Unicorn Start-up Cambricon Technology Sets IPO
Cambricon Technologies, a research and technology company that builds AI core processor chips for intelligent terminals, robots and cloud servers, announced on Monday it would issue shares on the Shanghai-based tech-related STAR market priced at RMB64.39 (US$9.18) per share, despite dampened revenue projections.
The Chinese unicorn startup, a privately held startup company valued at over US$1 billion, estimated revenue for the first half of 2020 would be RMB82 million to RMB86 million (US$11.53 million), down from RMB98 million during the same period last year.
Cambricon will issue nearly 7.1 million shares of stocks on the STAR market.
According to analysts, Cambricon profits are likely to be dampened because it plans to invest heavily in large-scale research and development. The company alerted investors to be "prudent and rational" before purchasing Cambricon's shares, as the financing from the stock listing would be mainly spent on R&D.
As the first unicorn start-up company in the global AI chip field, Cambricon gained Series-A funding of US$100 million in 2017. It was selected as the outstanding representative of Tesla Enhanced Auto Assisted Driving, IBM Watson and a large number of China's sub-communication technologies.
The founders, Chen Tianshi and Chen Tianji, both graduated from China University of Science and Technology, where Chen majored in artificial intelligence algorithms and Chen focused his studies on computer chips.
Commercial Vehicle Sales Lift Automotive Market
Commercial vehicle sales propped up second quarter growth in an otherwise anemic automotive sales market, with a slew of auto shows and the rollout of preferential buying policies also giving the market a lift.
With online sales boosted by the "6.18 Shopping Festival," China's vehicle market stabilized as June sales buoyed Q2 sales.
The China Association of Automobile Manufacturers (CAAM) said vehicle sales in June rose to 22.8 million units, an increase of 4% month-on-month and 11% year-on-year.
The 11% growth was mainly prompted by commercial vehicle sales, cautioned Haitong Securities, a major securities firm in China. As the economy recovers, domestic freight demand has also increased, with commercial vehicles like light trucks seeing increased demand.
The China Automobile Dealers Association revealed that 1.17 million second-hand cars were traded in June across the nation to hit RMB72.65 billion (US$10.35 billion), citing the first positive month-on-month growth of used vehicles in 2020.
Haitong Securities forecast more automotive discounts will be offered this year as major carmakers experience slow recovery, although it added that vehicle inventory levels would remain high.
Automotive manufacturing topped 25 million vehicles in 2019, with sales down 8.2% overall year-on-year.
Hainan Bans Reselling Of Duty-Free Purchases
Hainan Island, which is trying to rebrand itself as a tourist shopping haven after raising Duty-Free purchase quotas from RMB30,000 (US$4,243) to RMB100,000 (US$14,100) per person annually, has now announced restrictions on the reselling of duty-free products for a profit.
The measures, issued by General Administration of Customs on Monday, prohibit any attempt to resell duty-free goods in any domestic market or the use of fake ID cards or falsified travel documents to make such purchases.
Violators will not only lose their offshore duty-free buying privileges for three years, but their social credit scores will also be docked.
Additionally, if duty-free shops sell beyond specified quotas or transfer their business license to others, the Customs Department will issue a warning and suspend their business for up to a maximum of six months if they receive more than three warnings a year. For repeated offenses, Customs may recall the license of duty-free shops.
Health Care Fund To Aid COVID-Hit Regions
China's National Development and Reform Commission has arranged a fund of RMB45.66 billion (US$6.5 billion) to strengthen public health care facilities across 31 provinces, autonomous regions and province-level municipalities for the rest of the year, Xinhua Press reported on Tuesday.
The plan will prioritize those regions that were most severely affected by the COVID-19 pandemic and those that are short of medical facilities and materials, in order to meet their needs for the prevention and control of the novel coronavirus.
The plan is also expected to support the construction of health care for residents relocating from poverty-stricken regions, as China plans to eliminate severe poverty by the end of 2020.
China Faces Corn Shortage
China National Grain Oil Information Center has estimated that China's corn shortage could reach an unprecedented record of 25 million tons during the period from 2020 to 2021, with the corn shortage currently topping 12 million tons.
The corn price in some remote regions like Yunnan province has increased to RMB2200 (US$313.3) per ton, reaching a record high.
Feedtrade.com reported that the 7 million tons of imported corn quota for 2020 has nearly been reached. Currently, China has about 30 million tons of corn reserves, but those reserves usually take a long period of times to reach the market.
Aside from unprecedented floods this summer, which reduced corn production, the army worm infestation threatens major domestic corn producers this year. It has already caused corn production to drop by 5% for 2020 and could affect the coming year as well.
