1.In April, The PMI for China’s Manufacturing Sector Was 50.4%

According to the data released by National Bureau of Statistics on April 30, in March, the Manufacturing Purchasing Managers’ Index (PMI) was 50.4%, a decrease of 0.4 percentage points from the previous month.

When viewed by company size, the PMI for large enterprises was 50.3%, a drop of 0.8 percentage points from the previous month; the PMI for medium-sized enterprises was 50.7%, growing 0.1 percentage points from the previous month; the PMI for small enterprises was 50.3%, the same as in the previous month.

Looking at the sub-indices that comprise the manufacturing PMI, production index (52.9%) was above the critical threshold, rising by 0.7 percentage points, which indicates that manufacturing companies continued to accelerate their production activities. Although new orders index (51.1%), decreasing by 1.9 percentage points, and supplier delivery time index (50.4%), decreasing by 0.2 percentage points, they were still above the critical threshold, witnessing that the manufacturing market demand continues to recover. Employment index (48.0%), dropping by 0.1 percentage points, and raw material inventory index (48.1%), remaining A unchanged from last month, were below the critical threshold.

In April, the non-manufacturing business activity index was 51.2%, a decline of 1.8 percentage points from the previous month, above the critical threshold, indicating that the non-manufacturing sector continues to expand.

In April, the Composite PMI output index was 51.7%, a decrease of 1.0 percentage point from the previous month, but still above the critical point, indicating that business production and operations in China continue to expand.

Data Source: https://www.gov.cn/lianbo/bumen/202404/content_6948413.htm

2.A New Trend Among Young Chinese Travelers This May Day Holiday Is To Visit The County

Booking data from online travel agency (OTA) platforms clearly indicates a significant rise in tourism to China’s county-level areas during this year’s May Day holiday. Data from the Tongcheng travel platform show that, on April 29 and 30, demand for train and air travel to third-tier and smaller cities, including county-level cities, spiked by over 200% from the previous week. According to Ctrip’s figures, the top destinations during the May Day period included Yunnan’s Shangri-La, Gansu’s Dunhuang, Guangxi’s Yangshuo, and several counties like Anji, Deqing, Chun’an, and Pingtan.

Previously, the main attraction for young travelers to these areas was their extensive range of scenic sites. Now, county tourism offers much more. Insights from social media platforms like RED suggest that young attendees of county events are looking for immersive experiences that blend nature with modern lifestyles. Additionally, the “2024 May Day” Travel Trend Insight Report from Ctrip underscores a 68% year-over-year surge in hotel bookings within these counties for the holiday period, accompanied by a 151% increase in bookings for scenic spot tickets. This trend is largely driven by the challenges young travelers face in obtaining tickets to popular tourist sites, which deters them from visiting these crowded destinations. For young individuals who value relaxation above bustling attractions, a vacation is primarily about savoring delicious cuisine and enjoying restful downtime. Moreover, the growing popularity of “counties” as travel destinations among young people can also be attributed to the ongoing development within these regions themselves, which enhances the comfort and overall experience for tourists. Improved infrastructure and services in these areas have significantly elevated the quality of visits, making county destinations more appealing for young travelers seeking a pleasant and enjoyable getaway.

3.Zeekr Targets IPO Valuation of Up to $5.1 Billion, the Largest Chinese Company IPO in the U.S. in the Past Three Years

On May 6, Zeekr updated its prospectus and plans to officially list on the New York Stock Exchange under the ticker symbol “ZK” on May 10. Zeekr aims to issue 17.5 million American Depositary Shares (ADS) in this IPO, with a price range of $18 to $21 per ADS. At the upper limit of this range, Zeekr could raise up to $367.5 million, and if the over-allotment option is exercised, the total could reach up to $422 million. At the upper limit of the price range, Zeekr’s IPO valuation could reach $5.13 billion.

Geely plans to subscribe for up to $320 million worth of ADS in this IPO, while Mobileye and CATL plan to subscribe for up to $10 million and $19.08 million worth of ADS respectively, totaling up to $349.08 million.

Zeekr’s current product lineup includes models such as Zeekr 001, Zeekr 001FR, Zeekr 009, Zeekr X, and Zeekr 007. As of December 31, 2023, Zeekr has cumulatively delivered 196,633 vehicles. In 2023, Zeekr reported total revenue of $7.234 billion (CNY 51.674 billion), with a gross margin on vehicles of 15.0%, an increase of over 10 percentage points from 2022.

Over the past year, the stock prices of new automotive forces, including NIO and Xpeng, have fallen by an average of about 70% from their peak values in 2021 on the U.S. stock market.

Is now a good time for Zeekr to go public with an IPO?

4.Tesla’s Market Value Increased By $82.1 Billion As A Result Of Elon Musk’s Continued Engagement In China

As of the close of trading on Monday, March 29th EST, Tesla notably outperformed among the major U.S. stock indexes—the Dow, Nasdaq, and S&P 500—with a 15% surge in its share price, leading to an $82.1 billion increase in its market valuation overnight. Facing challenges in sales, Elon Musk has redirected his focus towards China, a market where Tesla has previously found considerable success. During his visit to China on March 29th, Musk confirmed that Tesla’s implementation of its Full Self-Driving (FSD) technology in China is viable, with data storage security measures meeting local regulations. Over the next decade, as the focus shifts towards automotive intelligence, software capabilities will become central to vehicle design and functionality, providing a distinct competitive advantage. FSD technology represents a significant opportunity for an automotive company to secure a competitive edge in the industry. Effectively leveraging this technology will be crucial for Tesla aiming to reach a trillion-dollar valuation in the future.

Tesla China has committed to local data storage in compliance with Chinese laws, operating a data center in Shanghai since 2021 and ensuring that no vehicle data is sent back to the United States. Tesla’s commitment to establishing data centers within the country to comply with Chinese regulations exemplifies China’s dedication to integrating into the global economy and its openness to allowing leading international companies to engage in legitimate business operations within its borders. This move aligns with China’s broader strategy to attract and accommodate global business enterprises.

5.A Road Collapse Has Occurred On The Chaoyang Section Of The Guangdong Meidai Expressway

Xinhua News Agency reported a highway pavement collapse on the Meidai Expressway near K11+900m (about 2 kilometers from the Chaoyang section exit) in the direction from Tai Po to Fujian at around 2:10 p.m. on May 1,2024. The collapse spanned approximately 17.9 meters in length and covered an area of about 184.3 square meters. By 2:00 p.m. on May 2, 2024, the incident resulted in 23 vehicles being trapped, 48 fatalities, 3 individuals pending DNA confirmation, and 30 injuries.

The Meizhou Municipal Government of Guangdong Province responded to the incident in an effective manner. A total of 577 personnel from various emergency response, public security, firefighting, health, transportation, communications, and other rescue forces have been mobilized, along with 64 rescue vehicles. The accident area has been systematically searched and rescued, and no hazardous vehicles, buses, or other large vehicles have been found. Rescue operations are continuing in an orderly manner.

A number of insurance companies in Guangdong also responded promptly, initiating their emergency claims plan for the first time. They proactively assessed the insurance status and facilitated claims services to ensure prompt processing. As of midnight on May 5, these companies had settled 36 claims, paying out CNY 32.609 million, with CNY 31.9578 million advanced.

The cause of the accident is still under investigation.