2024 Calendar Week 1

Posted on January 1, 2024

1.Xiaomi has launched its first electric vehicle

On December 28th, Xiaomi Group hosted the Xiaomi Car Technology Launch Event in Beijing, officially introducing Xiaomi Car’s five core technologies – E-Motors, Battery, Die-casting, Pilot Autonomous Driving, and Smart Cabin

The Xiaomi SU7, the first product, was also “pre-released,” revealing details such as its exterior design, performance, range, and safety for the first time. Positioned as a “C-class high-performance eco-tech sedan,” the SU7 is expected to fully leverage the operating system shared with Xiaomi smartphones. Lei Jun, CEO of Xiaomi stated that Xiaomi Car’s initial R&D investment has exceeded 10 billion RMB, with a research and development team comprising over 3,400 engineers, including thousands of top technical experts in key areas from both domestic and international backgrounds.

The debut of Xiaomi Electric Vehicles comes at a time when the world’s largest automotive market is facing overcapacity and slowing demand, leading to a fierce price war, while Xiaomi did not announce the MSRP of SU7. Following Tesla’s price reductions for two Chinese-made models earlier this year, the price war has fully erupted in the Chinese auto market. Since August, brands like BYD, NIO, and Lynk & Co have initiated price wars through official price reductions, new car incentives, and terminal discounts, covering more than 20 models.

2.Jack Ma’s exit has led to Alipay now having no actual controller

On December 30th, the People’s Bank of China (PBOC) recently approved the change of control for Ant Group’s affiliate, Alipay (China) Network Technology Co., Ltd., to a state of having no actual controller.

Public information indicates that Alipay (China) Network Technology Co., Ltd. holds the license for Alipay’s payment services, with its registered location in Shanghai, and over 50% of its workforce comprises technical developers. This payment technology company provides open payment technology to merchant institutions and offers acquiring services, establishing a mature business model. It currently serves 80 million merchants and 1 billion consumers.

Ant Group had previously announced at the beginning of the year that, in order to continuously improve corporate governance and achieve long-term sustainability, it planned to implement a series of upgrades at both the board and shareholder levels. These measures included introducing more independent directors, adjusting the voting rights structure of major shareholders, and promoting greater transparency and dispersion of shareholder voting rights. According to the adjusted ownership structure of Ant Group, prior to the adjustments, Jack Ma was the actual controller of Ant Group. After the adjustments were completed, while retaining his original shares, Jack Ma’s voting rights were reduced from approximately 53% to around 6%.

In addition, Hang Seng Electronics and Cathay Property & Casualty Insurance also released announcements stating that, as the relevant parties, Hang Seng Electronics and China Cathay Insurance have also transitioned to a state of having no actual controller.

3.Over 110,000 Visitors from Six Countries Enter China Visa-Free, with Tourism and Leisure Accounting for 70%

According to statistics from the National Immigration Administration of China, since December 1st, China has implemented a unilateral visa-free policy for ordinary passport holders from six countries, including France, Germany, Italy, the Netherlands, Spain, and Malaysia. As of December 31, 2023, a total of 214,000 people from these six countries have visited China, marking a 28.5% increase compared to November. Among them, 118,000 people entered China visa-free with ordinary passports, accounting for 55.1% of the total arrivals from these six countries during the same period.

In terms of the purpose of their visits, 91,000 of the visa-free arrivals with ordinary passports came to China for tourism and leisure activities or engaged in business activities, making up 77.3% of this group.

On December 2nd, Thai Prime Minister Srettha Thavisin said, Thailand and China will permanently waive visa requirements for each other’s citizens from March. Southeast Asia’s second-largest economy, which relies heavily on tourism, in September waived entry requirements for Chinese tourists until February this year.

Data source: https://news.cctv.com/2024/01/01/ARTID8ll88SLEwmGKGXkhW6d240101.shtml


4.China’s manufacturing PMI falls for third month in a row highlighting 2024 challenges for world’s second-biggest economy

In December, China’s PMI was 49%, an decrease of 0.4 percentage points from the previous month, a worse performance than forecasters had predicted.

PMI during the last 12 months

When viewed by company size, the PMI for large enterprises was 50%, an drop of 0.5 percentage points from the previous month,close the critical threshold. The PMI for medium-sized enterprises was 48.7%, down 0.1 percentage points from the previous month,below the critical threshold. The PMI for small enterprises was 47.3%, down 0.5 percentage points from the previous month, below the critical threshold as well.

Looking at the sub-indices that comprise the manufacturing PMI, the production index (50.2%), above the threshold, supplier delivery time index (50.3%) indicated that manufacturing production remains in expansion, while the new orders index (48.7%) and and employment index (47.9%) showed a slight decline in market demand for the manufacturing industry, and raw material inventory index (47.7%) has decreased by 0.3 percentage points from the previous month.

In December, the non-manufacturing business activity index was 50.4%, an increase of 0.2 percentage points from the previous month, still remaining above the critical threshold.

Non-manufacturing business activity index during the last 12 months

In December, the Composite PMI output index, which reflects the changes in the output in current period of the entire industry (manufacturing and non-manufacturing industries), was 50.3%, decrease of 0.1 percentage points from the previous month, indicating that overall business production and operations activities in China continued to expand

the Composite PMI output index during the last 12 months

Data Source: https://www.stats.gov.cn/sj/zxfb/202312/t20231229_1946102.html

5.Dongpin has completed CNY Hundred-Million Series C Financing, focusing on Beef and Fried Food Categories

Dongpin has successfully completed a CNY hundred-million Series C strategic financing round. This round of financing was led by Huixin Capital with participation from Fuzhou Xiongniu Fund. The funds raised in this round will primarily be used for the integration of fried food processing facilities and investment in the B2B pre-made vegetable supply chain sector.

Ready-to-cook meals have experienced growth opportunities post-pandemic but have also faced certain controversies, with some businesses explicitly stating their refusal to use pre-made food and some people commenting it is junk food. But no one can deny that the industry is growing at a very high speed (20-30% yoy growth). The category of ready-to-cook meals is quite broad, and currently, there is relatively low acceptance of Chinese-style seasoning packs, which are easily confused as synonymous with ready-to-cook meals. However, Dongpin focuses on ready-to-cook beef and fried food category, known for their overall crispiness and high taste retention after secondary frying in restaurants, which has gained high consumer acceptance.

Lin Zhiyong, the founder of Dongpin, stated that the company’s deep-processed beef products are focused on Chinese-style, noodle shops, and group dining demands. Furthermore, in terms of market size, the demand for beef products is estimated to be around CNY 200-300 billion, and for fried food products, it is about CNY150 billion, both having significant market expansion potential.

For supply chain platforms, turnover efficiency is a core metric. It is reported that Dongpin is also improving turnover efficiency through AI and industrial data models. This financing will also be used to integrate upstream supply chain resources. Lin Zhiyong mentioned that some upstream factories faced overcapacity issues post-pandemic. Dongpin utilizes the platform to aggregate a large number of restaurant orders and then feeds them back to the factories to fulfill their production capacity requirements. These factories are willing to join the platform to receive more orders, giving Dongpin the opportunity to integrate their upstream production capacity.


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