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China Business News Tuesday (2021-02-25)


1. 20 IPO companies were spot-checked, 16 withdrew their applications.

In total, 34 companies voluntarily withdrew their IPO applications in February. Since the beginningof the year, there has been strict monitoring with a zero-tolerance attitude by regulators towardsfinancial fraud and breaking the rules. 16 of 20 companies that got under an IPO inspection inFebruary by the China Securities Association then withdrew their application.


2. Tencent invest further in coffee and doughnut giant Tim Hortons.

The investment in Tim Hortons' Chinese venture is led by Sequoia China, with participation fromTencent, its digital partner in China. The aim is to use the proceeds to open more shops, expanddigital infrastructure, brand presence, and more. Tim Horton has so far gained three millionmembers through its WeChat Mini program. To appeal to young Chinese consumers, TimHortons opened an E-sports-themed café in partnership with Tencent.


3. Brazil's regulator approves Huawei in 5G spectrum auction.

Brazil's telecoms regulator Anatel has approved rules for a spectrum auction for 5G networksthis year without restricting Chinese firm Huawei as an equipment supplier. There weresecurity concerns about Huawei, but Brazil's telecoms insisted on a free market, complainingthat excluding Huawei would cost billions of dollars to replace the Chinese company'sequipment, which supplies 50% of current 3G and 4G networks.


4. NetEase increases revenue by 23%, but has a profit drop of almost 10%.

Net revenue for fiscal 2020 was RMB 73,667.1 million (US$11,290.0 million), compared to RMB 59,241.1 million in fiscal 2019, split between online games RMB 54,608.7 million (US$8,369.2million), Youdao RMB 3,167.5 million (US$485.4 million) and innovative businesses and others RMB 15,890.9 million (US$2,435.4 million). Net profit in 2020 was RMB 12,062.8 million (US$1,848.7 million), compared to RMB 13,275.0 million in FY2019.


5. Vipshop's revenue and GMV grow by 10%, with profits up 47%.

Total net revenue for the full year 2020 increased 9.5% year-on-year to RMB 101.9 billion (US$15.6 billion). Operating profit for the full year 2020 increased 22.8% year-on-year to RMB 5.9 billion (US$898.1 million). Net profit for the full year 2020 increased 47.1% year-on-year to RMB 5.9 billion (US$905.3 million). Full-year 2020 GMV increased 11% year-on-year to RMB165.0 billion. For the first quarter of 2021, the company expects total net revenue to bebetween RMB 27.2 billion and RMB 28.2 billion (year-on-year growth rate of 45% to 50%).


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