONG KONG (Reuters) – Leshi Internet Information & Technology Corp Beijing has been formally asked whether its assets, which have fallen 98 percent over the past year, are at risk of turning negative and triggering a share trading halt and possible eventual delisting.

The logo of of Leshi Internet Information & Technology Corp is seen on its building in Beijing, China March 15, 2018. REUTERS/Stringer

The Shenzhen Stock Exchange’s website on Wednesday showed the bourse had sent Leshi 33 questions, including about its assets. Under its rules, a year of negative net assets results in “suspension from being a listed company”, with two years ending in delisting.

Leshi, a video-streaming company that also makes internet-connected television sets, has seen revenue and profit dwindle since mid-2017 amid a funding crisis involving parent conglomerate LeEco and its founder Jia Yueting.

Net assets attributable to shareholders stood at 304 million yuan ($ 47.70 million) at the end of March, from 13.6 billion yuan a year earlier. It reported a net loss of 307 million yuan for January-March 2018 and a loss of 13.9 billion yuan for all of 2017.

The Shenzhen bourse also questioned Leshi about its operations, asset impairment and auditing. It asked the firm to detail its debts, explain slumping performance at subsidiaries, and disclose ownership relations with other companies as well as whether units conduct transactions with other group companies.

It also asked for an update on Jia and his related parties’ repayment of debt to Leshi, and whether there has been a change in the company’s decision-making personnel.

Leshi, which since July has been managed by second-largest shareholder Sunac China Holdings Ltd, in January said Jia and LeEco owed it 7.5 billion yuan. LeEco disputed the figure.

Jia, who remains Leshi’s largest shareholder, has been residing in the United States to work on his electric vehicle start-up company, though Chinese regulators have requested his return.

The Shenzhen exchange has also asked Leshi to explain how its salary expense rose in 2017 though headcount dropped.

It has requested a reply from Leshi by May 18.

A Leshi spokeswoman said the company had no immediate comment when contacted by Reuters.

Leshi’s shares were down 2.6 percent in morning trade in a flat broader market.

Reporting by Sijia Jiang and Hong Kong newsroom; Editing by Christopher Cushing

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China's Xiaomi files for mega Hong Kong tech IPO, lifts lid on financials
May 3, 2018 6:00 am|Comments (0)

BEIJING/HONG KONG (Reuters) – Smartphone and connected device maker Xiaomi [IPO-XMGP.HK] filed for a Hong Kong initial public offering on Thursday that could raise $ 10 billion and become the largest listing by a Chinese technology firm in almost four years.

FILE PHOTO: The logo of Xiaomi is seen inside the company’s office in Bengaluru, India January 18, 2018. Picture taken January 18, 2018. REUTERS/Abhishek N. Chinnappa/File photo

Xiaomi’s IPO, which will be one of the first in Hong Kong under new rules to attract tech firm listings, is a major win for the bourse as competition heats up between Hong Kong, New York and the Chinese mainland.

The listing is expected to raise about $ 10 billion via the public offering, giving Beijing-based Xiaomi a market value of between $ 80 billion and $ 100 billion, people familiar with the plans told Reuters.

Those targets, if achieved, will make it the biggest Chinese tech IPO since Chinese internet giant Alibaba Group Holding Ltd (BABA.N) raised $ 21.8 billion in 2014.

Xiaomi’s prospectus gave investors the first detailed look at its financial health ahead of the much-hyped IPO, which could be launched as soon as end-June, according to the people close to the process who requested anonymity as the details were not yet public.

The numbers underscore how Xiaomi has remained resilient even as the global smartphone market has slowed, helped in part by a push overseas into markets like India.

The company said its revenue was 114.62 billion yuan ($ 18 billion) in 2017, up 67.5 percent against 2016. Operating profit for 2017 was 12.22 billion yuan, up from 3.79 billion yuan a year ago.

It made a net loss of 43.89 billion yuan versus a profit of 491.6 million yuan in 2016, though this was impacted by the fair value changes of convertible redeemable preference shares.

A man walks past a Xiaomi store in Shenyang, Liaoning province, China April 7, 2018. Picture taken April 7, 2018. REUTERS/Stringer

Alongside smartphones, Xiaomi makes dozens of internet-connected home appliances and gadgets, including scooters, air purifiers and rice cookers, although it derives most of its profits from internet services.

Its relatively cheap handsets pose a rising challenge to market leaders Samsung Electronics Co Ltd (005930.KS) and Apple Inc (AAPL.O).

Xiaomi doubled its shipments in 2017 to become the world’s fourth-largest smartphone maker, according to Counterpoint Research, defying a global slowdown in smartphone sales.

It is also making a big push outside China’s borders, with 28 percent of its sales derived from overseas markets last year, up from 6.1 percent in 2015.

Yet margins on its smartphones are razor-thin. Xiaomi posted a gross profit margin of just 8.8 percent for its smartphone business in 2017 compared to 60 percent for its internet services business.

According to some analyst estimates, Apple’s flagship iPhone X and iPhone 8 have gross margins of around 60 percent.

The company makes the lion’s share of its profit – 60 percent – from internet services, including gaming and advertising linked to its homegrown user interface, MIUI, which had 190 million monthly active users as of March 2018.

DUAL-CLASS SHARES

Xiaomi’s listing plans come as the company and its investors look to capitalize on a bull run for the Hong Kong market, which has seen the benchmark Hang Seng Index rise about 27 percent over the past year.

Armed with the new rules allowing the listing of companies with dual-class structures, Hong Kong is eyeing several tech listings that are expected in the coming two years from Chinese firms with a combined market cap of $ 500 billion.

Xiaomi said in its IPO application the company would have a weighted voting rights (WVR) structure, or dual-class shares. The WVR give greater power to founding shareholders even with minority shareholding.

The structure would allow the company to benefit from the “continuing vision and leadership” of the dual-class share beneficiaries, who would control the company for its “long-term prospects and strategy”, it said.

Dual-class shares have been a contentious topic in Hong Kong since the city’s strict adherence to a one-share-one-vote principle cost it the float of Alibaba, which instead listed in New York.

Xiaomi is also likely to be among the first Chinese tech firms seeking a secondary listing in its home market, using the planned China depositary receipts route, two people with knowledge of the matter said.

CLSA, Morgan Stanley and Goldman Sachs Group Inc are sponsoring Xiaomi’s IPO.

($ 1 = 6.3610 Chinese yuan renminbi)

Reporting by Cate Cadell in Beijing, Julie Zhu in Hong Kong and Rushil Dutta in Bengaluru; Writing by Sumeet Chatterjee; Editing Stephen Coates

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U.S. considering restrictions on China's telecoms companies: WSJ
May 2, 2018 6:01 pm|Comments (0)

WASHINGTON (Reuters) – The Trump administration is considering executive action to restrict some Chinese companies’ ability to sell telecommunications equipment in the United States, the Wall Street Journal reported on Wednesday.

FILE PHOTO: The Huawei logo is seen during the Mobile World Congress in Barcelona, Spain, February 26, 2018. REUTERS/Yves Herman

The move, which if implemented would likely affect Huawei Technologies Co Ltd [HWT.UL] and ZTE Corp, two of the world’s major telecommunications equipment manufacturers, was based on national security concerns, the Journal said, citing several people familiar with the matter.

U.S. lawmakers and the Trump administration have pressured U.S. companies to not sell Huawei or ZTE products, saying they potentially could be used to spy on Americans. Earlier this year they pushed AT&T to drop a deal with Huawei to sell its smartphones in the United States.

The White House did not immediately respond to a Reuters request for comment. Representative of Huawei and ZTE could not be reached immediately for comment, though both have denied allegations that their products are used to spy.

Any executive action would come on the heels of a series of U.S. moves aimed at stopping or reducing access by Huawei and ZTE to the U.S. economy, including recent restrictions on U.S. suppliers of ZTE set by the Commerce Department, amid allegations the companies could be using their technology to spy on Americans. [nL3N1RX1NT]

The U.S. Department of Defense has already stopped selling mobile phones and modems made by the Chinese technology companies Huawei Technologies [HWT.UL] and ZTE Corp in stores on its military bases, citing potential security risks.

As of April 25, the Pentagon ordered that these and related products be removed from its stores worldwide, according to Pentagon spokesman Major Dave Eastburn.

“These devices may pose an unacceptable risk to the department’s personnel, and mission,” Eastburn said.

The Army and Air Force have more than 3,100 stores around the world, and also sell goods online to military personnel. The Navy Exchange has more than 300 stores worldwide, as well as stores aboard more than 100 ships.

Reporting by Tim Ahmann; Writing by Mohammad Zargham; editing by David Alexander and James Dalgleish

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China's Meituan Dianping acquires bike-sharing firm Mobike
April 4, 2018 6:00 am|Comments (0)

BEIJING (Reuters) – Meituan Dianping, China’s largest provider of on-demand online services, is buying bike-sharing firm Mobike for $ 2.7 billion excluding debt, in a deal that will intensify the rivalry of their common backer Tencent Holdings with Alibaba Group.

A Mobike bike-sharing bicycle is pictured in Singapore August 29, 2017. REUTERS/Edgar Su

Meituan announced the deal on Wednesday but did not disclose the value of the deal. Two sources told Reuters the equity value of the deal was $ 2.7 billion.

The deal consolidates the resources of the two firms, which are backed by Chinese gaming and social media giant Tencent, as Mobike faces off against Alibaba-backed Ofo, which also counts ride-hailing firm Didi Chuxing as a major investor.

A Mobike is pictured after Chinese bike sharing company MOBIKE launched its service in Mexico City, Mexico February 28, 2018. REUTERS/Henry Romero

The two bicycle-sharing companies have waged a costly war of subsidies in a bid to win the Chinese market as well as overseas markets.

Earlier this week, Alibaba said it would assume full control of Chinese food delivery platform Ele.me, a rival to Meituan.

Mobike, which counts over 30 million rides a day, will maintain its brand following the deal and keep its current management team, Meituan said.

Reporting by Cate Cadell in BEIJING, Julie Zhu and Kane Wu in HONG KONG; Editing by Muralikumar Anantharaman

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How China's ride-hailing giant Didi plans to challenge Uber in Mexico
March 19, 2018 6:00 am|Comments (0)

MEXICO CITY/SAN FRANCISCO (Reuters) – Working quietly from a shared office space in one of Mexico City’s trendiest neighborhoods, China’s ride-hailing giant Didi Chuxing is planning to hit its archrival Uber where it hurts.

A man walks by under an Uber logo in Mexico City, Mexico February 6, 2018. Picture taken on February 6, 2018. REUTERS/Carlos Jasso

Mexico is one of Uber Technologies Inc’s [UBER.UL] most prized and profitable markets. The San Francisco firm boasts a near monopoly here, with seven million users in more than three dozen cities. Which is precisely why Didi wants to knock Uber from that comfortable perch.

To learn how to conquer Uber, the Chinese firm is going straight to the source. It is poaching Uber employees for its Mexico management team. Didi employees are riding incognito with Uber drivers and chatting up passengers to pinpoint weaknesses, according to people familiar with its strategy. And Didi is thinking bigger than Uber, with ambitions for bike-sharing, scooters and motorcycles in Mexico, the people say.

The Chinese firm has deep pockets, thanks to blue-chip global investors that include Apple Inc and Japan’s SoftBank Group Corp [9984.T]. In the past year alone, it has pulled in nearly $ 10 billion to help fund global expansion.

“I would not want to go to war with Didi,” said Beijing-based investor and adviser Jeffrey Towson. “They don’t lose.”

But whether Didi can beat its nemesis here is far from certain. Mexico is the Chinese firm’s first attempt at building an operation from scratch outside of Asia – a costly gambit.

What is clear is that Didi is under pressure to keep growing to justify its $ 56 billion valuation. Latin America is the newest battleground for the old rivals, and Didi will be in enemy territory.

“It’s fundamentally different when you’re jumping across an ocean,” said IHS Markit analyst Jeremy Carlson.

DIDI ASCENDING

Didi Chuxing Technology Co is the world’s largest ride-hailing firm by number of rides, thanks to its commanding market share in China, where it has 450 million users. It completed more than 7.4 billion rides last year, not quite double Uber’s count.

Uber learned the hard way about Didi’s brawn. After waging an expensive campaign to crack the Chinese market, Uber in 2016 sold its operation to Didi in exchange for a 17.5 percent stake in the Chinese firm, which also made a $ 1 billion investment in Uber.

The titans continue to butt heads as they race to carve up the rest of the globe. Uber is the top dog in Latin America, where Brazil and Mexico rank among its largest markets outside the United States. In Mexico, Uber held an 87 percent market share as of August, according to Dalia Research, a Berlin-based consumer research firm.

(For a graphic on Uber’s market share in Latin America, see: tmsnrt.rs/2FhfZHo)

Didi wants to change that. Reuters was first to report that Didi had designs on Mexico, where it began recruiting employees last year.

The company declined to talk openly about its plans, but details of its strategy are emerging.

Nestled on the ninth floor of a WeWork shared office building in the capital’s Juarez neighborhood, Didi is building an operation from the ground up. In foreign markets such as India and the Middle East, it purchased stakes in existing companies. But Uber is so dominant in Mexico that there is no clear investment opportunity in a local competitor, according to people familiar with Didi’s thinking.

Hungry for experienced talent, Didi is aggressively recruiting current and former Uber employees, offering to nearly double their salaries in some cases, two people with knowledge of the matter said.

At the helm of Didi’s Mexico operation is Uber veteran Lin Ma, who helped launch Uber’s ill-fated venture in China. Now Didi’s director of international operations, Ma also worked on operations at 99, the Brazilian ride-hailing startup that Didi purchased at the end of last year, according to his LinkedIn profile.

Ma and others at Didi have so far poached at least five Uber managers and specialists in Mexico who have experience in operations, logistics, strategy, marketing and driver training, a review of LinkedIn profiles shows.

Ma declined to comment.

An Uber logo is seen outside an Uber car in Mexico City, Mexico February 6, 2018. Picture taken on February 6, 2018. REUTERS/Carlos Jasso

The company has yet to recruit drivers, and it is not clear which cities it will enter first, according to a person familiar with Didi’s strategy.

Rather than compete solely on price, the person said, Didi plans to promote safe drivers and fast response times; the company has built an algorithm to help it predict 15 minutes in advance where it should dispatch vehicles.

Didi is also considering offering bike-sharing, scooters and motorcycles in Mexico, while Uber so far has stuck to ride-hailing. A broad array of transport options helped Didi prevail in China.

But the biggest difference may come down to cash. To protect drivers, the person said, Didi will not handle cash fares in Mexico.

Uber, meanwhile, has pushed Mexican lawmakers hard for the right to accept cash in a region where tens of millions lack bank accounts. The move has generated business, along with controversy.

In Brazil, Uber saw a surge of robberies and murders of its drivers after the company began accepting cash there, according to a 2017 Reuters analysis. Uber says it has added tools to authenticate riders’ identities, better protecting drivers.

An Uber driver checks the route on a mobile phone inside his car in Mexico City, Mexico February 6, 2018. Picture taken on February 6, 2018. REUTERS/Carlos Jasso

Mexico has not seen a similar wave of attacks so far. Nevertheless, Uber’s position puts it at odds with regulators in some Mexican states.

While Didi appears to be sidestepping that obstacle, it faces cultural hurdles in Latin America, according to Daisy Wu, head of international business at Yeahmobi, which helps Chinese startups go global.

Latin American consumers generally prefer U.S. brands to Chinese brands, she said, and Chinese business culture can be off-putting to local employees.

“Most of the Chinese companies that have gone to Latin America are still trying to be successful,” Wu said.

Didi, for example, bewildered Mexico job candidates by trying to schedule interviews the week of Christmas.

“I was very surprised … I was thinking, should I cancel my vacation?” one applicant told Reuters.

UBER’S BATTLE

Uber’s lead in Latin America, meanwhile, has taken on heightened importance as it prepares for a potential initial public offering next year.

The company, which lost $ 4.5 billion last year, is facing fierce competition at home and in Asia, and a regulatory crackdown in Europe. It is also recovering from a year of scandals that saw co-founder Travis Kalanick forced out as chief executive in June amid multiple federal criminal probes and a workplace marred by sexual harassment allegations.

Andrew Macdonald, Uber’s vice president of operations for Latin America and Asia Pacific, said Uber is prepared to do what it takes to remain dominant in Mexico, a profitable market amid a sea of losses.

“Whether that’s more spending on customer acquisition or more deeply engaging with our existing customers, that will continue to be our focus,” he said.

Uber is committed to maintaining cheap fares for its basic service to keep its Mexican customers loyal, Macdonald said. But he said the company is considering adding more ride options such as upscale cars that would boost revenue.

If Uber is nervous about Didi stealing its lead in Mexico, it is not showing it. Macdonald said the learning curve is steep, something its rival is about to find out.

“Didi has significant bankroll,” Macdonald said. “But there are significant local complexities.”

Reporting by Julia Love in Mexico City and Heather Somerville in San Francisco; additional reporting by Noe Torres in Mexico City.; Editing by Marla Dickerson

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China's ZTE says is trusted partner after U.S. concern
February 15, 2018 6:00 am|Comments (0)

BEIJING (Reuters) – Chinese telecoms equipment group ZTE Corp hit back on Thursday against concerns from U.S. lawmakers that it is a vehicle for Chinese espionage, saying it was a trusted partner of its U.S. customers, state news agency Xinhua reported.

China is trying to gain access to sensitive U.S. technologies and intellectual properties through telecommunications companies, academia and joint business ventures, U.S. senators and spy chiefs warned on Tuesday.

Republican Senator Richard Burr, chairman of the Senate Intelligence Committee, said he was concerned about the ties to the Chinese government of Chinese telecoms companies like Huawei Technologies Co Ltd and ZTE.

“ZTE is proud of the innovation and security of our products in the U.S. market,” Xinhua cited a ZTE spokesman as saying.

The company takes cybersecurity and privacy seriously, has always adhered to laws and remains a trusted partner of U.S. suppliers and customers, the company added.

“As a publicly traded company, we are committed to adhering to all applicable laws and regulations of the United States, work with carriers to pass strict testing protocols, and adhere to the highest business standards,” it said.

Last week, Republican Senator Tom Cotton and Republican Senator Marco Rubio introduced legislation that would block the U.S. government from buying or leasing telecoms equipment from Huawei or ZTE, citing concern the companies would use their access to spy on U.S. officials.

In 2012, Huawei and ZTE were the subject of a U.S. investigation into whether their equipment provided an opportunity for foreign espionage and threatened critical U.S. infrastructure – something they have consistently denied.

Allegations of hacking and internet spying have long strained relations between China and the United States. In 2014 then FBI Director James Comey said Chinese hacking likely cost the U.S. economy billions of dollars every year.

China has strongly denied all U.S. accusations of hacking attacks.

Reporting by Ben Blanchard; Editing by Stephen Coates

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Exclusive: China's Ant plans equity fundraising at potential $100 billion valuation – sources
February 9, 2018 6:00 am|Comments (0)

HONG KONG (Reuters) – China’s Ant Financial Services Group is planning to raise up to $ 5 billion in fresh equity that could value the online payments giant at more than $ 100 billion, people familiar with the move told Reuters.

A fundraising would bring Ant, in which e-commerce firm Alibaba Group Holding Ltd is taking a one-third stake, a step closer to a hotly anticipated initial public offering by establishing a more current valuation.

Ant’s last fundraising in 2016 valued the owner of Alipay, China’s top online payment platform, at about $ 60 billion. The new round should start with a valuation of between $ 80 billion to $ 100 billion, the people said.

Ant is currently in talks to appoint advisers for the fundraising which is expected to be launched in the next couple of months, they added.

Ant declined to comment on its fundraising plans. All the people spoke to Reuters on the condition they not be identified due to the sensitivity of the issue.

While no timetable for an IPO has been set, nor any location yet chosen, Ant’s plans are being viewed as a pre-IPO fundraising, the people said. A pre-IPO round is an increasingly common move by sought-after Chinese companies to establish valuations and widen their investor base ahead of going public.

It was not immediately clear how the company plans to use the fresh cash.

The exact timing and size of the fundraising still depends on investor feedback but any deal will add to an already hectic pace of domestic and offshore fundraising by Chinese tech firms that are looking to expand both at home and abroad.

Chinese e-commerce firm JD.com is raising funds for its logistics unit with a target of attracting at least $ 2 billion, while live-video streaming start-up Kuaishou is nearing the close of a $ 1 billion funding round, sources have said.

Ant’s own existing investments include stakes in Paytm, the Indian mobile payment and e-commerce website, and Thai financial technology firm Ascend Money.

Last month, however, Ant suffered a setback when a U.S. government panel rejected its $ 1.2 billion offer for money transfer company MoneyGram International over security concerns.

At home, in addition to its core online payments business, which Ant says has 520 million yearly users, the company also offers wealth management, credit scoring, micro lending and insurance services.

Last week, Alibaba announced it would take a 33 percent stake in Ant – replacing the current system where Alibaba receives 37.5 percent of Ant’s pre-tax profit – in what was viewed as an important step ahead of any IPO.

Alibaba set up Alipay in 2004, modeling the business on PayPal, to help Chinese buyers shop online, and later controversially spun it off ahead of its own listing in 2014. Jack Ma, Alibaba’s founder, controls Ant, according to Alibaba filings with the U.S Securities and Exchange Commission.

Ant is considered by some analysts as one of the most valuable Alibaba assets due to its unique position in Chinese e-commerce.

Current shareholders in Ant include large state-owned institutions such as China Life Insurance, China Post Group – parent of Postal Savings Bank of China – and a unit of China Development Bank.

Reporting by Sumeet Chatterjee and Julie Zhu; Additional reporting by Kane Wu; Editing by Muralikumar Anantharaman and Edwina Gibbs

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China's Leshi says $890 million of debts due this year, shares drop 10 percent
February 5, 2018 6:00 am|Comments (0)

HONG KONG (Reuters) – China’s Leshi Internet said about 5.62 billion yuan ($ 890 million) of its debts would be due by the end of this year, or almost two-thirds of the company’s total loans and liabilities, sending its shares down for a ninth day.

This is the first time the video-streaming firm – which is battling the fallout from a severe cash crunch at its founder Jia Yueting’s embattled technology conglomerate LeEco – has provided an estimate for its debt in 2018.

Earlier, the company had said that a part of its total loans and financial liabilities of 9.29 billion yuan ($ 1.5 billion)would be due this year, without giving any further details.

Leshi shares plunged by the daily limit of 10 percent on Monday. Nine days of declines, since the stock resumed trading in January after a nine-month suspension, have knocked 37.5 billion yuan off the company’s market capitalization, that is currently at 23.7 billion yuan.

At its peak in 2015, Leshi was valued at 153 billion yuan.

Just last week, Leshi flagged that it expected a loss of 11.6 billion yuan for 2017, more than five times its combined profits since listing on the Shenzhen stock exchange in 2010, due to the ongoing crisis at LeEco.

LeEco was once China’s Netflix-to-Tesla contender but ran into a cash crunch since late 2016 after expanding too fast. Leshi used to be the main listed unit of the conglomerate.

But under the control of property developer Sunac China – its second-largest shareholder, Leshi is now trying to distance itself from the LeEco brand.

Leshi says its largest shareholder Jia and related LeEco units owe it 7.5 billion yuan ($ 1.19 billion). LeEco disputes the figure.

Shares of Sunac plunged as much as 6 percent, lagging a nearly 2 percent fall for the benchmark index.

Reporting by Sijia Jiang; Editing by Himani Sarkar

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