China kicks off new Shanghai tech board as it tests new ways to improve volatile stock market

Zhang Hengwei | China News Service | VCG via Getty ImagesChina is trying again to boost the credibility of its volatile stock market. But retail participation has been relatively high, leading to much speculative activity that has caused many to call China’s stock markets a casino. It’s a very different circumstance given the Chinese financial market evolution, but I think it is meaningful. The new stock board is aimed at domestic investors, with minimal opportunity for foreign participation rig


Zhang Hengwei | China News Service | VCG via Getty ImagesChina is trying again to boost the credibility of its volatile stock market. But retail participation has been relatively high, leading to much speculative activity that has caused many to call China’s stock markets a casino. It’s a very different circumstance given the Chinese financial market evolution, but I think it is meaningful. The new stock board is aimed at domestic investors, with minimal opportunity for foreign participation rig
China kicks off new Shanghai tech board as it tests new ways to improve volatile stock market Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-22  Authors: evelyn cheng
Keywords: news, cnbc, companies, stock, improve, tech, financial, volatile, tests, shanghai, kicks, companies, major, markets, chinese, ways, china, board, market, securities


China kicks off new Shanghai tech board as it tests new ways to improve volatile stock market

Chairman of the China Securities Regulatory Commission Yi Huiman presides over the launch ceremony of the SSE STAR Market or its Nasdaq-style tech board during the 11th Lujiazui Forum 2019 on June 13, 2019 in Shanghai, China. Zhang Hengwei | China News Service | VCG via Getty Images

China is trying again to boost the credibility of its volatile stock market. On Monday, China launched a new Nasdaq-style tech board — the Science and Technology Innovation Board, or “STAR Market” — on which 25 companies were listed, as the country attempts to address investor concerns like market volatility and lack of governance. China boasts the world’s second-largest equity market, just behind the U.S. More foreign capital is expected to flow into mainland Chinese stocks with their inclusion in major investment indexes. But retail participation has been relatively high, leading to much speculative activity that has caused many to call China’s stock markets a casino. Governance is also lacking. In the last few months, some major publicly-listed companies have reported executive criminal detentions, or the disappearance of billions of dollars that cannot be explained. In the meantime, Beijing would also like to keep its best companies listed at home. The country has produced some of the world’s largest technology companies, but they have chosen to list overseas. That’s partly due to stringent profitability requirements at home, and the brand credibility offered by markets such as New York or Hong Kong.

Pilot program

China’s chief securities regulator Yi Huiman has billed the new stock board as a pilot program, to try out new practices before implementation elsewhere. The focus is on valuable industries with major growth potential, such as high-tech equipment manufacturing and biotechnology. The board also creates a domestic investment channel for companies operating in areas of national security that cannot receive foreign capital.

China is centralized, different from the U.S. and Europe. It’s a very different circumstance given the Chinese financial market evolution, but I think it is meaningful. Andy Nybo director at Burton-Taylor International Consulting

Some of the key characteristics of the board are: Allowing some companies of a certain size to list before they have turned a profit

Making it easier for a company to go public by relying on a registration, rather than waiting for regulator approval — 57 companies went public on the Shanghai A-share market last year, versus 143 on Hong Kong’s main board, according to PwC.

Requiring individual investors to have assets of at least 500,000 yuan ($72,655) that can be invested, and two years of securities trading experience. All this sounds promising, except it’s the third time in 10 years that China has established a new major equity market. The last time was in 2013, when the over-the-counter New Third Board began operations. In 2009, the ChiNext was launched in Shenzhen. Neither has been able to gain the same investor interest as the primary A-share market. Anecdotally, many Chinese venture capital firms and other primary market investors are hopeful about a new platform that could allow them to exit investments more easily, and at a high valuation. The China Equity Strategy team at UBS Securities pointed out in a note that the implied average price-to-earnings ratio for the first batch of companies is 53, versus 49 for the ChiNext index.

But many investment funds are preferring to wait and see whether the new board will live up to expectations before commenting, or participating. The most critical thing the Sci-Tech Innovation Board has going for it is public support from Chinese President Xi Jinping, who announced plans for the board last November. Regulators and market participants took just over half a year to put everything together for Monday’s listing. The question is how much of that momentum will continue. “China is centralized, different from the U.S. and Europe. It’s a very different circumstance given the Chinese financial market evolution, but I think it is meaningful,” said Andy Nybo, director at Burton-Taylor International Consulting, which conducts financial markets research. “Regulators, political forces, will try to influence and support (the board) to see it’s a successful initiative.”

Individual vs institutional investors

The new stock board plays into Beijing’s general effort to build up its domestic financial system, which has far less international clout than the overall economy. China’s stock market, in its modern rendition, has existed for less than three decades, while the history of the New York Stock Exchange traces back more than 200 years. “(In China,) we’re likely to move from a world of largely lending-based financing to a little bit more of capital markets -based financing,” Peter Reynolds, partner at management consulting firm Oliver Wyman. “That journey requires a bit of infrastructure to sit beneath it, and parts of that infrastructure can be developed now and (is) being tested.” As an experiment, the Sci-Tech Innovation Board is quite small from a relative capital perspective. Heading into Monday’s launch, the 25 companies were expected to raise 37 billion yuan, according to a report by state news agency Xinhua. In contrast, the Shanghai Stock Exchange has a market valuation of $4.6 trillion, according to the World Federation of Exchanges. The new stock board is aimed at domestic investors, with minimal opportunity for foreign participation right now. But as a high-profile pilot program, its development bears watching for how China’s stock markets might look in the future.

What we are heading towards is a full confrontation … Can’t have a free market and a totally controlled market at the same time. James Early CEO of Stansberry China


Company: cnbc, Activity: cnbc, Date: 2019-07-22  Authors: evelyn cheng
Keywords: news, cnbc, companies, stock, improve, tech, financial, volatile, tests, shanghai, kicks, companies, major, markets, chinese, ways, china, board, market, securities


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Trump’s blacklisting of Huawei is hurting American chip firms

Components are displayed on a circuit board at the Qualcomm Inc. booth at the Mobile World Congress Shanghai in Shanghai, China, on Thursday, June 28, 2018. U.S. semiconductor stocks have been hit hard in the past month following President Donald Trump’s administration’s blacklisting of Huawei, which has raised the specter of wider restrictions to Chinese firms’ access to American technology. Semiconductors are one of America’s biggest tech exports and China is a crucial market because of the am


Components are displayed on a circuit board at the Qualcomm Inc. booth at the Mobile World Congress Shanghai in Shanghai, China, on Thursday, June 28, 2018. U.S. semiconductor stocks have been hit hard in the past month following President Donald Trump’s administration’s blacklisting of Huawei, which has raised the specter of wider restrictions to Chinese firms’ access to American technology. Semiconductors are one of America’s biggest tech exports and China is a crucial market because of the am
Trump’s blacklisting of Huawei is hurting American chip firms Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-05  Authors: arjun kharpal
Keywords: news, cnbc, companies, chinese, firms, blacklisting, shanghai, hit, american, trumps, china, month, world, hurting, huawei, permission, chip


Trump's blacklisting of Huawei is hurting American chip firms

Components are displayed on a circuit board at the Qualcomm Inc. booth at the Mobile World Congress Shanghai in Shanghai, China, on Thursday, June 28, 2018.

U.S. semiconductor stocks have been hit hard in the past month following President Donald Trump’s administration’s blacklisting of Huawei, which has raised the specter of wider restrictions to Chinese firms’ access to American technology.

Semiconductors are one of America’s biggest tech exports and China is a crucial market because of the amount of electronics manufacturers relying on U.S. chips.

Trump signed an executive order last month that gave permission to Commerce Secretary Wilbur Ross to block transactions that involve information or communications technology that “poses an unacceptable risk” to U.S. national security. Huawei was then put on a blacklist that requires American firms to get permission to sell to the Chinese networking equipment and smartphone giant.

The move has hit the businesses and share prices of U.S. chip firms.


Company: cnbc, Activity: cnbc, Date: 2019-06-05  Authors: arjun kharpal
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Tesla is investigating the apparent explosion of a parked car in Shanghai

Tesla said Monday it immediately sent a team to investigate an apparent explosion of one of its cars that occurred in Shanghai on Sunday evening local time. There are no known casualties at this time, the electric car company said in a Chinese-language post on Weibo, China’s version of Twitter. It was not immediately clear which Tesla model was affected, but reports indicated the car was parked at the time of the fire. In January, Chicago law firm Corboy & Demetrio said that there have been at l


Tesla said Monday it immediately sent a team to investigate an apparent explosion of one of its cars that occurred in Shanghai on Sunday evening local time. There are no known casualties at this time, the electric car company said in a Chinese-language post on Weibo, China’s version of Twitter. It was not immediately clear which Tesla model was affected, but reports indicated the car was parked at the time of the fire. In January, Chicago law firm Corboy & Demetrio said that there have been at l
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Company: cnbc, Activity: cnbc, Date: 2019-04-22  Authors: evelyn cheng
Keywords: news, cnbc, companies, version, worldwide, tesla, model, vehicles, parked, explosion, immediately, car, weibo, investigating, shanghai, apparent


Tesla is investigating the apparent explosion of a parked car in Shanghai

Tesla said Monday it immediately sent a team to investigate an apparent explosion of one of its cars that occurred in Shanghai on Sunday evening local time.

There are no known casualties at this time, the electric car company said in a Chinese-language post on Weibo, China’s version of Twitter. Tesla also said it is in active communication and cooperation with relevant departments about the situation.

It was not immediately clear which Tesla model was affected, but reports indicated the car was parked at the time of the fire.

In January, Chicago law firm Corboy & Demetrio said that there have been at least a dozen cases worldwide in the last five years of Model S batteries exploding in collisions and parked vehicles. The statement was part of a lawsuit filed against Tesla that alleged a 2014 Model S had a defective battery pack, causing an 18-year-old passenger to die in an accident last year, Reuters reported.

—Reuters contributed to this report.


Company: cnbc, Activity: cnbc, Date: 2019-04-22  Authors: evelyn cheng
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Aston Martin debuts its first electric car—take a look at the Rapid E

Aston Martin, a luxury British car manufacturer, debuted its new and first all-electric production car, the Aston Martin Rapide E, at Shanghai Motor Show in Shanghai, China, on April 16. There will only be 155 units made, according to Aston Martin. Though the price is only available upon application to buy, according to the website, it’s expected to cost around $330,000, according to CNN. There are twin rear-mounted electric motors, which produce 612 horsepower. All that gives the car a max spee


Aston Martin, a luxury British car manufacturer, debuted its new and first all-electric production car, the Aston Martin Rapide E, at Shanghai Motor Show in Shanghai, China, on April 16. There will only be 155 units made, according to Aston Martin. Though the price is only available upon application to buy, according to the website, it’s expected to cost around $330,000, according to CNN. There are twin rear-mounted electric motors, which produce 612 horsepower. All that gives the car a max spee
Aston Martin debuts its first electric car—take a look at the Rapid E Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-04-18  Authors: jimmy im, bloomberg, getty images, aston martin
Keywords: news, cnbc, companies, car, martin, cartake, hour, according, look, shanghai, 155, miles, rapid, electric, rapide, zero, aston, debuts


Aston Martin debuts its first electric car—take a look at the Rapid E

Aston Martin, a luxury British car manufacturer, debuted its new and first all-electric production car, the Aston Martin Rapide E, at Shanghai Motor Show in Shanghai, China, on April 16. There will only be 155 units made, according to Aston Martin.

Though the price is only available upon application to buy, according to the website, it’s expected to cost around $330,000, according to CNN.

The four-door Rapide E has a 6-liter, V12-engine and is powered by an 800V battery (encased in a carbon fiber and Kevlar casing) with a 65kWh capacity. There are twin rear-mounted electric motors, which produce 612 horsepower. All that gives the car a max speed of 155 miles per hour, and it can go from zero to 60 miles per hour in four seconds.


Company: cnbc, Activity: cnbc, Date: 2019-04-18  Authors: jimmy im, bloomberg, getty images, aston martin
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Shanghai stocks plummet more than 4 percent: ‘China’s trade recession has started to emerge’

Shares in mainland China crumbled on Friday after Chinese trade data missed expectations by a wide margin. China on Friday reported worse than expected trade data for the month of February. China’s February trade balance was also significantly weaker than expected at $4.12 billion. The country’s trade balance in January had been $39.16 billion. In a note on Friday, ANZ said the release of the trade numbers reinforced its view that “China’s trade recession has started to emerge.”


Shares in mainland China crumbled on Friday after Chinese trade data missed expectations by a wide margin. China on Friday reported worse than expected trade data for the month of February. China’s February trade balance was also significantly weaker than expected at $4.12 billion. The country’s trade balance in January had been $39.16 billion. In a note on Friday, ANZ said the release of the trade numbers reinforced its view that “China’s trade recession has started to emerge.”
Shanghai stocks plummet more than 4 percent: ‘China’s trade recession has started to emerge’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-03-08  Authors: eustance huang, weizhen tan, str, afp, getty images
Keywords: news, cnbc, companies, chinese, note, sentiment, shares, balance, chinas, release, expected, emerge, data, trade, shenzhen, shanghai, plummet, started, stocks, recession


Shanghai stocks plummet more than 4 percent: 'China's trade recession has started to emerge'

Shares in mainland China crumbled on Friday after Chinese trade data missed expectations by a wide margin.

All major Chinese indexes closed the day deep in negative territory. The Shanghai composite plunged 4.4 percent, the Shenzhen component tumbled 3.248 percent and the Shenzhen composite dropped 3.791 percent. The CSI 300, which tracks the largest shares on the mainland, plummeted nearly 4 percent.

The significant losses in Chinese stocks came as overall sentiment in Asia was downbeat for the day. MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1.5 percent, as of 3:14 p.m. HK/SIN.

China on Friday reported worse than expected trade data for the month of February. Dollar-denominated exports plunged 20.7 percent for the month from a year ago, missing economists’ expectations of a 4.8 percent decline, according to a Reuters poll. February’s dollar-denominated imports, meanwhile, fell 5.2 percent from the prior year, missing an expected 1.4 percent fall.

China’s February trade balance was also significantly weaker than expected at $4.12 billion. Economists polled by Reuters had expected the overall trade balance to come in at $26.38 billion. The country’s trade balance in January had been $39.16 billion.

In a note on Friday, ANZ said the release of the trade numbers reinforced its view that “China’s trade recession has started to emerge.”

China will require a stronger dose of stimulus to support growth, said Raymond Yeung, ANZ Research’s chief economist for Greater China.

“Looking ahead, we find little reason to expect a rebound in the near term on the back of a sluggish global electronics cycle,” he explained in the note, adding that Asia’s export figures are pointing to a “sobering” outlook.

That sentiment was echoed by Louis Kuijs, head of Asia economics at Oxford Economics.

“We expect subdued global trade and the impact of US tariffs to continue to weigh on exports in the coming months, although the tariff suspension by the US and China and increased likelihood of a more lasting agreement should help eventually,” Kuijs said in a note following Friday’s data release.

— CNBC’s Huileng Tan contributed to this report.


Company: cnbc, Activity: cnbc, Date: 2019-03-08  Authors: eustance huang, weizhen tan, str, afp, getty images
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Tesla enters into agreement with Chinese lenders for Shanghai Gigafactory

Tesla said on Thursday it signed an agreement with lenders in China for a 12-month facility of up to 3.5 billion yuan ($521 million) for the electric carmaker’s Gigafactory in Shanghai. The company broke ground on the factory in January, and a Shanghai city government official said on Wednesday that the facility is expected to be completed in May. Tesla has said that the Gigafactory will cost around $2 billion. Producing cars locally is likely to help the company minimize the impact of the U.S.-


Tesla said on Thursday it signed an agreement with lenders in China for a 12-month facility of up to 3.5 billion yuan ($521 million) for the electric carmaker’s Gigafactory in Shanghai. The company broke ground on the factory in January, and a Shanghai city government official said on Wednesday that the facility is expected to be completed in May. Tesla has said that the Gigafactory will cost around $2 billion. Producing cars locally is likely to help the company minimize the impact of the U.S.-
Tesla enters into agreement with Chinese lenders for Shanghai Gigafactory Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-03-07  Authors: getty images
Keywords: news, cnbc, companies, electric, agreement, shanghai, cars, gigafactory, company, xpeng, chinese, lenders, yuan, tesla, enters, facility, prices, help


Tesla enters into agreement with Chinese lenders for Shanghai Gigafactory

Tesla said on Thursday it signed an agreement with lenders in China for a 12-month facility of up to 3.5 billion yuan ($521 million) for the electric carmaker’s Gigafactory in Shanghai.

The company broke ground on the factory in January, and a Shanghai city government official said on Wednesday that the facility is expected to be completed in May.

Tesla has said that the Gigafactory will cost around $2 billion.

Producing cars locally is likely to help the company minimize the impact of the U.S.-China trade war, which has forced Tesla to adjust prices of its U.S.-made cars in China.

Keeping prices in check will also help Tesla fend off competition from a swathe of domestic electric vehicle startups such as Nio Inc, Byton and XPeng Motors.


Company: cnbc, Activity: cnbc, Date: 2019-03-07  Authors: getty images
Keywords: news, cnbc, companies, electric, agreement, shanghai, cars, gigafactory, company, xpeng, chinese, lenders, yuan, tesla, enters, facility, prices, help


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Tesla enters into agreement with Chinese lenders for Shanghai Gigafactory

Tesla said on Thursday it signed an agreement with lenders in China for a 12-month facility of up to 3.5 billion yuan ($521 million) for the electric carmaker’s Gigafactory in Shanghai. The company broke ground on the factory in January, and a Shanghai city government official said on Wednesday that the facility is expected to be completed in May. Tesla has said that the Gigafactory will cost around $2 billion. Producing cars locally is likely to help the company minimize the impact of the U.S.-


Tesla said on Thursday it signed an agreement with lenders in China for a 12-month facility of up to 3.5 billion yuan ($521 million) for the electric carmaker’s Gigafactory in Shanghai. The company broke ground on the factory in January, and a Shanghai city government official said on Wednesday that the facility is expected to be completed in May. Tesla has said that the Gigafactory will cost around $2 billion. Producing cars locally is likely to help the company minimize the impact of the U.S.-
Tesla enters into agreement with Chinese lenders for Shanghai Gigafactory Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-03-07  Authors: getty images
Keywords: news, cnbc, companies, help, chinese, prices, tesla, agreement, facility, electric, gigafactory, yuan, shanghai, enters, lenders, cars, xpeng, company


Tesla enters into agreement with Chinese lenders for Shanghai Gigafactory

Tesla said on Thursday it signed an agreement with lenders in China for a 12-month facility of up to 3.5 billion yuan ($521 million) for the electric carmaker’s Gigafactory in Shanghai.

The company broke ground on the factory in January, and a Shanghai city government official said on Wednesday that the facility is expected to be completed in May.

Tesla has said that the Gigafactory will cost around $2 billion.

Producing cars locally is likely to help the company minimize the impact of the U.S.-China trade war, which has forced Tesla to adjust prices of its U.S.-made cars in China.

Keeping prices in check will also help Tesla fend off competition from a swathe of domestic electric vehicle startups such as Nio Inc, Byton and XPeng Motors.


Company: cnbc, Activity: cnbc, Date: 2019-03-07  Authors: getty images
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Shanghai stocks are set to jump another 10 percent in wake of Chinese stimulus: Credit Suisse

China’s benchmark stock index could rise another 10 percent on the back of “market positive” Chinese policy announcements, John Woods, chief investment officer for Asia Pacific at Credit Suisse, said Wednesday. Woods’ comments to CNBC came in reaction to Chinese Premier Li Keqiang’s speech Tuesday at the National People’s Congress, China’s legislature. In response, Li unveiled stimulus measures,including infrastructure spending and cuts in taxes and fees worth nearly 2 trillion yuan ($289.28 bil


China’s benchmark stock index could rise another 10 percent on the back of “market positive” Chinese policy announcements, John Woods, chief investment officer for Asia Pacific at Credit Suisse, said Wednesday. Woods’ comments to CNBC came in reaction to Chinese Premier Li Keqiang’s speech Tuesday at the National People’s Congress, China’s legislature. In response, Li unveiled stimulus measures,including infrastructure spending and cuts in taxes and fees worth nearly 2 trillion yuan ($289.28 bil
Shanghai stocks are set to jump another 10 percent in wake of Chinese stimulus: Credit Suisse Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-03-06  Authors: kelly olsen, visual china group, getty images
Keywords: news, cnbc, companies, wake, credit, consumer, woods, stocks, market, infrastructure, shanghai, suisse, jump, positive, growth, cuts, set, sectors, chinese, think, stimulus, li


Shanghai stocks are set to jump another 10 percent in wake of Chinese stimulus: Credit Suisse

China’s benchmark stock index could rise another 10 percent on the back of “market positive” Chinese policy announcements, John Woods, chief investment officer for Asia Pacific at Credit Suisse, said Wednesday.

Woods’ comments to CNBC came in reaction to Chinese Premier Li Keqiang’s speech Tuesday at the National People’s Congress, China’s legislature.

Li highlighted risks threatening the world’s second-largest economy as the government lowered its economic growth target range to between 6 percent and 6.5 percent.

In response, Li unveiled stimulus measures,including infrastructure spending and cuts in taxes and fees worth nearly 2 trillion yuan ($289.28 billion). Those included cuts in the value-added tax rate for manufacturing, transportation and construction.

“We took the decisions as being market positive,” said Woods. “We think that the focus on infrastructure clearly lends itself to those commodities and equities which are in that space and we think will perform well.”

He added that the VAT reductions will have a positive impact on a host of sectors, including consumer staples, consumer discretionary, materials and industrials and energy.

“Those are the sectors which our analysis suggests will benefit with an uptick in earnings growth of between 2 and 3 percent, which is meaningful, which is substantial,” Woods said.

“So more broadly, the Shanghai composite I think’s got another 10 percent upside before I start to take profit,” he said. “But, of course, if the retail investor starts to engage, it could move substantially higher.”

Woods added that he was impressed that the legislature was focused on the private sector: “To me, that’s the main takeaway,” he said.


Company: cnbc, Activity: cnbc, Date: 2019-03-06  Authors: kelly olsen, visual china group, getty images
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Tesla is lining up about $2 billion in loans for Shanghai Gigafactory: analyst report

Tesla is lining up about $2 billion (more than 13 billion RMB) from Chinese lenders to build out its massive battery and car plant in Shanghai, according to research from JL Warren Capital. We’ve got import duties, we’ve got transport costs, we’ve got higher costs of labor here.” Musk said in the fourth-quarter earnings call that Tesla would need “something in the order of $0.5 billion in CapEx to get to the 3,000 vehicle rate in Shanghai.” JL Warren said the first stage of financing will likely


Tesla is lining up about $2 billion (more than 13 billion RMB) from Chinese lenders to build out its massive battery and car plant in Shanghai, according to research from JL Warren Capital. We’ve got import duties, we’ve got transport costs, we’ve got higher costs of labor here.” Musk said in the fourth-quarter earnings call that Tesla would need “something in the order of $0.5 billion in CapEx to get to the 3,000 vehicle rate in Shanghai.” JL Warren said the first stage of financing will likely
Tesla is lining up about $2 billion in loans for Shanghai Gigafactory: analyst report Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-02-28  Authors: lora kolodny, source, shanghai municipal peoples government, eunice yoon
Keywords: news, cnbc, companies, billion, stage, weve, rate, lining, tesla, china, bank, shanghai, gigafactory, analyst, chinese, warren, loans, report


Tesla is lining up about $2 billion in loans for Shanghai Gigafactory: analyst report

Tesla is lining up about $2 billion (more than 13 billion RMB) from Chinese lenders to build out its massive battery and car plant in Shanghai, according to research from JL Warren Capital.

JL Warren, a New York-based investment research firm that focuses on Chinese companies, as well as U.S. firms with significant exposure in China, wrote in a report last week that it expects backers of the Shanghai Gigafactory to include Shanghai Pudong Development Bank, Industrial and Commercial Bank of China, China Construction Bank and Agricultural Bank of China.

China represents a critical growth market for Tesla, and CEO Elon Musk talked up the company’s plans there on its latest earnings call in January.

“We need to bring the Shanghai factory online,” Musk said. “I think that’s the biggest variable for getting to 500,000-plus a year. Our car is just very expensive going into China. We’ve got import duties, we’ve got transport costs, we’ve got higher costs of labor here.”

According to JL Warren, which also tracks Chinese companies listed in the U.S., about $500 million (3.3 billion RMB) of Tesla’s new financing should apply to the first stage of the Shanghai Gigafactory build, with the total project loan amounting to about $2 billion.

Musk said in the fourth-quarter earnings call that Tesla would need “something in the order of $0.5 billion in CapEx to get to the 3,000 vehicle rate in Shanghai.”

JL Warren said the first stage of financing will likely have a 3.9 percent interest rate, below the People’s Bank of China benchmark rate of 4.35 percent. That should help Tesla get its assembly line running to produce its initial 250,000 lower-end Model 3 electric sedans.


Company: cnbc, Activity: cnbc, Date: 2019-02-28  Authors: lora kolodny, source, shanghai municipal peoples government, eunice yoon
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Tesla is betting big on China, and here’s what Elon Musk had to say about it

And as Deepak was saying, hooking up a very competitive debt financing in China really extremely compelling interest rates and so we do not expect that to be a capital drain on the company.” Tesla has the first wholly owned manufacturing facility in China of any automotive company. And in China, which is the biggest market for EV’s, we’ve never had any subsidies or tax incentives for vehicles. So it’s very important to get those cars especially to China as soon as possible. — Elon MuskWATCH: El


And as Deepak was saying, hooking up a very competitive debt financing in China really extremely compelling interest rates and so we do not expect that to be a capital drain on the company.” Tesla has the first wholly owned manufacturing facility in China of any automotive company. And in China, which is the biggest market for EV’s, we’ve never had any subsidies or tax incentives for vehicles. So it’s very important to get those cars especially to China as soon as possible. — Elon MuskWATCH: El
Tesla is betting big on China, and here’s what Elon Musk had to say about it Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-01-31  Authors: lora kolodny, aly song
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Tesla is betting big on China, and here's what Elon Musk had to say about it

The industry ministry of China expects annual “new energy vehicle” output to rise to 2 million in 2020, and sales of 7 million new energy vehicles in China by 2025, representing about 20 percent of the overall autos market there.

Tesla faces serious competition from domestic Chinese companies like: the Warren Buffet-backed BYD; SAIC, which makes Roewe electric cars; and Geely, the parent company of Volvo. It also faces competition from foreign automakers that produce electric cars or hybrid, and already know their way around manufacturing in China, like Ford, Hyundai and Toyota.

Here are some of Tesla’s biggest plans for China that execs outlined Wednesday’s fourth-quarter earnings call, as transcribed by FactSet:

Funding the Shanghai Gigafactory:

“The purchase of the land is a 50-year lease with the government of China. So, it’s not capex, but it’s operating lease, and that shows up as the cash flow from operations. However, the capex that we will invest is our equipment, and we fully own it. So that will show up as capex. The plan, as we have indicated in the letter, is still to get funding for majority of that capital spending from local China banks. And we expect very attractive rates based on the dialogue we’ve had and there’s a lot of interest.” — Deepak Ahuja

“Yeah. I mean, as a ballpark figure, probably something in the order of $500 million in capex to get to the 3,000-vehicle rate in Shanghai, ballpark figure. And as Deepak was saying, hooking up a very competitive debt financing in China really extremely compelling interest rates and so we do not expect that to be a capital drain on the company.” — Elon Musk

Tesla’s advantages in China:

“If you’re in the automotive industry you understand how significant this is, but maybe it’s not as obvious to everyone. Tesla has the first wholly owned manufacturing facility in China of any automotive company. So, this is profound. And we’re very appreciative of the Chinese government allowing us to do this. I think it is symbolic of them wanting to open the market and apply and it farewells to everyone. I’d just say like an order of appreciation for the Chinese government in allowing us to do that. It’s a very significant thing.” – Elon Musk

On making batteries in Shanghai:

“We’ll be making the module and the pack. So, it’s really just production of cell supply. And you can essentially use any high-energy density, 2170 chemistry. We expect it to be a combination of cells produced at our Gigafactory in Nevada, cells produced in Japan and cells produced locally in China. And we feel confident of sufficient supply to hit 3,000 units a week.” — Elon Musk

Delivering a lower-priced Model 3:

“We need to bring the Shanghai factory online. I think that’s the biggest variable for getting to 500,000-plus a year. Our car is just very expensive going into China. We’ve got import duties, we’ve got transport costs, we’ve got higher costs of labor here. And we’ve never been eligible for any of the EV tax credits. A lot of people criticize Tesla for being so dependent on incentives. In fact, for a company making EVs, we have the least access to incentives. It’s pretty crazy. Because there’s so many countries that have put price caps on the EV incentive which differentially affect Tesla. And in China, which is the biggest market for EV’s, we’ve never had any subsidies or tax incentives for vehicles.

“So, it’s difficult. Once a car is made there, it is eligible for that. That sounds like that’s going to be reducing in China in the coming years. But really, bottom line is, we need the Shanghai factory to achieve that 10,000 rate and have the cars be affordable. It’s important to appreciate, the demand for Model 3 is insanely high. The inhibitor is affordability. It’s just that people literally don’t have the money to buy the car. It’s got nothing to do with desire. They just don’t have enough money in the bank account. If the car can – if we made it more affordable, the demand is extraordinary.” — Elon Musk

On how demand in China stacks up versus Europe:

“Our relationship actually with Europe and China is how do we get the cars made and on order such that it reaches customers before end of quarter and we don’t have a massive number of cars on the order. That’s our biggest challenge. It’s not demand. It’s how do we get the cars there fast enough…I mean, we’re not even really trying, I should point out. Our factory is like right now only making cars for China and Europe. That’s all it’s doing with respect to Model 3. And our whole focus is okay, how do we get those cars made, get them on a ship as fast as possible.” — Elon Musk

On U.S.-China trade relations:

“We don’t know what’s going to happen with the trade negotiations. So it’s very important to get those cars especially to China as soon as possible. We hope the trade negotiations go well, but it’s not clear. But we need to get them there while there’s sort of de facto sort of a truce on the tariff war. And demand gen is really not one of the things we’re thinking about.” — Elon Musk

WATCH: Elon Musk says demand for Model 3 is “insanely high,” but cost is too high


Company: cnbc, Activity: cnbc, Date: 2019-01-31  Authors: lora kolodny, aly song
Keywords: news, cnbc, companies, order, cars, tesla, say, betting, heres, shanghai, demand, really, elon, china, thats, model, weve, musk, big


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