|Bid||39.14 x 800|
|Ask||39.30 x 800|
|Day's range||38.67 - 39.29|
|52-week range||30.12 - 50.22|
|Beta (5Y monthly)||0.78|
|PE ratio (TTM)||8.99|
|Forward dividend & yield||2.22 (5.84%)|
|Ex-dividend date||20 May 2020|
|1y target est||50.62|
(Bloomberg) -- Sign up for Next China, a weekly email on where the nation stands now and where it's going next.The deadly coronavirus outbreak, which has pushed the Chinese medical community into overdrive, has also prompted the country’s hospitals to more quickly adopt robots as medical assistants.Telepresence bots that allow remote video communication, patient health monitoring and safe delivery of medical goods are growing in number on hospital floors in urban China. They’re now acting as a safe go-between that helps curb the spread of the coronavirus.Keenon Robotics Co., a Shanghai-based company, deployed 16 robots of a model nicknamed “little peanut” to a hospital in Hangzhou after a group of Wuhan travelers to Singapore were held in quarantine. Siasun Robot and Automation Co. donated seven medical robots and 14 catering service robots to the Shenyang Red Cross to help hospitals combat the virus on Wednesday, according to a media release on the company’s website. Keenon and Siasun didn’t reply immediately to requests for comment. JD.com Inc. is testing the use of autonomous delivery robots in Wuhan, the company said in a statement. Local media has also reported robots being used in hospitals in the city as well as in Guangzhou, Jiangxi, Chengdu, Beijing, Shanghai, and Tianjin.The rapid spread of the coronavirus has left provincial hospitals straining to cope and helped accelerate the embrace of robots as one solution, turning the gadgets into medical assistants. These bots join China’s tech-heavy response to the coronavirus outbreak, which also includes airborne drones and work-from-home apps. The jury remains out on how effective these coping tactics will be.China’s rapid buildout of fifth-generation wireless networking in areas around urban hospitals has also seen a rise in 5G-powered medical robots -- equipped with cameras that allow remote video communication and patient monitoring. These are in contrast to robots like little peanut, whose primary function is to make indoor deliveries.“The technology of robots used in Chinese hospitals isn’t high, but what this virus is also highlighting -- and it could be the next stage of Chinese robots -- is the use of medical robot deployment,” said Bloomberg Intelligence analyst Nikkie Lu.China Mobile Ltd. donated one 5G robot each to both Wuhan Union Hospital and Tongji Tianyou Hospital this week, according to a report by ThePaper.cn. Riding the 5G network, these assistant bots carry a disinfectant tank on board and will be used to safely clean hospital areas along a predetermined route, reducing the risk to medical personnel.Zhejiang People’s Hospital used a 5G robot to diagnose its first coronavirus patient on Sunday, according to a report by the Hangzhou news center run by the State Council Information Office. Beijing Jishuitan Hospital performed remote surgery on a patient in Shandong province via China Telecom Corp.’s 5G network last June.While it may take patients a moment or two to get over the shock of being helped by a robot rather than a medical professional, bots have already permeated a growing number of sectors in Chinese society including nursing homes, restaurants, warehouses, banks and over 200 kindergartens.Financial services company Huachuang Securities Co. believes even more robots are in China’s immediate future. Pointing to National Bureau of Statistics data suggesting that domestic production of industrial robots increased by 15.3% in the month of December, they predict similarly fast growth in the current quarter, according to a report published by Finance Sina.The increased quantity of robots deployed to combat the coronavirus has helped accelerate China’s path to the goal it had already set for itself. The country wants to become one of the world’s top 10 most intensively automated nations by the end of this year.To contact the reporter on this story: Kari Lindberg in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Vlad Savov, Colum MurphyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Google and Facebook seem to have resigned themselves to losing part of the longest and highest-profile internet cable they have invested in to date. In a filing with the Federal Communications Commission last week, the two companies requested permission to activate the Pacific Light Cable Network (PLCN) between the U.S. and the Philippines and Taiwan, leaving its controversial Hong Kong and Chinese sections dormant. Every time you visit a foreign website or send an email abroad, you are using a fiber-optic cable on the seabed.
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
(Bloomberg) -- Sign up for Next China, a weekly email on where the nation stands now and where it's going next.China’s phone carriers offered discounts to subscribers after switching on the world’s largest 5G network Thursday, seeking to spur growth for an ultra-fast wireless system that’s key to technology supremacy. The country’s three wireless operators need to attract users to help pay for infrastructure they’ve spent more than $43 billion on in this year alone. While the technology is essential for developing industrial applications expected to drive a new digital economy, its faster speeds and lower lag times may be less compelling for consumers than previous upgrades.On the launch day of fifth-generation services in Beijing’s financial district, stores were quiet as carriers said they expect more users to sign up online.On the Twitter-like Weibo, “5G launching in 50 cities” and “5G package prices” were among the top-20 trending topics. But some Chinese consumers are balking at the high prices for handsets and service plans.“I don’t have money to buy a 5G phone, or to pay for a plan,” said Weibo user Yuanyao. “Too expensive. I can’t afford it,” said another named XBACK-No fear.Smartphone SupremacyWhile carriers look to lure more users to pay up for faster services, China’s handset makers also stand to benefit from fast uptake.Huawei Technologies Co., which also supplies the biggest slice of 5G network equipment, saw its smartphone market share jump to 42% in the third quarter, up from around 25% a year ago, according to research firm Canalys. It has already introduced several 5G models, as have Chinese brands including ZTE, Xiaomi and Vivo.Luring users to the world’s largest 5G networks may also help Chinese handset makers increase their global market share. Samsung Electronics Co. is the world’s top seller of smartphones, followed by Huawei. and Apple Inc.Huawei has already debuted models that work on the super-fast network in the U.K. and other markets in addition to China. On Wednesday, the Nikkei reported that Apple is telling suppliers that it expects to ship at least 80 million iPhones with 5G wireless modems next year.5G DealsAs of Thursday, China Mobile Ltd. was offering discounts of as much as 30% for users that pre-registered for 5G. Consumers buying 5G handsets from the carrier will get as much as 600 yuan ($85) off and gifts worth 699 yuan, the biggest operator by users said in a statement.China Unicom Hong Kong Ltd., the No. 3 carrier, and No. 2 China Telecom Corp. are also offering similar discounts to pre-registered users, along with other discounts and gifts via online lotteries and through their branches throughout the country.South Korea’s wireless carriers were the first to offer commercial 5G services, with SK Telecom Co. launching its network in April and Samsung already offering a 5G-enabled smartphone. Total 5G subscribers have surpassed 3 million in the country, although consumer reaction has been mixed.The faster network’s coverage was initially incomplete, leaving users to fall back on 4G more than some had expected, especially when using the service indoors.South Korean carriers SK Telecom Co., KT Corp. and LG Uplus Corp., have also sought to entice new users to adopt the technology, offering trade-ins and incentives that slash the price of new 5G phones to less than $200 from sticker prices of as much as $1,000. The subsidies have declined as the rollout expanded, said Kim Hee Sup, vice president at SK Telecom.“It’s true that the speed and coverage of 5G didn’t meet consumers’ expectations in early days,” said Kim Hee Sup, a vice president at South Korea’s largest carrier SK Telecom. “Now, the 5G service is rapidly improving as carriers are expanding the roll-out.”T-Mobile US Inc. earlier this week said it will flip on a nationwide 5G service by year end. Still, the carrier doesn’t offer yet offer a 5G compatible device yet and the service will be available only on one band of airwaves they are calling the “foundational layer,” with more layers of spectrum to come.The largest U.S. wireless carrier Verizon Communications Inc. launched 5G in April and has promised to have it available in parts of 30 cities this year. Rival AT&T Inc. has 5G in areas of 21 cities and plans to offer 5G nationwide by mid 2020. Sprint Inc., which has limited 5G available in nine cities, has promised a superior 5G network if its $26.5 billion merger with T-Mobile is approved.\--With assistance from Sohee Kim and Scott Moritz.To contact Bloomberg News staff for this story: Shirley Zhao in Hong Kong at firstname.lastname@example.org;Gao Yuan in Beijing at email@example.comTo contact the editors responsible for this story: Sam Nagarajan at firstname.lastname@example.org, Dave McCombs, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- China’s three state-owned wireless carriers debuted 5G mobile phone services Thursday, a milestone in the country’s push to become a technology power even as it remains locked in a trade war with the U.S.China Mobile Ltd., the country’s largest carrier, unveiled its network in 50 cities including Beijing, Shanghai and Shenzhen, with packages priced as low as 128 yuan ($18) a month. Rivals China Telecom Corp. and China Unicom Hong Kong Ltd. also introduced their services at comparable rates.The operators had planned to start the networks next year, but accelerated the rollout just as the U.S. dug in on a boycott of China-based 5G equipment supplier and technology giant Huawei Technologies Co. Operators in the U.S. have introduced 5G to parts of some cities, without using Huawei gear, and South Korea debuted its version in April, though China will quickly become the largest provider by virtue of its huge population and investment by the companies.“While some other countries launched 5G services earlier this year, China will have the largest commercial operating 5G network in the world on Friday,” Chris Lane and other analysts at Sanford C. Bernstein. wrote in a note to clients Wednesday. “The scale of its network and the price of its 5G services will have a pivotal impact throughout the supply chain.”How 5G Will Change China (Beyond Faster Video Games): QuickTakeLocal media had initially reported the carriers would make 5G available starting Friday. As of Thursday morning, all three were already offering access to the service.Subscribers in China -- more than 10 million have pre-registered for 5G -- will have access to faster videos and games, more virtual reality applications and improved performance for mobile videoconferencing.China Mobile’s 5G packages for the heaviest users are priced similar to 4G plans that go as high as 588 yuan a month.The largest cities including Beijing, Shanghai and Shenzhen will get full coverage first. The three operators have projected a combined capital spending of 302 billion yuan this year.Subsidies for Huawei Gear Would Be Banned Under FCC Proposal The scale of deploying 5G infrastructure across China is especially important for Huawei. Dominance in the world’s largest market can blunt the effects of a U.S. campaign against other countries installing Huawei gear, which it accuses of posing a security threat. Despite the U.S. pressure, Huawei said in July that it had signed more than 60 commercial contracts to supply 5G networks around the world, including at least 28 in Europe.(Updates with introductions Thursday in second paragraph)\--With assistance from Gao Yuan.To contact the reporter on this story: Shirley Zhao in Hong Kong at email@example.comTo contact the editors responsible for this story: Sam Nagarajan at firstname.lastname@example.org, Dave McCombsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- For most people, the transition to 5G means faster mobile data speeds, possibly up to 100 times quicker than the current standards. For Kim Duk-yong, it means amassing a fortune worth hundreds of millions of dollars.When South Korea became the first country to launch nationwide fifth-generation mobile services in April, Kim’s KMW Inc., a supplier of telecom equipment used in 5G networks, was a major beneficiary. Shares of the company surged sevenfold this year, boosting KMW’s market value to about $2.6 billion. The stock rose as much as 3.6% on Tuesday.Kim, who owns 36% of KMW along with his family, is now worth about $900 million, according to a calculation by the Bloomberg Billionaires Index that excludes shares pledged as collateral. He’s one of the first big winners of the shift to 5G that’s set to spread worldwide.It’s also a remarkable transformation for a company that had been mired in losses before sales more than doubled in the first half of 2019.Kim, 62, declined to comment. He told local media in August that some people were beginning to write off his company.“We were even called a zombie company by banks,” Kim was quoted as saying by ZDNet Korea, a technology news website. “Things have got better with the launch of 5G networks.”South Korea’s science and technology minister at the time, You Young-min, visited KMW in Hwaseong, a city south of Seoul, last month as part of checks on small and medium enterprises after the start of 5G services. Kim told the minister that demand for KMW’s products had surged, with revenue increasing 113% in the first half of 2019 from a year earlier, according to the ministry’s press release.KMW makes radio-frequency components for base stations. Its main customers include 5G infrastructure providers such as Samsung Electronics Co. and Nokia Oyj. The company’s ability to mass produce filters, essential for 5G services, at lower costs gives it an edge over competitors, according to a KMW spokesman.South Korea has seen a rapid expansion of 5G services since April, with the number of subscribers surpassing 2.5 million and more than 89,000 base stations in operation as of last month.China ProspectsKMW has room to grow outside South Korea as well, according to analysts. In the Chinese market, the government granted 5G licenses to wireless carriers in June. KMW supplies ZTE Corp., the smaller Chinese rival of telecom-gear giant Huawei Technologies Co.“5G spending by China’s big three operators is much larger than that of South Korea,” said Kim Hong-sik, an analyst at Hana Financial Investment Co. in Seoul who rates the stock a buy. “KMW provides its products to the largest one, China Mobile, through ZTE. Its exports to China are expected to increase further in line with the country’s preparation for 5G.”KMW also manufactures LED lights, which make up 10% of its revenue, according to its 2018 annual report. In 2015, the New York Yankees chose the company to install lights at its stadium.The stock surge has pushed up valuations, with KMW now trading at about 18 times book value. Still, all five analysts covering the stock recommend buying more. One risk to the company is how things will unfold in China, including a possible delay in 5G buildup because of a consumption slowdown, according to Wangjin Lee, an analyst at Ebest Investment & Securities Co.Wary LendersIt wasn’t Kim’s dream to become an entrepreneur. As an electronic engineering student in Seoul, he wanted to study more to become an academic. But he couldn’t afford to stay in school, so he entered the job market, working at companies including Samsung’s joint venture with Hewlett Packard before starting KMW in 1991.Kim founded the company with money from selling his apartment, and could only afford to hire one employee. Before this year, KMW incurred losses as Chinese competitors flooded the market with cheaper prices. That prompted banks to become wary of transactions with KMW, Kim told E-daily, a local newspaper, in a May interview.“I experienced how banks take the umbrella away when it rains,” Kim said. “I’ve been striving to show how a zombie company can survive.”(Updates with Tuesday’s share move in second paragraph.)To contact the reporter on this story: Yoojung Lee in Singapore at email@example.comTo contact the editors responsible for this story: Pierre Paulden at firstname.lastname@example.org, Tom Redmond, Peter EichenbaumFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
China Mobile Limited (CHL) is mulling to enter the Brazilian market by acquiring Oi to tap growth opportunities from 5G roll-out across the country.
(Bloomberg) -- Huawei Technologies Co. and China Mobile Ltd. are exploring a partnership to bid for Brazilian phone company Oi SA, O Globo Newspaper reported, without citing a source.Huawei, the phone maker caught in disputes between China and the U.S., is seeking the bid as an opportunity to enter the Brazilian market and expand its reach for 5G technology, the newspaper said. The plan also comes as the Brazilian government wants a solution for the indebted company, O Globo added.Oi declined to comment on the report, while officials at Huawei and China Mobile couldn’t be reached after regular office hours.Speculation of the bid comes as Brazil’s Senate approved a bill to update the country’s obsolete framework for telecommunications, paving the way for Oi to implement a plan to sell up to $2 billion in non-core assets. Earlier this week, Suno Notícias reported that China Mobile has filed a request to operate in Brazil and eventually acquire Oi. The country’s telecom regulatory agency Anatel said Sept. 17 it didn’t have any official information regarding the request.The Senate’s approval also sparked speculation of talks between the Brazilian carrier and other companies. In the past week, Telecom Italia SpA and Telefonica Brasil SA both denied reports in the Brazilian media that they’re in talks with Oi.The Rio de Janeiro-based telecom operator wants to sell assets including its African unit Unitel SA and focus on the last mile of its fiber-optic network, Brazil’s largest, to get revenue growing again as it enters the last phase of a two-year judicial recovery plan.Oi posted a loss of 1.56 billion reais ($376 million) last month and said it burned about 2 billion reais of cash in the second quarter, even as investors are still recovering from the company’s $19 billion debt restructuring in December 2017. The results prompted the phone giant’s largest shareholder to seek a replacement for a new chief executive officer.(Updates with regulator’s comment on earlier report on China Mobile in fourth paragraph.)To contact the reporter on this story: Mario Sergio Lima in Brasilia Newsroom at email@example.comTo contact the editors responsible for this story: Juan Pablo Spinetto at firstname.lastname@example.org, Ian FisherFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- The impact of the Trump administration’s blacklisting of Huawei Technologies Co. was laid bare as the Chinese company unveiled a flagship Android-powered smartphone that lacks any licensed Google apps.Announced at an event in Munich on Thursday, the Huawei Mate 30 and Mate 30 Pro mark the brand’s first top-of-the-range device launch since it was forbidden in the spring from trading with American partners.Huawei Consumer Group Chief Executive Officer Richard Yu remained upbeat on stage during the company’s presentation, promising the phone would be a technological powerhouse with an unmatched new camera system.In May, the U.S. government blacklisted Huawei -- which it accuses of aiding Beijing in espionage -- forcing chipmakers, software developers and other component manufacturers to stop selling critical smartphone parts to the company.The ban’s reach affected Alphabet Inc.’s Google, maker of the Android mobile operating system, which is why the new Huawei phone doesn’t have apps such as Google Maps, YouTube or the Google Play Store. The Mate 30 Pro runs on a version of Android that’s free and open-source, meaning companies don’t need a license from Google to use it. Huawei calls its edition EMUI10. But without the all-important Play Store app repository, it’s still a barebones Android version underneath.Consumers will be able to manually “side-load” some Google apps, or use available web versions, Richard Yu told reporters after the launch event.“We’re trying to make it okay for consumers but we need time to solve this issue,” he said. “The consumer can make a compromise. It’s a balance.”On the inside, the Mate 30 Pro runs on the new Kirin 990 5G processor, made by Huawei subsidiary HiSilicon, which packs more than 10.3 billion transistors into a space the size of a fingernail. The chip also combines a graphics processor, a 5G modem and dedicated neural processing units for accelerating artificial intelligence tasks into one.Huawei and Samsung’s New 5G Chips Pose Threat to QualcommYu said Huawei’s testing on the China Mobile network showed the Mate 30 Pro able to achieve 5G download speeds of about 1,500 megabits-per-second -- a figure that far outstrips the average figures possible even on most domestic fixed line internet connections in the U.S. and Europe.Commenting ahead of Thursday’s launch, CCS Insight analyst Ben Wood said Huawei’s strong brand in Europe meant there “will be a market for any new products,” given the company’s “good track record in slick design and leading edge features such as multiple cameras.”“However, not having Google services will mean it’s a huge challenge for customers,” he added.Other features of the Huawei Mate 30 Pro include:A 165 millimeter (6.5 inch) OLED screenA quad-camera array with uncommonly large image sensors for a smartphone that capture photos at 40 megapixels, as well as ultra-slow-motion video at 7,680 frames per secondA powerful octa-core CPUWater and dust resistantA 4,500mAh battery and wireless chargingThe Mate 30 and Mate 30 Pro will go on sale in China next week and in Europe next month, costing 799 euros ($884) and 1,099 euros respectively.Yu also announced Huawei’s folding phone, the Huawei Mate X, will go on sale in China in October. First announced in February, the phone supports next-generation 5G networks and is the second folding phone from a major manufacturer to go on sale this fall -- Samsung released the Galaxy Fold on Sept 6. It’ll be available in Europe next year, Yu said.(Updates with CEO quotes in 6th paragraph, pricing in penultimate.)To contact the reporters on this story: Nate Lanxon in London at email@example.com;Oliver Sachgau in Munich at firstname.lastname@example.orgTo contact the editors responsible for this story: Giles Turner at email@example.com, Vlad SavovFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Two U.S. senators on Monday asked the FCC and national security agencies to review whether two Chinese state-owned telecom companies should be allowed to operate in the United States, at a time of heightened concern about possible Chinese spying. Senate Democratic Leader Charles Schumer and Senator Tom Cotton, a Republican, asked Federal Communications Commission chairman Ajit Pai to review approvals in the early 2000s that allow China Telecom and China Unicom to operate in the United States.
(Bloomberg) -- Samsung Electronics Co. and Huawei Technologies Co. took turns announcing new mobile processors at the IFA technology show in Berlin last week, and the big thing the new chips have in common is an integrated 5G modem.In a market dominated by U.S. rival Qualcomm Inc., the world’s two biggest smartphone manufacturers asserted a lead in delivering one of the keys to unlocking widespread availability of 5G devices. A system-on-chip that integrates the applications processor and a fifth-generation wireless modem significantly reduces the space and power requirements compared to existing solutions that use two separate chips.Qualcomm has such models on its 2020 road map, but this past week Samsung announced it’s planning mass production for its alternative at the end of 2019 and Huawei is moving even faster, promising to release its most advanced processor with the Mate 30 Pro smartphone on Sept. 19.The Kirin 990 5G from Huawei subsidiary HiSilicon is built at Taiwan Semiconductor Manufacturing Co. and packs more than 10.3 billion transistors into a space the size of a fingernail. It includes a graphics processor, an octa-core CPU, and the all-important 5G modem, along with dedicated neural processing units for accelerating artificial intelligence tasks.At Huawei’s Berlin launch event, consumer group Chief Executive Officer Richard Yu showed the high-end 990 5G achieving real-world download speeds on China Mobile’s network in excess of 1.7Gbps. That’s fast enough to download high-definition movies and demanding 3-D games in a matter of seconds.Samsung’s approach with its Exynos 980 is to target the mid-range. Along with 5G capabilities, this new chip integrates 802.11ax fast Wi-Fi along with Samsung’s own NPU. It won’t run apps and games quite as quickly as flagship chips, but should help the South Korean company garner a slice of the more mainstream market before Qualcomm brings out an armada of new 5G-capable chips next year.Samsung’s emphasis on this part of the mobile market was also signaled by its launch of the Galaxy A90 this month, one of the earliest examples of a mid-range device with 5G.Huawei’s Next Flagship Phone Set to Sink Without Google Apps (1)For its part, Qualcomm is promising to cover the entire range of price points and mobile device types with its 5G portfolio in 2020, however the world’s premier mobile chip designer is finding itself behind its faster-moving rivals.While Huawei is “pushing to show tech leadership,” the company has “made sacrifices in order to make an integrated SOC,” said Anshel Sag, mobile industry analyst at Moor Insights & Strategy. He cited the chip’s lack of support for mmWave -- the high-frequency 5G favored by U.S. carriers AT&T Inc. and Verizon Communications Inc. plus some European ones -- as an example. The Kirin 990 5G is fast by today’s standards and a great upgrade for Huawei’s upcoming devices in China, but Sag said it’ll find itself outpaced by rivals in 2020.The silver lining to the trade war for Qualcomm, however, is that Huawei’s Mate 30 Pro will struggle to sell in Europe so long as the Trump administration prevents it from offering Google services on new phones. Irrespective of how fast and advanced its Kirin 990 5G may be, the trade war will prevent Huawei from fully capitalizing on its capabilities and may, in fact, push the company to license the chip out to other smartphone vendors, such as Lenovo Group, which is not subject to the same sanctions.If the U.S. keeps Huawei on its blacklist, preventing it from buying American technology, the company faces further chip challenges. To develop successors to the Kirin 990, it needs to license the latest designs from SoftBank Group’s ARM, but that company discontinued work with Huawei because of the U.S. ban.(Updates with analyst comment in the third from last paragraph.)To contact the reporter on this story: Vlad Savov in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Nate Lanxon, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Megvii Technology Ltd. for the first time revealed the stunning growth fueled by a nation’s obsession with security.The Alibaba Group Holding Ltd.-backed startup tripled revenue to 949 million yuan ($133 million) in the first half. It generated more than 73% of those sales from AI services for major clients like government agencies, hospitals and real estate developers, the company said in a filing to the Hong Kong Stock Exchange.Seven-year-old Megvii is said to be angling to raise as much as $1 billion in its initial public offering, becoming the first of China’s fast-rising AI stars to debut and beating Sensetime Group Ltd. to the punch. Its share sale however will run up against a host of uncertainties from violent pro-democracy protests that’ve gripped Hong Kong to the Trump administration’s increasingly aggressive campaign to contain China’s tech champions.Megvii is moving forward even as other companies pump the brakes on their Hong Kong listing ambitions, wary of the turmoil. Its fundraising will further Beijing’s effort to lead the sector by 2030. That’s in turn prompting the Trump administration to sound the alarm about investment into Chinese technology.Megvii generates the bulk of its revenue from products that combine software and sensors to help government agencies and other clients enhance public safety and optimize traffic management. Sales from that business, which it labeled “city IoT solutions,” jumped 270% to 694.8 million yuan in 2019’s first six months. Megvii said it served 112 cities in China, 38% of the country’s total, as of June. It posted 5.2 billion yuan in losses for the first half, while adjusted profit reached 32.7 million yuan.‘IPOs‘ have been pretty disappointing in the past few months, but since AI is a hot category at the moment it could gain more traction,” said Mark Tanner, founder of Shanghai-based research and marketing company China Skinny.Read more: China AI Startup Files for Hong Kong IPO Despite ProtestsThe filing kicked off the formal process for an IPO, though it could be months before Megvii’s actual debut. The offering faces particular challenges. Washington has upped its rhetoric about inspection of investment into Chinese technology, which may erode the interest of U.S. money managers in the country’s AI startups.In a list of risk factors, Megvii warned of possible economic and trade restrictions similar to curbs imposed on Huawei Technologies Co. Should that happen, it would prevent the company from procuring technology, and impair its ability to develop solutions. The company stressed that it’s made sure it’s compliant with relevant restrictions, while making contingency plans to minimize the negative impact of potential curbs.Read more: Trump Aides Say He Has Power to Force Companies From China (2)Megvii also warned that sanctions on sales of American technology to Huawei may roil industries from consumer electronics to telecommunications. “Prolonged restrictions against Huawei could cause a turmoil to all such industries, which may in turn materially and adversely affect our business,” it said.Megvii also sells face-scanning systems to companies from iPhone-maker Foxconn Technology Group to Lenovo Group Ltd. and Ant Financial, the payments affiliate that supports Alibaba’s e-commerce business. The company generated 207.2 million yuan from the segment it dubs “personal IoT solutions,” or 21.8% of its revenue. Its third major business line, solutions for logistics that deploy AI-empowered robots and sensors, made up some 5% of revenue.Megvii counts Alibaba and its financial affiliate Ant Financial, Lenovo Group Ltd. and China Mobile Ltd. as strategic investors. Alibaba indirectly held 14.3% of its shares, while Ant Financial indirectly held 15.1%.Read the IPO filing here.(Updates with analyst’s comment in the fifth paragraph)To contact the reporter on this story: Lulu Yilun Chen in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Oct.21 -- Edison Lee, head of telecom and telecom equipment research at Jefferies, talks about Chinese mobile phone operators. China Mobile Ltd.’s nine-month profit fell as government mandated tariff cuts and spending on its business transformation eroded earnings, leaving the carrier on track for its first drop in annual profit since 2015. Lee speaks with Yvonne Man and Rishaad Salamat on "Bloomberg Markets: Asia."
Oct.21 -- Elinor Leung, head of Asia telecom and internet research at CLSA, talks about the outlook for Chinese mobile phone carriers. China Mobile Ltd.’s nine-month profit fell as government mandated tariff cuts and spending on its business transformation eroded earnings, leaving the carrier on track for its first drop in annual profit since 2015. Leung speaks on "Bloomberg Daybreak: Asia."