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Robyn Mak

Breakingviews - Alibaba finds a new ally against an old foe

06 Sep 2019

HONG KONG (Reuters Breakingviews) - Alibaba has found a new ally against an old foe. The Chinese internet titan is buying part of video-games group NetEase's e-commerce business for $2 billion. Perhaps more significantly, the two are forging closer ties in music-streaming, where rival Tencent's dominance is under antitrust scrutiny.

Breakingviews - Hong Kong leader's overdue concession is a start

04 Sep 2019

HONG KONG (Reuters Breakingviews) - Hong Kong's leader has finally caved. Chief Executive Carrie Lam has formally withdrawn an extradition bill that triggered months of anti-government protests. Investors cheered, and the territory’s stock market, including battered brands like airline Cathay Pacific, promptly rallied on the news. It will take more to appease protesters.

Breakingviews - Tencent is stuck in a losing battle with Beijing

28 Aug 2019

HONG KONG (Reuters Breakingviews) - Tencent is stuck in a losing battle with Beijing. A year after a video-games crackdown hit the web giant, its $21 billion music-streaming arm may be under scrutiny from regulators. Pony Ma's ambitions of building an entertainment empire are looking a little more fragile. It's a reminder that China's tolerance of its tech champions is waning.

Breakingviews - Repatriated cash revs up Taiwan's economic engine

14 Aug 2019

HONG KONG (Reuters Breakingviews) - Taiwan has a $350 billion chance to rev up its stuttering economic engine. The self-ruled island has been battered by a U.S.-China trade war and stalled diplomatic relations with Beijing. In response President Tsai Ing-wen is urging local companies that left decades ago in search of cheaper, larger markets to come home, bringing offshore riches with them. It’s an achievable ambition; a lasting impact, though, will depend on deeper reforms.

Breakingviews - JD deserves to be in trade-war tech discount bin

09 Aug 2019

HONG KONG (Reuters Breakingviews) - Online retailer JD.com deserves to be in China's tech discount bin. The country's new-age stocks have turned volatile with global trade tensions. The $40 billion loss-making online retailer led by Richard Liu has lost up to 17% of its value since late July, more than rivals like Alibaba and a much steeper drop than for the broader NASDAQ composite index. It partly reflects poor sentiment but JD’s focus on sales of one-off big-ticket items leave it especially vulnerable. Fraught U.S-China relations appear to be behind a selloff which began on July 29 around the time the two economies failed to reach a truce in bilateral talks. Things got worse this week, after the U.S. Treasury Department escalated the spat by labelling China a currency manipulator. As of Thursday in New York, investors had erased some $6 billion in market capitalisation from JD. That’s at odds with JD’s recent performance. It is expected to deliver a more than one-third increase in adjusted earnings from a year earlier when it reports results on Tuesday, according to an average of analyst estimates on Refinitiv. Cost cuts have helped lift operating margins, while JD’s capital-intensive logistics unit is benefitting from greater economies of scale. There are weak spots, however. Where other shopping sites have diversified into fast-moving-consumer goods, Liu’s empire is heavily reliant on electronics and household appliances. These items accounted for nearly three quarters of the company's total revenue in the three months to March. If Chinese consumers tighten their belts and eschew iPhone upgrades, for example, the financial damage could be acute for JD. In contrast, rivals Alibaba and the recently-listed Pinduoduo are gaining ground in wooing new shoppers in the far reaches of the People's Republic. Other stocks have traded weakly too as investors turn cautious on Chinese companies. Gaming and social media group Tencent, whose shares are listed in Hong Kong and tend to fetch a higher valuation than U.S-listed compatriots, has fallen roughly 10%, almost as much as Alibaba in the recent sell off. As bellwethers of the Chinese economy, that may be unsurprising amid slowing growth. But JD’s outsized woes puts it at the bottom of the pack.

Breakingviews - Japan dims hopes of a Samsung memory chip rebound

31 Jul 2019

HONG KONG (Reuters Breakingviews) - Japan is short-circuiting hopes of a price rebound for memory chips. Shares in $260 billion Samsung Electronics slid after the company warned of poor visibility into the impact of Tokyo's export curbs on Seoul. An escalating trade dispute between the two neighbours threatens semiconductor supply chains. It’s now also throwing into doubt confidence in a better end to 2019.

Breakingviews - Japan-Korea spat returns chip price error message

25 Jul 2019

HONG KONG (Reuters Breakingviews) - A Japan-Korea trade dispute is muddling the memory chip sector's outlook. Quarterly earnings at the $48 billion SK Hynix plunged 88% from a year earlier. Yet its shares rose on hopes that Tokyo's recent technology export curbs on South Korea will depress supply and lift prices. The risks of weaker demand and supply chain ruptures suggest any rally has weak legs.

Breakingviews - Stalling Didi scrabbles to rev its China engine

18 Jul 2019

HONG KONG (Reuters Breakingviews) - China's Didi Chuxing is revving up its sputtering engine. The ride-hailing app is trying to raise up to $2 billion in fresh funds, the Wall Street Journal reported on Wednesday, citing people familiar with the matter. Even with a dominant share in its home market, money-losing Didi is struggling with regulatory demands and a plethora of small rivals. There’s reason for investors to be cautious.

Breakingviews - Tokyo and Seoul can ill afford a standoff

11 Jul 2019

HONG KONG (Reuters Breakingviews) - A standoff between Tokyo and Seoul points to mutually assured damage. President Moon Jae-in could take aim at Japanese machinery, equipment and goods as payback for export curbs targeting South Korea’s vital chip industry. That casts a shadow over $85 billion of bilateral trade at a time when both economies are already under significant pressure. 

Breakingviews - Japan’s testy trade row strikes at Samsung

05 Jul 2019

HONG KONG (Reuters Breakingviews) - Samsung Electronics is caught in a new trade row. Japan has curbed exports to South Korea of vital materials used to make chips and display screens over an old wartime spat. Hardest hit may be the $260 billion handset-maker, which for now is expecting a recovery after a dismal second quarter.

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