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China Business News (2021-04-07)

1. NIO increases production capacity inspite of facing chip shortage

NIO has announced that its production capacity together with its partner JAC Motors monthly is up to 10,000 units now. However, due to supply chain issues in chips and batteries, it won't be easy to produce 7,500 units per month consistently. The chip shortage is expected to ease in the third quarter, and the deficit for batteries should reduce in June. In March, they sold 7,257 vehicles which is why there could be a slowdown in sales growth.


2. Xpeng Motors develops self-driving chip

Xpeng Motors has been developing a special chip for automatic driving for the last several months in China and the US simultaneously. Currently, the team size is minimal, but if things go well, the Xpeng chips are expected to be launched by the end of this year or early next year. Responsible for this project are two managers who previously worked for chip giant Qualcomm. Xpeng's software system is relatively mature and has precise requirements and definitions for automated driving hardware.


3. Number of online stores on Alibaba's Taobao continues to rise

The number of new active stores on one of the largest and most popular eCommerce platforms in China, Taobao, is at an all-time high. Alibaba's fiscal year report (April 2020 to March 2021) shows that the number of new active stores on Taobao had increased sharply, especially in the months after March 2020. The recovery after the epidemic of commercial digital transformation has led to a new wave of rush worldwide, including in China. During the pandemic here, the average number of new stores per day had reached 40,000.


4. In Q1, 117 IPO applications were approved in China (88%)

Wind, the stock market data provider, has published statistics on the IPO for the first quarter of 2021. A total of 117 IPO applications were approved, eight rejected, and two postponed. Thus, the success rate was 88%. Seven of the above eight companies that were rejected were rejected due to a lack of sustainable profitability. In terms of the gross amount, the cumulative fundraising capital in the first quarter of this year was CNY 80.5 billion. We have already reported that a high number of companies have voluntarily withdrawn their IPO in recent months.


5. Next mobility sharing platform plans US IPO

It is reported that shared e-scooter service provider Songguo Chuxing plans to go public in the US later this year. The size of the capital raising is said to be USD 300 million. It is yet another Chinese company that focuses on the "sharing economy." The company is only three years old. Songguo Chuxing was operating in 24 provinces, nearly 1,000 counties, and county-level cities by the end of December 2020, with almost 50 million users and more than 3 million orders per day.


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