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Jefferies: Volkswagen (VWAGY.US) plans to lay off over 15,000 employees when it closes factories.

Jefferies analysts said that Volkswagen (VWAGY.US) may forcefully proceed with factory closures this year, paving the way for the layoffs of over 15,000 people. Jefferies quoted Volkswagen executives on Monday saying that the carmaker could shut down production facilities without needing approval from the supervisory board, which could lead to provisions as high as 4 billion euros (4.4 billion dollars) in the fourth quarter. The board has previously obstructed management's restructuring efforts. Analysts stated in a report, "The unions should feel the pressure to reach a new agreement, and Volkswagen will have the ability to force layoffs." The report referenced comments made by Volkswagen during a North American roadshow. "But unions can only strike over wage issues, not over factory closures or layoffs if there is no contractual protection." A Volkswagen spokesperson declined to comment. The German manufacturer is reportedly struggling with high costs and facing more intense competition from companies like Tesla, Inc. (TSLA.US) and Chinese automakers led by BYD Company Limited (01211). Earlier this month, the company canceled employment protection measures in Germany that had been in place for 30 years after warning it may have to close a plant in Germany for the first time. The decision to terminate the employment protection agreement has led to lengthy conflicts between Volkswagen and labor representatives. The company's layoff plans are more challenging to implement elsewhere, as half of its supervisory board seats are held by labor representatives and the state of Lower Saxony, which owns a 20% stake, often sides with labor unions. Jefferies stated that Volkswagen is considering closing two to three plants and potentially up to five German plants. Volkswagen management told analysts that they have no alternative plan if negotiations with the union on improving competitiveness fail.
16/09/2024

Targeting the growth potential of the Greater Bay Area, Citigroup (C.US) plans to recruit more employees in Hong Kong.

Andy Sieg, the wealth manager of Citigroup (C.US), stated that the company plans to increase its staff in Hong Kong due to its positive outlook on Hong Kong and its connections with the surrounding Greater Bay Area. Sieg said in an interview in Hong Kong on Monday, "You will see us adding talent on a selective basis." "When we see the number of new clients that the average banker in this region is bringing in, we have confidence in adding more clients in the market." Sieg mentioned that these employees will be based in Hong Kong but will serve a wider region, although he declined to provide specific numbers. Citigroup has been pushing into the Asian wealth market, competing with rivals such as UBS Group AG and HSBC HOLDINGS. The Wall Street bank poached Sieg from Bank of America Corp in 2023 to lead its wealth management business, which is a key pillar of CEO Jane Fraser's turnaround plan. According to Sieg, the bank's investment business in Hong Kong grew by nearly 20% year-on-year. This is his third visit to Hong Kong since taking office last September. He will also visit Singapore and Shanghai. Previously, Citigroup carried out massive layoffs globally to boost the bank's lagging return on investment. The bank also exited consumer banking operations in markets such as China, India, Thailand, and the Philippines. Sieg said he is "not concerned" about not having a broad client base because although the business scope is narrower, it is also "deeper." He mentioned that retail banking in Hong Kong is "booming." Driven by growth in non-interest income, Citigroup's wealth revenue in the second quarter increased by 2% year-on-year to $1.8 billion.
16/09/2024

Union strikes may become a protracted battle, Boeing Company's financial difficulties are feared to worsen further.

The union leader of Boeing Company (BA.US), Jon Holden, said in an interview on Saturday that the strike "could last for a while" as workers believe they can get higher wages and better pension benefits. International Association of Machinists and Aerospace Workers (IAM) more than 30,000 members started the strike last Friday after overwhelmingly voting down a new contract. IAM produces Boeing Company's best-selling 737 MAX and other jetliners in Seattle and Portland. Boeing Company and union negotiators will return to the bargaining table this week for negotiations supervised by a federal mediator, after over 94% of workers rejected an initial contract proposal supported by Holden. Holden said that his members prioritize higher wage increases and restoration of the fixed pension plan, which IAM lost in the last round of negotiations with Boeing Company ten years ago. Holden said in the interview: "We have the most leverage and the most power at the most appropriate time in our history. Our members want us to utilize it." "I know our members are confident. They stand shoulder to shoulder, ready. So the strike could last for a while." The initial agreement included a 25% salary increase over four years and a commitment to build the next commercial plane in the Seattle area if the aircraft project is launched within the contract's four years. Union members expressed dissatisfaction with years of stagnant wages and rising living costs, stating that Boeing Company's proposal to eliminate performance bonuses would reduce overall wage growth by half. Boeing Company's stock fell 3.7% last Friday. The stock has fallen by nearly 40% this year, with a market value loss of about $58 billion. An extended strike could further damage Boeing Company's financial condition, as the company is already struggling with $60 billion in debt. A prolonged halt in aircraft production would also put pressure on airlines that operate Boeing Company aircraft and manufacturers of aircraft components.
16/09/2024

Treatment for multiple types of cancer! Roche (RHHBY.US) PD-L1 monoclonal antibody subcutaneous formulation treatment only takes 7 minutes.

Roche (RHHBY.US) announced that its targeted PD-L1 antibody Tecentriq Hybreza (atezolizumab and hyaluronidase) subcutaneous formulation has been approved by the US FDA for the treatment of all adult indications approved for Tecentriq intravenous injection, including certain types of lung cancer, liver cancer, skin cancer, and soft tissue cancer. According to the press release, Tecentriq Hybreza is the first FDA-approved PD-1/PD-L1 inhibitor subcutaneous injection therapy. Compared to traditional intravenous infusion which takes 30-60 minutes, Tecentriq Hybreza subcutaneous injection only takes about 7 minutes, providing patients with a more convenient treatment option. Tecentriq is a targeted PD-L1 monoclonal antibody developed by Roche. PD-L1 is a protein expressed on tumor cells and tumor-infiltrating immune cells. By inhibiting PD-L1, Tecentriq can activate T cells to achieve therapeutic effects on tumors. Currently, the drug has been approved globally for the treatment of various cancers including non-small cell lung cancer (NSCLC), small cell lung cancer (SCLC), hepatocellular carcinoma, urothelial carcinoma, PD-L1-positive metastatic triple-negative breast cancer, and BRAF V600 mutation-positive advanced melanoma.
15/09/2024

Lilly (LLY.US) heavy new drug "telaprevir" new indications have applied for listing in China.

The latest announcement on the website of China's National Medical Products Administration Drug Evaluation Center (CDE) reveals that Eli Lilly's blockbuster drug GIP/GLP-1 receptor dual agonist tirzepatide injection has applied for a new indication and has been accepted for review, but the specific indication has not been disclosed. According to the official website of CDE, this is the third application for market approval of tirzepatide in China. Public information shows that tirzepatide is a glucose-dependent insulinotropic peptide (GIP) and glucagon-like peptide-1 (GLP-1) receptor agonist that is injected once a week. The product was approved by the FDA in May 2022 and November 2023 for the treatment of diabetes as well as obesity and overweight patients. In China, tirzepatide was approved for its first indication for blood sugar control in adult type 2 diabetes patients in May this year. In July, the product was approved by the NMPA for long-term weight management in overweight patients with obesity or at least one weight-related comorbidity.
15/09/2024

Is the new feature of Apple Inc. (AAPL.US) a pie in the sky or a real deal?

Apple Inc. (AAPL.US) announced a third-quarter revenue of $85.8 billion for the fiscal year 2024, not only a 5% year-on-year increase but also surpassing the general expectation of $84.4 billion. It is particularly worth noting that this growth occurred in Apple Inc.'s seasonally weakest quarter. Thanks to its operational leverage, AAPL was able to achieve a GAAP earnings per share of $1.4, an 11% year-on-year increase, also surpassing the general expectation of $1.34 (although down by about $0.13 quarter-over-quarter). The better-than-expected performance and no significant negative guidance changes led to a collective adjustment in fourth-quarter earnings: Apple Inc.'s geographical expansion strategy has indeed proven to be effective, as evidenced by record revenue in over twenty countries, including major markets like Canada, Mexico, Germany, and the UK, as well as growth economies like India, the Philippines, and Thailand. These markets helped offset the decline in sales in the Chinese market (down 7% year-on-year), which was expected due to "economic and competitive pressure." Sales in the Americas (up 7% year-on-year) and Europe (up 8% year-on-year) also grew, showing the company's continued utilization of diverse market opportunities. The company's services division generated a record revenue of approximately $24.2 billion, up 14% year-on-year, further reducing its reliance on hardware cycles, which is good news for investors. Although its market share has slightly decreased from 16.6% to 15.8% compared to the same period last year, Apple Inc. still leads in global smartphone revenue and profit share. The iPhone generated $39.3 billion in revenue, accounting for 46% of total sales, a slight year-on-year decline of less than 1%. Additionally, Mac sales revenue increased (revenue of $7 billion, up 3% year-on-year) and iPad sales revenue increased by 24% to $7.2 billion, demonstrating Apple Inc.'s strength in the computing sector. However, the financial data for the third quarter is now in the past. Regardless, as Apple Inc. holds its annual product launch event, this data will soon fade from people's view, with the main focus of the event as always centered on the iPhone. Although there were no major surprises, this event provided important details about the launch of Apple Intelligence, iPhone pricing, and new Visual Intelligence features. In a recent research report, Morgan Stanley analysts pointed out that Apple Inc. plans to introduce Apple Intelligence to around 40% of the iPhone installed base by the end of this year, increasing to over 70% by next year, in line with initial market expectations and indicating a slightly accelerated rollout. They added that the "70% installed base" might drive upgrades faster than expected, as consumers may choose to use their devices "future-facing" to embrace these new features. iOS 18 promises to make the iPhone more personalized and intelligent, which could drive future sales - at least on the surface, this appears to be true. The Apple Intelligence tool kit should focus on four use cases: Expression (new writing tools, emojis); Recalling memories (enhanced photo capture and editing features); Prioritization and focus (email/notification summaries); Command/control (updated Siri, better natural language processing, new settings and feature knowledge, new personal environments). In a survey conducted by AlphaWise Survey in the US (a proprietary source owned by Morgan Stanley), about 60% of iPhone users planning to upgrade in the next 12 months indicate that Apple Intelligence is crucial to their decision. Analysts concluded that this "underscores the importance of Apple Intelligence for iPhone 16 upgrades," but those planning to upgrade their iPhone would do so anyway, with or without Apple Intelligence features. Now, what truly matters for the market's further reaction to the iPhone 16 is early pre-order data and the subsequent launch of Apple Intelligence. In their August report, Argus Research analysts noted that while the company may currently lag behind peers like Alphabet Inc. Class C, Microsoft Corporation, and Meta in AI development, its focus on privacy and device processing capabilities could be a significant differentiator in the long run. From a technological innovation perspective, analysts have some concerns about the new features of Apple Intelligence, fearing a long-term decline in mobile carrier upgrade rates that has been observed for several years. These data indicate that people are keeping their devices for longer: whether for economic reasons, satisfaction with current technology, or a lack of compelling new features in the latest models, this trend is not healthy for Apple Inc. The seasonal sales data for Apple Inc. is expected to improve soon, but whether Apple Intelligence is enough to be a compelling reason for consumers to upgrade their devices remains to be seen. However, results will soon be visible. Now, let's talk about Apple Inc.'s valuation. The company's capital return strategy, including a large-scale stock repurchase authorization of $110 billion and systematic dividend increases (recently increased by 4% to $0.25 per share), is helping create shareholder value and valuation premiums.Price. However, the P/E ratio has been stretched too far.Even though we don't know what Apple Inc.'s price-earnings ratio is, the company has been generating positive cash flow for many years, so it can be valued using a DCF analysis. Regardless, analysts have added a significant premium to the sales figures for each forecast year, and have kept the forecast EBIT margin above 32% for the years 2026-2028. They have also kept other driving assumptions at default mode, reflecting long-term averages. The results from the operating model are as follows: Assuming a debt cost of 4% (risk-free rate of 3.5%, so the interest margin is small in this case), and assuming a MRP of 5%, as is typically done when evaluating any company. As a result, the calculated WACC is 9.5%, which is an appropriate discount rate under the current conditions. Apple Inc. currently has an EV/FCF price-earnings ratio of about 32.45 times, which is over 65% higher than its 10 year average level. It is expected that by the end of fiscal year 2028, this multiple will decrease to at least 30 times, somewhat returning to the mean. Taking all these factors into consideration, the fair value of Apple Inc. stock has been determined, based on all optimistic assumptions, which limits its intrinsic growth potential. The recent release of Apple Intelligence has sparked great interest among investors and users, but it is currently unclear how this will affect upgrades and expected sales data. It will be necessary to wait for pre-order data (delivery times) to determine to what extent this will change the game for Apple Inc. However, the stagnant post-payment upgrade rate trend looks somewhat ominous. The DCF valuation model indicates that even with a meaningful premium added to Apple Inc.'s consistent revenue figures and profit margins, the stock can at most receive a fair valuation.
14/09/2024

BitFuFu (FUFU.US) will attend the TOKEN2049 conference in Singapore.

According to reports, BitFuFu Inc. ("BitFuFu" or "the Company") (FUFU.US), a rapidly growing digital asset hashpower service provider and a leading global cloud mining service provider, will participate in the TOKEN2049 conference held in Singapore from September 18th to 19th, 2024. This is a highly anticipated global event in the cryptocurrency industry. TOKEN2049, as a global conference series, aims to bring together decision-makers in the crypto ecosystem, promote exchanges, establish collaborations, and collectively drive the future development of the industry. It is expected that the Singapore conference will attract more than 20,000 participants from over 7,000 companies and 150 countries, making it one of the largest crypto industry events globally. BitFuFu's CEO, Leo Lu, will represent the company at the conference and participate in a roundtable discussion on "Bitcoin Hashpower and HashFi in the New Situation," focusing on opportunities related to hashpower and Real World Assets (RWA) and other industry dynamics. Leo Lu said, "TOKEN2049 is a top event in the global blockchain community, and we are honored to share our insights and vision with industry leaders and participants here. With the continuous evolution of the cryptocurrency industry, BitFuFu always stays at the forefront of innovation, providing exceptional solutions for users worldwide."
14/09/2024

NaaS Technology, Inc. Sponsored ADR (NAAS.US) CEO Wang Yang: Focusing on self-driving car technology, AI algorithms help accurately match traffic energy supply and demand.

On September 13th, at the 2024 China Service Corporation International Trade Fair (referred to as SERV) in China, the "UAE-Beijing Economic Forum" was co-hosted by the UAE Embassy in China, Beijing Council for the Promotion of International Trade, and Chaoyang District Government. Founder and CEO of NaaS Technology, Inc. Sponsored ADR (NAAS.US), Wang Yang attended and delivered a speech. She stated that China's 3 trillion yuan transportation energy consumption market is accelerating its shift from oil to electricity, with fuel vehicle ownership expected to peak by 2025 and the number of electric vehicles surpassing fuel vehicles by 2035, with the two overlapping. This is the most certain opportunity in the next ten years. Currently, China is the world's largest country in terms of automobile ownership, as well as the largest in automobile sales, with automobile export volume just recently surpassing the global rankings. In 2023, the total retail sales of consumer goods in China exceeded 47 trillion yuan, and the transportation energy consumption market, which includes refueling and charging, is an easily overlooked hidden giant, second only to automobiles in terms of volume, exceeding categories such as catering, clothing, electronics, etc. Transitioning from fuel vehicles to electric vehicles, the new energy transformation of transportation energy is irreversible, reducing the external dependence on energy consumption on one hand, and with transport carbon emissions in China exceeding 10%, this proportion is expected to continue growing. Green development is an inevitable trend. Wang Yang stated that the traditional energy industry in China, especially the digitalization level of gas stations, is low and the efficiency of the entire industry chain is not high. In 2016, Nenglian entered the energy digital field, starting with services such as city distribution of logistics vehicles and supply services for commercial vehicles such as taxis, accumulating over 400 million registered users by the end of 2023, with over 100 million trading users and an annual order volume exceeding 500 million transactions. Nenglian has pre-installed refueling and charging services in the onboard systems of 80% of domestic OEMs such as BYD Company Limited, GAC, FAW-Volkswagen, Chang'an, Expression, Great Wall, Hyundai, Geely, Extreme, Nezha, Zhiji, etc., creating a nationwide integrated digital network of oil and electricity. Currently, the monthly new car sales penetration rate of electric vehicles in China has exceeded 50%, but the overall inventory percentage has just crossed the 7% mark, and compared to fuel vehicles, the pressure of future matching of supply and demand in transportation energy will become increasingly greater. In the first half of this year, the proportion of charging from electric vehicles in the total national electricity consumption for the first time exceeded 1.1%, posing a certain impact on the power grid. Considering the instability of upstream new energy generation from sources such as photovoltaics and wind energy, as well as the distribution characteristics of storage charging, micro-grid configuration, vehicle-grid interaction, etc., how to use AI algorithms to guide the matching of the entire energy system has become a topic of global attention. "Since 2016, focusing on the matching of transportation energy supply and demand, efficiency improvement, and the smartization of energy supply experiences, Nenglian has conducted a large amount of AI algorithm research and development. Last year, NaaS Technology, Inc. Sponsored ADR launched the NEF (NAAS Energy Fintech) system, which, based on artificial intelligence algorithms, achieved a comprehensive intelligent approach in selecting charging station locations, revenue evaluation, operational scheduling, and maintenance." In terms of the value brought by AI, Wang Yang also gave some more vivid examples, such as which scenarios and locations are suitable for building charging stations, intelligent matching between vehicles and charging stations or gas stations, whether charging stations are suitable for integrated energy storage devices, formulation of operational strategies for light storage charging, etc., where the answers are provided by AI algorithms. Looking further ahead, with the advent of the era of autonomous driving, the evolution of charging infrastructure will move towards the phase of Auto Power smart replenishment. Wang Yang revealed that Nenglian will continue to focus on energy supply for autonomous driving, expand the cooperation ecosystem in the new energy industry, and embed refueling and charging services into the central screens of smart cars, allowing owners to automatically and intelligently match with gas stations and charging stations, truly achieving higher efficiency and lower delivery costs.
14/09/2024

The review of Nippon Steel's acquisition of United States Steel Corporation (X.US) will end on September 23rd and may be further delayed or postponed until after the election.

The Committee on Foreign Investment in the United States (CFIUS) is currently reviewing the transaction of Nippon Steel Corporation acquiring United States Steel Corporation for $14.9 billion, and must decide by September 23 whether to recommend the White House to block the transaction. This is the second 90-day review conducted by CFIUS since Nippon Steel announced the acquisition in February 2021. If officials decide to extend the review period, this politically sensitive decision may be postponed until after the November 5 election. This deal has sparked high-profile opposition from political figures including current U.S. President Joe Biden, Democratic Vice President Kamala Harris, and former President Donald Trump. They generally oppose foreign ownership of United States Steel Corporation because the steel produced by the company is a key commodity used in the construction of ships, trains, and infrastructure. White House advisor Saloni Sharma stated that President Biden's position is that United States Steel Corporation must continue to be a company owned and operated domestically in the United States. Headquartered in Pennsylvania, a crucial swing state in presidential elections, United States Steel Corporation's workers union also supports Harris and opposes this deal. As the September 23 deadline approaches, the political factors and uncertainties surrounding the transaction have become the focus. In a letter on August 31, the committee indicated that the deal could jeopardize the security of United States Steel Corporation's supply, but both companies rebutted in a 100-page letter, claiming that the agreement would increase the output of United States Steel Corporation and requested an extension to address concerns. CFIUS and Nippon Steel declined to comment, and United States Steel Corporation did not respond to requests for comment. According to senior government officials, a decision is not expected to be made in the coming days. Furthermore, reports suggest that the decision may be delayed until after the election. Both companies hope that recent support for the deal can turn the tide, including a letter from business groups expressing concerns about the political pressure affecting the deal. CFIUS's strict reviews typically take 90 days, but companies often withdraw applications and resubmit them to have more time to address the committee's concerns, resetting the 90-day review period. Nippon Steel and United States Steel Corporation submitted their review application in March, and CFIUS allowed them to resubmit in June, starting the second 90-day review period with a deadline of September 23. Previously, executives from Nippon Steel met with the CEO of United States Steel Corporation on Wednesday to salvage the $14.9 billion acquisition plan. In response, the United States Steel Corporation Workers Union submitted a memo on Thursday to "stakeholders," including the White House, stating that they will not succumb to coercion and will resist Nippon Steel's final efforts to acquire United States Steel Corporation. The union also stated that the near $15 billion acquisition is a "doomed deal" and pledged to oppose any foreign ownership of the company. Union President Dave McCall expressed in the memo that union members and retirees continue to strongly oppose the deal.
14/09/2024

Encrypt "big player" MicroStrategy's largest move in three years: Spending a staggering $1.1 billion to acquire nearly 20,000 bitcoins.

MicroStrategy (MSTR.US) recently purchased approximately 18,300 bitcoins at a price of around $1.1 billion, marking the company's largest single investment in digital assets in over three years. According to a filing submitted to the U.S. Securities and Exchange Commission (SEC) last Friday, the enterprise software manufacturer completed this purchase between August 6 and September 12. It is worth noting that this is the largest bitcoin purchase made by MicroStrategy since the company announced the purchase of 19,452 bitcoins in February 2021. As of now, MicroStrategy's bitcoin holdings have reached approximately 244,800 bitcoins, with a total value of around $14 billion, accounting for nearly 1% of the total historical bitcoin issuance. In comparison, BlackRock, Inc.'s iShares Bitcoin Trust, the world's largest bitcoin fund, has assets totaling around $20 billion. With an $1.1 billion investment, bitcoin "whale" MicroStrategy has made its largest bitcoin acquisition in three years. The filing shows that the average purchase cost of MicroStrategy's bitcoins is around $38,585, with a total investment of approximately $9.45 billion. On Friday, the price of bitcoin remained relatively stable at around $57,880, and rose further after the U.S. stock market closed, breaking the $60,000 mark for the first time since the end of August, with gains of over 10% in the past 24 hours. At the time of writing, bitcoin is up 3.86% last week, trading at $60,079. Since 2020, MicroStrategy has been purchasing bitcoin as part of its capital allocation strategy, with the company's co-founder and chairman Michael Saylor stating that this move is to hedge against inflation risks. While Saylor has garnered support within the bitcoin community, few U.S. publicly traded companies, apart from a few such as Tesla, Inc., choose to hold such volatile cryptocurrencies on their balance sheets. To fund its recent bitcoin purchases, MicroStrategy raised funds through issuing and selling common stock. In August of this year, the company implemented a 1:10 stock split to make its stock more accessible to investors and employees. This year, MicroStrategy's stock price has more than doubled, outperforming the approximately 40% increase in bitcoin prices during the same period.
14/09/2024
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