Business

Business

BNO migrants sell Hong Kong properties for UK tax reasons

  • The Young Reporter
  • By: Kwok Chiu Tung 郭昭彤Edited by: Zhu Zijin Cora 朱子槿
  • 2021-05-11

Hong Kong British National (Overseas) (BNO) passport holders moving to Britain tend to sell their properties in the city to avoid related taxes charged by the UK government on overseas properties and that may trigger a capital outflow of up to HK$280 billion from Hong Kong, based on banks and media estimation. BNO migrants will be subject to the UK's global tax system, under which their rental income from Hong Kong will be taxed and if they want to buy a residential property in Britain without selling their Hong Kong residence they have to pay an extra 3% of stamp duty. Therefore, Hong Kong residents emigrating to the UK are pondering what to do with their Hong Kong flats. Chan Siu-yi, 36, who moved to the UK several months ago with a BNO visa, has decided to sell her property in Hong Kong to avoid extra taxes. “The global taxation policy might charge us about €2000 (HK$18,717) every tax season if we don’t sell our property in Hong Kong after moving to the UK within 9 months,” she added. The British government launched a new policy after China passed a national security law last year, to allow Hong Kong BNO holders to live and work in the UK for up to five years and eventually seek citizenship. The policy is expected to spark a new wave of immigration. The British Home Office said in January that the number of immigrants via HK BNO visas is expected to reach between 258,000 and 322,400 over five years. Based on the estimation of Bloomberg Intelligence Research, up to 16,300 Hong Kong households may move to Britain via BNO visas this year and a maximum of HK$150 billion worth of properties from these families could be on sale in 2021 alone. A Bank of …

Business

US-listed Chinese firms rush to HK despite lukewarm welcome

  • The Young Reporter
  • By: Zhu Zijin Cora 朱子槿、Zhou Yichen Gloria 周奕辰Edited by: Alison Leung
  • 2021-04-30

Erica Lam, a 30-year-old broker eager to buy new shares of technology companies for profit, saw the Hong Kong secondary listing of online entertainment company Bilibili Inc. (9626) a great opportunity and bought 3,000 of its new shares.  However, the stock price of Bilibili fell as much as 6.8% on the first day of trading, translating into a loss of HK$165,000 for Ms Lam. Before Bilibili, search giant Baidu also briefly fell 0.2% below its Hong Kong IPO price and ended the first day of trading unchanged. "The listings of Baidu and Bilibili came amid a cooling market when Asian investors showed less enthusiasm for IPOs and worried about the increasingly high valuation of technology stocks in recent years," said Wang Hui, a portfolio manager at Haitong Securities. "On top of that, the rise in U.S. bond yields has also caused many investors to sell tech stocks." Higher interest rates are particularly damaging to high-growth tech companies as investors value them based on expected earnings over the next few years, she said. The Hang Seng Tech Index of top technology companies has dropped 22.3% from its Feb.17 high to 8500.13.  Also, China set its 2021 GDP growth target at above 6%, lower than the market’s expectation of  8% growth, which made investors worry about a tightening in monetary and fiscal policies. "Such a conservative GDP forecast would undermine investor confidence," said Ms Wang.   Booming home-coming trend under increasing Sino-US tensions Bilibili, like many Nasdaq-traded Chinese companies, jumped on the homecoming bandwagon by listing their stocks in Hong Kong with tech heavyweight Alibaba taking the lead in late 2019 due to growing Sino-US tensions. The two countries have played tit-for-tat with increased tariffs, imposed sanctions and targeted regulations. To hedge against rising risks, more mainland tech companies chose to seek secondary …

Society

Ethnic minority entrepreneurs break the glass ceiling

It was almost 8 pm when Anushka Purohit walked into a bakery in Tsim Sha Tsui. Fixated at the smell of freshly baked, glossy and sweet bread that lingered hours after it came out of the oven, she hoped to buy a piece before the store closed.  As she was getting ready to pay, the cashier said to the rest of the staff, “Last order of the day.”  On her way out, Anushka noticed a tall pile of trays, with each one separated by a layer of assorted breads. “What are you going to do with all this bread,” she asked, curious to know what will happen to all the leftovers.  “Throw it,” the cashier said while the other staff prepared black garbage bags. Anushka was shocked by the amount of fresh bread that was going to waste.  Days later she saw someone drinking beer. That got her thinking about how to turn one fermented product into another and that’s when Breer was born.  Anushka and her three co-founders of Breer use unwanted bread to make beer.   In 2019, Hong Kong saw 109.5kg of domestic food waste and 51.5kg of commercial and industrial food waste per person, according to the Environmental Protection Department. With craft beer and breweries becoming increasingly popular in Hong Kong alongside what seemed like a never-ending food waste problem, Breer seemed like a good solution. She first came up with the idea for the Enactus Social Innovation Competition at Hong Kong University of Science and Technology. After representing Hong Kong in the national competition, the team decided to pursue it full time, using the money they won from the competitions as capital.  Almost half of store-disposed foods in Hong Kong is leftover bread, according to a report by Breer. The city also produces 3,600 tonnes of …

Business

TikTok owner ByteDance likely to launch Hong Kong IPO in second quarter

  • The Young Reporter
  • By: Vikki Cai ChuchuEdited by: Zhou Yichen Gloria 周奕辰
  • 2021-04-16

ByteDance Ltd. has started preparations for its Hong Kong IPO and is likely to file a prospectus in the second quarter assuming the company’s valuation of up to $400 billion (HK$3.12 trillion), about 1.8 times of its competitor Kuaishou, according to media reports. Caixin Global said if the Hong Kong IPO could be successfully launched, ByteDance would be the third most valuable listed company at the Hong Kong stock exchange behind Tencent and Alibaba group. Caixin put the valuation of ByteDance at about US$300 billion (HK$ 2.33 trillion) while Hong Kong and international media reported that it would be up to $400 billion (HK$3.12 trillion). However, ByteDance kept silent on the rumoured listing plan.  The listing of the Beijing-based start-up is expected to include BtyeDance’s most popular mobile applications such as Douyin, news platform Toutiao and video service Xigua. TikTok will probably seek a separate listing since it involves overseas assets, Caixin said. China Securities Journal said that ByteDance had notified the operator of the HKEX that it had appointed securities underwriters on Wednesday but the media took away the story from its website on the same day. According to the HKEX underwriting agreements, firms are required to appoint sponsors and underwriters at least two months ahead of applying for IPO. The latest stock-option price for employees trading their bonuses to ByteDance’s unlisted stocks more than doubled compared with last year to $126 (HK$978.82) per share from under $50 (HK$388.42). The price did not move much from 2019 to 2020 at around $44 (HK$341.81). The prominent rise in internal stock-option price reflects the private equity market’s assessment of the firm’s value in the past 12 months. ByteDance now is the world’s highest-valued unicorn. ByteDance’s rival Kuaishou, with 271 million daily active users, reported revenue of 58.8 billion yuan (HK$ 69.93 …

Business

China's Trip.com raises up to $1.4 bln in HK secondary listing amid tourism recovery

  • The Young Reporter
  • By: Zhou Yichen Gloria 周奕辰Edited by: Kwok Chiu Tung 郭昭彤
  • 2021-04-09

Chinese online travel giant Trip.com Group Ltd. (9961) is raising as much as $1.4 billion (HK$ 10.9 billion) in its Hong Kong secondary listing, as a rebound in travel may lead to a business revival.  The public offer started on Thursday and would run through Apr.13, with trading expected to start on Apr.19, according to its listing document. The Nasdaq-listed company (Nasdaq: TCOM) is offering 31.6 million shares at a maximum price of HK$333 apiece. That's a premium of 11% to its closing price of $38.55 (HK$ 299.88) on Nasdaq on Thursday. Each Trip.com's American depositary receipt represents one ordinary share to be listed in Hong Kong. "Trip.com's secondary listing in Hong Kong could increase cash flow, diversify risk and attract more Asian investors amid growing tensions between China and the U.S.," said Zhang Xiao, an analyst from Great Wall Securities. "The domestic tourism is recovering strongly and the global tourism will gradually recover as more people having vaccinations. This will boost investor confidence and bring more opportunities for Trip.com to increase its market value." The Shanghai-based company is among the growing cohort of U.S.-listed Chinese firms to carry out homecoming listings, including search giant Baidu which is Ctrip's single largest shareholder holding a stake of 11.5%. Total fundraising via new share listings in Hong Kong surged 822% to a record high in the first quarter. Trip.com provides comprehensive travel products and services on its global one-stop travel platform, generating revenues primarily from the accommodation reservation and transportation ticketing businesses. Due to the severe impact of COVID-19 on the global tourism industry, the company's revenue in 2020 plunged 49% to 18.3 billion yuan (HK$ 21.74 billion), according to the prospectus. It also saw a loss of 3.3 billion yuan (HK$ 3.92 billion) after making a profit of 7 billion yuan …

Business

Goldman recommends “buy” Bilibili with expectation of soaring 40%

  • The Young Reporter
  • By: Vikki Cai ChuchuEdited by: Zhou Yichen Gloria 周奕辰
  • 2021-04-02

Bilibili (9626) was rated ‘buy’ by Goldman Sachs on Thursday and with the stock expected to increase by 40% to HK$1,219 a share, compared to the current stock price of HK$870, due to its large and fast-growing user base and strong revenue.  IPOs in the Hong Kong stock market often have potential first-day rallies, but Bilibili’s stock price dropped 3.6% from an HK$808 issue price to HK$780 at its trading debut on Monday. The recent global declines in technology stocks and China’s crackdown on the country’s technology conglomerates put heavy pressure on Bilibili. Goldman Sachs said as the online video sharing and streaming platform with the most Generation Z users, Bilibili was expected to see its monthly active users to reach 400 million before 2023.  Besides, Bilibili has high quality and abundant content which are the fundamental elements for expanding its users. Bilibili also adopts multiple liquidity strategies which can generate more revenues. Bilibili’s revenues are mainly generated from mobile games, value-added services, advertising, and e-commerce and others. Its revenue in 2020 increased by 77% to 12 billion yuan (HK$ 14.3 billion) according to its prospectus. Monthly average users reached 202 million in the fourth quarter of 2020, up 55% over the same period in 2019. Guosheng Securities also gave a buy recommendation to Bilibili, according to an analyst report released on March 29, expecting the company to continue expanding its commercialization. Goldman Sachs affirms Bilibili’s community value and its understanding towards Generation Z in encouraging them to join the activities in Bilibili community in its report. The investment bank also said Bilibili has chosen a clear company development path and hopes it can keep thriving. Bilibili is building a video content ecosystem by providing various video content in satisfying its audiences’ entertainment, cartoon, technology and life skills viewing demand. …

Business

Chinese sportswear stocks jump after anti-Xinjiang cotton statement

Shares of Chinese sportswear makers extended gains on Friday in hopes of increased sales as leading foreign brands, including H&M and Adidas, faced backlash in China after western countries imposed sanction on the country amid a Xinjiang cotton row. Li-Ning (2331.HK) ended 2.9% higher at HK$51.45 after jumping nearly 11% on Thursday. Anta Sports (2020.HK) rose 5.61%, extending gains of 8.4% yesterday. Chinese consumers boycotted some foreign brands after the US along with the European Union, Canada and the UK announced a joint statement earlier this week for sanctions on Chinese officials over human rights violations in Xinjiang. Xinjiang Uygur Autonomous Region in northwestern China produces about a fifth of the world’s cotton and supplies the material to many international brands. The anti-Xinjiang statement affected a number of fashion brands in China over Xinjiang cotton. Swedish fast-fashion retailer H&M products were removed from major Chinese e-commerce platforms including Alibaba and JD.com, following calls by state media for a boycott over the retailer's decision to stop buying cotton from Xinjiang, according to media reports. Several other international brands, including Nike and Adidas, were also targeted by social media in Mainland China this week. The People's Daily, a Chinese government-backed newspaper, shared an image with the hashtag “I support Xinjiang cotton” in Chinese. This post triggers a boycott on Adidas, News Balance, H&M, Nike and Burberry, brands, which expressed concern about the alleged use of Uighur forced labour in the production of Xinjiang cotton. Adidas, New Balance, H&M and Burberry and their stock prices were lower. Adidas was at $155.71 (HK$1209.7) and H&M $4.56 (HK$35.43), down 5.25% and 3.38% respectively overnight. Chinese celebrities cut ties with brands rejecting Xinjiang cotton. “Me and my company artist - Eason Chan Yick-shun resolutely boycott any action vilifying China, Therefore, we decided to terminate all collaboration …

Business

Hongkongers jump on live streaming e-commerce trend

  • The Young Reporter
  • By: Zhou Yichen Gloria 周奕辰、Zhu Zijin Cora 朱子槿Edited by: Alison Leung
  • 2021-03-25

Standing in the spotlight, Connie Hung enthusiastically sold a range of products to more than 30,000 people watching her live streaming. "Our products are of high quality and low price. Don't hesitate to buy them," said Ms Hung, a former insurance broker and veteran marketer. Numerous messages concerning the products pop up continuously from the viewers. In this Facebook Live with Group Buyer, one of the most popular group-buying websites in Hong Kong, Ms Hung pitched the company's products, mainly daily groceries, and the two hours’ sales exceeded the company's sales volume for three days. "More and more merchants are willing to come to me to do live streaming for their products because it can save the high cost of online advertising," said Ms Hung. "Every live streaming is watched by tens of thousands of people. Through interaction with fans, the sales are much higher than just advertising," she said. More Hongkongers like Ms Hung are becoming livestreamers, jumping on the new e-commerce bandwagon to tap into the profit as COVID-19 lingering and more brick-and-mortar stores sorting alternative ways to stay afloat. China’s live-streaming craze Influencer streaming has first shown prosperity in the mainland and has already become a new normal in China retail industry. According to iiMedia Research, the market size of the country’s live streaming e-commerce reached 961 billion yuan (HK$1.15 trillion) in 2020, with a year-on-year growth of 121.5%. As of June 2020, China has 309 million live-streaming consumers, accounting for about a third of its internet population. During the live interactive online video shopping, the influencer, as a host, hawks on viewers by introducing products and services, meanwhile adding non-shopping contents to make the whole session attractive. They will also answer viewers’ questions on-site and many offer exclusive discounts to lure customers. The top influencers such …

Business

Bilibili raises up to $3.2 billion in Hong Kong secondary listing amid a cooling market

  • The Young Reporter
  • By: Zhou Yichen Gloria 周奕辰Edited by: Kwok Chiu Tung 郭昭彤
  • 2021-03-19

Chineses video-sharing platform Bilibili Inc. (9626) planned to raise as much as $3.2 billion (HK$ 24.85 billion) in its secondary listing in Hong Kong, while the recent corrections in the market may force the company to price the stock below its maximum offering price. The public offer commenced on Thursday and would run through Mar.23, with trading expected to start on Mar.29, its listing document said. The Shanghai-based Bilibili, backed by Tencent Holdings Ltd. and Alibaba Group Holding Ltd., went public on Nasdaq in March 2018 (Nasdaq: BILI). Its 25 million Hong Kong shares are on offer at a maximum price of HK$988 apiece, 16.9% higher than its U.S. stock closing price of $108.82 (HK$ 845.18) on Thursday. Each American depositary receipt represents one ordinary share to be listed in Hong Kong. "Recent declines in the share prices of many US technology stocks and the volatility in the Hong Kong stock market could depress Bilibili's final price," said Wang Hui, a portfolio manager at Haitong Securities. "The final offer price will have a lot to do with the value of Bilibili’s American Depositary Receipts in the coming week, as well as the investor demand level." Baidu, another technology stock listed in the U.S, just completed its Hong Kong IPO on March 17. It initially priced its shares at HK$295 based on the average trading price of its US stocks in the previous period of time. But eventually, Baidu cut its offer price by 14.6% to HK$252 due to the recent decline in its US share price. The Nasdaq Composite Index fell 7.5% from its 2021 high of 14,175.12 to close at 13,116.17 overnight. The Hang Seng Index closed at 29,405.72 on Wednesday, down 5.7% from its 2021 peak of 31,183.36. Bilibili generates its revenues primarily from mobile games, value-added services, …

Society

Surge in complaints on wedding services amid Covid

The number of complaints against wedding-related services has reached a three-year high, according to the Consumer Council. Of 233 complaints the Council received last year, more than half were about catering services, and 122 had to do with wedding banquets, the Council said in an online press conference today. In January, the consumer watchdog conducted a survey on cancellation and postponement policies for Chinese wedding banquets. All 10 catering providers said they allowed special arrangements because of the pandemic, customers were guaranteed the same services or menu prices despite the cancellation. Deadlines for cancellation also varied. The sum involved in the complaints to the Council ranged from HK$250,000 to HK$400,000, according to Gilly Wong, the council’s chief executive. In one case, a couple had paid a $72,000 deposit, but when they wanted to cancel the booking after several postponements, they were asked to pay the remaining sum as compensation for terminating the contract. “The couple ended up giving 30% of the deposit to the venue”, Ms Wong said. “Don’t trust verbal contracts, this is the most important advice that we would offer to consumers,” she added. “Think of all the ‘devil in the details’, and think through before you talk to the provider.” The Council has outlined a number of guidelines for consumers before signing up for a wedding banquet contract: Understand the service terms and conditions carefully and thoroughly before signing the contract. Retain all relevant records and important information such as promotional flyers, quotations, contracts or receipts, so it can be used as evidence and for follow-up in case of future disputes. Ask the provider to put all verbal promises in writing, and request confirmation of all phone and text communications in an official company email; Should both sides agree to postpone the wedding banquet, set up a …