Daily Tech Roundup: Alibaba Signals Possible Sale of Grocery Unit
Huawei smart car boss predicts unit will turn a profit in 2024, GAC partners with air taxi developer on flying car factory
Snacks sit on display on Nov. 27 at a Freshhippo store in Hangzhou, East China’s Zhejiang province. Photo: VCG
Welcome to the Daily Tech Roundup — a briefing of the top technology news making headlines in China and the rest of Asia.
Alibaba signals possible sale of grocery unit with leadership shake-up
Alibaba Group Holding Ltd. has appointed a new head of its grocery arm Freshippo, raising speculation about the future direction of the retail unit. Hou Yi, Freshippo’s founder, will be replaced as CEO by Yan Xiaolei, the current chief financial officer. Hou, 60, will retire but serve as chief adviser to the company, Alibaba CEO Wu Yongming announced in a letter to employees Monday.
A retail analyst suggested that Yan’s appointment may signal Alibaba’s intention to sell the grocery unit, which would be in line with Chairman Joe Tsai’s statement in the fourth quarter earnings call that the physical retail business no longer represents Alibaba’s core focus.
Huawei smart car boss predicts profits in 2024
Huawei Technologies Co. Ltd.’s smart car boss has predicted that the unit will turn a profit this year, despite its 6 billion yuan ($834 million) loss in 2023. The unit’s Smart Selection business, one of two main models under which Huawei collaborates with automakers, ended the first three months of 2024 in the black, helping the unit near profitability during that period, Chairman Yu Chengdong said Saturday. He predicted that the Intelligent Automotive Solution business unit “should be able to turn around and achieve benign positive growth” from April onward.
EU considers joining U.S. in reviewing risks from Chinese legacy chips
The European Union is considering a formal review of how widely its businesses use mature or lower-end chips from China, joining the United States in flagging a potential risk to national security and global supply chains. The EU is considering whether to investigate how deeply such semiconductors are embedded across industry networks, according to a draft statement seen by Bloomberg News. Such a move would mirror a Biden administration initiative to assess the risks of relying on the chips, which aren’t cutting-edge but are vital to the military and sectors from electric vehicles to infrastructure. A European Commission survey could mark a first step toward joint measures with the U.S., including restrictions or other curbs.
GAC partners with air taxi developer on flying car factory
Guangzhou Automobile Group Co. Ltd. (GAC) has clinched a deal with an air taxi developer to jointly build a flying car plant in Guangzhou, the latest push by the state-owned automaker to tap a technology that is crucial to nurturing the low-altitude economy. Under the Feb. 6 agreement, Guangzhou-based EHang Holdings Ltd. will provide its self-flying car technology and product integration to help GAC develop its electric vertical takeoff and landing aircraft project, a representative from the automaker said Friday.
WeChat Pay operator approved to boost registered capital
The People’s Bank of China has given Tencent Holdings Ltd.’s payment arm approval to raise its registered capital to 15.3 billion yuan ($2.1 billion), according to the central bank’s updates on Friday. This will make Tenpay Payment Technology Co. Ltd. the country’s largest nonbank payment provider by the measure. The approval increases the amount of capital that investors can commit in the operator of WeChat Pay, one of China’s ubiquitous online payment platforms. With the approval, Tenpay’s registered capital will be more than 15 times higher than the current 1 billion yuan.
CATL fends of rivals as EV demand growth slows
Contemporary Amperex Technology Co. Ltd.’s (CATL) full-year net income beat estimates as the world’s biggest battery-maker for electric vehicles (EV) successfully fended off rivals while benefiting from a slump in input costs. Net income for 2023 rose 44% to 44.12 billion yuan ($6.1 billion) on revenue of 400.9 billion yuan, which fell short of estimates, according to a filing. For the fourth quarter alone, CATL reported 13 billion yuan in earnings on revenue of 106.2 billion yuan. The Chinese battery-making giant attributed its earnings growth to the continued — albeit slower — expansion of sales of electric cars in China.
China calls out BMW for tech issues
BMW AG got named in an annual Chinese show airing consumer complaints about technical issues and shoddy services, just as legacy automakers fight intense competition from local rivals. The televised program — called the “315 Gala” that runs on World’s Consumer Rights Day every year — criticized the German automaker for technical defects on its BMW 530Li, according to the broadcast on China Central Television Friday. Consumers filed persistent complaints against abnormal sounds from the model’s propeller shaft, the broadcaster said. The company and local dealers didn’t provide satisfying solutions to the issue. The 530Li sedan is specifically designed for the Chinese market.
Honda, Nissan team up to take on China EV juggernaut
Honda Motor Co. Ltd. and Nissan Motor Co. Ltd. are teaming up to develop electric car technology, seeking to keep up with their Chinese counterparts in the rapid shift toward clean energy. The carmakers will collaborate on core technology for battery-based electric vehicles, including software, they said in a statement Friday, adding that a memorandum of understanding for the strategic partnership had been signed. Japanese car manufacturers are facing strong competition in China from local newcomers, which has forced them to cut back production and staffing or, in the case of Mitsubishi Motors Corp., pull out entirely.
Tencent unveils image-to-video model with Tsinghua and HKUST
Tencent Holdings Ltd., in partnership with Tsinghua University and the Hong Kong University of Science and Technology, unveiled a novel image-to-video model named “Follow-Your-Click” on Friday. This model can animate static areas within an image into video with just a click on the desired region and a prompt of a few words. Tencent highlighted the broad application prospects of image-to-video generation technology for several industries, including movie production, game development and advertising.
Exclusive: ByteDance revives gaming ambitions amid fears of U.S. TikTok ban
In a surprising reversal of its recent strategy, TikTok’s parent company ByteDance Ltd. plans to re-enter the gaming industry. This decision came less than four months after it chose to wind down its Nuverse gaming brand and retreat from mainstream video games.
The Beijing-based short video platform said it will be watching how the industry develops, and will keep exploring the gaming business, according to an internal letter seen by Caixin.
The letter also revealed a series of personnel changes. Hua Wei, the current head of human resources, is to lead the gaming business, while Yan Shou, the former chief of its Nuverse division, is to be transferred to the finance department.
An executive at Nuverse confirmed the letter’s contents, adding this was part of the company’s normal personnel changes.
Nio teams up with CATL to develop longer-life batteries
Chinese electric vehicle upstart Nio Inc. is teaming up with battery giant Contemporary Amperex Technology Co. Ltd. (CATL) to develop batteries with a longer lifespan in a bid to cut the cost of powering electric cars.
The pair signed the partnership Thursday. It will focus on researching ways to lower the “full life cycle” cost of batteries and aim to develop batteries with a warranty period of up to 15 years without a mileage limit.
With the growing adoption of new-energy vehicles, automakers and battery manufacturers are concentrating on improving battery energy density, charge and discharge rates and other performance metrics to address “range anxiety.”
Chinese electronics duo nosedive after graft busters detain chairman
Chengdu Screen Micro Electronics Co. Ltd. and Guoguang Electric Co. Ltd. Chengdu were sent plunging after Zhang Ya, the actual controller and chairman of both firms, was detained by graft investigators in North China’s Hebei province.
The companies — both listed on Shanghai’s Nasdaq-like STAR Market — said they were notified of Zhang’s situation on Monday by his family, according to exchange filings submitted Wednesday. They provided no further details.
Zhang was detained by a county-level supervisory commission, which is responsible for investigating suspected corruption, misuse of authority and various other serious violations of law.
Huawei’s enterprise business revenue in China grows over 25% in 2023
Huawei Technologies Co. Ltd. saw rapid growth of over 25% in its enterprise business in China last year, as its number of partners jumped 15% past 40,000, said Wang Tao, executive director of the firm’s ICT Infrastructure Managing Board.
Wang reported at the company’s Partner Conference in Shenzhen Thursday that Huawei maintained robust operations in 2023, with revenue growing some 9% to more than 700 billion yuan ($97.3 billion).
Biotech trade group will support a U.S. bill limiting China ties
BIO, the world’s largest trade group for the biotechnology industry, said it will support the U.S.’ Biosecure Act that aims to sever ties with some of China’s biggest health care companies — including WuXi AppTec Co. Ltd. — over reports they have ties to the government.
The group, whose leaders have discussed the serious consequences such a move may have on the U.S. pharmaceutical industry and the supply of medicine globally, is taking steps to revoke WuXi AppTec’s membership in the organization, according to a statement.