Issue 25

Tencent launches video streaming in Thailand, eyes SE Asia expansion

Chinese tech giant Tencent Holdings Ltd launched its first overseas video streaming service in Thailand on Friday, as it ramps up its presence outside China. 

Tencent is diversifying from its core Chinese gaming business, which has been beset by regulatory problems, pushing revenue growth to its slowest-ever in the first quarter. 

Tencent‘s existing Thai user base made the country a good first target for its push into Southeast Asia, said Jeff Han, Senior Vice President of Tencent Penguin Pictures, which produces original content for the streaming business. 

“This is the market we need to first enter to try to see whether an overseas launch could be a success for us, so we can continue the challenge,” Han told reporters in a group interview in Bangkok. “We have our priority markets… the Chinese-speaking markets, which will be more receptive to our offerings,” he said. 

In Thailand, Tencent Video will be called WeTV and feature original Chinese content from Tencent Penguin Pictures with Thai dubbing, and content created with local partners, Han said. 

He declined to comment how much the company was investing overseas. WeTV adds to Tencent‘s music streaming service JOOX and the mobile version of PUBG games in Thailand. Tencent‘s video streaming subscriptions increased 43% in the first quarter of 2019 on an annual basis, contributing to a growth in digital content revenue, according to its latest results. 

Tencent Video in China claims over 89 million subscribers and more than 200 million daily active users.


From – Deal Street Asia


U.S. chipmakers quietly lobby to ease Huawei ban: sources

Huawei’s American chip suppliers, including Qualcomm and Intel, are quietly pressing the U.S. government to ease its ban on sales to the Chinese tech giant, even as Huawei itself avoids typical government lobbying, people familiar with the situation said. 

Executives from top U.S. chipmakers Intel and Xilinx Inc attended a meeting in late May with the Commerce Department to discuss a response to Huawei’s placement on the black list, one person said. 

The ban bars U.S. suppliers from selling to Huawei, the world’s largest telecommunications equipment company, without special approval, because of what the government said were national security issues. 

Qualcomm has also pressed the Commerce Department over the issue, four people said. 

Chip makers argue that Huawei units selling products such as smartphones and computer servers use commonly available parts and are unlikely to present the same security concerns as the Chinese technology firm’s 5G networking gear, according to three people. 

“This isn’t about helping Huawei. It’s about preventing harm to American companies,” one of the people said. 

Out of $70 billion that Huawei spent buying components in 2018, some $11 billion went to U.S. firms including Qualcomm, Intel and Micron Technology Inc. 

Qualcomm, for example, wants to be able to continue shipping chips to Huawei for common devices like phones and smart watches, a person familiar with the company’s situation said. 

The Semiconductor Industry Association (SIA), a trade group, acknowledged it arranged consultations with the U.S. government on behalf of the companies to help them comply and brief officials on the impact of the ban on the companies. 

“For technologies that do not relate to national security, it seems they shouldn’t fall within the scope of the order. And we have conveyed this perspective to government,” said Jimmy Goodrich, vice president of global policy at SIA. 

The ban came soon after the breakdown of talks to end the months-long trade spat between China and the United States, spurred by U.S. allegations of Chinese corporate espionage, intellectual property theft and forced technology transfer. 

Google, which sells hardware, software and technical services to Huawei, has also advocated so it can keep selling to the company, Huawei Chairman Liang Hua told reporters in China earlier this month. 

The online search company, a unit of Alphabet Inc, said in a statement that it works with Commerce to ensure it is in compliance with the new rules. 

A Commerce Department representative said the agency “routinely responds to inquiries from companies regarding the scope of regulatory requirements,” adding that the conversations do not “influence law enforcement actions.” 

Intel, Xilinx and Qualcomm declined to comment. Huawei did not respond to a request for comment. 

In an interview in Mexico, Andrew Williamson, vice president of Huawei’s public affairs, said the company had not asked anyone specifically to lobby on its behalf. 

“They’re doing it by their own desire because, for many of them, Huawei is one of their major customers,” he said, adding that chipmakers knew that cutting Huawei off could have “catastrophic” consequences for them. 

China watchers say U.S. suppliers are essentially trying to thread the needle - not wanting to be seen as aiding an alleged spy, thief and sanctions violator, but fearful of losing a good client and encouraging it to develop supplies elsewhere. 


Huawei itself, which is also a top smartphone maker, has done very little traditional lobbying in Washington on the matter, but has considered sending a letter to the Commerce Department, two people familiar with Huawei’s thinking said. 

“We simply have no channel of communication,” Liang told reporters earlier this month. 

A month after being blacklisted, Huawei has not spoken to the United States government about the matter, two people said. 

Huawei had been cutting back its lobbying efforts even before the ban. Last year, it laid off five employees at its Washington office, including its vice president of external affairs, and slashed lobbying expenditures, Reuters reported. 

Still, Huawei has put up a vigorous legal fight and unleashed a public relations campaign to defend itself against the U.S. government’s allegations. It ran a full-page ad in major U.S. newspapers in February following a string of interviews with Huawei Chief Executive Ren Zhengfei aimed at softening its dark image in the West. 

Huawei’s response underscores its recognition of its waning influence with the Trump administration, which has launched a global campaign against the company, analysts said. 

“Huawei is at a loss over what they should do next,” said Jim Lewis, a cyber expert with Washington’s Center for Strategic and International Studies. “It is in a really bad position in the U.S. Nobody is looking out to do Huawei a favor.” 

Even so, the ban has had real repercussions. 

Broadcom, which has not been lobbying the Commerce Department, sent a shockwave through the global chipmaking industry when it forecast that the U.S.-China trade tensions and the Huawei ban would knock $2 billion off its sales this year. 

The Commerce Department did make a concession just days after the ban was put in place, announcing on May 20 that it would offer a temporary general license allowing Huawei to purchase U.S. goods so it can help existing customers maintain the reliability of networks and equipment.

From – Reuters

Ping An unit OneConnect said to prefer New York over Hong Kong for IPO

Ping An Insurance’s OneConnect financial technology unit is leaning toward picking New York over Hong Kong for its initial public offering (IPO) in the hope of achieving a higher valuation, three people with direct knowledge of the matter said. 

Ping An Insurance Group Co of China Ltd , China’s biggest insurer by market value, had been planning a Hong Kong IPO of the unit since the beginning of the year in a deal that could raise up to $1 billion. The insurer is now seeking to list OneConnect in New York as early as in September, said one of the people, who were not authorised to speak to media and so declined to be identified. 

Ping An declined to comment. While Hong Kong took the global IPO crown last year for the most money raised in stock market flotation, its new listings were the worst performers versus those on other leading bourses. Just six of the biggest 20 IPOs in Hong Kong that had begun trading in 2018 were above their offer prices a month after debut, according to Dealogic data, compared with 16 on the NYSE and 10 on Nasdaq. 

“Given the tougher market conditions amid the Sino-U.S. trade tension, New York has probably become more attractive for many Asia-based issuers as it offers more mature markets with a more predictable listing pace and deeper pool of capital,” said one of the people. “All these certainly help smooth the listing process and stabilise stock performance in public markets as long as the company can sell a good story to U.S. investors first.” 

The move also comes as markets are jittery in Hong Kong. The benchmark Hang Seng Index declined 0.7% on Friday following Wednesday’s 1.7% fall, amid massive street protests over a planned extradition bill with mainland China. 

The city’s leader, Carrie Lam, on Saturday bowed to pressure and delayed the bill indefinitely. The Hang Seng Index has gained about 5% so far this year, lagging a 15% rise in the U.S. S&P 500. 

Hong Kong’s exchange is also far behind the New York Stock Exchange and Nasdaq in raising capital via IPOs this year, with just $8.06 billion raised as of mid-June compared with a combined $28.2 billion raised by the U.S. exchanges, showed data from Refinitiv. OneConnect, which provides technology solutions to small and medium-sized financial institutions, raised $750 million in its maiden funding round in 2018, valuing it at $7.5 billion. 

It counts Japan’s SoftBank Corp among its main investors. Reuters previously reported the company was targeting a valuation of about $8 billion and selected JPMorgan, Goldman Sachs and Morgan Stanley to work on its Hong Kong IPO.

From – Deal Street Asia

Long-delayed London-Shanghai share listing project goes live

Companies listed in Britain will be able to sell shares in China on Monday with the launch of a long-awaited London-Shanghai Stock Connect project that finance minister Philip Hammond called a chance to deepen “global connectivity”. 

Under the Connect scheme, Shanghai-listed companies can raise new funds via London’s stock market while British companies can broaden their investor base by selling existing shares in Shanghai. The project was intended to begin late last year with the December listing of Chinese brokerage Huatai, backed by Alibaba Group Holding Ltd. But the listing was delayed at the last minute. 

Huatai Securities Co Ltd then effectively launched Connect earlier this month with the announcement of plans to raise money on the London Stock Exchange (LSE). Huatai, one of China’s largest brokerages, is expected to make its London market debut on June 17, becoming the first company to trade via the London-Shanghai Stock Connect project. 

From Monday, London investors will have the opportunity to trade Global Depositary Receipts in Huatai. Hammond, launching Stock Connect’s first day of trading at the LSE, is expected to say: “London is a global financial center like no other, and today’s launch is a strong vote of confidence in the UK market.” 

“Stock Connect is a ground-breaking initiative, which will deepen our global connectivity as we look outwards to new opportunities in Asia,” he will say, according to extracts from his comments provided by finance ministry.

From – Deal Street Asia

South Korean battery maker LG Chem to join hands with China’s Geely on EV batteries

South Korean battery maker LG Chem Ltd said on Thursday it had signed an agreement to set up a joint venture with China’s Geely Automobile Holdings Ltd to produce batteries for electric vehicles. 

The joint venture would have annual production capacity of 10 GWh by the end of 2021, and its products would be supplied to Geely‘s electric vehicles from 2022, LG Chem said in a statement. The two parties would invest $94 million each in the venture, LG Chem said in a statement. 

Vehicles equipped with South Korean batteries currently are not eligible for government subsidies in China, the biggest auto and EV market in the world. But Korean battery makers including LG Chem have announced investment plans to expand capacity in China, hoping China’s plan to phase out subsidies over the next couple of years will level the playing field. 

“Through the joint venture, LG Chem has secured a stable structure to provide batteries for electric vehicles to the Chinese market,” LG Chem said in a statement. The South Korean company said it would pursue more joint ventures with other global carmakers.

From – Deal Street Asia
 All Rights Reserved 2019.

Vision Ventures Management Berhad, 
22-3a & 22-5, Menara Oval Damansara
+603 7733 4593

[References] [Disclosure]