Chinese EV makers face 'do-or-die moment' as competitive screws tighten
Unprofitable Chinese electric vehicle (EV) makers, ravaged by a discount war at home and higher tariffs abroad, are stepping up cost-cutting measures and new model launches as they strive to survive in the cutthroat market.
Only those that can sustain their operations without resorting to external funding will stay in the country’s EV race as overcapacity woes loom, analysts said.
“As the domestic market becomes saturated and overseas sales in developed economies are hampered by punitive tariffs, the key players will have to be very efficient in cost control and refrain from splashy spending to save powder for the tough business environment ahead,” said Chen Jinzhu, CEO of Shanghai Mingliang Auto Service, an industry consultancy.
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“The market has entered a new phase, with all companies expected to face a do-or-die moment soon.”
Among the four unprofitable, publicly traded Chinese premium EV builders – Nio, Xpeng, Geely unit Zeekr and Stellantis-backed Leapmotor – only Nio reported a wider net loss in the three months ending September, year on year. All of them have made plans to stem their losses.
The mismatch between capacity and actual demand is stark. By the end of 2023, EV assemblers in mainland China were capable of producing 17 million electric cars annually, and the overall factory utilisation rate stood at 54 per cent, according to Goldman Sachs.
The US bank predicted that additional capacity of 3.2 million units would be added this year, less than the 5.2 million units of capacity added in 2023.
The China Association of Automobile Manufacturers forecast full-year deliveries of more than 11 million units in 2024, which would represent 54.5 per cent of that total capacity of 20.2 million – nearly unchanged from a year earlier.
The mainland is home to about 50 EV assemblers, but He Xiaopeng, CEO of Xpeng, said last year that only eight players would remain by 2027, because smaller players will not be able to survive the fierce competition in the fast-growing industry.
To date, only BYD, the world’s largest EV builder, Li Auto, Tesla‘s nearest rival on the mainland, and Aito, backed by telecoms equipment giant Huawei Technologies, have eked out profits, while the bruising price war is ensnaring most of their domestic competitors.
Manufacturers hoping that international markets would help improve their bottom lines hit a speed bump this year after the US and the European Union decided to slap additional tariffs on Chinese-made electric cars.
Jensen Huang Just Delivered Fantastic News for Nvidia Investors
Nvidia (NASDAQ: NVDA) is one of the most-watched companies on the planet right now, thanks to its dominance in the hot growth area of artificial intelligence (AI). The tech giant holds an 80% share of the AI chip market, and this has translated into triple-digit revenue growth for its data center business quarter after quarter. That’s why all eyes were on Nvidia this week when the company reported fiscal 2025 third-quarter figures.
This market powerhouse once again surpassed analysts’ estimates for revenue and earnings per share, delivered record revenue, and maintained gross margin of more than 74%. Importantly, Nvidia also was optimistic about the future, predicting a 70% increase in fourth-quarter revenue year over year. But what really stood out were words from chief executive officer Jensen Huang. In fact, he delivered fantastic news for Nvidia investors.
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First, though, a bit of background on Nvidia’s path so far. As mentioned, Nvidia is a major player in the world of AI, a market that’s worth about $200 billion today and is forecast to reach $1 trillion by the end of the decade. The company is well-positioned to benefit as it sells not only the best-performing chips around, but also related products and services — such as networking tools and enterprise software. The company offers a full stack of AI, so customers can turn to Nvidia for any of their AI needs.
This has translated into soaring earnings and share-price performance, as well as major gains in free cash flow and return on invested capital over time.
Today, Nvidia has reached a particularly key moment. It’s in the process of launching its Blackwell architecture and best-performing chip yet. The company already has shipped 13,000 sample Blackwell chips to customers, and the Blackwell platform is in full production.
What about the fantastic news delivered by Nvidia’s chief? “Blackwell production is in full steam,” Jensen Huang said during the company’s earnings call. “We will deliver this quarter more Blackwells than we had previously estimated.”
This comment is key because it may eliminate one of the company’s biggest risks: potential supply chain or production snags early in the launch that could threaten delivery volume. Of course, demand still exceeds supply, and Nvidia expects this to continue. But this isn’t due to a problem with Nvidia’s processes. Instead, it’s because we’re in the early days of this AI revolution, and everyone aims to get on board with the best possible products — and Blackwell is at the top of the list.
Brand Empowerment Helps Guangxi's Agricultural Products Enter Domestic and International Markets
NANNING, China, Nov. 22, 2024 (GLOBE NEWSWIRE) — On November 9th, the Liubao Tea Promotion Event with the theme of “Liubao Tea Shines in China” was unveiled at the 2024 Guangxi International Agricultural Expo. Tea industry practitioners from all over the country gathered together to share their experience and new opportunities for the development of the tea industry.
As a famous tea sold to overseas Chinese, Wuzhou Liu Pao Tea has been exported to Southeast Asia and other regions. In recent years, Wuzhou City has vigorously built the regional public brand of “Wuzhou Liu Pao Tea” and the cultural brand of “Ancient Tea Boat Road”, enhancing the brand influence of the Liu Pao Tea.
At the 2024 China Tea Brand Building Forum jointly hosted by the China Tea Marketing Association and other organizations, Wuzhou Liu Pao Tea ranked the 13th place in the “TOP 20 Regional Public Brand Value of Tea in China in 2024”, with a brand value of 4.973 billion yuan. The Liu Pao Tea industry has provided employment for more than 83,000 people, benefiting about 310,000 villagers with comprehensive output value of over 20 billion yuan.
According to the data provided by the Department of Agriculture and Rural Affairs of Guangxi Zhuang Autonomous Region, 14 geographical indication brands in Guangxi have been included in the list of top 100 Chinese brands, ranking second in number in China. In the past five years, Guangxi has built a total of 18 advantageous zones for Chinese distinctive agricultural products and 68 advantageous zones for Guangxi distinctive agricultural products. In 2023, Guangxi had 1,739 green, organic, and agricultural products of geographical indications, with a total area of 16.58 million mu and a total output value of over 50 billion yuan for green and organic agricultural products.
In Guangxi, it is not uncommon for agricultural industries like Liu Pao Tea to guide people on a path of getting rich. As a major agricultural province in China, Guangxi was among the top in China for consecutive years in gross output value of agriculture, forestry, animal husbandry and fishery. With outstanding advantages in featured resources such as forestry, fruit, vegetable, animal husbandry, and cane sugar, Guangxi is recognized as the “fruit kingdom” and “vegetable basket” of China. At present, the fruit planting area in Guangxi exceeds 20 million mu, with a yield of over 32 million tons, ranking first in China for six years in a row, accounting for about one eighth of the country’s total. Guangxi ranks number one for years on end in terms of the production of citrus, persimmon, dragon fruit, and passion fruit. The output of citrus exceeded 18 million tons in 2023, accounting for one tenth of the world’s total. Agricultural brands such as “Guiqi Mango”, “Qinmi Passion Fruit”, and “Rongan Kumquat” have enjoyed reputation at home and abroad.
Huang Zhiyu, Director of the Department of Agriculture and Rural Affairs of Guangxi Zhuang Autonomous Region stated that, by fully leveraging the advantages of abundant featured resources in the forestry, fruit, vegetable, animal husbandry and cane sugar industry, Guangxi has made new achievements by speeding up the building of a “10+3+N” modern characteristic agricultural system and persistently boosting high-quality agricultural development. Guangxi has been ranked among the top ten in the country for years in terms of the total output value of agriculture, forestry, animal husbandry, and fishery. The region has successfully built six hundred-billion-yuan level industrial clusters, including grain, cane sugar, vegetable, fruit, fishery, and high-quality livestock industry, making it well-known nationwide as the “Fruit Plate,” “Sugar Jar,” and “Vegetable Basket”.
Wei Bo, Deputy Director of the Department of Agriculture and Rural Affairs of Guangxi Zhuang Autonomous Region, introduced that Guangxi persistently builds high-quality agricultural brands by focusing on improving the quality of agricultural products and attaching importance to variety cultivation, quality certification and standard construction. To date, Guangxi has identified a series agricultural brands containing “Gui”, totaling 641 in seven batches, with a total brand value exceeding 500 billion yuan.
Source: The Department of Agriculture and Rural Affairs of Guangxi Zhuang Autonomous Region
Contact person: Mr. Zeng, Tel: 86-10-63074558
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Alexandria Real Estate Equities, Inc. Announces Long-Term 258,581 RSF Lease With Longstanding Tenant Vaxcyte, Inc. at the Alexandria Center for Life Science – San Carlos Mega Campus
PASADENA, Calif., Nov. 21, 2024 /PRNewswire/ — Alexandria Real Estate Equities, Inc. ARE, the first, preeminent, longest-tenured and pioneering owner, operator and developer of collaborative mega campuses in AAA life science innovation cluster locations, today announced that it executed a 10-year lease with Vaxcyte, Inc., a clinical-stage biopharmaceutical company working to protect humankind from the consequences of bacterial diseases, for a total of 258,581 RSF at 825 Industrial Road on the Alexandria Center® for Life Science – San Carlos mega campus in the San Francisco Bay Area. The lease includes new space as well as an extension of the lease term for its existing space.
Vaxcyte has been an anchor tenant at the Alexandria Center for Life Science – San Carlos since it opened in 2021. The company’s expansion on the highly differentiated mega campus with a long-term lease affirms the Alexandria Center as the flagship destination for life science innovation in the Mid-Peninsula region. The purpose-built mega campus features significant options for future growth in addition to best-in-class essential Labspace® infrastructure in a compelling location, which offers convenient access to Highway 101 and walkability to Caltrain, boutique shops and restaurants, and is sought after by disruptive life science companies. Alexandria has created and operates this award-winning mega campus with inspiring design and people-centered amenities, including cutting-edge conference and meeting spaces, an expansive courtyard, a contemporary eatery, an artisanal coffee bar and a fully equipped fitness and wellness center — all intended to enable its tenants to recruit and retain the best talent to advance their mission-critical work.
With 739,157 RSF in operation that is 97.4% occupied and approximately 1.4 million RSF of future development opportunities as of September 30, 2024, the Alexandria Center for Life Science – San Carlos is positioned to provide the scale and flexibility that is crucial to meeting the evolving needs of leading life science companies as they work to translate scientific discoveries into the next-generation of life-changing medicines to benefit patients.
About Alexandria Real Estate Equities, Inc.
Alexandria Real Estate Equities, Inc. ARE, an S&P 500® company, is a best-in-class, mission-driven life science REIT making a positive and lasting impact on the world. As the pioneer of the life science real estate niche with our founding in 1994, Alexandria is the preeminent and longest-tenured owner, operator and developer of collaborative mega campuses in AAA life science innovation cluster locations, including Greater Boston, the San Francisco Bay Area, San Diego, Seattle, Maryland, Research Triangle and New York City. As of September 30, 2024, Alexandria has a total market capitalization of $33.1 billion and an asset base in North America that includes 41.8 million RSF of operating properties, 5.3 million RSF of Class A/A+ properties undergoing construction, and one committed near-term project expected to commence construction in the next two years. Alexandria has a longstanding and proven track record of developing Class A/A+ properties clustered in mega campuses that provide our innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity and success. Alexandria also provides strategic capital to transformative life science companies through our venture capital platform. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns and greater long-term asset value. For more information on Alexandria, please visit www.are.com.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, statements regarding Alexandria’s impact on its tenants’ ability to recruit and retain top talent and on its tenants’ businesses in their pursuit of novel treatments and cures; the features and amenities of the Alexandria Center for Life Science – San Carlos mega campus; and Alexandria’s ability to continue to attract life science companies and meet their evolving needs. These forward-looking statements are based on Alexandria’s present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Actual results may differ materially from those contained in or implied by Alexandria’s forward-looking statements as a result of a variety of factors, including, without limitation, the risks and uncertainties detailed in its filings with the Securities and Exchange Commission. All forward-looking statements are made as of the date of this press release, and Alexandria assumes no obligation to update this information. For more discussion relating to risks and uncertainties that could cause actual results to differ materially from those anticipated in Alexandria’s forward-looking statements, and risks and uncertainties to Alexandria’s business in general, please refer to Alexandria’s filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and any subsequently filed quarterly reports on Form 10-Q.
CONTACT: Joel S. Marcus, Executive Chairman & Founder, (626) 578-9693, jmarcus@are.com
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Chinese Stocks Slump on Tech Earnings, Geopolitical Tensions
(Bloomberg) — A selloff in Chinese stocks deepened on Friday afternoon, as disappointing tech earnings hurt sentiment already weakened by concerns over Donald Trump’s imminent return.
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The mainland benchmark CSI 300 Index slumped 3.1%, the most since Oct. 9. The Hang Seng China Enterprises Index of Chinese stocks traded in Hong Kong lost 2.1%, capping a second straight week of losses. A gauge of Chinese tech stocks in Hong Kong tumbled into a technical bear market.
The retreat extends the market’s slide since an October peak, underscoring growing frustration over the pace of Beijing’s fiscal stimulus rollout and jitters over a potential escalation in US-China tensions. The disappointing earnings from consumption bellwether PDD Holdings Inc. and online search company Baidu Inc. have further dented confidence, with the latter’s shares briefly plunging 10% in Hong Kong following a decline in revenue.
Traders also pointed to statement by Texas Governor Greg Abbott dated Nov. 21, which prohibited state agencies from putting new money into investments originating from China and urged a divestment of previous holdings. That worsened fears that some of the largest US funds may avoid investing in China as part of political considerations.
The statement from Texas has affected “sentiment especially when the market is lacking momentum,” said Steven Leung, an executive director at UOB Kay Hian Hong Kong. Investors have also “found nothing has improved from property and equity to consumption — also no positive surprise from corporate earnings.’
Traders have looked to Chinese tech earnings to regain confidence over the economy’s trajectory, only to face the harsh reality of anemic consumer spending. Baidu Inc. recorded its biggest revenue drop in more than two years. PDD warned that its profitability will trend downward over time because of intensifying competition in its home market of China.
The Hang Seng Tech Index fell 2.6% on Friday, taking its decline from an October high to over 20%.
The market’s outlook has been under debate after a massive rally in late September, driven by monetary easing, lost momentum. Wall Street analysts including those at Morgan Stanley and CLSA have recently trimmed their recommendation on Chinese stocks. Some, however, have said a selloff will be an opportunity to add positions as Beijing likely has enough policy tools to counter US president-elect’s tariff proposals.
Should You Buy Archer Aviation Stock While It's Below $9?
Archer Aviation (NYSE: ACHR) has disappointed a lot of investors since its public debut three years ago. The developer of electric vertical take-off and landing (eVTOL) aircraft went public by merging with a special purpose acquisition company (SPAC), and it started trading at $9.90 and soared to a record high of $17.14 in February 2021. But today, Archer’s stock trades at about $4.
It crashed and burned as it missed its own pre-merger expectations, racked up steep losses, and issued a lot more shares to raise fresh cash. Rising interest rates also rattled investors and drove them away from its speculative pre-revenue business. However, analysts still have an average price target of $9.06 for Archer’s beaten-down stock. Should investors buy it today as it languishes more than 50% below that price?
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Archer’s Midnight eVTOL aircraft has a maximum speed of 150 miles per hour, a max range of 100 miles, and can carry a single pilot and four passengers. These electric aircraft are cheaper, cleaner, quieter, and easier to land in urban areas than helicopters, so they’re well suited for short-range air taxi services.
In early 2021, United Airlines placed a long-term $1 billion order for 200 of its Midnight aircraft. In 2022, it paid Archer a $10 million deposit for the first 100 aircraft. In 2023, automaker Stellantis invested in Archer and selected it as the exclusive contract manufacturer for its own eVTOL aircraft. Archer also secured additional deals with the U.S. Air Force and Future Flight Global.
Earlier this year, Soracle — a new joint venture formed by Japan Airlines and Sumimoto — followed United’s lead and placed a $500 million order for 100 Midnight aircraft. All of those deals could help Archer outlast its other competitors in the fragmented eVTOL market.
But for 2024, analysts expect Archer Aviation to generate less than $1 million in revenue as it racks up a net loss of $467 million. With an enterprise value of $1.43 billion, Archer trades at more than 2,000 times that sales estimate.
Prior to going public, Archer claimed it could produce its first 10 aircraft in 2024. But it only delivered its first Midnight aircraft to the U.S. Air Force this August, and it’s aiming to ramp up its annual production to 10 aircraft in 2025.
But looking further ahead, Archer plans to produce 48 aircraft in 2026, 252 aircraft in 2027, and 650 aircraft in 2028. It’s also establishing dedicated air taxi routes with its partners, and it expects to launch its first air taxi services in the UAE as early as the fourth quarter of 2025.
Reddit Tumbles 7% In Premarket Amid Advance's Stake Sale Announcement: Technicals Show Strong Support, But Selling Pressure Persists At Overbought Levels
Shares of Reddit Inc RDDT nosedived by 6.2% to $148.11 per share in premarket, despite closing 16% higher at $158.02 apiece on Thursday. Technical analysis points towards a bullish trend, with the stock trading at overbought levels.
What Happened: Reddit’s shareholder, Advance Magazine Publishers Inc. plans to sell as much as $1.2 billion of the company’s stake, reported Bloomberg on Friday morning. The company is said to be offering 7.8 million shares in between the range of $145.38-$148.54 each.
Advance Magazine Publishers is an arm of the Newhouse family publishing empire that owns Conde Nast. The company seeks to establish a credit facility using Reddit’s stake, while buying derivatives on Reddit’s shares, which allow it to indirectly maintain an ownership stake, reported Bloomberg.
Apart from this, Reddit faced an outage on Wednesday and Thursday this week. This outage stems from an HTTP error, as per TechCrunch. The platform was able to resolve the issue later.
Also read: Reddit Suffers Second Disruption In Two Days
Why It Matters: Technical analysis points towards strong support for the RDDT stock.
Thursday’s closing price of $158.02 sits above its eight, 20, and 50-day simple moving averages, signaling a bullish trend. However, the stock’s distance from its 100-day moving average of $75.59 suggests potential selling opportunities with the relative strength index of 79.18 indicating overbought conditions.
While RDDT stock could face volatility, if the stake sale report holds true its recent upgrade from Piper Sandler citing strong user growth metrics, makes it attractive in the longer term.
According to Benzinga pro data, Reddit has a consensus price target of $92.84 based on the ratings of 19 analysts. The high is $150 per share issued by Piper Sandler on Nov. 19 and the low is $54 apiece issued by New Street Research on March 26, 2024.
The average price target of $118.33 between Piper Sandler, Bernstein, and Citigroup implies a 19.28% downside for Reddit.
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This ETF Has Nearly Doubled the S&P 500 Since 2009. Here's How It Could Turn $200 per Month Into $1.3 Million.
Investing in exchange-traded funds (ETFs) is one of the simplest and most straightforward ways to buy into the stock market. By owning just one share of an ETF, you can gain exposure to dozens or hundreds of stocks at once.
While some ETFs aim to track major indexes, like the S&P 500 (SNPINDEX: ^GSPC), others are more niche. Growth ETFs, for example, are designed to beat the market and earn above-average returns over time.
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These investments can carry more risk than broad-market funds, but they could also help supercharge your savings. This one growth ETF has nearly doubled the S&P 500’s performance over the last 15 years, and it could potentially turn just $200 per month into more than $1 million. Here’s how.
If you’re looking for a growth ETF with a proven track record, the Schwab U.S. Large-Cap Growth ETF (NYSEMKT: SCHG) could be a smart option. This fund includes 231 stocks (nearly half of which come from the tech sector), with a weighted average market capitalization of around $1.4 billion.
The five largest holdings in this ETF are Nvidia, Apple, Microsoft, Amazon, and Meta Platforms, respectively, and those stocks alone make up nearly 40% of the entire fund. The rest of the ETF, then, is made up of dozens of smaller stocks.
While all of the holdings in this fund are large-cap stocks (meaning they have a market cap of at least $10 billion), the inclusion of “mega-cap” stocks (generally defined as having a market cap of at least $200 billion) can help mitigate some risk. These industry titans may not have quite as much room for explosive growth as up-and-coming companies, but they’re also more likely to survive market volatility.
Growth ETFs are designed to outperform the market over time, and this fund is no exception. Since its inception in December 2009, it’s earned total returns of around 755%, as of this writing — almost double the S&P 500’s returns of 435% in that time.
Keep in mind that there are no guarantees this ETF will continue performing at this rate, and growth ETFs, in general, tend to be riskier than many other types of investments. They are also often hit harder during downturns, so be prepared for more severe fluctuations if the market takes a turn for the worse.
Again, there’s no way to know for certain how any investment will fare going forward, as past performance doesn’t predict future returns. But it can still be helpful to look at those past returns to get a rough idea of how much you might be able to earn.