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China and U.S. Negotiate On-Site Audit Checks as Delistings Loom
(Bloomberg) -- Beijing is discussing with American regulators the logistics of allowing on-site audit inspections of Chinese companies listed in New York, according to people familiar with the matter, a sign of progress in talks to keep U.S. stock markets open to issuers from Asia’s largest economy.
Regulators on both sides are negotiating how to let a team of inspectors from the Public Company Accounting Oversight Board visit China so they can scrutinize auditing procedures and access the reports of a majority of 261 U.S.-listed firms, the people said, requesting not to be named because the matter is private. The talks, aimed at preserving these listings and reviving fresh public offerings, include hammering out issues such as quarantine requirements, the people added.
The two countries have yet to reach a conclusive agreement on moving forward with the checks, the people said.
On-site inspections would kick off the process of satisfying the U.S. that its inspectors will get the full access to audit papers required by legislation passed during the Trump administration. The negotiations gained urgency after the Securities and Exchange Commission began publishing a provisional list of companies that face being kicked off the New York Stock Exchange and Nasdaq Stock Market unless China becomes compliant. SEC Chair Gary Gensler has stressed that the law gives him little room for compromise.
Progress on a standoff that’s festered for two decades would demonstrate Beijing is serious about bolstering market confidence, and balancing national security concerns with the needs of businesses.
Chinese markets have slumped this year, with the benchmark CSI 300 Index plunging 20% as a stringent Covid Zero policy and crackdowns on private enterprise combine to sap investor confidence. Worries about potential delistings have contributed to a 69% slide in the Nasdaq Golden Dragon Index of U.S.-traded Chinese shares since the gauge peaked in February 2021.
“We continue to meet and engage with PRC authorities in an effort to reach an agreement, but speculation about a final agreement remains premature,” the PCAOB said in a statement. It had earlier said that any deal would be a “first step” and that the PCAOB would then investigate to ensure it is being followed.
The China Securities Regulatory Commission didn’t immediately respond to a fax seeking comment, while the SEC declined to comment.
Dozens of countries permit U.S. audit inspections, giving American officials the go ahead to interview local accountants and scrutinize the documentation underlying their work. Mainland China and Hong Kong have refused, citing confidentiality laws and national security concerns.
The SEC is adding companies weekly to a provisional list that could face removal if a congressionally imposed deadline of 2024 isn’t met. They now include Baidu Inc., Weibo Corp. and Futu Holdings Ltd. It’s expected that the list will eventually cover all the Chinese stocks traded in the U.S. including the largest of them, Alibaba Group Holding Ltd.
China’s government is prepared to accept that some state-owned enterprises and private companies that hold sensitive data will be delisted, people familiar with the matter said previously.
The CSRC is confident of reaching a deal and is talking with the PCAOB every two weeks to resolve the dispute, Fang Xinghai, the Chinese regulator’s vice chairman, said last week.
China has also modified a decade-long rule that restricted how offshore-listed firms share financial data. The draft rules delete the requirement that on-site inspections should be mainly conducted by Chinese regulatory agencies or rely on their inspection results.
The CSRC earlier this month promised to provide assistance through a cross-border regulatory cooperation mechanism. All companies listed directly or indirectly overseas will be responsible for properly managing confidential and sensitive information, and protecting national information security, it said.
Under the rules issued in 2009, working papers drafted onshore during the process of overseas share sales couldn’t be shared with any foreign entities or individuals. Working papers that concern state secrets or national security were also prohibited from being stored, processed or transmitted in non-confidential computer systems.
The CSRC has said it’s rare in practice that companies need to provide documents containing confidential and sensitive information. However, if required during the auditing process, they must obtain approvals in accordance with related laws and regulations, the watchdog said.
Chinese authorities are trying to bolster investor confidence following a series of crackdowns that have rattled markets. Promising greater policy stability, China’s top financial regulator last month said it supports overseas listings, prospects for which have been clouded by a raft of new rules and the stand-off with the U.S.
China tightened scrutiny on overseas listings last year after the New York initial public offering of ride-hailing giant Didi Global Inc., which proceeded despite regulatory concerns. In December, it imposed new restrictions on offshore offerings by firms in sectors that are off-limits to foreign investment.
The tightening scrutiny prompted the SEC to halt IPOs of Chinese companies last year until they boosted disclosures of risks posed to shareholders. Only a few Chinese firms have listed in the U.S. following the additional restrictions on both sides.
There were 261 Chinese firms listed in the U.S. as American Depository shares, with a combined market capitalization of $1.4 trillion as of March 31, including eight national-level state-owned enterprises, according to a report from the U.S. government.
https://www.yahoo.com/finance/news/china-u-negotiate-audits-key-034849708.html
GO DIDI
"PEACE"
..However, DIDI has positioned to allow the share price to go lower...?
https://www.scmp.com/tech/big-tech/article/3160529/china-tech-crackdown-2021-technology-giants-came-under-intense?module=perpetual_scroll_1&pgtype=article&campaign=3160529
GO DIDI
"PEACE"
..But will DIDI get some of the favor
Didi’s Fate in Limbo As Officials Object to Proposed Penalty
In this article:
DIDI
-6.12%
(Bloomberg) -- Senior Chinese officials have pushed back on a set of proposed punishments for Didi Global Inc. submitted by the nation’s cybersecurity regulator, people familiar with the matter said, leaving the future of the troubled ride-hailing giant in limbo.
Didi has been in talks with the Cyberspace Administration of China about a fine and other penalties after proceeding with a U.S. initial public offering last June over the regulator’s objections, the people said. The agency had aimed to publish the results of that probe in April but central government officials told the CAC they’re not satisfied with the proposed punishments and asked for revisions, the people said. The officials felt the remedies were too lenient, one person said, asking not to be identified because the matter is private.
That’s why Didi suspended plans for a Hong Kong listing, the people said, adding that it’s uncertain when that dispute could be resolved.
The result is that Didi, once the most celebrated startup in China, faces yet more uncertainty as it prepares to depart New York bourses under orders from Beijing. The company, once worth about $80 billion, will likely see its stock traded over the counter on the so-called pink-sheets market, home to penny stocks and other riskier businesses. Didi said last week it hadn’t applied to move to another exchange, surprising investors who anticipated a smoother transition.
Didi’s shareholders -- which include marquee names from Fidelity Investments to Blackrock Inc. -- have so far refrained from public comment on the delisting. The Chinese company briefed several investors on the potential relegation of its stock and at least one of them was unhappy with the latest development, one of the people said. Some investors could be forced to sell because their mandates don’t allow them to hold unlisted shares. Japan’s SoftBank Group Corp., which can hold unlisted stock and plowed more than $12 billion into the company, has seen its 20% stake fall from a peak of about $16 billion to less than $2 billion.
Representatives for Didi and the CAC didn’t respond to requests for comment on the penalties. A Didi spokesperson previously referred Bloomberg to their April 16 statement, which stated the option of trading on the pink-sheet market.
Read More: Didi’s Move from NYSE to Hong Kong - What to Know: QuickTake
The settlement delay is another setback for Didi, the national champion that defeated Uber Technologies Inc. before becoming one of the biggest targets of a tech-sector crackdown. Days after its $4.4 billion IPO, the company was placed under a cybersecurity probe and its services were taken off the country’s app stores. The debut was so controversial it triggered an onslaught of regulatory actions constraining Chinese companies from raising capital overseas.
It’s unclear what measures the CAC recommended. The ride-hailing giant has explored several alternatives including hiving off data to a third-party Chinese firm and selling a stake to state-backed companies, Bloomberg News has reported. The China Securities Regulatory Commission said in a statement after last week’s announcement that Didi made the decision to delist based on the market and its own situation.
The lingering uncertainty around Didi’s fate is contributing to persistent questions over Beijing’s longer-term intentions for a giant internet industry it regards as having amassed too much wealth and power.
Shareholders will vote May 23 on Didi’s delisting plan, which is almost certain to pass should co-founders Cheng Wei and Jean Liu exercise their majority voting control. However, Didi said Saturday that owners of Class B shares have informed the company they will cast their ballot on a 1 vote-per-share basis.
Once delisted, the stock will then be traded as a pink-sheet for an indefinite period of time, said people familiar with the matter.
Although some non-American blue-chip names trade over the counter, pink sheets -- named for the traditional hue of the share slips -- are typically the province of highly speculative securities that won’t or don’t meet the stricter requirements of the main bourse. Examples include Luckin Coffee Inc., the once high-flying Chinese challenger to Starbucks that admitted to inflating sales.
https://finance.yahoo.com/news/didi-fate-limbo-officials-object-100633848.html
GO DIDI
"PEACE"
Pinksheet here we come.....
If You Invested $10,000 in DiDi Global in 2021, This Is How Much You Would Have Today
Key Points
DiDi Global has lost more than 85% of its value since its IPO.
The stock was crushed by regulatory headwinds.
It looks like a deep value play, but it's still a very risky stock.
NYSE: DIDI
DiDi Global Inc.
DiDi Global Inc. Stock Quote
Market Cap
$10B
Today's Change
(-5.52%) -$0.11
Current Price
$1.91
Price as of April 20, 2022, 4:11 p.m. ET
The Chinese ride-hailing giant has burned a lot of investors.
DiDi Global ( DIDI -5.52% ), China's largest ride-hailing company, went public on June 30, 2021, at $14 per share. But the stock now trades at about $2 -- so a $10,000 investment in its initial public offering (IPO) would only be worth $1,400 today. Let's revisit DiDi's precipitous decline and see if there's any hope left for the bulls.
Why did DiDi's stock collapse?
A few days after DiDi's public debut on the New York Stock Exchange (NYSE), the Cyberspace Administration of China (CAC) abruptly ordered the suspension of new user registrations for all 25 of its apps. Shortly afterward, all of DiDi's apps were removed from China's mobile app stores.
The CAC cited vague cybersecurity, data protection, and national security concerns as its main reasons for cracking down on DiDi, but the platform's existing users could still access their downloaded apps.
Meanwhile, China's antitrust agency, transportation ministry, and public security bureau co-drafted new guidelines that forced DiDi and other ride-hailing platforms to reduce their commissions, provide better wages for drivers, and limit their collection of personal data from passengers.
That one-two punch, which crippled DiDi's ability to gain new users while forcing it to increase its expenses, caused investors to head for the exits.
Last December, DiDi announced that it would delist its NYSE shares and pursue a new listing in Hong Kong. At the time, many investors assumed that meant the CAC would finally lift its restrictions on new user registrations and allow DiDi to relaunch its apps across China's mobile app stores.
But last month, DiDi suspended its plans for a Hong Kong listing after its apps failed to meet the CAC's data privacy and cybersecurity requirements again. On April 16, the company said it would not pursue any new public listings before it delisted its shares from the NYSE. However, it also said it would hold a shareholder vote on May 23 for those delisting plans.
Simply put, investors still don't know what will happen to DiDi. That's why it trades at just 0.4 times this year's sales. Uber Technologies and Lyft trade at 2.3 and 2.8 times this year's sales, respectively.
undefined Stock Quote
NYSE: DIDI
DiDi Global Inc.
Today's Change
(-5.52%) -$0.11
Current Price
$1.91
Key Data Points
Market Cap
$10B
Day's Range
$1.90 - $2.05
52wk Range
$1.71 - $18.01
Volume
24,076,133
Avg Vol
66,973,849
P/E (ttm)
Could DiDi be a deep value play?
DiDi is a very risky investment right now, but its underlying business remains stable even as regulators throttle its domestic growth. Its revenue rose 14% in 2019, dipped 8% in 2020 as the pandemic spread, but increased 23% to 173.8 billion yuan ($27.3 billion) in 2021.
Its "China mobility" (the ride-hailing segment) revenue, which accounted for 92% of its top line, rose 20% last year. However, its loss more than doubled on an adjusted earnings before interest, taxes, and amortization (EBITA) basis to 19.2 billion yuan ($3 billion), with the losses from its international and "other initiatives" segments wiping out the profits of its domestic business.
Analysts expect DiDi's revenue to rise 3% to 179.6 billion yuan ($28.2 billion) this year, even as it's barred from gaining new users or downloads in China, and for its EBITA loss to narrow to 10.5 billion yuan ($1.7 billion) as its reins in its expenses. However, the recent COVID-19 lockdowns across China could make it much tougher for DiDi to hit those targets.
But if China's regulators finally allow DiDi to relaunch its apps, its growth could accelerate significantly as the current lockdowns end. Furthermore, DiDi's recent decision to have investors vote on its "voluntary" delisting plans suggests it might still postpone (or completely cancel) that exit.
China's securities regulator also recently said DiDi made its delisting decision on its own accord, which suggests the government won't prevent the company from reversing its initial decision to leave the NYSE.
If any of those positive developments occur, DiDi's stock could potentially reverse a large portion of its post-IPO decline. However, the company could also still try to take itself private with a lowball offer and burn most investors who prematurely thought it was a deep value play. So for now, the risks still outweigh the rewards and make DiDi a very dangerous stock to own.
https://www.fool.com/investing/2022/04/20/if-you-invested-10000-in-didi-global-in-2021-this/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
GO DIDI
"PEACE"
Gap around $3.75....But all this is just pocket change....Until.
GO DIDI
"PEACE"
Alibaba, Didi Fuel $93 Billion Rally for Chinese Stocks in U.S.
In this article:
BABA
+6.62%
DIDI
+6.38%
(Bloomberg) -- Alibaba Group Holding Ltd. and Didi Global Inc. rallied for a second day, adding $93 billion in value to U.S. listed Chinese stocks as fears of potential delistings eased.
The Nasdaq Golden Dragon China Index jumped 7.4% Monday, adding to Friday’s climb after Beijing regulators published revised draft rules scrapping requirements that on-site inspections should be mainly conducted by Chinese regulatory agencies.
Alibaba rose 6.6% and Didi climbed 6.4%, while JD.com Inc. advanced 7.1%. Pinduoduo Inc., Bilibili Inc. and iQiyi Inc. were among the top gainers, climbing at least 16% each. The advance in American depositary receipts tracked a 5.4% gain in Hong Kong’s Hang Seng Tech Index, the sharpest in two weeks. China was closed for a holiday.
China Removes Key Hurdle to Allow U.S. Full Access to Audits
“For now, investors are erasing the regulatory risk premium which is helping both markets and sentiment recover,” said Olivier d’Assier, head of APAC applied research at Qontigo. While the regulatory risks is receding, there still leaves a lot of macro risk which is yet unknown, as well as geopolitics, he added.
Beijing’s move could potentially remove a key hurdle to U.S. regulators gaining full access to auditing reports for Chinese companies listed in New York, ending a long-running dispute over data sharing. Last week, Bloomberg News had reported that Beijing is drafting a framework that will allow a majority of Chinese firms to keep their listings.
“We believe this is an important step in clarifying China’s stance on the audit dispute,” Morgan Stanley equity strategists led by Laura Wang said in an April 3 note. “We maintain our view that the likelihood of a final agreement being reached over the ADR audit dispute is now higher.”
China Rule Change to Help Ease U.S. Delistings Risk: Street Wrap
While the latest statement appears to show Beijing is more constructive on this, some remain cautious until the final resolution comes through.
“I am expecting more twists going forward, as the U.S. and China go back and forth on this,” said Henry Guo, an analyst at M Science LLC. “The regulation overhang for Chinese ADRs should remain in the near future and investors are cautious about investing in them as regulation-related risks are totally out of their control.”
SEC chief last week dialed down speculation of an imminent deal with Chinese counterpart on the delisting issue.
https://finance.yahoo.com/news/alibaba-didi-fuel-80-billion-140202697.html
GO DIDI
"PEACE"
China to bring down audit barrier in long-running US listing row
Sat, April 2, 2022, 4:30 AM
China's securities regulator has proposed changes to key rules on Chinese companies listed abroad in a move that could ease a long-standing auditing dispute with the United States.
In revised draft rules released on Saturday, the China Securities Regulatory Commission (CSRC) withdrew a requirement that only Chinese regulators conduct on-site audit inspections of Chinese companies listed overseas.
The changes were made to "accommodate the new circumstances and developments concerning overseas securities listings and offerings" and Chinese regulators' "open attitude" in audit oversight cooperation, the commission said in a joint statement with various agencies including the Ministry of Finance.
"China remains committed to supporting eligible companies of all types list or offer securities in overseas markets," they said.
More than 200 mainland Chinese companies are listed on US exchanges.
In recent years, US regulators have increased scrutiny of the accounting standards of these companies amid allegations of ties to the military and use of forced labour in the Xinjiang Uygur autonomous region.
China has long denied US securities regulators the ability to inspect the financial audits of its US-listed companies, saying they contain state secrets.
The tensions culminated in 2019 with the US Holding Foreign Companies Accountable Act, which requires foreign companies listed in the US comply with audit inspection rules under the auspices of the Public Company Accounting Oversight Board (PCAOB) or face delisting within three years.
In the aftermath, US-listed Chinese companies were hit by bruising sell-offs.
In March, the Securities and Exchange Commission (SEC) identified 11 Chinese companies - including Baidu, Weibo and BeiGene and Yum China - liable under the law.
In the statement on Saturday, the CSRC said the proposed rules offered more guidance on protecting state secrets.
In practice, it is rare that companies need to provide documents that contain state secrets and sensitive information, according to the CSRC.
But should the situation arise, the burden of ensuring information security would fall on the Chinese companies, it said.
The amendments have been released for public feedback until April 17.
Louis Tse Ming-kwong, managing director at Wealthy Securities, said the proposed changes were a good start.
"It is a good beginning as China is willing to conform to US requirements to some degree, balancing the need for fundraising in overseas markets," Tse said.
"But it is not necessarily that bad times are over. We still need to see further blueprints or if this would satisfy US regulators."
SEC chairman Gary Gensler and CSRC chairman Yi Huiman have held three online meetings since August to discuss the prospect of cooperating on audit regulations, the commission said on Thursday.
It also said the Chinese securities regulator met representatives from the PCAOB, adding that communications were continuing.
Yet in the past week, US regulators have pushed back on speculation that the dispute was close to being resolved, demanding total compliance with US audit inspections.
Chinese authorities have ramped up efforts to bolster investor confidence. Last month, Vice-Premier Liu He vowed to keep capital markets stable, adding that talks between China and US on offshore listing issues saw progress and that Beijing supported overseas listings.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.
https://www.yahoo.com/finance/news/china-bring-down-audit-barrier-093000921.html
GO DIDI
"PEACE"
Why Shares of Alibaba, DiDi Global, and Futu Are Rising
By Bram Berkowitz - Apr 1, 2022 at 1:01PM
Key Points
U.S. and Chinese financial regulators have long argued over the auditing practices of Chinese stocks listed on U.S. exchanges.
Chinese regulators said they are planning to make current financial statements of these companies available to U.S. regulators.
If reached, an agreement would prevent many Chinese stocks from being delisted from U.S. exchanges.
NYSE: BABA
Alibaba Group Holding Limited
Alibaba Group Holding Limited Stock Quote
Market Cap
$296B
Today's Change
(1.29%) $1.40
Current Price
$110.20
Price as of April 1, 2022, 8:00 p.m. ET
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More
Some good news came out today regarding the ongoing auditing dispute between U.S. and Chinese financial regulators.
What happened
Shares of Chinese stocks rose today on news that Chinese regulators may cooperate with U.S. financial regulators and allow them to audit the current financials of Chinese stocks listed on U.S. exchanges, potentially ending a feud that has lasted for decades.
Shares of DiDi Global ( DIDI 12.80% ) had risen roughly 9% and shares of Alibaba Group Holding ( BABA 1.29% ) traded nearly 3% higher as of 12:27 p.m. ET today. Shares of Futu Holdings ( FUTU 6.26% ) were up nearly 11.5% earlier in the day before giving back much of those gains, likely due to broader market trends.
undefined Stock Quote
NYSE: BABA
Alibaba Group Holding Limited
Today's Change
(1.29%) $1.40
Current Price
$110.20
Key Data Points
Market Cap
$296B
Day's Range
$109.75 - $118.95
52wk Range
$73.28 - $245.69
Volume
55,873,017
Avg Vol
37,794,725
P/E (ttm)
4.55
So what
U.S. regulators have long been frustrated with Chinese companies that trade on U.S. exchanges because they want access to audit their full and current financials. However, Chinese regulators have barred Chinese firms from sharing their working financials with foreign accountants due to national security concerns.
In 2020, U.S. lawmakers passed the Holding Foreign Companies Accountable Act (HFCAA), which said that if U.S. regulators could not review the financials of Chinese public companies for three consecutive years, those companies would be delisted. As many as 200 Chinese stocks could be delisted due to the HFCAA, according to the U.S. Securities and Exchange Commission (SEC). In recent weeks, the SEC has started naming specific Chinese companies that are in danger of being delisted. That growing list now includes Yum China Holdings, ACM Research, BeiGene, Zai Lab, Hutchmed, Weibo, Futu, Nocera, iQIYI, and CASI Pharmaceuticals.
After the SEC started naming specific companies, Chinese regulators came out in support of foreign-listed Chinese stocks, which have been hammered over the last year, and said they would work with U.S. regulators to sort the auditing dispute out. That sparked a big rally in Chinese stocks. Since, then, however, it's been a bit of a roller-coaster ride, with the SEC continuing to name specific Chinese stocks that face being delisted. U.S. regulators have also maintained that Chinese companies would have to be in full compliance with U.S. accounting and auditing laws, making an impending deal seem less likely.
But today, the conflict took an unexpected positive turn, with Bloomberg reporting that Chinese regulators are planning to make the financials of Chinese companies available to U.S. regulators. This may happen by the middle of the year. Bloomberg also reported that Chinese regulators are planning to design a system that allows most companies listed in the U.S. to remain listed. However, some Chinese companies with "sensitive data" may still end up being removed. Furthermore, CNBC reported that a statement it received from the Chinese Securities Regulatory Commission said the agency has told accounting firms it works with to be ready for audits with both sets of regulators.
This is obviously great news for Futu, one of the stocks specifically named by the SEC. I also think it's quite good for DiDi, which has had its plans to delist from the New York Stock Exchange (NYSE) and list its shares in Hong Kong shut down by Chinese regulators, so staying on the NYSE might be the ride-hailing company's best option right now.
Now what
This situation has been evolving by the day, so things could certainly change, but I don't think Chinese financial regulators have ever seemed so willing to work with the U.S., particularly as U.S. regulators take a hard line on the auditing issue.
I think China may see it's in its best interest to have some of its largest, most successful companies be known globally, as the country continues to be a hot spot for foreign investment. Overall, while things are unpredictable and near-term volatility is likely, I am getting more optimistic about a potential deal between U.S. and Chinese financial regulators, which bodes very well for these U.S.-listed Chinese stocks.
https://www.fool.com/investing/2022/04/01/why-shares-of-alibaba-didi-global-and-futu-are-ris/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
GO DIDI
"PEACE"
Chinese Stocks in the U.S. Surge as Delisting Worries Ease
In this article:
(Bloomberg) -- U.S.-listed Chinese stocks rallied on Friday after a Bloomberg News report that Beijing is preparing to give U.S. regulators full access to auditing reports for a majority of the 200-plus companies listed in New York as soon as mid-this year.
Didi Global Inc. led the advance in American depository receipts, rising 13%. E-commerce giant Alibaba Group Holding Ltd. climbed 1.3%, while JD.com Inc. gained 2.1% and Baidu Inc. jumped 6.6%. The Nasdaq Golden Dragon China Index rose 4.7%, just a day after locking in its worst start to a year since 2008.
“It’s a big game-changer,” said Matt Maley, chief market strategist at Miller Tabak + Co., cautioning that Chinese authorities will need to allow access. “It will cause a lot of bearish investors to reconsider their stance that China is ‘uninvestable.’”
China Securities Regulatory Commission and other national regulators are in the process of drafting a framework that will allow most Chinese companies to keep their listings, according to people familiar with the matter. Details are still under discussion and may change, the people said.
Such a plan could potentially alleviate concerns that the U.S. is moving closer to delisting Chinese companies, since the Securities and Exchange Commission started publishing a provisional list of firms running foul of requirements in early March. Baidu, Futu Holdings Ltd. and iQIYI Inc. were among five additions to SEC’s delisting watch list this week.
SEC Chair Gary Gensler said on Wednesday that Chinese authorities could face a “hard set of choices” to avoid security delistings, continuing to play down expectations of an imminent resolution to the audit dispute.
For investors, Friday’s report is just the latest twist in what has been a roller-coaster ride to begin the year. Realized volatility for the Nasdaq Golden Dragon China Index over the last 30 days has soared to its highest on record, surpassing its prior peak seen during the global financial crisis.
The gauge -- which tracks firms on American exchanges that conduct a majority of their business in China -- has surged about 43% from its lowest close in more than eight years last month. Still, U.S.-listed Chinese stocks may not be in the clear just yet.
“The probability of delisting has declined, which is why you see the stocks rebound,” according to Brendan Ahern, chief investment officer at Krane Funds Advisors LLC. That said, “the names won’t fully rebound until definitive resolution is found.”
https://finance.yahoo.com/news/didi-global-alibaba-surge-u-141020369.html
GO DIDI
"PEACE"
Why Shares of JD.Com, DiDi Global, and Up Fintech Holding Are Falling Today
By Bram Berkowitz - Mar 31, 2022 at 1:34PM
Key Points
The SEC this week added Baidu, Futu Holdings Limited, Nocera, iQIYI, and CASI Pharmaceuticals to its growing list of Chinese stocks that face delisting.
U.S. regulators also appear to be taking a hard line over the auditing issue with China.
Motley Fool Issues Rare “All In” Buy Alert
NASDAQ: JD
JD.com, Inc.
JD.com, Inc. Stock Quote
Market Cap
$90B
Today's Change
(-5.89%) -$3.62
Current Price
$57.87
Price as of March 31, 2022, 8:00 p.m. ET
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More
The U.S. Securities and Exchange Commission listed more Chinese stocks trading on U.S. exchanges that could be delisted.
What happened
Shares of Chinese stocks listed on U.S. exchanges struggled today as the situation between U.S. and Chinese financial regulators continued to play out. Recently, the Securities and Exchange Commission (SEC) has added more Chinese stocks that face being delisted.
Shares of JD.com ( JD -5.89% ) had fallen nearly 6% as of 1:03 p.m. ET today. Shares of DiDi Global ( DIDI -14.97% ) had sunk more than 9% and shares of Up Fintech Holding ( TIGR -10.09% ) traded nearly 11% down.
undefined Stock Quote
NASDAQ: JD
JD.com, Inc.
Today's Change
(-5.89%) -$3.62
Current Price
$57.87
Key Data Points
Market Cap
$90B
Day's Range
$56.80 - $60.09
52wk Range
$41.56 - $92.69
Volume
19,529
Avg Vol
16,216,469
P/E (ttm)
So what
For decades now, U.S. and Chinese regulators have been at odds over the auditing of Chinese stocks that trade on U.S. exchanges. U.S. regulators want to fully review Chinese company financials like they do with U.S.-based stocks. However, Chinese regulators don't allow foreign accountants to review current Chinese company financials due to national security concerns.
The argument came to a boiling point in 2020 when U.S. lawmakers passed the Holding Foreign Companies Accountable Act (HFCAA), which would delist Chinese stocks if U.S. regulators can not review their financials for three consecutive years. Recently, U.S. regulators took more steps to uphold the law by specifically listing names of Chinese companies that face being delisted. The first five were Yum China Holdings, ACM Research, BeiGene, Zai Lab, and Hutchmed. Potentially 200 Chinese stocks could face delisting due to the HFCAA.
However, shortly after the SEC specifically named companies that face delisting, Chinese regulators surprised the market and voiced support for foreign-listed Chinese stocks. They even said they would work with U.S. regulators on a cooperation agreement to solve the long-standing auditing issue. Following this news, Chinese stocks soared and enjoyed their best day of trading in years.
Since then, the situation has shown that it may be more difficult to solve than initially believed. The SEC has added more Chinese companies that face delisting threats, including Weibo. This week, the SEC added Baidu, as well as Futu Holdings Limited, Nocera, iQIYI, and CASI Pharmaceuticals as potential delisting candidates.
"There have been thoughtful, respectful, productive conversations, but I don't know where this is going to end up," SEC Commissioner Gary Gensler said earlier this week, according to Bloomberg, referring to a potential agreement over the auditing issue. "It's up to the Chinese authorities, and it could be frankly a hard set of choices for them."
Similar to Futu, Up Fintech is an online brokerage, so investors may see the fact that Futu has now joined the list as a precursor of what's to come.
NASDAQ: TIGR
UP Fintech Holding Limited
Today's Change
(-10.09%) -$0.55
Current Price
$4.90
Key Data Points
Market Cap
$742M
Day's Range
$4.80 - $5.30
52wk Range
$2.68 - $29.93
Volume
96,719
Avg Vol
5,204,596
P/E (ttm)
49.04
DiDi is also in interesting shape because toward the end of 2021 the company had announced that it planned to delist from the New York Stock Exchange and list its shares in Hong Kong. But not long ago, Chinese regulators shut this plan down, at least for the time being, citing security and data concerns. Now, China's largest ride-hailing company may not have a lot of options if it were to delist from the New York Stock Exchange.
undefined Stock Quote
NYSE: DIDI
DiDi Global Inc.
Today's Change
(-14.97%) -$0.44
Current Price
$2.50
Key Data Points
Market Cap
$12B
Day's Range
$2.50 - $2.88
52wk Range
$1.71 - $18.01
Volume
355,540
Avg Vol
56,048,841
P/E (ttm)
Now what
The fact that Chinese regulators signaled support for foreign-listed Chinese stocks is certainly good news. But it's also clear that U.S. regulators have taken a hard line on their position, as they continue to name stocks that face delisting and say that Chinese companies will need to be in full compliance with U.S. auditing laws.
That may be a difficult pill for Chinese authorities to swallow, considering this issue has gone on for decades. While Chinese stocks have been hammered and there is upside, given their large market opportunities and if regulators come to terms on the auditing issue, I see these stocks as particularly risky trades right now because so much depends on regulators.
https://www.fool.com/investing/2022/03/31/why-shares-of-jdcom-didi-global-and-up-fintech-hol/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
GO DIDI
"PEACE"
Why Shares of DiDi Global, Alibaba, and JD.com Are Falling Today
Key Points
Last week, Chinese stocks listed on U.S. exchanges soared after Beijing signaled support.
Chinese government officials said they were working with the U.S. on a potential agreement over a longstanding accounting feud.
But a deal may not come as easy as some think.
The situation between U.S. and Chinese regulators over Chinese stocks listed on U.S. exchanges continues to evolve.
What happened
Shares of several Chinese stocks listed on U.S. stock exchanges are continuing their volatile ways as the situation between U.S. and Chinese regulators plays out.
Shares of the large Chinese ride-hailing company DiDi Global ( DIDI -13.95% ) traded nearly 10% lower as of 10:50 a.m. ET today. Shares of the large Chinese e-commerce players Alibaba Group Holding ( BABA -1.88% ) and JD.com ( JD -2.60% ) had fallen nearly 3% and 4%, respectively.
So what
U.S. and Chinese regulators have had a decades-long dispute over accounting practices of Chinese stocks listed on U.S. exchanges. U.S. financial regulators want complete access to audit the financials of Chinese companies that trade in the U.S., but the Chinese government doesn't allow foreign accountants to view the finances of Chinese companies due to national security concerns. In 2020, U.S. lawmakers passed a law called the Holding Foreign Companies Accountable Act (HFCAA), which essentially said Chinese companies would be delisted from U.S. exchanges if U.S. regulators could not properly audit their financials for three straight years.
Last week, Chinese government officials signaled support for U.S.-listed Chinese stocks and said they were working with U.S. regulators on a cooperation agreement. The news sent Chinese stocks soaring. Ever since, Chinese stocks have been up and down as the situation has evolved.
Yesterday, the Public Company Accounting Oversight Board (PCAOB), a nonprofit that Congress created in order to watch over public company auditing, said media reports regarding a forthcoming deal between U.S. and Chinese regulators were still "premature."
"If an agreement is reached, we will then proceed with our inspection and investigation activities to determine if the agreement operates as intended ... [but] an agreement without successful execution will not satisfy U.S. law," the PCAOB said, according to Reuters.
In another not-so-great development, the U.S. Securities and Exchange Commission (SEC) added the Chinese social media platform Weibo to its list of U.S.-listed Chinese stocks that could face being delisted for failure to comply with the HFCAA. Prior to the news of the potential cooperation agreement, the SEC listed five Chinese companies that faced delisting: Yum China Holdings, ACM Research, BeiGene, Zai Lab, and Hutchmed.
In December, the SEC said 273 companies faced potential delisting due to the HFCAA, and the regulator will likely name more.
For a beleaguered company like DiDi, a delisting could be particularly troublesome. DiDi had announced last December that it was planning to delist from the New York Stock Exchange (NYSE) and list in Hong Kong. But the Chinese government has now shut that plan down, citing data security concerns. The Chinese government has also suspended DiDi's apps from China's apps stores. While the future is uncertain, it may be better for the company to remain listed on the NYSE.
undefined Stock Quote
NYSE: DIDI
DiDi Global Inc.
Today's Change
(-13.95%) -$0.53
Current Price
$3.27
Key Data Points
Market Cap
$16B
Day's Range
$3.12 - $3.50
52wk Range
$1.71 - $18.01
Volume
275,083
Avg Vol
56,049,476
P/E (ttm)
Now what
Make no mistake, China announcing support for foreign-listed stocks is certainly a big deal, as can be seen in the surging stock prices recently. Still, Chinese regulators can be somewhat unpredictable and a deal hasn't been reached yet.
It also seems like U.S. regulators and the PCAOB are taking a hard line on having U.S. accountants review the financials of Chinese stocks, so it would appear that Beijing may need to make some concessions for this to work. The situation is up in the air, so trade with caution.
https://www.fool.com/investing/2022/03/25/why-shares-of-didi-global-alibaba-and-jdcom-are-fa/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Yes, no $hit.....But why?
GO DIDI
"PEACE"
Why Shares of Alibaba, Didi, and TAL Education Group Are Rising Today
Chinese regulators earlier this week said they are working with U.S. regulators on a cooperation agreement over a longstanding auditing issue.
Chinese stocks continued their climb this week, sparked by Chinese regulators voicing support for Chinese stocks listed on foreign exchanges.
What happened
Shares of several large Chinese stocks traded on U.S. exchanges continued their ascent this week following positive news from Chinese regulators. In fact, Chinese stocks have had their best multiday rally in the 21st century this week.
Shares of e-commerce giant Alibaba ( BABA 8.25% ) traded about 5.5% higher today as of 10:20 a.m. EST. Meanwhile, shares of the ride-hailing company Didi Global ( DIDI 52.15% ) jumped more than 32%, and shares of TAL Education Group ( TAL 16.00% ) traded more than 16% higher.
So what
After what has been a brutal year for Chinese stocks listed on U.S. exchanges, things looked as if they were getting worse last week when the U.S. Securities and Exchange Commission named five Chinese stocks that could possibly get delisted. The issue revolves around a decades-long feud between U.S. and Chinese regulators because Chinese companies are not allowed to have their active financial documents reviewed by U.S.-based accountants. Meanwhile, U.S. regulators passed a law in 2020 that says that companies that aren't audited by regulators for three years in a row can't trade on U.S. exchanges.
Chinese stocks have been largely soaring all week after the Chinese government came out in support of Chinese stocks listed abroad and said it plans to ease some of the restrictive policies it has put in place over the past year and work with U.S. regulators to find a resolution on the audit issue.
The news has been met with a positive outlook from investors and analysts. Earlier this week, analysts at Credit Suisse upgraded its rating on Chinese stocks to overweight.
"We think that Chinese equities offer attractive upside potential, with valuations still depressed. Efforts to contain the current COVID-19 outbreak are likely to have a more limited impact than in 2020 and 2021," Credit Suisse said in a research note.
Thomas Hayes, chairman of Great Hill Capital, told Yahoo! Finance earlier this week that he thinks the returns in the sector are going to be "spectacular" over the next eight to 12 months and that he is particularly focused on Alibaba.
undefined Stock Quote
Shares of e-commerce giant Alibaba ( BABA 8.25% ) traded about 5.5% higher today as of 10:20 a.m. EST. Meanwhile, shares of the ride-hailing company Didi Global ( DIDI 52.15% ) jumped more than 32%, and shares of TAL Education Group ( TAL 16.00% ) traded more than 16% higher.
(8.25%) $8.28
Current Price
$108.65
Key Data Points
Market Cap
$270B
Day's Range
$99.60 - $109.19
52wk Range
$73.28 - $245.69
Volume
40,566,590
Avg Vol
29,270,277
P/E (ttm)
4.14
"The only two things holding these companies back were ... the tech crackdown over the summer, in earnest, and then the delisting risk," Hayes said. He added, "The businesses were growing despite the regulatory crackdowns, despite the zero-COVID shutdowns."
Didi is in a particularly interesting spot right now. Last week, the company, which had previously announced plans to leave the New York Stock Exchange (NYSE), said that it would delay its plans to list shares in Hong Kong, sending its stock down 44%. The Chinese government reportedly told Didi that its plans for data security were not in line with regulations. Chinese regulators have been a real problem for the company, suspending Didi apps from app stores in the country. However, with a potential cooperation agreement in the works between Washington and Beijing, investors might be hopeful that Didi will be able to continue trading on the NYSE.
undefined Stock Quote
NYSE: DIDI
DiDi Global Inc.
Today's Change
(52.15%) $1.33
Current Price
$3.90
Key Data Points
Market Cap
$12B
Day's Range
$2.56 - $4.09
52wk Range
$1.71 - $18.01
Volume
159,171,943
Avg Vol
37,308,919
P/E (ttm)
Now what
A cooperation agreement between the two governments would be great, but there is still the possibility it won't come to fruition.
The Public Company Accountability Oversight Board, one of the main organizations leading the charge on delisting noncompliant Chinese stocks, said this week that while it is seeking a resolution, regulators must still have the same access to Chinese financials that they get from other foreign companies trading on U.S. exchanges. There is no certainty that Chinese regulators will want to grant this full access.
If a resolution is reached, that would be great for investors because they could then focus more on the fundamentals of individual Chinese companies as opposed to what regulators are doing. But understand that there is still a chance it won't happen, and always expect more volatility with Chinese stocks than in other sectors of the market.
https://www.fool.com/investing/2022/03/18/why-shares-of-alibaba-didi-and-tal-education-group/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
GO DIDI
"PEACE"
Global Exodus From Chinese Markets Prompts Xi to Change Tack[/b
(Bloomberg) -- It took one of the biggest stock-market routs in Chinese history, but President Xi Jinping may finally be heeding the concerns of international investors.
A sweeping set of promises this week from Xi’s government to make regulation more transparent and predictable -- as well as a commitment to overseas markets including Hong Kong -- suggests authorities are appealing to investors abroad. The ruling Communist Party is seeking to regain the trust of international funds and the global business community after the country was lumped in with Russia as an “uninvestable” destination.
China has more overtly distanced itself from Russia over the past week, saying it wants to avoid being impacted by U.S. sanctions and promising to “never attack” Ukraine. Xi is set to speak with U.S. President Joe Biden on Friday morning in Washington for the first time since Russia’s invasion.
Xi’s shift contrasts with the unbending strategy of his friend President Vladimir Putin, despite global sanctions decimating Russia’s economy. While China still needs to follow through with this week’s pledges, the rhetoric has helped reduce turmoil in the nation’s financial markets. A gauge of Chinese stocks in Hong Kong rebounded at the fastest pace since the 1998 Asian financial crisis.
“The market was in freefall -- a clear signal was needed from a senior level to clear the air,” said Victor Shih, an associate professor at the University of California San Diego who researches elite Chinese politics. “I think unclear and even deleterious policy conditions were beginning to create an all-out panic.”
In the latest potential shift, Xi pledged at a Politburo meeting to limit the economic impact of the country’s Covid-Zero policy, the first time he has done so during the pandemic.
Hong Kong’s leader Carrie Lam on Thursday promised a review of Covid-fighting measures that have spurred a growing exodus from the business community. That came a month after Xi told local officials bringing the omicron outbreak under control was “a mission that overrides everything.”
Among other notable developments this week, China’s securities watchdog is considering giving U.S. regulators access to company audits as soon as this year, people familiar with the matter said. This would be Beijing’s biggest concession since Chinese firms first listed in the U.S. more than two decades ago, and may help ease concern about forced delistings.
The State Council said a crackdown on internet platform companies would be completed “as soon as possible.” Increased regulation helped wipe as much as $661 billion off Alibaba Group Holding Ltd.’s shares alone since their 2020 peak.
The Finance Ministry said it won’t expand a property tax trial this year -- a plan that had been floated in October. China’s cabinet said it would resolve risks around property developers. A liquidity crisis for builders such as China Evergrande Group has weighed on the nation’s property, stock and credit markets for months. Previously, officials described the collapsing value of such firms as a market event which wouldn’t necessitate government intervention.
Xi’s government had until now displayed little concern for the rout in Chinese markets. State-directed campaigns like “common prosperity” limited private sector-growth and dragged the MSCI China Index of stocks down 22% last year -- the biggest underperformance versus global shares since 1998. Investors in Chinese junk dollar bonds suffered their worst relative returns in more than a decade.
But with Xi set to seek a third term as president in a twice-decade leadership reshuffle later this year, the Communist Party is prioritizing stability above all else.
The need for the government to act had been growing more urgent. Global confidence in Chinese financial markets was by some metrics the weakest since the financial crisis in 2008, with stocks cratering, credit plunging and record outflows from government bonds undermining the currency’s strength. Hong Kong’s reputation as an international finance hub has been called into question, after two years of closed borders spurred at least tens of thousands of residents to abandon the city.
China’s worst Covid outbreak since Wuhan and Putin’s invasion of Ukraine pose new and unpredictable threats to China’s already slowing economy. Authorities risk a downward spiral in their bursting of a property-market bubble, with the largest developers suffering a 43% year-on-year decline in home sales in the first two months.
There’s still plenty that can go wrong for investors. China’s closeness with Russia puts it at the center of increasingly fraught geopolitical tensions. A potential overhaul of Tencent Holdings Ltd.’s payments business and Didi Global Inc.’s delayed Hong Kong listing shows regulators are unlikely to go soft on Big Tech.
The central bank’s decision this week to refrain from cutting interest rates served as a reminder that monetary policy will remain prudent. Bulls got burned so many times in the past year that few are convinced the worst is finally over. Markets remain volatile, with the Hang Seng China gauge falling as much as 3.6% on Friday before recovering.
Xi’s government has faced collapsing investor confidence before. Heavy-handed intervention in the domestic stock market in 2015 after a bubble burst drew criticism from global funds, who said officials were turning their backs on free-market reforms. A messy devaluation of the yuan the same year spurred capital outflows and raised questions over the competence of China’s oversight of financial markets. In 2018, the CSI 300 Index lost about a quarter of its value in a rout triggered by the Sino-U.S. trade war.
Yet each time Xi’s government pushed ahead with plans to further open up China’s capital markets and attract foreign funds. The country’s domestic shares were added to MSCI indexes in 2018, and bonds included in global benchmarks from the following year.
Soon, foreign investors couldn’t get enough. Between the start of 2019 and the end of 2021, overseas holdings of local stocks increased by more than 242% to 3.9 trillion yuan ($614 billion). Inflows into the nation’s bond market rose by 129% to 4.1 trillion yuan.
Western capital and technology are essential to China, despite recent efforts to make the country more self-sufficient. Foreign direct investment topped 1 trillion yuan last year, with about a third going into high-tech sectors, Chinese Commerce Minister Wang Wentao said this month.
The need to ensure global investors are on China’s side is unlikely to end any time soon.
“China can not develop in isolation of the world and nor can the world develop without China,” Vice President Wang Qishan said in a speech at the Bloomberg New Economy Forum in November. “China will keep its arms wide open, provide more market investment and growth opportunities to the world.”
https://finance.yahoo.com/news/global-exodus-chinese-markets-prompts-074623911.html
GO DIDI
"PEACE"
China Makes Strong Vow to Ease Crackdowns After Market Turmoil
In this article:
(Bloomberg) -- China made a strong push to stabilize battered financial markets, promising to ease a regulatory crackdown, support property and technology companies and stimulate the economy.
Xi Spurs Frantic Stock Buying With Lifeline for China Market
The government should “actively introduce policies that benefit markets,” according to a meeting of China’s top financial policy committee led by Vice Premier Liu He, the country’s top economic official. That vow to take investors interests into account comes after a sell-off in domestic shares due to fears over growth risks and tough regulation of real estate and internet companies.
The meeting offered investors re-assurance that a sweeping crackdown on internet companies was nearing its end and that the government would prevent a disorderly collapse in the property market. China’s banking regulator said after the meeting that it would support insurance companies to increase investment in stock markets.
Stocks surged after the announcements. The Hang Seng China Enterprises Index jumped 13% at the close in Hong Kong, the most since 2008, recouping nearly half of this year’s losses. The CSI 300 Index of mainland shares climbed 4.3%.
“The statement addressed so many issues on various fronts, which is really rare,” said Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered Plc. “Selloffs tended to be self-fulfilling partly because of the lack of response from the government,” and one aim of the government is probably to break that inertia and stabilize market expectations, he said.
The statement signals an adjustment after months in which Chinese capital markets were battered by government policies ranging from a squeeze on financing for property developers to a sweeping regulatory campaign aimed at internet giants like Alibaba Group Holding and Tencent Holdings. The sell-off deepened in recent days, as rising energy prices caused by Russia’s invasion of Ukraine and a surge in Chinese coronavirus cases called into question Beijing’s ability to meet its economic growth target.
The Financial Stability and Development Committee meeting concluded there is a need to “boost the economy,” in the first quarter and promised investors relief on several regulatory fronts. Monetary policy will be proactive in this quarter and new loans will grow appropriately, it added.
Fed Hike
Echoing moves in 2018, the comments were followed quickly by statements from the central bank, banking watchdog and currency market regulator pledging to implement the policies. Xinhua News Agency separately cited an unidentified Finance Ministry official saying China won’t expand a trial on property taxes, removing another concern for investors.
The flurry of statements came shortly before an expected interest rate hike by the Federal Reserve, which Chinese officials have said risks fueling capital outflows. Further monetary easing by China at the same time as the Fed is tightening could spur those outflows but that is a risk policymakers may have to take to support the domestic economy.
Wednesday’s announcement offered the strongest statement yet that Beijing is loosening its grip on internet platforms, saying that efforts to “rectify” internet platform companies should be completed “as soon as possible.” It also promised investors more policy stability, after a year when markets were repeatedly surprised by sudden announcements on regulatory reform.
A series of policy moves in the past year taking aim at some of the country’s most valuable companies have battered investors, with Beijing warning that platform operators may abuse their power and undermine competition and that real-estate giants were destabilizing the economy.
In particular, regulators took issue with highly-leveraged real-estate companies like China Evergrande, e-commerce leader Alibaba Group Holding Ltd., which eventually paid a record fine, and food-delivery giant Meituan, which was forced to lower the fees that it charges restaurants for delivery and improve the treatment of its drivers. China’s private tutoring industry was largely shut down as part of a drive to reduce education costs.
“Any policy that has a significant impact on capital markets should be co-ordinated with financial management departments in advance to maintain the stability and consistency of policy expectations,” the financial committee meeting concluded, according to a state-media report.
On the deep slump in China’s housing market which began last year and has pushed large property developers close to collapse, the statement called for the introduction of an effective plan to prevent and resolve risks around the developers, as well as policies to help the industry transform to a “new development model.”
China’s banking and insurance regulator said in a statement following the meeting that it would guide trust, wealth management and insurance companies to stabilize capital markets, supports insurance companies to boost stock investment in high-quality companies and help property developers acquire real-estate projects from other developers experiencing financial difficulty.
Since last week Chinese stocks listed in the U.S. had sold-off after Washington raised the stakes in a festering dispute over auditing standards by raising the prospect that some Chinese companies would be delisted. The statement promised that China has achieved positive progress in talks about Chinese companies listed in U.S. markets, adding that both sides are working to formulate a detailed cooperation plan.
China’s yuan rose by as much as 0.43% to 6.3421 in onshore trading following the government’s statements, paring most of its loss over the past two days. The news is helping the yuan as capital outflows seen in March may come to a halt if losses in China’s equity market end, says Alvin T. Tan, head of Asia FX strategy at Royal Bank of Canada.
Growth Target
At the annual parliamentary meeting earlier this month, Beijing signaled that it was putting some long-term reforms on hold to focus on economic growth. Stabilizing the economy is a political imperative for Beijing ahead of a ruling Communist Party meeting in the fall, where President Xi Jinping is expected to seek a precedent-defying third term as party leader.
Policy makers said this year’s ambitious economic growth target of around 5.5% would be achieved mainly through looser fiscal policy, with officials remaining hawkish about the property market and debt growth.
“There was fear that Beijing doesn’t care much about financial markets, and this meeting shows that isn’t the case. It looks serious,” said Chen Long, an economist at Beijing-based consultancy Plenum. “But they have to do things quickly. If nothing happens in the next one or two weeks, markets will begin to think this is fake”.
The government statements did not mention Russia’s invasion of Ukraine, which has fueled a spike in oil prices and fears among investors that Chinese companies might be subject to sanctions. Coronavirus controls should be co-ordinated with economic development, the meeting said, reiterating official statements that China’s “dynamic zero” Covid policy will be tweaked to prevent business closures, even as the nation struggles to contain the largest outbreak in two years.
Authorities have made some changes to that approach in recent days, allowing the use of rapid tests to confirm cases and saying that patients with mild or no symptoms can quarantine in designated facilities instead of being moved to hospitals.
Its not the first time Liu He has tried to calm investor fears following a market sell-off. In 2018 he gave an interview with state media saying Beijing valued the stock market, which helped calm an equity sell-off. However, the statement didn’t lead to any large-scale stimulus.
Other points from the financial committee meeting:
Regulation of internet platform companies should be “standardized, transparent and predictable”
Financial institutions should “consider the big picture” and firmly support the development of the real economy
Long-term institutional investors are welcome to increase shareholdings in Chinese companies
Beijing and Hong Kong should strengthen communication over the stability of Hong Kong’s financial markets
Continuing economic development is the first priority of the Chinese Communist party
The economy should operate in a reasonable range and the operation of capital markets should remain stable
(Updates with property tax.)
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©2022 Bloomberg L.P.
https://finance.yahoo.com/news/china-vows-keep-markets-stable-053034834.html
GO DIDI
"PEACE"
...And with a premarket rising price comes this hit piece?
7 Red Flags for DiDi Global's Future
The Chinese ride-hailing giant faces serious challenges.
Leo Sun
(TMFSunLion)
Mar 16, 2022 at 7:35AM
Author Bio
Key Points
DiDi burned a lot of investors after its disastrous IPO.
The suspension of its Chinese apps, delisting threats, government pressure, and widening losses have all crushed the stock.
DiDi’s stock looks dirt cheap, but it’s a deep value trap.
Motley Fool Issues Rare “All In” Buy Alert
DiDi Global (NYSE:DIDI) was one of the worst-performing IPOs of 2021. China's top ride-hailing company went public at $14 per share last June, and its stock rose to about $18 by the end of that month. But that turned out to be DiDi's all-time high.
A series of unfortunate events subsequently occurred, and DiDi's stock price plunged to less than $2 -- which reduced its market cap from nearly $80 billion to about $8.5 billion. Let's review the seven red flags that caused investors to dump DiDi, and why this beaten-down stock still isn't a great value at 0.3 times this year's sales.
A passenger in a car checks a phone.
Image source: Getty Images.
1. The suspension of its apps in China
The first red flag appeared just a few days after its public debut. Citing vague cybersecurity and data privacy issues, China's regulators abruptly forced the country's app stores to suspend all of DiDi's apps.
DiDi's existing users could continue using the app, but that suspension -- which hasn't ended yet -- has hindered its ability to gain new users in China.
2. A costly overseas expansion
DiDi has been expanding its overseas business, which primarily operates in Europe and Latin America, to reduce its dependence on China.
DiDi's international revenue rose 57% year over year to 2.58 billion yuan ($400 million) in the first nine months of 2021, but the segment's loss widened from 2.02 billion yuan to 3.99 billion yuan ($618 million) on an adjusted earnings before interest, taxes, and amortization (EBITA) basis.
3. Being forced to take more losses in Russia
In late February, DiDi announced it would exit Russia and Kazakhstan to narrow those losses. However, it abruptly walked back its plans to exit Russia -- presumably because Beijing opposes the economic sanctions that were levied against the country in response to its invasion of Ukraine.
DiDi didn't disclose exactly how much money it was losing in Russia, but being forced to stay in a market that is likely unprofitable highlights its painful subservience to the Chinese government. Investors should recall that Uber Technologies (NYSE:UBER) also left Russia last December by selling its stake in a ride-hailing joint venture with Yandex (NASDAQ:YNDX).
4. New regulations for ride-hailing services
China's regulators also recently drafted new guidelines that will force DiDi and its competitors to reduce their commissions, provide better wages and benefits for their drivers, and limit their usage of personal data. Those requests could all cause DiDi's operating losses to soar.
DiDi's net loss already widened significantly year over year, from 3.38 billion yuan to 49.16 billion yuan ($7.63 billion), in the first nine months of 2021.
5. Even more macro headwinds
Even if DiDi complies with those new rules and the government allows it to relaunch its apps, it will still face major macro headwinds this year.
Rising gas prices could make it difficult for its drivers to turn a profit on each ride, even if DiDi raises its wages. It can raise its fees with gas surcharges, as Uber and Lyft (NASDAQ:LYFT) have recently done, but doing so could alienate its potential passengers.
The recent resurgence of COVID-19 cases in China -- which just hit their highest levels since 2020 -- has also resulted in new lockdowns. DiDi's growth decelerated during the onset of the pandemic, and it will likely suffer a similar slowdown this year if those cases aren't quickly contained.
6. Its imminent delisting from the NYSE
Last December, DiDi said it would delist its shares from the New York Stock Exchange (NYSE) and pursue a new listing in Hong Kong. At the time, it told investors they could exchange their ADR shares for HK-listed ones.
That decision wasn't surprising, since the U.S. Securities and Exchange Commission (SEC) already plans to delist U.S.-listed foreign stocks -- primarily Chinese ones -- that don't comply with tighter auditing rules soon.
7. An uncertain future in Hong Kong
Even after DiDi announced its delisting plans, some investors still bought the stock as a potential turnaround play. They likely believed DiDi would relaunch its apps in China ahead of the Hong Kong IPO, and that its shares would rally after overcoming its app suspension and delisting threats.
But earlier this month, DiDi suddenly suspended its plans for a Hong Kong listing. The Cyberspace Administration of China reportedly told DiDi its data security measures were still inadequate, and that its apps would remain suspended from app stores. With that escape hatch now locked, it's unclear if DiDi will still delist its NYSE shares -- which exposes it to a forced delisting (and possible liquidation) if it doesn't comply with the new SEC rules.
DiDi isn't a deep value play
DiDi stock might look tempting when compared to Uber and Lyft, which trade at two and three times this year's sales, respectively. But DiDi is also dirt cheap because its main apps are still suspended, it's being squeezed by government regulators, and its shares could be delisted soon.
Even if DiDi overcomes all those existential challenges, it will still need to deal with the margin-crushing pressure of new labor regulations, higher fuel costs, and its unprofitable overseas expansion. Investors should stay far away from this struggling company and stick with safer tech stocks instead.
https://www.fool.com/investing/2022/03/16/7-red-flags-for-didi-global-future/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
GO DIDI
"PEACE"
Most be caught in a short position, this Author...
Stocks Surge as China Pledge Revives Risk Appetite: Markets Wrap
(Bloomberg) -- Stocks surged Wednesday and U.S. futures climbed as China’s vow to stabilize battered markets lifted sentiment after weeks of worries about war and high inflation. Treasuries were steady and the dollar slipped ahead of the Federal Reserve rates decision.
The Stoxx Europe 600 index jumped as much as 2.3%, with technology shares leading the advance as Prosus NV rebounded 20% from a record low. Contracts on the tech-heavy Nasdaq 100 climbed 1.8% while those on the S%P 500 crested 1%. U.S.-listed Chinese stocks soared, with Alibaba Group Holding Ltd. and Baidu Inc. both up at least 20% in premarket trading, while Didi Global Inc. jumped more than 40%.
An Asia-Pacific share gauge advanced the most since 2020, a measure tracking mainland companies listed in Hong Kong posted the biggest gain since the global financial crisis and a Chinese tech index added a record 20%.
China vowed policies to boost financial markets and spur economic growth as it attempted to ease fears over challenges related to the ailing property sector, overseas listings and a clampdown on internet firms. Equities in China and Hong Kong had been under pressure -- shedding about $1.5 trillion over the first two days this week -- in part on speculation that Beijing’s ties with Russia raise the risk of a U.S. backlash.
“The market was indeed oversold, irrational, in the dramatic rout, so real money is back doing bottom fishing,” said Castor Pang, head of research at Core Pacific Yamaichi.
West Texas Intermediate crude oil advanced, while staying below $100 a barrel. The International Energy Agency said Wednesday that Russia’s oil output may drop by about a quarter next month. Treasuries pared declines that had pushed 10-year and 30-year yields to the highest since 2019 ahead of the Fed decision later Wednesday.
A quarter-point Fed rate increase, the first since 2018, to fight high inflation is widely anticipated but there’s less certainty beyond that. While markets expect a total of seven such moves this year, policy makers also have to factor in growth risks emanating from Russia’s invasion of Ukraine.
“We will be closely watching the Fed’s dot plot, which we expect to signal five or six interest-rate hikes this year, more than December’s projections but in line with market expectations,” wrote Lauren Goodwin, portfolio strategist at New York Life Investments. “A dot plot projecting more hiking would likely be a hawkish signal and could result in an earlier yield curve inversion.”
In the latest developments from the war, Ukraine and Russia are due to resume talks Wednesday. A key adviser to Ukrainian President Volodymyr Zelenskiy called the negotiations “difficult” but said there is room for compromise. In Russia, President Vladimir Putin said Ukraine’s leadership was not “serious” about resolving the conflict.
Russia has begun the process of paying $117 million in interest due Wednesday on dollar bonds. The country would be in default if it doesn’t pay the coupons in U.S. currency within a 30-day grace period, according to credit assessor Fitch Ratings. The ruble strengthened in Moscow trading.
Meanwhile, yields on German bunds rose after the cabinet approved additional borrowing of at least 200 billion euros ($220 billion) this year to finance a fund to modernize the military alongside already-planned debt for climate protection and other initiatives.
https://finance.yahoo.com/news/asia-boost-easing-china-rout-222756209.html
GO DIDI
"PEACE"
China's Didi reverses course, will remain in Russia
BEIJING (Reuters) - Chinese ride-hailing giant Didi Global said on Saturday that it would continue to operate in Russia, reversing a decision announced on Monday that it was leaving that country as well as Kazakhstan.
No explanation was given. Didi did not immediately respond to a request for further comment.
On Monday, Didi said it was leaving Russia on March 4, about a year and a half after launching services there. It has been in Kazakhstan for about a year.
"Unfortunately, due to changing market conditions and other challenges, it has become clear at the moment we will not be able to provide the best results in Russia and Kazakhstan," it said on Monday.
Neither statement mentioned geopolitical factors in the decision, but some critics online said the timing of the move opened Didi to accusations of succumbing to U.S. pressure on Russia, which invaded neighbouring Ukraine on Thursday.
Saturday's statement did not mention Kazakhstan.
The Chinese government has called for dialogue on Ukraine but has refrained from condemning Russia's attack or calling it an invasion.
Didi has had a turbulent time since it went public last summer in New York. Under pressure from Chinese regulators concerned about data security, Didi in December said it will delist from the NYSE and pursue a Hong Kong listing.
https://finance.yahoo.com/news/chinas-didi-reverses-course-remain-083223697.html
GO DIDI
"PEACE"
Unfortunately we never heard the previous new of such...
Exclusive-Tesla plans new Shanghai plant to more than double China capacity
In this article:
SHANGHAI (Reuters) - Tesla Inc plans to start work on a new plant in Shanghai as soon as next month as part of a plan to more than double production capacity in China to meet growing demand for its cars in the country and export markets, two people familiar with the matter told Reuters.
Once the new plant is fully operational, Tesla will have the capacity to produce up to 2 million cars per year at its expanded Shanghai facility, the company's main export hub, according to the people, who asked not to be identified in discussing still-private plans.
The new plant will be located in the vicinity of its existing production base in Lingang, Pudong New Area.
Tesla declined to comment.
The expansion, if it goes ahead, would give Tesla EV-dedicated production capacity in the world's largest auto market on a par with more established brands in China.
In comparison, Toyota Motor Corp produced 1.6 million vehicles in China in 2021. General Motors produced 1.4 million with its major Chinese partner SAIC Motor Corp . Volkswagen plans to have capacity to make 1 million EVs in China by 2023.
The cost of the planned expansion and Tesla's timetable for completion were not immediately known.
Tesla started production at its Shanghai plant - also known as the Gigafactory 3 - less than a year after breaking ground. The plant makes the Tesla Model 3 sedan and the Model Y crossover.
Expansion plans for the existing plant aim to put Tesla on track to produce around 1 million vehicles this year, two sources familiar with the expansion plans told Reuters, though one said this also depended on the availability of parts.
Tesla has projected to take its weekly production to about 22,000 vehicles at the plant in the coming months, one of the sources said.
That production rate would amount to about 1.1 million vehicles over a year, more than double the plant's original projected capacity.
Reuters previously reported that Tesla could expand its capacity on the existing site.
The Shanghai city government did not immediately respond to a request for comment.
Shanghai has been a supporter of Tesla's establishment of a wholly-owned factory in China - the first foreign auto plant not required to form a joint venture with a Chinese partner.
In a regulatory filing with Shanghai earlier this week, Tesla said it planned to expand parts production at its Shanghai factory, hiring additional workers and running its factory for longer in a day, to meet growing export demand.
Tesla sales have surged in China and its Shanghai factory has become a crucial export hub to markets such as Germany and Japan. Last year, Tesla's China-made cars accounted for around half of the 936,000 vehicles it delivered globally, based on Reuters calculations using China Passenger Car Association data.
Earlier this month, Tesla said its China revenue more than doubled in 2021 to $13.8 billion from the previous year. Elon Musk also said in October that Shanghai had surpassed its Fremont, California factory -- the company's first plant -- in output.
Tesla has faced delays in opening a plant in Germany. Musk had originally aimed to open a Berlin plant in July last year. Approval for the plant has been complicated by a court case challenging a licence granted to its water supplier.
https://finance.yahoo.com/news/exclusive-tesla-plans-shanghai-plant-113054992.html
GO TESLA, INC
"PEACE"
$$$$$$ $$$$$$
AMADEINAMERICA,INTERNATIONAL,ENERGY,TECHNOLOGYANDCARCOMPANY
My opinion was that. Conventional wisdom leans towards it being on the OTC as a penny stock.
However, DIDI is huge and has entrapped a great deal of Institutional holders, capped with some very large caches of shares.
That being said, special consideration is a distinct possibility, that may be given to DIDI, because of the way things turned out and may given an exception.
Even after they have attempted to de-list from the exchange. NYSE may not accept the de-listing.....It's possible?
GO DIDI
"PEACE"
https://www.investopedia.com/terms/p/pennystock.asp
U.S. prosecutors explore racketeering charges in short-seller probe -sources
NEW YORK/WASHINGTON (Reuters) - U.S. prosecutors are exploring whether they can use a federal law originally enacted to take down the mafia, in a sprawling probe of hedge funds and research firms that bet against stocks, according to two sources familiar with the situation.
The Justice Department last year issued subpoenas to dozens of firms, including such well-known names as Citron Research and Muddy Waters Research LLC, as part of the sweeping probe focused on potentially manipulative trading around negative reports on listed companies published by some of their investors, Reuters and other media have reported.
While prosecutors haven't made any decisions yet, potential charges under the Racketeer Influenced and Corrupt Organizations Act (RICO) were an option on the table, the sources said.
In the past, prosecutors have built RICO cases alongside other allegations, such as manipulation. One of the most high profile cases brought under the RICO Act included that of Michael Milken, who was indicted in the 1980s for racketeering and securities fraud but reached a plea deal, pleading guilty to securities violations but not racketeering or insider trading.
Reuters could not ascertain which types of charges the agency was leaning toward at this stage of the investigation or whether the probe would eventually lead to charges.
Spokespeople for the Justice Department in Washington and the U.S. attorney's office in Los Angeles, which are involved in the probe according to the sources, declined to comment.
Citron declined to comment.
A spokesperson for Muddy Waters did not immediately respond to a request for comment.
The potential use of the 1970 law, which has not been previously reported, provides new insights into the scale and ambition of the investigation. The probe marks a new frontier for the Justice Department's unit in Washington tasked with rooting out corporate crime.
A racketeering case could allow prosecutors to ensnare a broad swathe of investors involved in an alleged "criminal enterprise," even if they participated indirectly, lawyers said.
But such a case would also face more challenges than a narrower one aimed at a smaller group of people. That's in part because prosecutors have to establish a pattern of activity, they said.
Among the activities the Justice Department is investigating is whether funds conspired to perpetrate a so-called "short and distort scheme," sources have previously told Reuters.
In such a scheme the funds would have placed trades that stood to profit if a company's stock fell and then issued false or misleading negative research reports about the company.
Prosecutors are also investigating the relationships between the short-sellers who publish the reports and hedge funds and other investors that may have profited, the sources have said.
They are examining whether there is coordinated trading designed to boost trading volumes and exaggerate price drops on news of the short reports, Reuters previously reported.
RICO charges have historically been used to combat bribery, money laundering, or drug trafficking conducted by organized criminal enterprises such as the mafia. They are unusual in the world of finance but not unprecedented.
U.S. prosecutors in 2019 charged then-current and former JPMorgan Chase & Co executives with racketeering and manipulating prices of precious metals.
"RICO statutes haven’t been used in this realm often in recent years, but they aren’t limited to organized crime," Robert Frenchman of Mukasey Frenchman LLP in New York said. "It’s certainly in the prosecutors’ toolbox."
https://finance.yahoo.com/news/u-prosecutors-explore-racketeering-charges-223050611.html
Still letting it all RIDE....
"PEACE"
Real company, Real product, Real jobs, Real potential for sales.
Sir, technically as they are below $5 bucks, they are already a penny stock.
What Is a Penny Stock?
A penny stock typically refers to the stock of a small company that trades for less than $5 per share. Though some penny stocks trade on large exchanges such as the New York Stock Exchange (NYSE), most trade via over-the-counter (OTC) transactions through the electronic OTC Bulletin Board (OTCBB) or through the privately-owned OTC Markets Group. There is no trading floor for OTC transactions. Quotations are also all done electronically.
Penny Stocks Explained
In the past, penny stocks were considered any stocks that traded for less than one dollar per share. The U.S. Securities and Exchange Commission (SEC) has modified the definition to include all shares trading below five dollars. The SEC is an independent federal government agency responsible for protecting investors as they maintain fair and orderly functioning of the securities markets.
Penny stocks are usually associated with small companies and trade infrequently meaning they have a lack of liquidity or ready buyers in the marketplace. As a result, investors may find it difficult to sell stock since there may not be any buyers at that time. Because of the low liquidity, investors might have difficulty finding a price that accurately reflects the market.
https://www.investopedia.com/terms/p/pennystock.asp
Conventional wisdom leans towards it being an OTC. However, DIDI is huge and has entrapped a great deal of Institutional holders, capped with very large cache of shares.
That being said, special consideration is a distinct possibility, that may be given to DIDI, because of the way things turned
GO DIDI
"PEACE"
WE WILL SEE!
China's foreign listing regulations that mandate cybersecurity reviews apply to Hong Kong, experts say
In this article:
DIDI
-4.48%
Chinese companies handling data from more than 1 million users are required to go through a cybersecurity review if they want to list overseas, and that includes Hong Kong, according to an assessment endorsed by China's cyberspace watchdog.
The conclusion, included in the "expert views" that the Cyberspace Administration of China (CAC) published on its website, shows how the regulator is empowering itself to be a key gatekeeper of overseas listings even though the new law, which came into effect this week, does not specifically mention Hong Kong.
According to the Cybersecurity Review Measures, a regulation jointly signed off by 13 Chinese ministerial bodies, Chinese internet companies seeking to go public in a "foreign" market must go through a cybersecurity review by the cybersecurity Review Office, a unit inside the CAC.
review
The regulation, however, left open the question of whether it covers Hong Kong, which is not a "foreign" market, but is run as a separate legal system under the "one country, two systems" framework.
The CAC has not officially clarified whether a company seeking to list in Hong Kong must file for a cybersecurity review.
In the first expert interpretation, Qi Yue, an engineer from the China Cybersecurity Review Technology and Certification Centre (CCRC), wrote that Chinese internet operators cannot ignore cyberspace, data and national security risks in the process of listing in Hong Kong, even though the regulation does not specifically mention the city.
Qi added that only those already listed abroad would be exempt from such reviews.
All other cases, including initial public offering (IPO), direct public offering, acquiring a special-purpose acquisition company (SPAC), and reverse takeovers (RTO), need to undergo the review procedures, Qi said.
The CCRC is the agency designated to accept documents from companies for their cybersecurity review. Created in 2006 by China's market regulator, the agency's website says it provides "technical support for cybersecurity reviews".
Another internet company source, who has worked with CCRC on multiple projects, said it has been largely toothless in the past and often tried to sell certification services to tech firms.
A second expert view from Hu Ying, who heads the data security department at the China Electronics Standardisation Institute, said companies seeking a listing in Hong Kong "shall still be assessed in accordance with the relevant provisions of the security review of cross-border data transmission", regardless of the fact that Hong Kong is not mentioned directly.
China's cybersecurity review system came under the spotlight last summer after Chinese ride-hailing giant Didi Chuxing defied the wishes of Chinese regulators by going ahead with a US$4.4 billion IPO in New York, later described as a "deliberate act of deceit".
The IPO prompted the CAC to tighten regulations and initiate an on-site data security investigation of Didi's offices. It also ordered Didi to remove 25 apps from app stores and barred the company from accepting new customers. The investigation has not yet issued any official conclusions.
In December, Didi said it would delist from the New York Stock Exchange and explore a listing in Hong Kong. Didi's bankers have held preliminary discussions with Hong Kong Exchanges and Clearing Limited for a listing that may take place in the second quarter, the Post reported last month.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.
https://finance.yahoo.com/news/chinas-foreign-listing-regulations-mandate-093000575.html
GO DIDI
"PEACE"
Didi’s Brief U.S. Foray Is Ending. What Happens Next?
In this article:
DIDI
+2.34%
(Bloomberg) -- Didi Global Inc. is preparing to delist from the New York Stock Exchange, after its initial public offering there last year drew the wrath of Beijing. The Chinese ride-hailing giant said it plans to list in Hong Kong instead, allowing existing shareholders to convert their holdings in the company. There are challenges ahead -- for Didi, its shareholders and other Chinese companies looking to go public. Meanwhile, the government’s ongoing investigation and new regulatory measures have hit Didi’s bottom line hard.
1. Why is Didi going to delist?
Chinese regulators opposed the U.S. listing, saying it could expose Didi’s vast troves of data to foreign powers. The firm pressed ahead with the June IPO anyway, in a move that Beijing saw as a challenge to its authority. Days after the listing, the government announced a cybersecurity probe into the firm and forced its services off domestic app stores. Later the Cyberspace Administration of China, the agency responsible for data security, was said to have asked Didi’s top executives to devise a plan to delist because of concerns about leakage of sensitive data.
2. How will it work?
Didi said it aims to list on the Hong Kong Stock Exchange and ensure that its American depositary shares can be swapped for “freely tradable shares of the Company on another internationally recognized stock exchange,” according to a statement. The firm is planning to file for the Hong Kong listing around March, people with knowledge of the matter have told Bloomberg News. The entire process could take months from that point.
3. What are the challenges?
Prior to its U.S. IPO, Didi had weighed a potential Hong Kong listing but abandoned the effort after the city’s exchange questioned its compliance with Chinese regulations, such as having licenses in all the cities where it operated. (The Hong Kong exchange makes far more stringent demands on companies seeking a listing than its New York peers.) In preparation for its new listing, the company is said to be planning to reduce its headcount by as much as 20%, not including drivers. Didi in December disclosed a $4.7 billion loss in the September quarter after revenue slid 13% from the previous three months. Even if Didi pulls off a listing in Hong Kong, some investors may choose this opportunity to sell rather than swap their shares, which have fallen drastically. Technically speaking, swapping the U.S. shares for stock in Hong Kong should be relatively straightforward for most institutional shareholders. But the new securities may trade with a valuation discount: Hong Kong has long been home to some of the world’s lowest price-to-earnings ratios.
4. Why is this such a big deal?
Didi’s blockbuster IPO was the second-biggest in the U.S. by a company based in China (Alibaba Group Holding Ltd.’s was bigger) and gave Didi a market value of about $68 billion. The listing, which was shepherded by a who’s who of Wall Street banks, appeared to be a model for how international investors could tap into China’s red-hot tech sector. Didi’s largest shareholder was Japan’s SoftBank Group Corp., with more than 20%.
5. Will China force other companies to change listings?
Didi’s exit is unlikely to be the last. The Chinese internet regulator began probing two more U.S.-listed companies, Full Truck Alliance Co. and Kanzhun Ltd., soon after launching the review into Didi. In December the government unveiled tighter regulations for Chinese companies seeking to go public abroad using the so-called variable interest entity (VIE) structure, as Didi did. Meanwhile, the U.S. is moving to implement a new law that mandates foreign companies open their books to U.S. regulators or face delisting starting in 2024. The U.S. Securities and Exchange Commission says that only two jurisdictions historically have not allowed the required inspections, China and Hong Kong.
6. Will this end Didi’s troubles?
Unlikely. The cybersecurity probe into Didi is ongoing, and regulators may still impose an array of punishments such as a fine, suspension of certain operations or the introduction of a state-owned investor. The municipal government of Beijing, where Didi is based, was said to have proposed that the Shouqi Group -- part of the influential Beijing Tourism Group -- and others acquire a stake in Didi, which would give control to state-run firms. Media including the South China Morning Post have reported that regulators may force Didi to reshuffle its top management. Didi has put forth several proposals to appease the cybersecurity regulator, including ceding management of its data to a private third party. President Xi Jinping’s campaign to achieve “common prosperity” has heaped pressure on platform companies like Didi to offer better wages and benefits to its army of drivers. More fundamentally, the Chinese government is expected to maintain strict curbs on and scrutiny over big tech enterprises like Didi that amass sensitive data.
https://finance.yahoo.com/news/didi-brief-u-foray-ending-061802436.html
GO DIDI
"PEACE"
Didi to Cut Up to 20% of Jobs Before Hong Kong Listing
(Bloomberg) -- Chinese ridehailing giant Didi Global Inc. plans to reduce its overall headcount by as much as 20% as the troubled tech firm pushes ahead with plans to transfer its stock-market listing to Hong Kong, people with knowledge of the matter said.
Most of the company’s core businesses will be affected by the cuts, which are aimed at reducing expenses ahead of the Hong Kong listing, the people said, asking not to be identified as the information isn’t public. Ridehailing may see staff reductions of up to 15%, one of the people said, though drivers -- gig workers who aren’t officially included in the company’s headcount -- won’t be affected.
A Didi representative didn’t immediately comment on the job reductions, which were first reported by Chinese media Late Post. The plans have not yet been finalized and could still change. The company has already pared investments in once red-hot businesses like community grocery buying, some of the people said. Some units like Didi Finance, which is expanding outside China, and its autonomous driving business will be less impacted, another person said.
Didi, which pulled off its $4.4 billion U.S. initial public offering in June against Beijing’s wishes, has emerged as one of the biggest targets of a crackdown by Chinese authorities. Days after its listing, the company was placed under a cybersecurity probe and its services were taken off Chinese app stores. Months later, Didi announced it was planning to withdraw from the New York Stock Exchange and instead seek a new listing in Hong Kong, a move aimed at allaying concerns over the potential exposure of its data to foreign powers.
What Bloomberg Intelligence Says:
Didi slashing up to 20% of its workforce including up to 15% in its core ride-hailing business, as reported by Bloomberg News, could lift profitability before its planned Hong Kong IPO and U.S. delisting. Margins in its domestic ride-hailing business were hit in 2021 by competitive and regulatory pressure on pricing and costs, so a narrowed cost base could right-size the business for the slower growth that’s now expected.
Shares of Didi have dropped nearly 70% from its offering price. The Beijing-based company revealed a $4.7 billion loss after revenues shrank in the September quarter following the regulatory assault against the tech firm.
Investors now await the final penalties stemming from the cybersecurity probe, as well as more details on how Didi, which is backed by SoftBank Group Corp. and Tencent Holdings Ltd., intends to transfer its shares to Hong Kong.
The market has priced in a possible penalty of 10 billion yuan ($1.6 billion) stemming from the government’s probe into Didi, Bernstein analysts led by Cherry Leung wrote in a report Monday that said “the regulatory storm is largely over.”
The company saw order share drop only 7 points to 74% in December, compared with the No. 2 player’s 16%, and Didi is expected to invest in marketing shortly after resuming new customer acquisition, the analysts added.
But in a sign that Beijing isn’t letting up on efforts to curb its tech companies, eight government departments including the ministries of transport and public security this week pledged to tighten regulations governing the car-hailing industry.
Rules for drivers and vehicles taking to the streets for the first time will be tightened, according to the statement published by the transport regulator.
https://finance.yahoo.com/news/didi-cut-20-jobs-hong-040940119.html
GO DIDI
"PEACE"
So, as it turns out. The shares reported, where already held, but not reported earlier.
https://finance.yahoo.com/news/didi-shares-climb-tencent-boosts-144113595.html
But still it also appears they did and have not sold them.....STILL HOLDING!
GO DIDI
"PEACE"
How long, how long will the bull $hit go on.
Didi Shares Climb as Tencent Boosts Stake in Chinese Ride-Hailing Giant
In this article:
(Bloomberg) -- Didi Global Inc. shares got a shot in the arm after one of its largest shareholders increased its stake in the company.
Shares of the Chinese ride-hailing firm rose as much as 5.8% Thursday, their fourth straight day of gains, after a regulatory filing showed that Tencent Holdings Ltd. added about 1.8 million Class A ordinary shares to its holdings. The move raises Tencent’s total ownership of Didi to 7.4% as of Dec. 31, up from the 6.4% that had been disclosed ahead of its June initial public offering.
“The increased stake indicates Tencent’s confidence in Didi, while providing another indication that China’s Internet regulatory cycle is likely over,” said Brendan Ahern, Chief Investment Officer at Krane Funds Advisors LLC.
Tencent’s boosted stake in Didi is a much needed show of faith for the stock which has been decimated by regulatory crackdowns since its trading debut last year. The firm has seen its market value plunge by nearly $50 billion in the span of less than eight months after authorities in China raised concerns about its data security. Didi said in December that it has begun making preparations to withdraw from U.S. stock exchanges and pursue a listing in Hong Kong.
The move also stands in stark contrast to other changes in Tencent’s holdings in recent months. In early January the e-commerce firm cut its holdings of Singapore’s Sea Ltd., fueling speculation that it was planning to pare back its ownership in other Chinese tech firms. That came less than a month after Tencent told investors it planned to divest more of its stake in JD.com Inc. by handing out more than $16 billion of shares as a one-time dividend.
Didi’s four-day rally comes in the wake of news that Chinese state-backed funds had intervened in domestic stock markets Tuesday, rekindling hope that a bottom is near for the nation’s battered equities. Didi’s winning streak would be its longest since October.
https://finance.yahoo.com/news/didi-shares-climb-tencent-boosts-144113595.html
GO DIDI
"PEACE"
Strategic Vision Investment Ltd Buys Amazon. ...
insider
Tue, February 8, 2022, 8:38 AM
In this article:
SE
+2.56%
BZ
+5.42%
XM
+3.56%
AMZN
+1.19%
ACMR
+1.78%
DIDI
+8.73%
IMAB
-6.05%
Investment company Strategic Vision Investment Ltd (Current Portfolio) buys Amazon.com Inc, Qualtrics International Inc, I-MAB, DiDi Global Inc, ACM Research Inc, sells Sea, Kanzhun, Stem Inc, New Frontier Health Corp during the 3-months ended 2021Q4, according to the most recent filings of the investment company, Strategic Vision Investment Ltd. As of 2021Q4, Strategic Vision Investment Ltd owns 14 stocks with a total value of $59 million. These are the details of the buys and sells.
New Purchases: AMZN, XM, IMAB, DIDI,
Added Positions: ACMR,
Reduced Positions: STEM, ADAG,
Sold Out: SE, BZ, NFH,
Warning! GuruFocus has detected 7 Warning Signs with ACMR. Click here to check it out.
ACMR 15-Year Financial Data
The intrinsic value of ACMR
Peter Lynch Chart of ACMR
For the details of Strategic Vision Investment Ltd's stock buys and sells,
go to https://www.gurufocus.com/guru/strategic+vision+investment+ltd/current-portfolio/portfolio
These are the top 5 holdings of Strategic Vision Investment Ltd
iShares China Large-Cap ETF (FXI) - 297,600 shares, 18.45% of the total portfolio.
Amazon.com Inc (AMZN) - 3,100 shares, 17.52% of the total portfolio. New Position
Qualtrics International Inc (XM) - 251,100 shares, 15.07% of the total portfolio. New Position
ARK Innovation ETF (ARKK) - 83,600 shares, 13.40% of the total portfolio.
ACM Research Inc (ACMR) - 71,900 shares, 10.39% of the total portfolio. Shares added by 30.25%
New Purchase: Amazon.com Inc (AMZN)
Strategic Vision Investment Ltd initiated holding in Amazon.com Inc. The purchase prices were between $3189.78 and $3696.06, with an estimated average price of $3427.48. The stock is now traded at around $3158.710000. The impact to a portfolio due to this purchase was 17.52%. The holding were 3,100 shares as of 2021-12-31.
New Purchase: Qualtrics International Inc (XM)
Strategic Vision Investment Ltd initiated holding in Qualtrics International Inc. The purchase prices were between $31.27 and $47.24, with an estimated average price of $38.66. The stock is now traded at around $29.490000. The impact to a portfolio due to this purchase was 15.07%. The holding were 251,100 shares as of 2021-12-31.
New Purchase: Amazon.com Inc (AMZN)
Strategic Vision Investment Ltd initiated holding in Amazon.com Inc. The purchase prices were between $3189.78 and $3696.06, with an estimated average price of $3427.48. The stock is now traded at around $3158.710000. The impact to a portfolio due to this purchase was 17.52%. The holding were 3,100 shares as of 2021-12-31.
New Purchase: Qualtrics International Inc (XM)
Strategic Vision Investment Ltd initiated holding in Qualtrics International Inc. The purchase prices were between $31.27 and $47.24, with an estimated average price of $38.66. The stock is now traded at around $29.490000. The impact to a portfolio due to this purchase was 15.07%. The holding were 251,100 shares as of 2021-12-31.
New Purchase: I-MAB (IMAB)
Strategic Vision Investment Ltd initiated holding in I-MAB. The purchase prices were between $45.28 and $74.5, with an estimated average price of $59.71. The stock is now traded at around $22.970000. The impact to a portfolio due to this purchase was 4.96%. The holding were 61,800 shares as of 2021-12-31.
New Purchase: DiDi Global Inc (DIDI)
Strategic Vision Investment Ltd initiated holding in DiDi Global Inc. The purchase prices were between $4.94 and $9.81, with an estimated average price of $7.57. The stock is now traded at around $3.550000. The impact to a portfolio due to this purchase was 3.78%. The holding were 447,524 shares as of 2021-12-31.
Added: ACM Research Inc (ACMR)
Strategic Vision Investment Ltd added to a holding in ACM Research Inc by 30.25%. The purchase prices were between $70.35 and $117.7, with an estimated average price of $94.3. The stock is now traded at around $80.210000. The impact to a portfolio due to this purchase was 2.41%. The holding were 71,900 shares as of 2021-12-31.
Sold Out: Sea Ltd (SE)
Strategic Vision Investment Ltd sold out a holding in Sea Ltd. The sale prices were between $205.68 and $366.99, with an estimated average price of $296.89.
Sold Out: Kanzhun Ltd (BZ)
Strategic Vision Investment Ltd sold out a holding in Kanzhun Ltd. The sale prices were between $29.5 and $40.62, with an estimated average price of $35.03.
Sold Out: New Frontier Health Corp (NFH)
Strategic Vision Investment Ltd sold out a holding in New Frontier Health Corp. The sale prices were between $10.27 and $11.63, with an estimated average price of $11.27.
Here is the complete portfolio of Strategic Vision Investment Ltd. Also check out:
1. Strategic Vision Investment Ltd's Undervalued Stocks
2. Strategic Vision Investment Ltd's Top Growth Companies, and
3. Strategic Vision Investment Ltd's High Yield stocks
4. Stocks that Strategic Vision Investment Ltd keeps buyingThis article first appeared on GuruFocus.
https://finance.yahoo.com/news/strategic-vision-investment-ltd-buys-143833204.html
GO DIDI
"PEACE"
..Hence one of the reason for the movement today.
Lordstown Endurance EV pickup deliveries will begin this year
Last November, Lordstown Motors closed the deal to sell its manufacturing facility in Lordstown, Ohio, to Taiwanese electronics manufacturing conglomerate Foxconn. The plant went for $230 million, and could have been decorated with one of those banners reading, "Under new management!" On top of that, Foxconn put down another $50 million for an equity share of Lordstown Motors that opened up a joint-venture development deal for commercial EVs for North American and international markets. That part of the deal should have come with its own banner: "There's a new sheriff in town." That's how you get Foxconn Chairman Young Liu saying in an interview with Asia's Nikkei newspaper, "Electric pickups made in cooperation with Lordstown will begin shipping in the second half of this year," and nary a peep from executives at the aspirational electric vehicle maker.
A few days later, Lordstown Motors posted a picture of at least three pre-production Endurance pickups at the facility. The caption explained, "Thanks to our collaboration with Foxconn, our pre-production vehicles are rolling out of assembly and into diverse testing environments." This would be the second foray into pre-production that we know of, and everyone will hope it goes better than the first. Last February, when powertrain engineers took one of the first Endurance prototype for its first drive, the pickup caught fire after 10 minutes, and burned to a crisp. None of the three engineers in the truck were hurt, and of course that's the point of prototypes and testing — to catch issues like fire hazards before customers get their homes burned down. We're sure there have been a lot of lessons over the past year that will make this latest version better.
If Liu can be believed, we'll all be finding out within the next 11 months. When the factory sold, Lordstown execs (not Liu) said Endurance deliveries would begin one quarter later than planned, in Q3 of this year. Liu's new statement makes us think December could be more likely, especially if prototype testing has only recently begun. The lack of clarity about the whats and the whens is an effect of more than just the Foxconn deal; Lordstown got a new CEO and CFO in August last year, then it scrubbed information about the Endurance from its website as "a reminder for everyone that we're geared toward fleet customers and so we don't communicate with them through our website necessarily." Also, investigations by U.S. prosecutors in Manhattan and the Securities and Exchange Commission need to be dealt with.
If prototype testing goes well, we image we'll start hearing more about the Endurance come the middle of the year. Meanwhile, Foxconn will be playing its own EV hands after showing three electric vehicle concepts of its own, built on its Mobility in Harmony open EV architecture, and it also has a deal to co-develop and build a Fisker EV called the PEAR at the Lordstown, Ohio, plant.
https://www.yahoo.com/autos/lordstown-endurance-ev-pickup-deliveries-161700015.html
Still letting it all RIDE....
"PEACE"
Real company, Real product, Real jobs, Real potential for sales.
Why Are Lordstown Motors, Romeo Power, and Workhorse Group Up Today?
Who had "busted-meme-stock rally" on their 2022 bingo card?
What happened
Shares of many companies in the electric vehicle space were up sharply on Monday morning. Some of the largest gains were seen in former meme stocks that had fallen on hard times in recent weeks.
Here's where things stood for three leading examples of that trend as of noon ET, relative to their closing prices on Friday:
So what
Until today, January had not been a good month for these three stocks. Here's how their 2022 performance looked as of last Friday's close.
So why are they up today? I think it's something of a relief rally: The crypto free fall seems to have abated for the moment, category leader Tesla was up nicely in early trading, and there's a sense that worries about higher interest rates -- which were at least partially responsible for the month's declines -- may now be priced in, more or less.
They certainly weren't moving on company-specific news. Neither Lordstown nor Workhorse has shared any news of note in weeks; neither has Romeo Power, aside from announcing a new chief operating officer on Jan. 18. There were no Wall Street upgrades or other analyst mentions relating to any of the three on Monday. Market conditions haven't shifted; none of the three is known to have a major deal in the works; nothing material seems to have changed.
But investors seem excited about these three companies' stocks again, at least for the moment. If you're wondering why, I can't help you.
A year ago this week, Lordstown Motors said it was on track to begin building its Endurance electric pickup in the fall of 2021. Many things have changed since then. Image source: Lordstown Motors.
Now what
The good news is that electric vehicle investors wondering what the heck is going on will be able to hear directly from the companies' management teams before long. While none of the three have yet announced dates for their fourth-quarter and full-year 2021 earnings reports, past practice suggests that all three will likely report in mid- to late February.
https://www.fool.com/investing/2022/01/31/why-are-lordstown-motors-romeo-power-and-workhorse/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Still letting it all RIDE....
"PEACE"
Real company, Real product, Real jobs, Real potential for sales.
Yes they have enacted a plan to start "Delisting". Hench the header in the article you referenced,
Didi is delisting from New York just months after its disastrous IPO
https://www.cnn.com/2021/12/02/investing/didi-ipo-delist-new-york-hong-kong-intl-hnk/index.html
But as of today, they have yet to have "Delisted" from the NYSE:
DiDi Global Inc. (DIDI)
NYSE - NYSE Delayed Price. Currency in USD
https://finance.yahoo.com/quote/DIDI?p=DIDI&.tsrc=fin-srch
The thoughts put forward, with my opinion, are / is they that are letting the price fall below a $1 and remain as such until it is automatically kicked-off the exchange by default......THAT IS THE PLAN?
GO FIGURE...
GO DIDI
"PEACE"
As the plan continues to progress....
....It this rate it will be there in 8-9 business days. Then the wait for boot off the exchange.
GO DIDI
"PEACE"
DAMN SHAME!
So, it seems, the plan is to push it down below a dollar, sustain that for 60-90 days which automatically gets it kicked off the big stock exchange.......Hence, now a pink or OTC?
WOW!!!......And the SEC, how is this legal? pure manipulation.
GO DIDI
"PEACE"
ALL FUNKED UP
Tesla's Fremont Is The Most Productive Car Plant In North America
With a production of 8,550 cars a week last year, Fremont beat Toyota’s Georgetown plant in Kentucky (8,427 cars a week).
Tesla’s original factory in Fremont, California, was the most productive auto plant in North America in 2021, according to a Bloomberg analysis of production data from more than 70 production facilities.
The former NUMMI facility bought by Tesla in 2010 produced an average of 8,550 cars a week last year, more than Toyota’s facility in Georgetown, Kentucky (8,427 cars a week), BMW’s Spartanburg plant in South Carolina (8,343) or Ford’s truck plant in Dearborn, Michigan (5,564).
With a total production of approximately 444,600 cars in 2021 (Tesla did not release an official figure for Fremont but that's what you get by multiplying 8,550 cars a week by 52 weeks), the California plant got surpassed by Tesla’s other vehicle manufacturing facility, Giga Shanghai, which tripled its output last year to nearly 486,000.Overall, Tesla expanded its global production by 83% over 2020 levels to 930,422 vehicles.
While 2021 was a remarkable year for Tesla despite the supply-chain shortages that stifled auto production around the world, 2022 looks set to become another record-breaking year seeing as the EV maker is expected to open two new plants in the first quarter—in Austin, Texas, and Berlin, Germany.
Furthermore, Elon Musk said in October that he plans to further increase production in Fremont and Shanghai by 50%—not to mention his longstanding target to increase vehicle deliveries by roughly 50% every year.
Despite its phenomenal growth and dominance in electric vehicles, Tesla is still just the 10th biggest auto manufacturer in North America, trailing giants like General Motors, Ford, Toyota, Stellantis, and Honda. However, with the EV segment set to grow exponentially in the coming years, we may see Tesla climb further.
Originally built by General Motors in the 1960s and jointly operated by GM and Toyota’s NUMMI joint venture until after the former company’s 2009 bankruptcy, the Fremont facility has been a work in progress ever since Model S production started in 2012, seeing new additions on a regular basis to increase production. There are limits to its continuous expansion, though, and that's where the much bigger Giga Texas plant comes in.
https://www.msn.com/en-us/autos/news/teslas-fremont-is-the-most-productive-car-plant-in-north-america/ar-AAT6ejN?ocid=U507DHP&li=BBnb7Kz
GO TESLA, INC
"PEACE"
$$$$$$ $$$$$$
AMADEINAMERICA,INTERNATIONAL,ENERGY,TECHNOLOGYANDCARCOMPANY
China’s Uber, DiDi Has a Strong Future Ahead
In this article:
We finally have more clarity regarding when DiDi Global (NYSE:DIDI) will list in Hong Kong. According to a South China Morning Post report, shares could list as early as the second quarter of this year. The company is set to delist in the U.S. and offer a one-for-one exchange for their shares. It caps a horrendous few months for DIDI stock.
The Chinese ride-hailing company is in hot water after having its New York Stock Exchange initial public offering (IPO). Chinese regulators told DiDi not to move forward with the plan, but they continued anyway, and now it’s costing them greatly.
For investors, it is looking like a costly investment. They rushed in with the Didi IPO. And can you blame them? The Chinese market is huge, and its middle class is the biggest globally. In 2020, the Internet Society of China estimated that transactions reached around $39 billion.
However, the regulatory issues mean that only risk-tolerant investors will even remotely consider investing in DIDI stock. National security in China can be a vague and broad term. The laws purporting to cover all key industries are only limited by the imagination of those that enforce them. That will not change with a listing in Hong Kong.
But what about the investors who haven’t cashed out yet? For them, there are multiple options. Most will still give a nice return on their investment. However, any losses already incurred cannot be recouped. But you can still make some nice gains on the remaining options on the table.
What is more interesting is where the company is headed next. China won’t deal a fatal blow to this company; it’s just too valuable. Therefore, expect it to mount a comeback when it’s all said and done.
China’s Ride-Hailing Market and Regulation
The “Millennial lifestyle subsidy” is one of the best things in mobility right now. Ride-hailing services give discounted rates to people who use their service, which can save you money if you aren’t looking for anything too extravagant or long-term like car ownership.
Ride-hailing companies are now public corporations with massive investor bases and global reach. In theory, this means that they should withstand any setbacks faced by their competitors while still being profitable on an individual level — but there’s always something compelling enough about new ideas or fresh approaches that may prove too much for some established brands in the industry.
For investors, there are several things to consider; one of them is its position in China. China has been known as the world’s factory for many years due to its low labor costs and weak labor regulations. This reputation is mostly still intact today, with strong business ecosystems throughout Chinese cities like Shenzhen or Zhuhai.
That has helped increase consumer incomes, which has given rise to the middle-class consumer in China. The sharing economy is booming, and the new generation of mobility customers want to be part of this exciting trend. Ride-hailing services now focusing on tier three, four, or five cities because they are still below capacity compared with other parts of their country.
The regulatory turmoil has allowed competitors like Meituan (OTCMKTS:MPNGF) to infringe on the market share that was once solely occupied by Didi. But it still remains the number one company in the sector.
With its home market being the source of much confidence, Didi is counting on expanding into other countries. However, it faces an uphill battle as its dominance isn’t yet established, and many competitors await them. That will weigh down DIDI stock for the foreseeable future.
Earnings Highlight Recent Financial Woes
Didi is still the most prominent ride-hailing company in China. However, regulatory issues are still concerning for executives. The company’s financials are not looking good, with their latest quarterly report revealing a $4.7 billion loss after revenues shrank in the September quarter — a direct result of increasing costs due to regulatory actions.
The company’s sales have fallen more than 13% sequentially and 1% year on year. It adds to investors’ woes that are already reeling from the delisting announcement and what the future holds for Didi.
Operating expenses jumped by 16% during the last quarter to meet new compliance demands. In a move that should raise security concerns for all businesses operating in China, Didi’s delisting is unprecedented and highlights the depth of Beijing’s concern about sensitive data leaking out.
One of the most important things for a company’s long-term growth is unrestricted access to data from consumers. But this may not be possible in China, where Didi Global is facing restrictions on using customer information because it doesn’t meet national standards — and there are fears these rules could extend elsewhere too.
The company is a clear leader in China’s $50 billion domestic ride-hailing markets, but there are numerous hurdles it must overcome to maintain this position. If Didi can succeed with its plans for future growth and regulation, it will be well on track to achieve its ambitious goals by continuing its international expansion. For now, investors and the company have to roll with the punches.
DiDi Stock Makes Sense for the Risk-Tolerant Investor
For several months ahead, the future of DIDI stock will be vague. That means only investors confident in its recovery and outlook should pursue this one. The company has an excellent asset-light business model and is operating in a huge and growing market.
Even if you hold onto shares and convert to overseas exchange, the fundamentals and outlook are enticing. If the company goes private, you have a great chance to profit from the transaction. Finally, the company itself is a great prospect. Its issues deal with the regulatory environment in Beijing, not anything of the company’s own doing.
The DiDi carsharing service has expanded to 14 countries outside China, including Australia and New Zealand. Last year, the company continued its international expansion with the recent launch in South Africa for their fast-growing network that now includes many more countries across Latin America, Japan, and Mexico. And it has yet to step onto European shores, a huge potential market for DiDi.
There is an incentive to hold onto your DIDI stock for all these reasons.
https://finance.yahoo.com/news/china-uber-didi-strong-future-200247032.html
GO DID
"PEACE"
It's going to be a while.....
DiDi’s Regulatory Troubles Provide an Excellent if Risky Entry Point
In this article:
DiDi’s (NYSE:DIDI) rapid growth has come to a screeching halt, as it is subject to intense regulatory scrutiny. It is now one of the worst-performing major listings of a Chinese company on a U.S. exchange. Since making its public debut on the New York Stock Exchange on June 30 at $14 a share, DIDI stock has plummeted 66%.
You can’t pin the stock’s poor performance on Didi’s management or operations. Rather, shares got whacked by a regulatory crackdown, as the Chinese government sought to tighten its oversight of data security and companies listed overseas.
Didi raised $4.4 billion in its initial public offering after selling 317 million American depositary shares at the IPO price, larger than any Chinese company since Alibaba Group (NYSE:BABA).
In early December, just five months after its U.S. IPO, DiDi announced it would file for delisting from the NYSE and pursue a listing in Hong Kong. That’s a tough pill to swallow, and many investors chose to cash out, sending DIDI stock down 22% on the day.
Recently, shares fell to another low after Didi’s 180-day lockup period expired. Management does not want the stock to fall any further. So, it’s restricting current and former employees from selling shares in the hopes of shoring up the share price.
Nevertheless, despite the negative external factors, it is hard not to be impressed by DiDi Global’s growth prospects. As China’s middle class continues to expand, so do opportunities for DiDi Global. So, the long-term tailwinds are positive. If you are an investor willing to take a bit of risk, there are several ways to play this stock for short-term and long-term gains.
Regulatory Issues Thump Didi Stock
Over the last year, Beijing has come down hard on Chinese tech stocks. President Xi Jinping’s administration touts data privacy as the reason to curb the once-freewheeling sector. However, several prominent names are feeling the brunt. For DiDi Global, it looked like the sky was the limit when it made its debut on the NYSE. However, now things are looking a bit fuzzier.
DiDi’s board has greenlighted the delisting from the NYSE and is pursuing an IPO in Hong Kong. According to the company, DIDI stock will be “convertible into freely tradable shares of the company on another internationally recognized stock exchange at the election of ADS holders.”
Bloomberg reported that the company is currently looking to register its IPO in Hong Kong around March, citing people privy to the matter. According to the report, we might see shares trading on the exchange by the summer.
There are three options investors are facing. The first is to sell their shares and wipe their hands of the investment. The second option is to wait for the conversion to the Hong Kong exchange. You have to confirm that your brokerage account provides access to international stock exchanges if that option suits your investment needs. The third option is to wait and see if the company decides to go private.
In July, The Wall Street Journal reported DiDi was considering taking the company private to appease the Chinese government. At the time, DiDi denied the report, but let’s consider the possibility for a moment. If the ride-hailing giant was taken private, it is highly likely to be at a premium over shares’ current levels.
Whichever way you slice it, shares are trading at an enticing discount for all these possibilities.
International Expansion
With the ever-growing middle class in China, major cities face taxicab shortages. Ride-hailing provides a solution to this problem and an income opportunity for thousands of drivers all over those areas. Didi Chuxing is the most popular ride-hailing service in China, with around 90% market share.
Looking ahead, DIDI is focusing on international expansion to become a truly global player in the ride-hailing industry. It previously planned for their operations in Europe and Britain but halted these plans after privacy concerns arose from local law regulations regarding data protection.
A major part of maintaining high revenue growth rates is expanding into new markets like Africa. The continent’s middle class is a major catalyst for economic growth in the region. And it will continue to fuel urbanization. With an increasing number of people living on upper-tier incomes level or higher, there are more opportunities than ever for companies like DiDi.
Overall, according to a report by Precedence Research, the ride-sharing market is expected to grow at a compound annual rate of 16.7% through 2030, reaching $344.4 billion.
That growth does not even include the autonomous driving market, which is the biggest potential moneyspinner for the company. Removing drivers from behind the steering wheels would allow a company like DiDi to eliminate one of its major expenses that eat into profit margins. The bottom-line impact will be astronomical.
DiDi Is Investing in the Future
DiDi is pouring massive capital into electric vehicles and autonomous driving technology. With its “robotaxi” unit that offers rides via mobile robots (think: driverless taxis), they’re one of few companies that have managed not only to provide these services but also create them. Didi Chuxing has announced that it plans to operate more than one million such vehicles by 2030.
It already has 100 autonomous vehicles on the roads. And it is hoping to deploy shared, electric ones in China’s cities soon. Didi has a dedicated subsidiary for its autonomous driving ventures. With funding of $800 million, this startup is now by SoftBank Vision Fund, among others.
Didi Chuxing is also active in financial services. The product suite includes car insurance products, personal loans, and crowdfunded medical coverage. In addition, the transportation segment includes food and grocery delivery. They have a community group buying platform called Tuán Gòu. It allows you to buy items in bulk from other members through your app at discount prices. The ride-hailing giant uses its vast trove of user data to deduce what people earn from where they spend most of their time.
Didi directly competes with more established players such as Alibaba’s Ant Financial and Tencent’s (OTCMKTS:TCEHY) WeSure platform. Meanwhile, the Chinese government is extending its pressure on fintech beyond Jack Ma’s Ant Group, with Tencent and ByteDance among the latest companies to be summoned by authorities.
However, you cannot fault DiDi for diversifying its revenue base.
The Bottom Line on DIDI Stock
There’s no denying DIDI stock is deep in the red as confusion abounds ahead of the company’s planned U.S. delisting. Nevertheless, there are bright spots that bulls can exploit for quick gains.
The company controls an estimated 90% share of the ride-sharing market in China and is still growing despite the pressure being applied by regulatory agencies. The Chinese ride-hailing giant is also active in several areas with tremendous growth potential.
Hence, there are more than enough positive tailwinds for an investor who’s willing to take on a bit of risk and has the ability to potentially access shares overseas. It is just about navigating choppy waters. On the flip side, DIDI stock also makes sense as a short-term investment, considering the near-term catalysts.
https://finance.yahoo.com/news/didi-regulatory-troubles-excellent-risky-131407241.html
GO DIDI
"PEACE"
GO RIDE....
If you will wait for $1, you will then claim to wait for .25 cents.
If you will wait for .25 cents, you will then claim to wait for sub-penny.
And so on..........
Still letting it all RIDE....
"PEACE"
Real company, Real product, Real jobs, Real potential for sales.
Didi in talks for a second-quarter IPO in Hong Kong on its way to delisting from New York, sources say
In this article:
Didi Global is in talks to launch its initial public offering (IPO) in Hong Kong in the second quarter, as China's dominant ride-hailing company prepares to exit the New York Stock Exchange (NYSE), according to two sources familiar with the matter.
Didi's bankers have had preliminary discussions with the Hong Kong Exchanges and Clearing Limited (HKEX) before submitting the A1 form to officially apply to list on the exchange, according to the sources, requesting anonymity for discussing a matter before its announcement.
Depending on market conditions, the Beijing-based company may list in Hong Kong in the second quarter, the sources said, adding that the financial terms of the proposed listing are still being worked on. HKEX's spokesman declined to comment on individual cases.
Didi forced its way last June to a US$4.4 billion IPO in New York that defied injunctions by Chinese regulators, who later described the controversial listing as a "deliberate act of deceit." The move set off a spate of retributions against Didi, forcing its smartphone application - the platform for drivers and passengers to interact - to be taken off app stores and setting off a series of cybersecurity investigations into the company's use of customers' data.
In December, Didi said it would delist from New York and explore listing in Hong Kong. The company's bankers are now busy finding a solution to ensure Didi meets all the listing requirements in Hong Kong, including the licensing of its drivers and other issues, the sources said.
Didi will be a test to see if Hong Kong can step up as the alternative listing avenue for more than 200 Chinese companies that are currently listed on US exchanges, where they have come under increasing legislative scrutiny for everything from accounting standards to alleged ties to the Chinese military and US sanctions on Xinjiang.
Hong Kong's government and the local burse have rolled out the red carpet to welcome US-listed Chinese companies to raise capital, offering a series of incentives and regulatory reforms starting on January 1.
"With mainland companies seeking to grow and still hoping to explore international financing in the face of increasing regulatory uncertainty in the US, it is likely that we will see more China concept stocks return from the overseas market," Hong Kong's Financial Secretary Paul Chan Mo-po said in a speech to the 15th Asian Financial Forum this week. "We are actively making preparations for that."
Didi's listing would also be a big boost to the HKEX, whose IPO tally shrank 17 per cent in 2021, its first decline since 2017. Hong Kong was the world's top IPO destination in seven of the previous 12 years.
Didi's capitalisation shrank to US$23.6 billion as of the close of trading on Tuesday in New York. Didi's NYSE listing was handled by a syndicate of banks comprising Goldman Sachs, Morgan Stanley, JPMorgan & Chase, Bank Of America, Barclays, China Renaissance, China International Capital Corporation (CICC), Citi, HSBC, UBS, and Guotai Junan.
The Cyberspace Administration of China in July launched its investigation into Didi's operations, which has yet to turn out an official conclusion. The investigators installed at Didi's Beijing headquarters had not been seen in the last two months, according to employees.
Didi reported a 30.4 billion yuan (US$4.77 billion) loss and a 1.7 per cent decline in revenue to 42.7 billion yuan in the third quarter of 2021.
https://finance.yahoo.com/news/didi-talks-second-quarter-ipo-093000904.html
GO DIDI
"PEACE"
Tesla close to producing first cars at Austin-area factory
Tesla is close to being able to produce cars at its $1.1 billion Travis County manufacturing facility, with at least one industry analyst saying the automaker could start rolling out Texas-built vehicles as early as this week.
Tesla — which in October said it was moving its corporate headquarters to Austin — has yet to make any announcements about the start of production. However, construction of the facilty has moved swiftly since Tesla announced in July 2020 that it had chosen the Austin area for the factory, which has been dubbed Giga Texas.
Tesla CEO Elon Musk and other executives had previously predicted that production could start at the factory before the end of 2021.
That didn't happen, but analyst Dan Ives of Wedbush Securities said it's possible Tesla could start producing vehicles as early as this week. Ives said his firm's analysis of Tesla-filed paperwork shows the company is nearing the start of production for its Model Y vehicles in Austin.
"Based on our analysis of Giga Austin it appears paperwork is now clearing the way for Model Y production starting over the next 7-10 days. We also believe the stamping machines for Model Y and testing is already in place and mostly completed, with paperwork now filed by Tesla to officially start key production in Austin over the next week," Ives said in a Wedbush report.
More: Texas 130 sign directs Austin drivers to Tesla Road — but there is no Tesla Road yet
More: Elon Musk says he lives in a $50,000 tiny home. Is he actually living at a friend's Austin mansion?
Construction continues Monday on Tesla's $1.1 billion factory in southeastern Travis County. An industry analyst said Tesla might start producing vehicles at the plant as early as this week.
Construction continues Monday on Tesla's $1.1 billion factory in southeastern Travis County. An industry analyst said Tesla might start producing vehicles at the plant as early as this week.
Ives pointed to Tesla obtaining certificates of compliance from the Travis County fire marshal's office as a key sign the company is nearing production.
Hector Nieto, a spokesperson for Travis County, confirmed that Tesla has obtained certificates of completion for certain sections of its facility.
Tesla has said it plans to produce its Cybertruck, Semi, Model 3 compact sedan and Model Y vehicles at the $1.1 billion manufacturing facility, which is in southeastern Travis County, near Texas 130 and Harold Green Road. Tesla received tax breaks from Travis County and the Del Valle school district valued at more than $60 million combined to build the facility. Musk has said the facility could eventually employ 10,000 workers.
Ives predicted cars could be rolling out of the Austin-area factory by early February and that Giga Texas would ramp up to full capacity around the fourth quarter of 2022 or early 2023.
Tesla has not confirmed any of that, but Musk tweeted last month that the factory would host a grand opening party with factory tours in early 2022.
Key role for Austin
Austin is expected to play a key role in boosting Tesla's production numbers as demand continues to grow for electric vehicles. Tesla last week reported that it set a company record for total deliveries in the fourth quarter with 308,600. For all of 2021, the company delivered 936,172, 87% more than the 499,647 it delivered the year before.
Tesla's Austin-area facility has been progressing quickly, and it was anticipated that major construction would be completed around the end of 2021. Ives said the start of production in Austin will be an important milestone for Tesla, and that it comes at an important time for the company.
“It's going to add to the capacity for Tesla globally at a time where demand is outstripping supply by 15% for Tesla cars,” Ives said. “Giga Texas represents one of the most strategic endeavors from Musk and Tesla because it's such an important factory relative to engineering production and what ultimately is going to be the main epicenter of domestic as well as global aspirations, along with China and Berlin.”
More: Tesla officially moves headquarters to site of new Austin factory
More: Welcome to Musklandia: Austin adjusts to life with Tesla and its eccentric billionaire boss Elon Musk
Tesla CEO Elon Musk has said the factory, dubbed Giga Texas, could eventually employ 10,000 workers.
Tesla CEO Elon Musk has said the factory, dubbed Giga Texas, could eventually employ 10,000 workers.
Ives said the Texas plant and another facility opening soon in Berlin are expected to be key to Tesla’s future, as demand is outpacing production and reservations are getting pushed later in the year.
“They have an iron grip on the market share in the EV world,” Ives said. “There’s competition coming from all angles, but they're two to three years ahead of any competitor. GM, Ford, other traditional automakers are gaining share in EVs, and there's many winners, including Rivian, Canoo and Fisker, but Tesla continues to be miles ahead of the competition, and Austin is so important in terms of that scale.”
In October, Musk announced at a shareholders meeting that Tesla was moving its corporate headquarters from California to Austin, but he gave little detail at the time. In December, documents filed with the U.S. Securities and Exchange Commission showed the company had formally relocated its corporate headquarters to the same site as the gigafactory.
At the time, Musk said there was a limit to how big the company was able to scale in the San Francisco Bay Area, and he also cited the higher cost of housing there and long commutes for employees.
Ives predicted Central Texas will increasingly be an innovation center for the company.
“There'll be a ripple effect. I think more battery technology will come to Austin, and supply chain efficiency," Ives said. "And I look at future models down the road, and to Roadster, CyberTruck, I think Austin will be the heart and the lungs and the product development.”
Vehicles fill an unpaved parking lot Monday at Tesla's gigafactory. Tesla received tax breaks from Travis County and the Del Valle school district valued at more than $60 million combined to build the facility.
Vehicles fill an unpaved parking lot Monday at Tesla's gigafactory. Tesla received tax breaks from Travis County and the Del Valle school district valued at more than $60 million combined to build the facility.
But at least for now, any cars produced in Austin will need to be taken out of state before being sold to Texans. That's because Texas law prevents automakers from selling directly to consumers, as Tesla does.
Texas and Austin are increasingly becoming a center of activity for Musk. The billionaire announced in 2020 that he had moved his residence to Texas to be closer to the gigafactory site and SpaceX's facility in South Texas. Musk has also quietly expanded his other ventures into the Central Texas region. This includes his tunneling and infrastructure company, the Boring Co., which has facilities in Pflugerville and Bastrop; a potential Austin SpaceX office; a potential Neuralink office; and the headquarters of his private foundation, the Musk Foundation.
https://www.yahoo.com/news/tesla-close-producing-first-cars-211944122.html
GO TESLA, INC
"PEACE"
$$$$$$ $$$$$$
AMADEINAMERICA,INTERNATIONAL,ENERGY,TECHNOLOGYANDCARCOMPANY
UPDATE 4-Tesla sold a record 70,847 China-made vehicles in Dec -CPCA
BEIJING, Jan 11 (Reuters) - U.S. electric vehicle maker Tesla Inc sold 70,847 China-made vehicles in December, the highest monthly rate since it started manufacturing in Shanghai in 2019, data from the China Passenger Car Association (CPCA) showed on Tuesday.
Tesla's December sales, which included 245 for export, were almost three times the amount achieved in the same month last year and 34% higher than November's sales.
It also brought Tesla's total sales of China-made cars for last year to at least 473,078, according to Reuters' calculations of CPCA's data, which prior to April did not publish figures for Tesla's China-made car exports.
This accounts for around half of 936,000 vehicles the U.S. automaker delivered globally last year.
Tesla's Shanghai factory, which started delivering vehicles at the end of 2019, makes electric Model 3 sedans and Model Y sport-utility vehicles for domestic and international markets, including Germany and Japan.
The automaker, which has been able to surmount supply chain woes experienced by rivals to post record quarterly deliveries, said during its third-quarter results in October that the Shanghai plant's potential annual output exceeded 450,000 vehicles.
Tu Le, Beijing-based managing director at Sino Auto Insights, said the December numbers showed that the Tesla brand in China remained strong and that it was also operationally "impressive" given that the Shanghai factory had the capacity to make around 42,000 vehicles a month on average.
"They were well over that number in December. And this is despite the chip and battery shortages that other EV makers dealt with."
China's EV market is dominated by domestic brands including BYD and Wuling - a local marque that is part of General Motors. Tesla is only the foreign brand in the top 10, according to Shanghai-based consultancy Automobility.
The CPCA also said Chinese EV maker Nio Inc delivered 10,489 cars last month, a year-on-year increase of 49.7%, while Xpeng Inc delivered 16,000 vehicles. Volkswagen AG said it sold more than 13,787 ID. series EVs in China in December, the fourth consecutive month in which the ID. family has delivered more than 10,000 units in China.
CPCA said passenger car sales in December in China totalled 2.14 million, down 7.7% from a year earlier.
https://finance.yahoo.com/news/3-tesla-sold-record-70-102320393.html
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