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China Business News (2021-03-25)

1.Former Xiaomi VP becomes the new CFO of ByteDance.

Chew Shou Zi, the former president of Xiaomi International Department, will join ByteDance as its CFO. This comes as a relative surprise, as Chew Shou Zi had just announced his retirement from Xiaomi. ByteDance's creation of the CFO role signals that it is moving towards a much-anticipated initial public offering.


2. Baidu chip division valued at CNY 13B in external investment.

Legend Capital has made an external investment in Baidu's chip subsidiary. The investment took place at a valuation of CNY 13 billion. Legend Capital has long focused on investments in the semiconductor and chip sector. The Baidu Kunlun Chip is a general cloud AI chip independently developed by Baidu. Baidu Kunlun-1 was successfully tested in 2019 and put into mass production in 2020. The Baidu Kunlun-2, which is under development, will reach mass production in the second half of 2021.


3. ERP company Kingdee publishes disappointing figures.

Kingdee managed to achieve almost no growth and accordingly increased its revenue by only 0.9% to CNY 3.45 billion. This was justified by its cloud transformation strategy, with revenue in the cloud services business also increasing by 45.6%. The loss in 2020 was CNY 335 million, compared to the three-digit million profit last year. Kingdee is a Chinese company that is currently number one in cloud ERP systems in China.


4. Tencent meets high Q4 expectations.

Tencent had revenue that amounted to USD 20,486 million (26% YoY) in the last quarter of 2020. Profit for the same quarter was USD 5.089 million (30% YoY). Compared to other technology companies, Tencent also invests a lot of its cash in startups. Still, total cash at the end of the quarter was USD 39,772 million. The revenue is mainly generated in 3 areas, which are Gaming (28% YoY), Online Advertising (22% YoY), and FinTech and Business Services (29% YoY). With WeChat, they now have over 1.2 billion users.


5. ZTE announces ineffectiveness of US sanctions on their business.

On March 12, the US Federal Communications Commission (FCC) published a list of prohibited companies from operating in particular infrastructure. Now, ZTE from China has released a statement that the FCC's actions will only focus on replacing the devices and services on a list in local infrastructure in the US (rural areas and public facilities). The company claims that they will not be affected by a greater extent here and can continue to operate internationally inspite of these restrictions.


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