Online Book Seller China Literature Reports Epic Loss
Tencent-backed China Literature Ltd., China's largest online book seller, reported a massive loss of RMB3.31 billion ($476 million) in net profits in the first half of the year, reversing its RMB393 million profit from the same period a year earlier, the company said in its fiscal report.
The company indicated that this was its first loss since 2017, and it blamed the loss mainly on one of its acquisitions, New Classics Media – an entertainment and media company that primarily produces TV shows and films.
When China Literature acquired New Classic Media at a price of RMB15.5 billion in 2018, the latter company promised to make no less than RMB500 million, RMB700 million and RMB900 million, respectively, in net profits from 2018 through 2000. Its actual net profits were RMB324 million in 2018 and RMB549 million in 2019.
The pandemic took an unexpected toll, though, and exposed the "structural issues" in company's business model in terms of facing high risks, said China Literature CEO Cheng Wu, who also acts as vice president of Tencent Holdings Limited.
China Literature's shares shot up after the company's 2017 initial public offering in Hong Kong, but have gradually declined as the market leader faces growing competition. The stock now trades at HK$50.6, or about 10% below its IPO price of HK$55, Caixin Media reported.
Alibaba Gives Digital Boost To Hainan Ag Supply Chains
Alibaba will enhance its local digital supply chains across Hainan Island to further expand the distribution of local farm products – part of Alibaba's ongoing efforts to build 1,000 digital agricultural bases nationwide and promote locally branded agricultural products, Hainan Daily reported.
Under a project named "the Chunlei Plan," Alibaba aims to upgrade the digital development of Hainan's agricultural sector. The collaboration with local government will focus on building countryside infrastructures, developing local e-commerce businesses, enhancing the supply chain for farm products, building local brands for high-quality farm products and providing preferential financing services for locals, according to the report.
The project is part of a comprehensive strategic partnership Alibaba signed with the Hainan government in 2018 to collaborate in aspects of e-commerce and intelligent services, transforming the island into a digital economic hub.
When the COVID-19 pandemic hit, efforts in this area ground to a halt. Instead, a few Hainan governors promoted local fruit and vegetable sales via online live streaming on Taobao, the world's largest e-commerce website, which is owned by Alibaba, achieving unprecedented sales. One of the governors sold off 60,000 kilograms of Hainan mangos within two minutes, drawing an online audience of 25,000.
As of April 1, the cumulative sales volume of Taobao's "Love to Help Agriculture" channel reached 157,000 tons, state news service Xinhua reported.
Flood Costs Hit $25 Billion
Over 63 million people have been affected by this year's floods, which have led to direct economic losses of up to RMB178.96 billion ($25.78 billion), a rise of 12.7% to 15.5% compared with average losses in previous years, according to the statement released by State Flood Control and Drought Relief Headquarters this Thursday.
Additionally, 219 people have died or have been missing since the flooding began in June. Roughly 54,000 houses were destroyed, which is about 65.3% less than the average number in the recent five years, the authority said.
The regional rainy season this year has brought severe flooding to vast areas within 27 provincial-level regions across China. Floods have impacted large tracts of southern, central and eastern China, primarily around the Yangtze basin and its tributaries.
The authority said it was the most severe flooding in more than two decades, with Jiangxi, Anhui, Hubei and Hunan provinces, as well as the city of Chongqing, the worst-hit areas..
The severe rainfall this year may have been caused by increased evaporation arising from warming in the Indian and Pacific oceans, according to the China Meteorological Administration. Some experts said the climate change is partly to blame and that such events may become more frequent in the near future.
High-Tech Development Attracts Big Investments In Hangzhou
Up to RMB84 billion ($12.1 billion) in investments will go to the New Qiantang Area in Hangzhou, an east coast city that has attracted many high-tech developments in the past five years after holding the G-20 conference in 2016. About 76 key projects have been launched since Wednesday and will fund further local development, the Zhejiang Daily reported.
Medical biotechnology, intercollegiate cooperation, cross-border e-commerce, integrated circuits, new materials and artificial intelligence in manufacturing are the key sectors that are expected to gain from large-scale investments. Prior to this, a real estate project, Yunfan Community, billing itself as a "community for the future," had already broken ground on construction, with more than RMB10 billion in investments.
Situated on the west bank of the Qiantang River in Hangzhou, the Qiantang New Area covers an area of 531.7 square kilometers and seeks to accelerate Hangzhou's integration with the Yangtze River Delta region through attracting world-class intelligent manufacturing industry clusters and providing innovative and high-tech industry services.
The development area is expected to help Hangzhou triple the production value of its manufacturing industries by the year of 2035.
Incentives For Foreign Trade Announced
The country is rolling out more incentives to help foreign-trade enterprises navigate through tough economic times that have resuled in nationwide product overstocks and decreasing orders from overseas.
After calling on May 18 for an expansion of the current 59 cross-border e-commerce pilot programs to 105, the State Council is now taking further steps to help small and medium-size export enterprises. There will be more than 30 foreign-trade pilot programs across China to support their business, with special funds and more access to cross-border e-commerce platforms, according to a notice the State Council released on Wednesday.
The State Council is also encouraging the China Export & Credit Insurance Corporation, or Sinosure, to actively protect risks associated with order cancellations before shipment. Additionally, the authority has suggested that local governments see to it that financial institutions provide exporters guarantees and reasonable loan rates to reduce their risk exposure.
