Leshi Delisting Leaves Investors In The Lurch
Leshi Internet Information and Technology, or LeTV, has delisted from the ChiNext technology board on the Shenzhen stock exchange after a 10-year run, with a final stock price of RMB 0.18 per share and a market valuation of RMB718 million (US$102.71 million) – a drastic plunge from its RMB170 billion peak valuation in 2015.
As part of Chinese conglomerate LeEco, Leshi – formerly a major player among Chinese video-streaming service providers – was founded by the embattled Chinese entrepreneur Jia Yueting, whose bankruptcy restructuring plan was approved this May in California. He claimed earlier this month that he would reserve up to 10% of a creditor trust to compensate Leshi's Chinese shareholders.
The firm's delisting is disappointing news for its 280,800 domestic individual shareholders, who together hold 62% of Leshi's shares. Nearly a dozen celebrities, including the renowned director Zhang Yimou, were ensnared in the investment fiasco.
In addition, Leshi had attracted investment of RMB68 million (US$9.73 million) from Jack Ma's private fund firm, Yufeng Capital, and RMB100 million (US$14.3 million) from Dalian Wanda Group, the majority shareholder of U.S. cinema chain AMC theaters, and Prometheus Capital, China News Network reported.
From 2017 to 2019, Leshi reported three consecutive years of revenue losses –RMB13.878 billion (US$1.986 billion), RMB4.096 billion (US$586 million) and RMB11.279 billion (US$1.613 billion) respectively, or a total of RMB29 billion (US$4.149 billion.)
The tech firm debuted on the ChiNext in 2010. As the first video-streaming stock, Leshi was dubbed "China's Netflix."
Leshi was making profits from 2007 to 2009, a period when other online video networks were hemorrhaging cash, according to fiscal reports at that time. Leshi's stock share reached a peak of RMB179.03 per share in 2015, even as Jia, the founder, was financially overextending himself in his other companies making intelligent automobiles, which would later bring parent firm LeEco into a serious debt crisis.
In 2016, Jia admitted in an internal letter that the firm's investments were at risk. In 2017, while Leshi dealt with large-scale lay-offs, Jia left for the U.S., ostensibly to seek funding for Faraday Future, a California-based electric car start-up subsidiary of LeEco.
Legal analysts said that despite Jia's bankruptcy in the U.S., Chinese domestic loan holders and shareholders still retain creditors' rights. China's current legal system doesn't allow individuals to gain debt relief through bankruptcy.
Urumqi Follows Beijing in Citywide COVID-19 Testing
Urumqi, the capital of Xinjiang province and home to the mainly Muslim Uighur people, has implemented citywide control and prevention measures in order to contain the spread of COVID-19. It will launch large-scale testing for the coronavirus, following the so-called Beijing model implemented in the capital during the latest outbreak of coronavirus cases last month.
Urumqi's Center for Disease Control and Prevention said on Monday that tests on all the key close contacts of the 3,119 people currently under medical observation have been completed. They will expand the free testing citywide, with 25 nucleic acid testing institutions and 10 nucleic acid testing medical teams from 10 provinces and cities organized by the National Health Commission.
As of Tuesday, Urumqi had reported a total of 53 confirmed coronavirus infections and 55 asymptomatic cases, according to the authority.
After declaring a "war-time state" in Urumqi last weekend due to a spike in coronavirus cases since last Wednesday, China's authorities have been implementing strict and sweeping measures in Urumqi.
With the lockdown in the city, its 3.5 million residents are restricted from leaving their home compounds. Meanwhile, all group activities have been suspended, all flights in and out of the city have been cancelled and subway services have been suspended as well.
Tianjin Port Ranked First in LNG imports
North China's Tianjin port ranked first in liquefied natural gas (LNG) imports among China's LNG import ports in the first half of the year, topping 5.949 million tons, a rise of 26.1% year-on-year, according to Tianjin Customs.
The LNG imported through the port during the six-month period mainly came from Australia, Russia, India and members of the Association of Southeast Asian Nations.
Imported LNG is a more efficient and greener energy source that ensures the supply reserves for winter heating and new energy vehicles like the burgeoning fleet of LNG buses in China.
By 2019, there were 343,933 LNG-fuelled vehicles on the road in China, according to a report released by the Shanghai Municipal Government and energy research firm GTI Energy.
Airports See Drastic Decline in Passengers
The 10 busiest airports in Mainland China, excluding the Hong Kong and Macau special administrative regions, saw passengers throughput drop 52.68% across the first two quarters of 2020, according statistics released by aviation data analysis platform variflight.com.
The passenger throughput in the airports – PEK (Beijing), PVG (Shanghai), CAN (Guangzhou), CTU (Chengdu), SZX (Shenzhen), KMG (Kunming), XIY (Xi'an), SHA (Shanghai), CKG (Chongqing) and HGH (Hangzhou) – reached 128 million passengers, accounting for 85.33% of national volume, according to the Civil Aviation Administration of China (CAAC).
Beijing Capital International Airport (PEK) experienced the largest drop of 73.6% fewer passengers year-on-year, while Chongqing Jiangbei International Airport had the smallest decrease of 40.6% compared with the same period in 2019, as China's air carriers faced the strict "Five-One Policy" for COVID-19 control.
Issued by CAAC in March, the policy limited each domestic airline to one international flight per week to each country, while foreign airlines were allowed one flight to one city in China per week.
The policy was revised in early June to allow international airlines to resume more flights to China, while enhancing rules providing both incentives and protections.
Firms Race for COVID Vaccine
A phase II trial of a potentially effective COVID-19 vaccine was recently completed in China and found the vaccine safe while it induces an immune response, according to a study published Monday in the medical journal The Lancet.
"The phase II trial adds further evidence on safety and immunogenicity in a larger population than the phase 1 trial. This is an important step in evaluating this early-stage experimental vaccine and phase III trials are now underway," said Professor Fengcai Zhu from Jiangsu Provincial Center for Disease Control and Prevention, China.
This joins a host of other vaccine candidates currently under research and development around the world as researchers and manufacturers rush towards a vaccine to protect against the novel coronavirus pandemic.
There are currently almost 30 vaccines in one of the phases of clinical trials, those involving humans. More than 130 are in the pre-clinical trial stage. Vaccines typically require years of research and testing before reaching the approval or licensing stage, but scientists are racing to produce a safe and effective vaccine by next year.
The general stages of the development cycle of a vaccine are: exploratory stage, pre-clinical stage, clinical development, regulatory review and approval, manufacturing and quality control. Clinical development involves three tiers starting with phase I safety testing where small groups of people receive the trial vaccine. In phase 2, the clinical study tests hundreds of subjects. In phase 3, the vaccine is given to thousands of people and tested for efficacy and safety, according to the U.S. Centers for Disease Control.
Many vaccines additionally undergo Phase IV formal, ongoing studies after the vaccine is approved and licensed, especially in the case of the final fast-tracked COVID-19 vaccine.
The Chinese trial of this Ad5 vectored COVID-19 vaccine candidate was conducted in Wuhan, the epicenter of the pandemic outbreak, with 508 participants. On the same day, The Lancet published results of an Oxford, England phase I/II trial, due to the pressure for speed, some researchers have acquired approval to combine phases I and II. The Oxford coronavirus vaccine ChAdOx1 nCoV-19 trial involved over 1,000 volunteers and showed promising results in activating T cell immune system response, according to researchers.
China's Sinopharm launched its own phase 3 trial of a vaccine candidate in Abu Dhabi with 15,000 trial subjects on July 15. This study marked the first phase III trial of an inactivated vaccine, said Ashish Koshy, CEO of G42 Healthcare.
Inactivated vaccines are commonly used in vaccines against viruses including influenza and measles. Inactivated vaccines or "terminated" vaccines are created from what researchers call "wild" pathogens that have been rendered ineffective before being used as a vaccine.
No vaccine has yet been approved for general use and, despite promising initial results in some candidates, there is still further research needed before any of the vaccines can be deemed safe and effective.
