Dynamics of multinational corporations

Release Date:

2019-01-04

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On January 2nd, at the working meeting of China Railway Corporation, General Manager of China Railway Corporation, Lu Dongfu, stated that 6800 kilometers of new lines will be guaranteed to be put into operation in 2019. Among them, 3200 kilometers of high-speed rail. Industry insiders predict that the scale of railway investment will reach a new high in 2019, with a scale of over 800 billion yuan. In addition, in 2019, China Railway Corporation will accelerate the promotion of shareholding reform, implement a three-year work plan for mixed reform in the railway sector, and promote the listing of key projects through shareholding reform.


The stock price of 'FAANG' (abbreviation for Facebook, Apple, Amazon, Netflix, and Google's parent company Alphabet) has mostly declined. Some analysts believe that the downward trend of 'FAANG' stocks in recent months seems to have set the tone for the trend in 2019. Many investors are concerned that the era of technology stocks leading the stock market has come to an end, and signs of a slowdown in the US economy have exacerbated this concern. Affected by factors such as user data privacy scandals, Facebook's stock price fell by about 25% in 2018, marking the first decline since its listing in 2012. Apple's stock price slightly declined by 7% throughout 2018, but it was also the worst performing year after the 2008 financial crisis. Alphabet's stock price did not fluctuate significantly in 2018, with a range of less than 1%. The other two 'FAANG' stocks performed well. Netflix was the best performing stock in the 2018 'FAANG' market, and due to increased investment in original content, it successfully attracted strong growth from new users, with an increase of nearly 40%. Amazon's stock price rose 28% throughout 2018.


On January 3rd, in the third phase of China's 5G technology research and development experiment organized by the IMT-2020 (5G) promotion team, Huawei took the lead in completing the 5G core network security technology test with a 100% pass rate on December 27, 2018. Network security is a key capability for the large-scale commercial use of 5G. This time, Huawei took the lead in completing all (mandatory and optional) network security technology tests, once again proving that Huawei has a deep technical accumulation in network security and is ready for the large-scale commercial use of 5G by operators.


With the end of 2018, Microsoft ranked first in the market value of the United States for the first time since 2002, with a market value of $779.7 billion, leaving behind Apple (market value of $749.1 billion) and Amazon (market value of $734.4 billion). The top five rising stocks in the S&P 500 Index (SPX) in 2018 were: healthcare stocks Centene rose 128.6%, AMD rose 79.6%, Abiomed rose 73.4%, Fortinet rose 61.2%, and Advance Auto Parts rose 57.9%. The top five losers in the S&P 500 index were: cosmetics company Coty fell 67%, Mohawk Industries fell 57.6%, L Brands fell 57.4%, General Electric fell 56.6%, and Bailiko fell 55.5%.


On January 3rd, Qualcomm announced that it had issued a total of 1.34 billion euros in guaranteed bonds to enforce a permanent ban on Apple's iPhone. Previously, the Munich District Court ruled on December 20, 2018 that Apple had infringed on Qualcomm's intellectual property rights in smartphone energy efficiency and approved Qualcomm's request for a permanent injunction, ordering Apple to stop selling, promising to sell, and importing infringing iPhones in the German market.


On January 4th, the United Auto Workers (UAW) announced on Thursday that it is suing General Motors for allegedly violating labor contracts by hiring temporary workers at an assembly plant in Indiana, escalating the union's struggle against General Motors' plan to close American factories. The lawsuit filed Wednesday in the United States District Court in Ohio is the union's first counterattack after General Motors decided to close five North American factories at the end of November. UAW will negotiate a new national labor agreement with General Motors this year and vow to resist layoffs. The current labor contract was signed in 2015 and will expire in September of this year.


On the afternoon of December 26th, the first 'Smart Hospital+Prescription Circulation Platform' project in Beijing was officially launched at Beijing Aerospace General Hospital. Beijing Aerospace General Hospital has issued its first electronic prescription through the 'prescription circulation platform'. The 'Smart Hospital+Prescription Circulation Platform' project is a successful exploration of the 'Internet+Medical' cooperation model by China Resources Pharmaceutical Commercial Group. The project focuses on patients and constructs a comprehensive medical information platform that integrates functions such as appointment diagnosis and treatment, online payment, and online pharmacy. It is committed to providing patients with convenient, safe, and comprehensive online and offline medical services covering pre, during, and post diagnosis.


Volvo Group has stated that it will allocate 7 billion Swedish kronor ($780 million) to cover the potential cost of acknowledging that its trucks may emit toxic nitrogen oxide gases above legal standards. Last October, the company disclosed that the 'emission control components' in its vehicles were being worn out faster than expected, and on the day of the announcement, the company's stock price fell by more than 6%. At that time, Volvo predicted that this incident would result in significant costs.


Hon Hai Precision and its subsidiary Sharp plan to build the most advanced semiconductor factory in China, with a total investment of up to 1 trillion yen. Hon Hai and Sharp plan to collaborate with the Zhuhai Municipal Government to build the most advanced large-scale factory using 300mm diameter silicon wafers. The direction being negotiated is through subsidies and tax exemptions, with the majority of the investment being borne by the municipal government and others. The factory construction will fully utilize the technology of Sharp, the only company under Hon Hai Group involved in semiconductor production.


Deutsche Bank Chairman Paul Achleitner stated that the bank's strong strategy of turning losses into profits is bearing fruit, ruling out the need for government assistance and downplaying speculation that the German bank, which is losing money, should merge. Ahleitner added that after a difficult year, he will not resign. During this year, Deutsche Bank changed its CEO and became the target of a money laundering investigation, with its stock price falling by half.


Evergrande Health announced on December 31st that the company had reached a restructuring agreement with Faraday Future (FF) controlled by Jia Yueting, which took effect on the same day. Evergrande will no longer invest in FF and holds 100% of FF Hong Kong. Evergrande will hold 32% of FF's preferred equity through its previous acquisition of Hong Kong Shiying Company. Meanwhile, Evergrande holds 100% of the rights under the joint venture's wholly-owned subsidiary FF Hong Kong and the restructuring agreement, totaling $200 million. Among them, the acquisition of FF Hong Kong is priced at $100 million.


On January 2nd, UBS (UBS) covered Rongchuang China for the first time and gave a buy rating, with a target price of HKD 32.5 per share. In 2016, Rongchuang China actively acquired land and remained cautious in acquiring land from high land prices in 2017 to the first half of 2018. This precise timing of land acquisition will enable Rongchuang to achieve a compound growth rate of 88% in sales contract volume from 2015 to 2018. These sales will also be converted into revenue and profit from 2019 to 2020. It is expected that Rongchuang's net profit can achieve a compound growth of 30% from 2018 to 2021, which will strongly support Rongchuang's leverage reduction strategy.


After years of struggle with investors, personal computer pioneer Michael Dell returned to the stock market yesterday, with Wall Street valuing his company's newly listed stocks at $34 billion. The listing on the New York Stock Exchange ended the five-year private ownership of the personal computer manufacturer, during which Michael Dell and private equity partner Silver Lake used financial operations, trading matchmaking, and massive borrowing to thoroughly reform Dell. This includes acquiring data storage manufacturer EMC for $67 billion and accumulating over $50 billion in debt.


On January 2nd, Tesla Corporation released fourth quarter car delivery data that disappointed investors. Despite Tesla's efforts to increase production, delivering 90700 cars in the fourth quarter and producing and delivering nearly 1000 cars per day, it has yet to meet Wall Street analysts' expectations. Tesla's stock price plummeted 8% after the US stock market opened on Wednesday.


Philips has created an ecosystem of 'full health care', and the cooperation between Philips and Baiyang Pharmaceutical has been further upgraded. Committed to further resource integration, integrating personal health management and professional medical care through new distribution channel networks and innovative business models, and creating a 'health care full process' integrated ecosystem. According to the latest signed agreement, Baiyang will become the omnichannel agent of Philips infrared therapy equipment.


Recently, Schneider Electric, the leader of digital transformation in the field of global energy efficiency management and automation, announced that it has assisted Blue Hall Information Beijing Shunyi Cloud Computing Data Center (hereinafter referred to as 'Blue Hall Cloud Data Center') in building a highly reliable data center infrastructure and creating a safe, efficient, and low-cost world-class data center through EcoStruxure based intelligent distribution solutions and full lifecycle services, Provide reliable operational support for its end users in the data center.




Multinational Corporation Dynamics [2019, January 11]


On January 8th, State Grid of China started construction at five pumped storage power stations in Funing, Hebei, Jiaohe, Jilin, Qujiang, Zhejiang, Weifang, Shandong, and Hami, Xinjiang. The total investment of five pumped storage power stations is 38.7 billion yuan, with a total installed capacity of 6 million kilowatts. They are planned to be put into operation and generate electricity in 2026. This major project is a concrete practice of implementing the concept of green development and building a clean, low-carbon, safe and efficient energy system.


[Wal Mart] Wal Mart will cooperate with Udelv, a driverless car startup, to pilot driverless car distribution services in Surprise, Arizona. The company will use box trucks to deliver fresh food. Prior to this, Wal Mart also established a partnership with Ford Motor to carry out pilot distribution of driverless vehicles.


Huawei has released the industry's first data center switch for the AI era, CloudEngine 16800, which defines the three main features of AI era data center switches. It innovatively introduces AI technology and helps customers accelerate intelligent transformation through inclusive AI. Huawei GIV (Global Industry Vision) predicts in 2025 that the adoption rate of AI by enterprises will increase from 16% in 2015 to 86% in 2025, making AI a key driving force for reshaping business models, assisting decision-making, and improving customer experience.


On January 8th, Samsung Electronics announced its preliminary results for the fourth quarter of 2018. The financial report showed that Samsung Electronics' sales in the fourth quarter were 59 trillion won, a year-on-year decrease of 11%, lower than the market expectation of 63.58 trillion won; The operating profit was 10.8 trillion won, a year-on-year decrease of 29%, lower than market expectations of 13.83 trillion won. Based on this estimate, Samsung Electronics' total revenue in 2018 was approximately $216.87 billion.


Boeing Co. and Airbus Group failed to deliver all the planes they had planned to produce in 2018, indicating that production issues have hindered the progress of these two major aircraft manufacturers at a time of soaring demand for aircraft. Boeing delivered 806 jet aircraft in 2018, setting a historic high, but lower than the company's previously set delivery target of 810-815 aircraft. Airbus delivered 800 aircraft in 2018, setting the company's highest historical record and achieving its revised delivery target. However, the company only managed to meet the lowered delivery target of 800 aircraft.


On January 10th, Amazon hired Disney Vice President Kyle Laughlin to lead its Alexa Gadgets department. Laughlin has been working at Disney for 8 years and recently worked in the consumer products and interactive media department of this entertainment giant, serving as Senior Vice President and General Manager of the gaming, application, and network experience business.


Intel subsidiary Mobileye announced that it is vigorously promoting autonomous driving technology in China. It is reported that Mobileye is continuously promoting two major projects using its autonomous driving technology in China, the most notable of which is in the field of public transportation. Mobileye hopes to collaborate with public transportation companies in Beijing to launch unmanned public transportation services in China, including the development of autonomous driving Level 4 technology and the creation of industry standards. If everything goes smoothly, Mobileye may provide transportation services for the Beijing Winter Olympics in 2022.


On the 8th, Google released a system at the International Consumer Electronics Show (CES) to lower the threshold for home appliance manufacturers to develop 'connected home appliances'. The small hardware to be released is called 'Google Connect'. Home appliance manufacturers can integrate it into their company's products and interact with products such as the speaker of Google's intelligent voice assistant 'Assistant' online. Google hopes to increase the number of products that support our company's technology to expand data collection and further improve the performance of artificial intelligence (AI). The new system does not require complex semiconductors for artificial intelligence, so the price is low.


Deutsche Bank's management committee plans to reduce its bonus pool by approximately 10% as the German bank strives to address concerns about talent loss while addressing cost pressures. Deutsche Bank will be more selective in distributing last year's bonuses to retain the best performing employees.


Alibaba Health and Pfizer have decided to collaborate on internet physician training. It is understood that both sides will continue to cooperate in drug traceability, smart healthcare, and gradually explore in-depth research in areas such as medication safety and patient education. In the future, both parties hope to further combine their respective business advantages, explore a patient-centered and technology driven cooperation model, and establish innovative integrated medical and health services.


Following Samsung's explosive performance, LG Electronics in South Korea also released a earnings report. It is reported that LG Electronics released its fourth quarter earnings report on Tuesday, with an expected operating profit of 75.3 billion won, a year-on-year drop of 80%, far below the market's expected 389 billion won. The sales revenue was 15.77 trillion won, lower than the market expectation of 16.46 trillion won.


SoftBank Group has cancelled its proposed $16 billion investment in shared office space provider WeWork Cos. Faced with market turmoil and opposition from investment partners, the company has instead opted for a smaller transaction of approximately $2 billion. The transaction has a valuation of approximately $36 billion for WeWork

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