31.31 +0.26 (0.84%)
Pre-market: 8:17AM EDT
|Bid||31.25 x 3000|
|Ask||31.30 x 1200|
|Day's range||30.91 - 32.00|
|52-week range||19.21 - 32.38|
|Beta (3Y monthly)||1.44|
|PE ratio (TTM)||211.22|
|Earnings date||18 Nov. 2019 - 22 Nov. 2019|
|Forward dividend & yield||N/A (N/A)|
|1y target est||36.00|
(Bloomberg) -- India became the latest country to ban electronic cigarettes only days after Juul Labs Inc.’s products vanished from online Chinese marketplaces, a sign Asian nations may be no refuge for the industry from an escalating crackdown in the U.S.India’s government announced an executive order Wednesday banning the sale and production of all e-cigarettes, echoing growing concerns worldwide over health risks associated with the smokeless nicotine devices popular with teenagers.“Why are we debating if it’s more harmful or less? It is harmful. It is addictive,” said Preeti Sudan, India’s health secretary. “The entire next generation will be going down the drain if we don’t control it now.”Originally touted as a safer alternative to wean people off cigarettes, e-cigarettes have come under widespread attack in the U.S., especially for their appeal among youth. India’s decision follows similar prohibitions in about 27 other countries including Australia, Singapore and Brazil and comes on the heels of halted online sales of Juul’s products in China, the world’s largest tobacco market.‘Strong’ ActionDespite increasing global curbs on vaping, some nations view e-cigarettes as viable alternatives to smoking, a leading cause of preventable death. And though cigarette companies are getting into the electronic nicotine-delivery business -- including most notably a nearly $13 billion investment in Juul by Marlboro maker Altria Group Inc. -- a vaping health scare could cause sales of the tobacco giants’ most important products to jump.Shares of cigarette makers in India gained on news of the ban.U.S. President Donald Trump has vowed to “do something very, very strong” after the recent outbreak of a mysterious lung disease linked to vaping that has killed six people in the U.S. and afflicted hundreds of others. Lawmakers in the U.S. are also investigating the marketing of Juul, America’s top-selling e-cigarette brand.U.S. Representative Raja Krishnamoorthi, an Illinois Democrat, told Juul Chief Executive Officer Kevin Burns in a letter dated Tuesday that the company had failed to produce all the documents requested by a House Oversight Committee and that further delay could result in the company receiving a subpoena.Juul only started selling its nicotine vaporizers online in China last week. Its official online stores disappeared on Alibaba Group Holding Ltd.’s Tmall and JD.com Inc. by Tuesday, prompting speculation that official action may be on the way.Juul wasn’t given a reason for why its products were pulled, according to a person familiar with the matter, but said in a statement it wants to make them available again.No Reasons GivenThe latest developments in India and China come as a blow to vaping companies that were setting their sights on Asia, where 65% of the world’s cigarettes are sold, as increased pressure in the U.S. forces them to look for growth elsewhere. India alone has 266.8 million tobacco users, according to a WHO factsheet.It isn’t clear if China plans to ban or enforce stricter scrutiny of e-cigarettes or vaping devices. The country’s National Health Commission -- a body responsible for health and sanitation -- announced it was devising legislation for such products in July, arguing the “hazards of e-cigarettes should be highly valued.”The Chinese health commission also said labels describing nicotine concentration on many such products are vague, and can lead to excessive consumption by users.Michael R. Bloomberg, the founder and majority owner of Bloomberg News parent Bloomberg LP, has campaigned and given money in support of a ban on flavored e-cigarettes and tobacco.Some nations, however, view vaping as a lesser evil than smoking.Public health officials in the U.K., the biggest market in Europe for the products, endorse vaping as a way to wean people off smoking -- the prevailing view across Europe, where authorities are more sanguine about the effects of vaping.E-cigarettes allow users to satisfy their cravings by inhaling vaporized nicotine rather than tobacco smoke. Their popularity has soared in recent years driven by candy-like flavorings, sleek devices and savvy marketing.The U.S. Surgeon General called it an “epidemic,” after Health and Human Services Secretary Alex Azar told reporters that 5 million American kids said they’ve vaped this year. The Food and Drug Administration has been investigating the safety of e-cigarettes after reports of seizures.(Updates with U.S. lawmaker’s letter to Juul Labs in eighth paragraph.)\--With assistance from Carolynn Look and Shruti Srivastava.To contact the reporters on this story: Ari Altstedter in Mumbai at email@example.com;Bibhudatta Pradhan in New Delhi at firstname.lastname@example.orgTo contact the editors responsible for this story: Rachel Chang at email@example.com, Bhuma Shrivastava, Timothy AnnettFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Buying a low-cost index fund will get you the average market return. But if you invest in individual stocks, some are...
(Bloomberg Opinion) -- If the trade war's objective is to even the playing field for American firms, President Donald Trump isn't going about it the right way. China’s easy access to U.S. dollars over the past decade has fueled asset bubbles, driven an overseas debt binge and laid the groundwork for its low-cost, export-driven economy. Only cutting off the supply of cheap money will reverse this.So while Trump is pressuring Federal Reserve Chairman Jerome Powell to cut interest rates – questioning the central bank chief's patriotism and calling him "a bigger enemy than Xi Jinping" – the way to wring equitable behavior out of China is for the Fed to hold the line.Fundamentally, money will go where it can find yield. And however much capital the world has to spare, China has shown an appetite to absorb it. During the most expansive years of quantitative easing in the U.S., foreign money seeking yield went into China labeled as "trade" and "investment."From 2009 to 2014, China may have taken in as much as $2 trillion in hot money spewing from the Federal Reserve's low interest-rate policy. My company looked at just one measure – the over-invoicing of exports via Hong Kong – in just one year, 2013, and found $390 billion of such flows into China.Since Beijing's capital controls, at the time, aimed to shut out foreigners eager to bet on a steadily strengthening yuan, speculators looked for bypasses: For example, some trading companies in China would inflate the value of their exports, enabling more money to enter the country as “export receipts.” Exaggerated foreign direct investment was also a popular channel for incoming speculative money, as was debt.China’s economic story begins and ends with liquidity; with so many dead assets that have to be refinanced every year, the country requires an ever-growing supply of capital. Much more than cheap labor, this cheap capital is what has created bargain-basement export goods. It also fosters anti-competitive behavior. Domestic companies can operate at a much lower cost than their U.S. counterparts, and they are rewarded in capital markets, despite growing evidence of intellectual-property theft.Consider what a decade of near-zero interest-rate policy has done for China:IPOs: Chinese companies listed in the U.S. now have a value of about $890 billion. Not even the high-profile delistings and fraud charges against China MediaExpress Holdings Inc. and Sino-Forest Corp. could drain the hype for the IPOs of Alibaba Group Holding Ltd., JD.com Inc. and Vipshop Holdings Ltd. Bonds: Investors hungry for yield have lapped up bonds issued by China's riskiest companies. That's enabled firms such as junk-rated China Evergrande Group, one of the country's most indebted developers, to continue tapping U.S. markets. Chinese firms have raised more than 90% of the high-yield Asian dollar debt issued this year. Mainland developers have about $110 billion in offshore junk-rated debt outstanding. Dumping: A steady flow of dollars into China fueled an investment splurge that supported the manufacturing of ultra-cheap exports, from DVD players and TV sets to solar panels. China's history of leniency toward borrowers – its first onshore default was in 2014 – meant firms were able to sell their goods at cut-rate prices without worrying about how they'd pay back their loans.All this means that the best way to curb Chinese excess is to limit the availability of the dollar. Trump’s demand that Powell cut rates by one percentage point is counterproductive to what appears, anyway, to be the goal of the trade war. There are other, more targeted measures that the U.S. can pursue in tandem. These include: Halting new Chinese IPOs in the U.S. American regulators have already ramped up scrutiny over such listings, which have tumbled to $2.8 billion so far this year compared with $29.1 billion in 2014. The U.S. needs to close the door to all share sales until China agrees to enable investigation and prosecution of fraud by listed companies. Requiring that American auditors and stock regulators have access to the audit papers of Chinese companies that are part of U.S.-listed entities, under penalty of delisting. The Public Company Accounting Oversight Board, a Washington-based non-profit that scrutinizes audits, also should be permitted to review its members in China, a goal the Securities and Exchange Commission highlighted in recent commentary. Taxing incoming Chinese (and other foreign) investment. U.S. Senators Tammy Baldwin and Josh Hawley in late July submitted a bill that would allow the Fed to impose a flexible tax on capital inflows. This measure would make it less attractive to park money in U.S. assets, thereby shrinking the capital account imbalance, and by extension, the trade deficit.Depending on whether Trump gets his rate cut, China’s slowdown will be fast or slow. By enabling new stimulus, cheap dollars would give the Chinese more rope to hang themselves with. Holding the line will mean Chinese austerity and unemployment. In that case, there would be no way out of economic recession other than an ambitious program of economic reform.To contact the author of this story: Anne Stevenson-Yang at firstname.lastname@example.orgTo contact the editor responsible for this story: Rachel Rosenthal at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Anne Stevenson-Yang is co-founder and research director of J Capital Research Ltd., a provider of investment advisory services.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Baidu Inc. has once again lost its spot among China’s five most valuable internet companies, this time elbowed out by much younger rival Pinduoduo Inc.The four-year-old e-commerce startup PDD is now worth more than Baidu after its shares surged 8.7% in New York on Thursday. That puts it among China’s Top 5 internet companies in market value, trailing the likes of rival JD.com Inc. and food delivery service Meituan. Baidu has been pushed to sixth place.It’s not the first time that Baidu dropped from the Top 5. NetEase Inc., China’s second-largest gaming house, briefly overtook the local internet search leader in market value earlier this month. Baidu’s shares later recovered after it posted stronger-than-expected second-quarter results. The company has shed about $63 billion of capitalization since its peak in May 2018, or roughly equivalent to one Caterpillar Inc.Once touted as a member of China’s internet triumvirate alongside Alibaba Group Holding Ltd. and Tencent Holdings Ltd., Baidu is grappling with a slowdown in China’s economy and is facing intensifying competition for advertising from app factory ByteDance Inc. That popular social media giant recently launched its own Google-like general search engine, posing a direct challenge to Baidu’s core business.PDD has experienced meteoric growth since its inception. The shopping app, known for cheap deals and gamified purchasing experiences, is luring new users from China’s rising middle class while investing in its own logistics network -- areas currently dominated by rivals Alibaba and JD.com.To contact the reporter on this story: Zheping Huang in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- China has been a graveyard for many foreign retailers, which frequently arrived with grand hopes only to pull back after years of debilitating struggle. Carrefour SA sold 80% of its operations in June after more than two decades in the country, Tesco Plc folded its business into a joint venture in 2013, and Metro AG is seeking a buyer for its Chinese unit. Costco Wholesale Corp. has more reason than most to believe it can buck the trend.It’s an inauspicious time to enter the world’s second-largest economy. Growth has slowed, and the trade war has made the environment less hospitable for overseas companies. China’s plan to set up a corporate social credit system will raise compliance costs and could put some firms out of business, the European Union Chamber of Commerce in China said Wednesday. At the same time, online shopping is increasingly taking market share from bricks-and-mortar retailers. None of that stopped Costco’s first Chinese outlet, in Shanghai, from being mobbed on its opening Tuesday.It’s probably not a flash in the pan, opening-day discounts notwithstanding. China’s consumer markets are fickle and retail is viciously competitive, with razor-thin margins. Still, Costco looks to have picked its niche carefully. The Shanghai outlet is in a suburban district, aiming to cater to car-driving shoppers willing to load up with bulk items such as 30-pack boxes of cookies or 200-fluid-ounce (6-liter) bottles of detergent. Selling in quantity helps enable the discounts that underpin Costco’s appeal.Such a model wouldn’t work in the more built-up central areas of Shanghai, where most people live in cramped apartments and take public transport. That needn’t matter to Costco, though, as long as the U.S. retailer can find enough suitable suburban markets. Costco’s outlet in Shanghai’s Minhang district has parking space for 1,200 cars, more than any other of its locations.Membership is a key element of Costco’s pitch to consumers. Being part of a fee-paying club adds an aura of exclusivity that may play well with Chinese shoppers, particularly when the Shanghai store offers high-end products such as Maine lobsters, bluefin tuna and Birkin bags. Costco was charging an introductory membership fee of 199 yuan ($28) at Tuesday’s opening, which will rise to 299 yuan.Costco has already shown that it can export its warehouse model, building successful operations in Japan, Taiwan and South Korea. Revenue from international operations more than tripled in the past 10 years.Sam’s Club, a warehouse membership chain owned by Walmart Inc. that’s been in China for more than 20 years, gives cause for optimism on Costco’s entry. Sam’s Club has pushed upmarket by adding services such private dental clinics (for a higher membership fee) and aims to increase outlets in the country to 40 in 2020, from 23 at the start of this year, company executives told the China Daily in January. Chinese consumers have become increasingly willing to pay for better services in the past one to two years, Chen Zhiyu, senior vice president of Sam's Club China, was cited as saying.Costco positions itself as a higher-end shopping destination than Sam’s Club, and has built a reputation for quality fresh food. That may be the company’s best bulwark against the encroachment of internet operators. Venture capital money has been pouring into online grocers, as my colleague Shuli Ren observed last month. Even so, most shoppers in China still like to touch or at least see their vegetables with their own eyes. Sam's Club drove a 4.7% surge in Walmart’s China sales in its most recent quarter, thanks largely to fresh-food sales.Costco has had a five-year online partnership with Alibaba Group Holding Ltd. in China to market its flagship private label Kirkland. That’s helped to build the company’s name in China ahead of its entry to physical retail. A strategy that integrates the two may be critical to flourish in China’s demanding retail landscape. “In many parts of China, same-day delivery really means same-hour delivery,” as Walmart observed in its 2019 annual report. The Sam’s Club owner has a partnership with Chinese e-commerce giant JD.com Inc.Shares of Costco rose 5% on Tuesday, the most since March. That may overstate the potential from a Chinese expansion that’s likely to be modest and incremental, at least at first. But if Costco can thrive in China’s current conditions, it should be there to stay. To contact the author of this story: Nisha Gopalan at firstname.lastname@example.orgTo contact the editor responsible for this story: Matthew Brooker at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
JD.com rose 3.3% Monday after President Trump said he spoke with Premier Xi Jinping. Trump's claim that China is open to a trade deal boosted the market.
(Bloomberg) -- Shares in Meituan Dianping surged the most in five months, hitting the highest price since its initial public offering after the Chinese internet giant posted its first quarterly profit last week.The stock jumped 8.9% to close at HK$76.20 on Monday in Hong Kong, becoming the second biggest gainer on the MSCI China Index. Meituan went public at HK$69 a share in September 2018 and has spent most of the intervening months below that level.Meituan recorded a net income of 877.4 million yuan ($124 million) compared with the 1.57 billion yuan loss analysts projected on average, after it grabbed market share from rivals like Alibaba Group Holding Ltd. in food delivery. The company however got help from one-time investment gains, such as in wealth management products. Revenue rose 51% to 22.7 billion yuan, compared with the 21.9 billion yuan mean estimate.Hard-charging billionaire founder Wang Xing is waging a take-no-prisoners battle of subsidies with Alibaba for China’s $1.3 trillion online services industry, which includes food delivery. Meituan’s expenses have soared, though it’s trying to control costs by putting the brakes on investment in loss-making areas such as bike sharing and ride hailing.Meituan Earns Its Way Into Amazon’s Virtuous Circle: Tim CulpanAdvances made against Alibaba however have helped the company become China’s third largest publicly traded tech company. It’s overtaken search engine Baidu Inc. and e-commerce platform JD.com Inc. in capitalization after gaining 59% this year. Backed by WeChat-operator Tencent Holdings Ltd., Meituan could have gained another 2 percentage points of food-delivery market share versus its rivals, reaching 36% in the second quarter, according to Bernstein.“Food delivery business achieved positive adjusted operating profit due to favorable seasonality and improved economies of scale,” Jefferies analysts Thomas Chong and Ken Chong wrote.For now, Meituan is focusing on its bread-and-butter business of dining, expanding up the value chain to help restaurants manage their back-end systems. Longer-term, Wang envisions a super-app modeled on WeChat, extending a raft of everyday services to an increasingly wealthy populace.Read more: The Greatest Delivery Empire on Earth Has Alibaba’s AttentionHere are a few highlights from its quarterly results:Food delivery revenue rose 44%In-store, hotel booking and travel business revenue rose 43%Gross transaction volumes climbed 29% to 159.2 billion yuanAnnual active merchants grew 16% to 5.9 million in the year ended June 30Company will continue to prioritize revenue over profit, and accelerate investment in marketing channels, allocate more resources to membership programs to increase active users.(Updates with share moves from the second paragraph)To contact the reporter on this story: Lulu Yilun Chen in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Colum Murphy, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The Zacks Analyst Blog Highlights: China Life Insurance, JD.com, Qudian, China Southern and Sinopec Shanghai