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SenseTime, Mengniu join UBTech in wave of Chinese firms tapping capital markets
SenseTime, Mengniu join UBTech in wave of Chinese firms tapping capital markets

South China Morning Post

time24-07-2025

  • Business
  • South China Morning Post

SenseTime, Mengniu join UBTech in wave of Chinese firms tapping capital markets

Chinese companies are stepping up their fundraising activities to shore up liquidity and manage refinancing needs as market sentiment shows signs of recovery in the second half of the year. Advertisement On Thursday, artificial intelligence firm SenseTime unveiled an agreement to raise HK$2.5 billion (US$318 million) through a share subscription, and dairy giant Mengniu Dairy said it would generate 3.5 billion yuan (US$489 million) through a bond issuance. Those plans came to light a day after UBTech Robotics divulged a HK$2.4 billion share placement plan. The financing moves come amid strong momentum in Hong Kong's equity market . Initial public offerings in the city surged 695 per cent year on year in the first half to US$14.1 billion, making it the world's largest IPO market during the period, according to a report released by bourse operator Hong Kong Exchanges and Clearing (HKEX) on Wednesday. 'Investor sentiment has improved markedly,' despite complicated geopolitical tensions, HKEX said, noting that both international institutions and retail investors had shown strong demand for new offerings. Equity fundraising was particularly active in the consumer sector and the technology, media and telecommunications sector, with firms in AI, healthcare and fast-moving consumer goods raising substantial capital to fuel expansion, it said. SenseTime said its conditional subscription agreement with unnamed investors would involve 1.67 billion new shares priced at HK$1.50 apiece, representing a 6.25 per cent discount to its last closing price. The proceeds were expected to support the firm's business development and general corporate use, including ongoing investment in AI infrastructure and research into generative models, as well as new areas such as robotics and digital finance, it said. Advertisement Mengniu, one of China's largest dairy producers, said it would issue two tranches of yuan-denominated bonds: a 2 billion yuan bond maturing in 2030 with a 2 per cent coupon, and a 1.5 billion yuan bond maturing in 2035 with a 2.3 per cent coupon. The company said the proceeds would be used for refinancing existing debt, with an equivalent amount to be allocated to eligible green and social-responsibility projects under its sustainable-financing framework.

China's household brands battle economic uncertainty, fierce foreign competition
China's household brands battle economic uncertainty, fierce foreign competition

Qatar Tribune

time26-05-2025

  • Business
  • Qatar Tribune

China's household brands battle economic uncertainty, fierce foreign competition

Agencies Beijing China's consumer goods industry is facing mounting pressures due to declining domestic demand and economic uncertainties. Once a booming sector driven by rapid urbanization and increasing purchasing power, the market has now slowed as consumers cut back on discretionary spending. Major players, like China Mengniu Dairy, are witnessing sharp revenue declines, forcing them to explore international markets for growth. However, overseas expansion is proving to be a complex challenge, as price-dumping concerns and regulatory scrutiny threaten their ability to establish a strong global presence. China's post-pandemic economic slowdown has led to weaker consumer confidence, driving a 3.5 percent decline in FMCG (fast-moving consumer goods) sales in the third quarter of2024. Reduced household spending, stagnant wages, and shifting consumer priorities have impacted sectors ranging from dairy to household products. While companies like Mengniu Dairy are looking outward, their exports face EU trade barriers and anti-dumping investigations, reminiscent of past restrictions on Chinese solar panel exports. Additionally, fierce competition with established foreign brands further complicates their overseas ambitions. If domestic consumption remains subdued, Chinese firms will struggle to sustain profitability both at home and abroad. China's consumer spending downturn is also tied to shifting demographic trends and weakened investor confidence. As the population ages, demand for premium and convenience-oriented products is declining, while younger consumers focus on savings due to economic uncertainty. Additionally, property market instability, a pillar of household wealth, has led to tightened budgets for discretionary spending. The government's stimulus measures, including interest rate cuts and consumption incentives, have yielded limited results, failing to restore robust demand. International brands operating in China have adjusted forecasts downward, reflecting concerns over long-term market stagnation. Meanwhile, e-commerce sales, once a key driver of FMCG growth, have plateaued due to regulatory pressures and reduced consumer engagement. As businesses struggle to navigate these challenges, reliance on overseas markets is increasing; yet global trade barriers and pricing scrutiny further complicate expansion strategies, leaving Chinese firms vulnerable to prolonged financial strain. To counter domestic losses, Chinese consumer goods firms are aggressively targeting foreign markets. However, this approach is filled with challenges as governments and trade regulators in Europe and North America scrutinise Chinese exports for price manipulation. Many nations argue that Chinese companies sell products at artificially low prices to gain market dominance, undermining local competitors. Similar accusations were made against Chinese solar panel manufacturers in the early 2010s, leading to EU-imposed tariffs that significantly restricted exports. A similar pattern is emerging in food and household goods, with European regulators investigating Chinese dairy and packaged food exports for unfair pricing practices. Additionally, Chinese brands face tough competition from well-established local players who benefit from consumer trust and strict safety standards. Many consumers in the US and EU prefer domestic brands due to concerns over product quality and national economic stability. Despite aggressive pricing strategies, Chinese firms struggle to capture significant market share amid regulatory barriers and consumer skepticism. Governments across the globe are imposing stricter regulations on Chinese imports, aiming to counter concerns over unfair competition and state-backed subsidies. Both the EU and US have already enforced trade restrictions on Chinese goods, and similar measures could soon extend to food and household products, making market access more challenging for Chinese firms. A precedent was set by the EU's anti-dumping actions against Chinese solar panels, which resulted in a 30 percent export decline within two years. If comparable tariffs target consumer goods, China's overseas revenue could see significant losses. The US is also assessing duties on Chinese dairy imports, citing risks of market distortion and unfair pricing strategies. The broader economic downturn in China has significantly affected stock performance, with consumer staples experiencing one of the weakest sales periods in recent years. The MSCI China consumer staples gauge is facing its worst sales underperformance in two years, reflecting investor concerns over declining consumer demand. Major retailers, including Li Ning and Alibaba, have lowered their revenue projections, underscoring persistent uncertainty in the sector. Additionally, Chinese companies are grappling with rising operational costs. Inflation, supply chain disruptions, and heightened regulatory compliance expenses are squeezing profit margins. Mengniu Dairy, a leading player in the industry, saw its profit margin plummet to just 0.1 percent in 2024, compared to 5 percent in 2022. This sharp decline highlights the financial strain many firms are enduring as they navigate economic challenges. The growing pressure on consumer goods companies suggests a prolonged period of instability, forcing businesses to re-evaluate their strategies for sustaining profitability in both domestic and global markets. While overseas expansion remains a viable strategy, Chinese companies must navigate complex trade policies and shifting consumer preferences. Strengthening domestic demand through innovation and policy support could offer a more sustainable path forward. Otherwise, the reliance on foreign markets may expose them to further economic and political risks. To remain competitive, Chinese firms must invest in product innovation, branding, and quality improvements. Simply relying on low prices will not be enough to sustain growth in foreign markets. Additionally, government support in the form of subsidies and trade negotiations could help mitigate some of the challenges posed by international trade restrictions. However, if current trends continue, China's consumer goods sector may face long-term stagnation, with companies struggling to maintain profitability both at home and abroad. The next few years will be crucial in determining whether Chinese firms can adapt to the changing global trade landscape or if they will continue to face declining revenues and market share.

Study Buddy (Explorer): China's ‘Dairy Godfather' and his booming ice cream empire
Study Buddy (Explorer): China's ‘Dairy Godfather' and his booming ice cream empire

South China Morning Post

time25-05-2025

  • Business
  • South China Morning Post

Study Buddy (Explorer): China's ‘Dairy Godfather' and his booming ice cream empire

Content provided by British Council Read the following text, and answer questions 1-9 below: [1] The story of China's 'Dairy Godfather', who went from an abandoned baby to the head of a 3-billion-yuan (HK$3.25 billion) ice cream empire, is one of resilience and vision. Niu Gensheng, 67, founded the corporate giant Mengniu Dairy and created Aice, an ice cream brand popular across Southeast Asia. [2] Niu was born into poverty in Inner Mongolia, a region of China known for its vast grasslands and deserts. His parents struggled to make ends meet. Unable to care for him, they sold him to a cattle farmer, who adopted him for 50 yuan (HK$54) shortly after he was born. When Niu was eight, his adoptive father lost his money, forcing Niu to sweep the streets and do hard labour with him. Later, both his adoptive parents died. [3] In 1983, Niu became a bottle washer at a local dairy factory, which later became Yili, one of China's leading dairy companies. Over the next decade, he worked his way up to workshop director, gaining a deep knowledge of the dairy production process. [4] By 1992, Niu was promoted to Vice-President of Production and Operations at Yili, where he reportedly earned an annual salary exceeding 1 million yuan (HK$1,086,500). Despite his success, Niu faced rumours and fierce competition at Yili, leading to his resignation. But he did not give up on his dream of building China's largest dairy company. [5] Niu used his experience and resources to launch Mengniu Dairy in 1999. At the time, his former employer, Yili, already had assets worth billions. Niu's unique marketing strategy focused on rural markets, using local dialects in advertisements and low prices to attract customers. [6] By 2004, Mengniu's revenue reached 7.2 billion yuan (HK$7.8 billion). The following year, it surpassed Yili to become China's top dairy brand. After building the Mengniu empire, Niu set his sights on the Southeast Asian market, which many other entrepreneurs had overlooked. In 2015, he launched Aice, an ice cream brand targeting Indonesia's market. [7] Niu adopted the same strategy focused on small profits and high volume, with prices ranging from 900 to 1500 IDR (HK$0.42 to HK$0.70), making 'quality ice cream affordable for everyone'. Aice introduced popular flavours like durian and coconut milk coffee ice cream, catering to local cultural and religious preferences. They also provided small shops with free freezers and electricity subsidies to support local vendors. [8] Today, Aice operates in more than 1,200 districts across Indonesia, with more than three billion yuan in annual revenue, securing its position as Southeast Asia's top ice cream brand. Niu describes his business philosophy as 'not about making the rich more grand, but about allowing the poor to live with dignity.' Niu is also deeply involved in philanthropy, funding initiatives that build schools across China and help children with serious illnesses in Inner Mongolia. Source: South China Morning Post, April 13 Questions 1. In paragraph 1, Aice is … A. the name of a company. B. an ice cream brand. C. an ice cream flavour. D. Niu's nickname. 2. Why did Niu's parents give him away, according to paragraph 2? 3. In paragraph 3, what did Niu do when he first joined the dairy factory? 4. According to paragraph 4, Niu's goal was to … A. become the vice-president of a dairy company. B. earn more than one million yuan every year. C. build China's largest dairy company. D. none of the above 5. In paragraph 5, what geographic areas did Niu's unique marketing strategy focus on? 6. Find a word in paragraph 6 that means 'failed to notice'. 7. Decide whether the following statements about paragraphs 6 and 7 are True, False or the information is Not Given. Fill in ONE circle only for each. (4 marks) (i) Aice is extremely popular with young children and university students in Indonesia. (ii) To help small stores, Aice provided them with freezers and financial help for electricity costs. (iii) Yili was China's top dairy company in 2005. (iv) Aice only offers flavours in Indonesia that are popular with Chinese customers. 8. According to paragraph 8, how does Niu help children in Inner Mongolia? 9. Arrange the following events in Niu's life in chronological order from 1 to 4. (4 marks) Aice is a popular ice cream brand in Southeast Asian countries like Indonesia and the Philippines. Photo: Handout Answers 1. B 2. They struggled to make ends meet and could not take care of him. 3. He washed bottles. 4. C 5. He focused on rural markets. 6. overlooked 7. (i) NG; (ii) T; (iii) F; (iv) F 8. He funds initiatives that help children with serious illnesses in Inner Mongolia. 9. (a) 3; (b) 4; (c) 1; (d) 2

China's ‘Dairy Godfather' rises from unwanted baby to head US$410 million ice cream empire
China's ‘Dairy Godfather' rises from unwanted baby to head US$410 million ice cream empire

South China Morning Post

time13-04-2025

  • Business
  • South China Morning Post

China's ‘Dairy Godfather' rises from unwanted baby to head US$410 million ice cream empire

The rise of China's so-called Dairy Godfather, from being an abandoned baby to becoming the head of a three-billion-yuan (US$410 million) ice cream empire, is a story of true resilience and vision. Advertisement Niu Gensheng, 67, is the founder of the corporate giant Mengniu Dairy, and the creator of Aice, an ice cream brand popular across Southeast Asia. Born into poverty in Inner Mongolia, a northern region of China known for its vast grasslands and deserts, Niu's parents struggled to make ends meet. Unable to care for him, they sold him to a cattle farmer for 50 yuan (US$7) shortly after he was born, and the farmer adopted him. At the age of eight, Niu's adoptive father lost his assets after a political row, forcing Niu to sweep streets and do hard labour with him. A short time later, both of his adoptive parents passed away. Advertisement In 1983, Niu started as a bottle washer at a local dairy factory, which later became Yili, one of China's leading dairy companies.

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