Luckin Board Faces More Churn
Following its delisting from Nasdaq after an accounting fraud scandal, Luckin Coffee is now facing even more internal strife, with two newly appointed independent board members resigning while two of Luckin's main shareholding companies have requested that a previous board member be reinstated, according to a report in thepaper.cn.
Luckin sent a document to the U.S. Securities and Exchange Commission (SEC) on Monday announcing its board had received and approved the resignations of two independent board members, Yang Jie and Zeng Ying. Both were appointed on July 14 and have extensive legal backgrounds. Neither gave a reason for their resignations.
Meanwhile, Lucky Cup Holdings Limited and Fortune Cup Holdings Limited, two of Luckin's major shareholding companies, requested a special shareholders meeting on September 2 to consider the reappointment of Sean Shao to the board.
Shao was involved in the special board committee that was originally investigating Luckin's estimated US$300 million in fabricated transactions, but was ousted with board members Li Hui and Liu Erhai in early July. Li is the founder of Centrium Capital, which holds no less than 10 percent of Luckin Coffee shares and is the parent company of Fortune Cup Holdings.
Guo Jinyi, who replaced ousted former chairman Lu Zhengyao, has been Luckin's chairman since his appointment on July 5.
Wanda Media Takes $224 Million Loss In First Half
China's largest private film production company, Wanda Media, whose parent company Dalian Wanda Group holds majority shares of AMC Theaters, reported a net profit loss of up to RMB1.567 billion ($224.5 million) in the first half of the year.
Wanda Media totaled RMB580 million in domestic box office receipts during the period, a decline of 88.3% year-on-year, while overseas box office receipts topped RMB330 million, a drop of 79.37%.
As of the end of March, about 630 AMC theaters across the U.S. were closed in response to COVID-19. More than 600 employees were laid off and 25,000 staff members have been temporarily suspended from work, according to a statement from AMC.
Wanda had invested $7.9 billion in Qingdao-based Oriental Movie Metropolis, a project that was hailed as the largest production hub in the world when it opened in April 2018, but fully divested itself of the project amid rising debts by the end of 2018. Since then, Wanda Media has shifted its focus from theatrical movie production to making popular TV and web series. It has found some success with titles including "Love Advanced Customization," "We Are All Alone" and "Love a Lifetime," but these successes were not enough to offset losses in cinemas.
Wanda reported a decline of 47.05% in operational costs, a decline of 50.93% in sales costs and a decline of 33.57% in content development costs year-on-year, according to Wanda Media's first-half fiscal report.
Analysts have forecast that China's box office receipts in August and September will equal only about 20% to 30% of projections before the global pandemic, but the October golden holiday is expected to see a more robust box-office rebound.
Seafood Producer at Center of Dalian COVID-19 Outbreak
A Dalian-based seafood production company is facing a total shutdown after it found itself at the epicenter of a COVID-19 outbreak, with all its staff quarantined and required to be tested for the coronavirus.
So far, 83% of the new COVID-19 cases that have been confirmed in Dalian have come from the city's Anjingzi district, where Kaiyang Seafood is located. Up to 80 housing compounds in Dalian have been locked down, with 24 of these labeled as high-risk areas, according to state media.
The gene sequencing of the Dalian outbreak differs from the one responsible for the recent Beijing and Urumqi outbreaks. The outbreak was more likely transported from overseas rather than contracted domestically, according to the Information Office of Dalian Municipal Government.
The outbreak likely started from the seafood processing workshop and then spread rapidly inside and outside the company. There were about 60 Kaiyang Seafood staff infected including asymptomatic infections, according to the information office.
As of Tuesday, there were 89 cases of active infections and 26 asymptomatic cases under medical observation. About 1 million people are taking the nucleic acid test each day since city-wide testing was launched on July 26 as Dalian aims to test every resident.
Fosun International Credit Rating Downgraded
Moody's Investors Service, a bond credit rating company, recently reported that it was downgrading Fosun International Limited's Corporate Family Rating (CFR) from Ba2 to Ba3, while Fortune Star Limited, a foreign subsidiary of Fosun, was given a negative rating.
In response to the downgrading and concerns over the company's ability to maintain credit metrics at required levels amid the coronavirus pandemic, Fosun posted a WeChat statement saying Moody's held "overly pessimistic projections" regarding Fosun's future developments.
Fosun International has locations in 16 countries and is one of the largest privately owned conglomerates in China. It was ranked 371st on the Forbes Global 2000 ranking in 2020.
Fosun International's continually increasing debt leverage ratio is leading to its higher credit risk rating, as its investment cash outflows have persistently surpassed its divesture receipts, Moody's said. Dividends from underlying investments would be insufficient in meeting interest and operating expenses while its cash on hand is also inadequate to cover short-term debt, according to Moody's.
As of July 24, Fosun International estimated its net profit was RMB1.8 billion to RMB2.2 billion for the first half of the year, a decline of 70% from the RMB7.61 billion one year earlier.
Beidou Satellite System in Heavy Demand
China plans to build a complete industrial chain of chips, modules, boards, terminals and operation services for China's Beidou Navigation Satellite System, according to the China Satellite Navigation Office, with up to 120 countries, including those in ASEAN, South Asia, Eastern Europe, West Asia and Africa, expected to use Beidou-related services.
Beidou, a rival to the U.S.-owned GPS, Russia's GLONASS and the European Union's Galileo networks, declared on July 29 the completion of its network with the 55th and final geostationary satellite, which was launched on June 23 after passing all tests.
Analysts estimate that the total output value of China's satellite navigation and location services industry will reach RMB400 billion this year.
The core components of China's Beidou satellite navigation system are touted as made in China. Mass production of 28-nanometer chips that will enable mobile devices to receive signals from Baidu has begun, while the production of higher-precision 22-nanometer positioning chips is scheduled to take place soon, said China's satellite navigation authority.