Quoteworthy: "As far as WHO is concerned, all hypotheses remain on the table." –— Tedros Adhanom Ghebreyesus, director-general of the World Health Organisation, on the origins of Covid-19.
Xiaomi plans to invest US$10 billion into electric cars
Xiaomi Corp unveiled plans to invest about US$10 billion ($13.4 billion) over the next decade on manufacturing electric cars, embarking on its biggest-ever overhaul to enter China’s booming electric vehicle (EV) market.
Billionaire co-founder Lei Jun announced his intention to lead a new standalone division and spearhead the smartphone giant’s drive into vast but unfamiliar territory, in what he called his final major start-up endeavour. The company will invest an initial RMB10 billion ($2.05 billion) on smart vehicle manufacturing before ramping that up rapidly in subsequent years.
Xiaomi’s stock rose as much as 6.1% on March 30 in Hong Kong.
The Chinese smartphone maker joins tech giants from Apple to Huawei Technologies. In targeting the vehicle industry, betting future cars will grow increasingly autonomous and connected.
Depending on progress, Xiaomi could end up investing a total RMB100 billion in the project in as little as three years, taking external financing into account, a person familiar with the matter told Bloomberg News before the March 30 announcement.
The company will contribute about 60% of the envisioned sum and plans to raise the rest of the funds, said the person, who asked not to be identified because the plans are private.
“We have a deep pocket for this project,” Lei, also Xiaomi’s CEO, said at an event in Beijing.
“I’m fully aware of the risks of the car-making industry. I’m also aware the project will take at least three to five years with tens of billions of investment.”
Xiaomi does not plan to invite outside investors to the project as the company wants full control of the car making business, he added. “This will be the last start-up project in my career.”
Xiaomi becomes the latest to pile into an already crowded arena, where an array of automakers from Tesla Inc to local upstarts Nio Inc and Xpeng Inc are battling for a slice of the world’s biggest EV market.
Search giant Baidu Inc and Geely Automobile Holdings are also said to be teaming up to build electric cars.
EV sales in China may climb more than 50% this year alone as consumers embrace cleaner automobiles and costs tumble, research firm Canalys estimates.
The Beijing-based company will outsource car assembly to contract manufacturers, a model it uses for its smartphones, according to the person. Xiaomi relies on contract manufacturers such as Taiwan’s Foxconn Technology Group to make its mobile devices.
However, the company has no plans to choose “established” automakers for its manufacturing partners, the person said.
Great Wall Motor Co last week rejected a Reuters report that it will help Xiaomi make EVs.
Lei led a review of the EV industry’s potential several months ago and a final decision to enter the arena was made in recent weeks, said another person familiar with the matter. Xiaomi has already hired engineers to work on software to be embedded in its cars, the person added. It is venturing into unfamiliar territory.
The smartphone maker also had just under 100 billion yuan of cash and equivalents at the end of 2020. — Bloomberg
Vegas Sands probes moneylaundering safeguards at Marina Bay Sands
Las Vegas Sands Corp set up a special committee to look into potential breaches of anti-money laundering procedures at its Singapore casino, which has already been the target of probes by US officials and local police.
The committee of three independent board members is reviewing money transfers among high-rollers and third parties at Marina Bay Sands, as well as any possible retaliation against whistleblowers, according to people familiar with the matter.
US law firm Vinson & Elkins LLP has been hired to assist with the review, according to the people, who asked not to be identified because of the confidentiality involved. Las Vegas Sands declined to comment.
The investigation into the firm’s second-most profitable unit follows scrutiny by the US Department of Justice (DOJ) and Singapore police after former patron Wang Xi complained Marina Bay Sands transferred $9.1 million from his casino account to other gamblers without his knowledge.
The Wang lawsuit was settled out of court in June with “non-admission” of liability from both sides.
The DOJ is reviewing whether the casino breached money-laundering controls in its treatment of high rollers and retaliated against whistleblowers who are current or former employees, according to a January 2020 subpoena issued to a former chief compliance officer.
A spokeswoman for the US Attorney’s Office in Nevada declined to comment. Singapore police could not immediately comment.
An internal investigation by the casino showed that the transactions sparking the Wang lawsuit were not isolated cases.
Thousands of transfers worth $1.64 billion were shuffled among gamblers by casino employees from 2010 to the end of 2018.
While the wires are legal, the probe found that several employees appear to have hijacked the process to facilitate gambling.
They would get the patrons to sign a blank authorisation form, then fill in the amount of the transfer and other details for subsequent wires.
At times they would use photocopies of the same document on multiple occasions to expedite the moves, copy signatures if needed and destroy the originals, people familiar with the transfers have said.
Marina Bay Sands has said it has cut back on third-party transfers and tightened security over their usage. Documents seen by Bloomberg show the amount of transfers dropped to just six in 2018 from a peak of 1,011 in 2014. — Bloomberg
Vanguard, BlackRock join investors pledging net-zero emissions
The world’s largest asset managers have joined a group of investors committing to cut the net greenhouse-gas emissions of their portfolios to zero.
BlackRock and Vanguard Group are among 43 investment firms managing more than US$22.8 trillion ($30.7 trillion) of assets that are joining the Net Zero Asset Managers initiative, according to a statement on March 29.
By signing up, the money managers are pledging to support efforts to limit global warming to 1.5 degrees Celsius by targeting net-zero emissions by 2050 across all their holdings.
They also will set a public goal for the proportion of their assets that in 2030 will be on course for net zero.
Eliminating emissions is becoming a greater focus for investors as activists, clients and regulators push them to move from talk to action and use their influence and resources to hold companies to account. And there is a growing urgency to act since scientists have said emissions need to drop by about 50% by 2030 and reach net zero by the middle of the century to avoid the most
catastrophic impacts of climate change. “Climate change represents a long-term, material risk to our investors’ portfolios,” Vanguard chairman and CEO Tim Buckley said in the statement. “As a steward of our clients’ assets, we recognize the crucial role we and others play in driving real progress on climate risk over time.”
Asset managers’ 2030 targets should be commensurate with the 50% global reduction in carbon dioxide that scientists have specified as necessary to limit warming to 1.5 degrees.
They also should report annually on their progress toward the recommendations of the Task Force for Climate-related Financial Disclosures.
That includes setting an action plan that will be monitored by investor climate groups.
Money managers can contribute to a cooler planet by pressing the companies they own to do more to cut emissions and redesigning their portfolios to support green businesses. While the asset-management industry is under pressure to contribute to the low-carbon transition, BlackRock and Vanguard have faced particular criticisms from climate campaigners who say their large holdings of fossil-fuel companies make them complicit in warming the world, while their track record on proxy voting has not signalled a sufficient desire to act on climate change.
“Helping investors prepare their portfolios and capture investment opportunities on the path to net zero is one of our greatest responsibilities,” BlackRock chairman and CEO Larry Fink said.
The Net Zero Asset Managers initiative was started last year with Legal & General Investment Management and UBS Asset Management among its founding members. With the additions, the group now represents US$32 trillion of assets, accounting for more than a third of the total global funds under management, according to the statement.
Other new signatories include Aberdeen Standard Investments, Allianz Global Investors, Brookfield Asset Management, Jupiter Asset Management, Lazard Asset Management and Storebrand Asset Management.
“The transition to net-zero carbon emissions is imperative, and we have a responsibility to work together as an industry and a society to tackle climate change,” said Andrew Formica, CEO of Jupiter Asset Management. — Bloomberg
Huawei reports slower earnings growth as impact of US sanctions hit
Huawei Technologies has reported earnings of RMB64.6 billion ($13.26 billion) for the year ended December 2020, up 3.2%.
Revenue in the same period was up 3.8% y-o-y to RBM891.4 billion. Evidently, the US sanctions and the economic impact of the pandemic have hurt Huawei’s business this past year. In the preceding five years, Huawei’s compounded annual growth rate for both its revenue and earnings have been around 14%. Speaking at the media briefing on March 31, Huawei’s rotating chairman Ken Hu maintains that the company is sticking to its strategic direction of providing connectivity and computing capabilities. “We are not rearing pigs,” says Hu, referring to recent media reports on how Huawei is being forced
to drastically diversify its business. Rather, Huawei is expanding the application of technologies to a bigger group of users including farming. In 2020, despite the slowdown in revenue growth, the company has maintained its research and development spending at around 15% of its turnover.
Nevertheless, because of the US sanctions, which bans sale of essential components to Huawei, the company’s handset business has been hit badly.
Last year, its sales of wearable, tablets and personal computers grew by 65%. However, the growth of these products was offset by a drop in its handsets sales.
As a result, Huawei’s consumer business group — one of the three groups in which the company organises itself — reported revenue growth of just 3.3%.
This was a significant slowdown from the double-digit growth experienced for several past years.
Hu notes that because of US sanctions, many US suppliers couldn’t readily find buyers to make up for the business they were doing with Huawei.
“From our point of view, this is a lose-lose situation. If a political decision is damaging different players in the whole value chain, shouldn’t it be reviewed and corrected?”
Meanwhile, its two other business segments that focuses on telecom operators and enterprises are relatively unscathed, as businesses speed up the pace of digitalisation.
“The pandemic has brought forward cloud computing adoption by one to three years,” says Hu, adding that he sees 97% of large companies adopting some kind of artificial intelligence capabilities by 2025.
“We see both challenges, and opportunities,” he adds. — The Edge Singapore
