Last week's highlights: Huawei has shown resilience in the face of U.S. restrictions. Intel's foundry business lost $7 billion last year. Hynix's HBM memory chip beats Samsung. Musk said he did not abandon the low-cost car program. Tsai Chongxin reflected on Alibaba's backwardness because he forgot who the real customers were. Home Depot acquires SRS for $18.25 billion. Johnson & Johnson announced the acquisition of Shockwave Healthcare. The spin-off of 3M's healthcare business has been completed. GE completes the spin-off into three independent public companies. LVMH boss Arnault remains the richest man in the world.
1
Huawei has shown resilience in the face of U.S. restrictions
After the United States restricted the sale of its most powerful chips to Huawei for five years, the telecommunications equipment and handset maker has shown resilience. The company has diversified into new business areas such as cloud computing, enterprise software, and automotive systems, and has realigned its offerings. Ken Hu, Huawei's Rotating Chairman, said in the annual report: "Over the past few years, Huawei has gone through many trials and challenges, and has grown in the face of challenges. "Last year, nearly 70% of Huawei's revenue came from China. According to Huawei, the Mate 60 series and HarmonyOS are loved by consumers, and the consumer sector has grown by overcoming major technical hurdles and solving the industry's most challenging problems. Related: Huawei announced its 2023 dividend plan. According to the Shanghai Clearing House, Huawei Investment Holding Co., Ltd. issued an announcement on the distribution of dividends, proposing to distribute dividends of RMB 77.095 billion to shareholders. Huawei Investment Holding Co., Ltd. also stated that the above-mentioned dividend distribution is the company's normal profit distribution, and has no adverse impact on the company's production and operation, financial condition and solvency. At present, the number of employees holding shares in Huawei is 142315, and the average dividend per person is more than 500,000 yuan.
2. Intel's foundry business lost $7 billion last year
Intel's foundry business posted a $7 billion operating loss last year, and the chip company expects the loss to peak this year. This is new information disclosed when Intel resegments its business. The company separates the performance of its product and foundry businesses to help investors better understand the value of each business. Compared with the loss of $5.2 billion in 2022, Intel's foundry business operating loss in 2023 increased sharply. The foundry business generated revenue of $18.9 billion in 2023, compared to $27.5 billion in 2022. GlobalFoundries, an independent foundry company, generated less than half the revenue of Intel's foundry division over the same period, but made more than $1 billion in profits. Related: It's been nearly three years since Pat Gelsinger returned to the role of CEO of Intel Corp. to lead an ambitious turnaround plan, and the chipmaker has essentially been discussing plans to build a chip foundry business. The division tries to compete with other contract semiconductor manufacturers to make chips designed by other companies.
3. Hynix's HBM memory chip beats Samsung
South Korea's SK Hynix has a market capitalization of more than $100 billion. The chipmaker's share price has more than doubled in the past year to become South Korea's second-largest publicly traded company due to surging demand for its high-bandwidth memory (HBM). SK hynix has a market share of more than 90% in the latest version of HBM. Although rival Samsung Electronics still has a market capitalization of more than $360 billion, it lags behind SK hynix in developing memory chips for artificial intelligence. Samsung shares are up 31% over the past year. Related: Samsung Electronics is adopting a dual-track AI semiconductor strategy to simultaneously improve its competitiveness in the field of AI memory chips and AI computing chips. In the AI memory chip segment, Samsung has established an HBM memory capacity and quality improvement team led by the head of DRAM products and technologies, which is the second HBM dedicated team it has established this year. Samsung recently made a massive investment in HBM memory to win back the market leadership in HBM memory that SK hynix won due to a strategic mistake: in 2019, Samsung disbanded the then HBM R&D team due to a misprediction of the future market.
4. Musk said he had not abandoned the low-cost car program
Reuters reported that Tesla has canceled plans for a low-cost car, the Model 2, and will go all in on developing a robotaxi, a robotaxi, but its production volume is expected to be much lower than that of the Model 2. Musk posted on social media platform X that "Reuters is lying". Musk also said that Tesla plans to launch a robotaxi on August 8. At an event held in September 2020, Musk said that Tesla's ongoing series of innovations convinced him that the company could produce a cheap electric car in about three years. And it turns out that more than three years have passed, and the Model 2 has been missing for a long time. Related: Tesla announced its Q1 2024 vehicle production and delivery report, with deliveries down 8.5% from the same period last year and about 20% from the fourth quarter. Tesla delivered a total of 386,810 vehicles and produced 433371 vehicles in the first quarter. In the first quarter of last year, the electric vehicle maker reported deliveries of 422875 vehicles and production of 440808 vehicles. In the fourth quarter of 2023, Tesla reported deliveries of 484507 vehicles and production of 494989 vehicles. Tesla's first-quarter vehicle deliveries were even lower than analysts' lowest expectations of 414,000 units.
5. Tsai Chongxin reflected on the reasons for Ali's backwardness
Tsai Chongxin, chairman of the board of directors of Alibaba Group, recently gave a podcast interview. "When we look internally and reflect on what has happened over the past few years, we find ourselves falling behind because we have forgotten who our real customers are. We don't have the best experience for users who shop with our app. Tsai Chongxin said that the group has reorganized its personnel and reorganized its organizational structure in line with the strategy. "The CEO, who is 12 years younger than himself, is very, very user-focused, focused on the product, the interface and the user experience, which is the most important thing for us. ”
Related: Chinese e-commerce giant Alibaba spent $4.8 billion on share buybacks in the first three months of 2024, the second-highest quarterly buyback record in the company's history, amid a share price near multi-year lows. The spending is second only to the amount spent on share buybacks in the three months to September 2021, when Alibaba's share buyback expenses were $5.1 billion. Alibaba spent $12.5 billion on share buybacks in the fiscal year ending in late March, up from $10.8 billion the year before. Alibaba's share price has fallen 30% over the past year. The stock is now down 77% from its peak in October 2020.
6
Home Depot acquires SRS for $18.25 billion
Home Depot has agreed to acquire SRS Distribution, a residential specialty trade and distribution company, for approximately $18.25 billion, including net debt. SRS is a building products distributor serving professionals in the horticulture, pool and rooftop businesses. The company operates 760 locations in 47 states, with more than 2,500 sales professionals and 4,000 delivery trucks. The acquisition will accelerate Home Depot's growth in residential professional customers, while also making it a major specialty trade distributor across multiple verticals. Related: As the largest home improvement retailer in the United States, Home Depot is often seen as a representative of the U.S. real estate market. Building on this, The Home Depot's acquisition of SRS Distribution, a supplier of specialty building products, will significantly expand The Home Depot's presence among contractors and builders. These professionals already account for about half of Home Depot's sales, with the rest coming from regular customers who usually do it themselves.
7
Johnson & Johnson announced the acquisition of Shockwave Healthcare
Johnson & Johnson and Shockwave Medical announced on April 5 that they have entered into a definitive agreement whereby Johnson & Johnson will acquire all of Shockwave's outstanding shares for $335 per share in cash. The total value of the transaction is approximately $13.1 billion, including acquisition cash. The transaction has been approved by the boards of directors of both companies. The acquisition of Shockwave will further strengthen Johnson & Johnson Medical's position as a market leader in cardiovascular interventions and accelerate its transition to higher-growth markets.
Related: Shockwave is the first company in the world to offer coronary intravascular lithotripsy (IVL) and is committed to providing innovative solutions for the treatment of calcified lesions in CAD and PAD. Coronary calcification lesions can lead to insufficient blood supply to the heart muscle, which can lead to serious heart diseases such as angina. IVL is a transcatheter, minimally invasive technique used to treat coronary calcified lesions. This technique can help improve vascular compliance in the treatment of CAD and PAD by using acoustic pressure waves to treat calcified lesions, and is often used in conjunction with stenting. Shockwave is currently the only company to provide commercial IVL technology, which has provided safe, simple and effective treatment options to nearly 400,000 patients worldwide.
8
3M Healthcare was spun off and listed
Solventum announced that the spin-off from 3M has been completed. The newly independent healthcare company will begin trading on the New York Stock Exchange. As part of 3M's business, Solventum had sales of $8.2 billion in 2023 and employed 22,000 people. Solventum is headed by Bryan Hanson as CEO, Wayde McMillan as CFO and Carrie Cox as Chairman. Solventum rang the opening bell on the NYSE on April 3 to celebrate the company's listing.
Related: 3M retains 19.9% of the outstanding shares of Solventum common stock, which will be monetized five years after the spin-off.
9
GE completed the spin-off into three independent public companies
With the completion of the spin-off of GE Vernova, the energy business of General Electric (GE), GE Aerospace officially became an independent, publicly traded company. On April 2, GE Aerospace and GE Vernova jointly rang the opening bell at the New York Stock Exchange. GE also completed the final step of a multi-year transformation that was spun off into three independent, publicly traded companies: GE HealthCare, GE Vernova and GE Aerospace. In 2023, GE Aerospace will have revenue of approximately $32 billion, GE Vernova approximately $33 billion, and GE Healthcare approximately $19 billion.
Related: GE HealthCare shares were officially listed on the Nasdaq in January 2023. Previously, General Electric (GE) announced plans to form three of the world's leading investment-grade listed companies through spin-offs. The three companies will focus on three growth sectors: healthcare, energy and aviation.
10LVMH boss Arnault remains the richest man in the world
Forbes released the 2024 Global Billionaires List, and Bernard Arnault, chairman and CEO of LVMH Group, remains the world's richest man, and his personal wealth increased by 10% from 2023 to $233 billion. Elon Musk remains in second place, with a personal fortune of about $195 billion, an 8% increase from last year, but a figure well below his previous peak of $300 billion due to the fall in Tesla's stock price. The third is Amazon founder Bezos, with a net worth of $194 billion. Related: The top 10 richest people in Chinese mainland on the list are: Zhong Zhuxi, Zhang Yiming, Huang Zheng, Ding Lei, Ma Huateng, He Xiangjian, Ma Yun, Li Shufu, Qin Yinglin and Wang Chuanfu.