Today, a handful of tech giants such as Amazon, Apple, Facebook, and Google are having an increasing impact on consumers' daily lives, and it has become a global trend for governments to tighten regulations on big tech companies.
Recently, US President Biden signed a wide-ranging executive order, the core of which is to encourage regulators such as the Federal Trade Commission to adopt new rules and policies to limit the growing scale and strength of large technology platforms such as Amazon, Google, and Facebook, and the new restriction rules may revolve around online monitoring and user data accumulation.
In view of the impact of global regulation on technology giants and capital markets, 36Kr talked with Hong Jiajun, chief of the overseas TMT industry of Industrial Securities, commenting on the current investment hotspots:
<h3>E-commerce has a greater impact</h3>
36Kr: What are the risks for tech giants in the current tightening of regulations?
Hong Jiajun: In the long run, the tightening of global Internet supervision is a trend need for the industry or for general users, for data privacy security and wide coverage of scenarios, the industry must develop in an orderly manner, and it is more necessary for regulatory authorities to regulate to avoid economic life or industry operation failure or loss of innovation ability.
Europe and the United States are the forerunners of Internet regulation. Since there is no global Internet platform in Europe, one of the important purposes of its regulation is to resist overseas Internet giants, often through business restrictions, fines, punitive damages and other means. The regulatory motivation in the United States is more about data security than in Europe. Giants hold a large amount of personal and corporate privacy data, which is highly correlated with global economic interests and national security in the data age, and regulating global giants will help to better control related interests.
In the long run, the capital market is more concerned about the profitability of the giants themselves and the expansion of future businesses, and I think stock price fluctuations are a short-term phenomenon and a corrective process.
Supervision is actually a good thing for users, and there is no need to worry too much about the business development of enterprises. For example, for a company with a good user base like Meituan, supervision is regulating its business, which will produce a marginal change in the company's performance, but it will not have a core impact.
But like e-commerce may have a greater impact, such as Ali's early establishment of merchant resource barriers, Jingdong and Pinduoduo they are not easy to get, after the "two to choose one" restriction is eliminated, the giant's business operations slowly produce marginal changes, market opportunities are also released, but the user habits accumulated over the years, as well as the advantages of the business itself supply chain are difficult to quickly eliminate.
<h3>Technology is the core competitiveness</h3>
36Kr: What is the impact of stricter data security on the Internet industry?
Hong Jiajun: Protecting data security is an industry trend, Apple IDFA (hardware terminal ID) at present users can choose not to open personal data to the platform, the general three-party users are not authorized to get the user's data, this is the future trend. But as long as the data demand remains the same and the technology evolves, the business model of these platforms will not change much.
For example, the data that could be bought for 100 yuan in the past is now relatively less valuable and the value increment of the data purchased at the same price, but whether it is advertising or user labels, these data are still needed, so the business model has not changed much in essence.
From an investment point of view, the existing data business model may have some reshuffle in the short term, the future technology will be a key point, who has the ability to better analyze these involved data, or who has a good relationship to get more core data, may increase their relative advantage, so the industry share may become more and more concentrated in the future.
Apple has canceled the IDFA, and it is expected that Android will follow in the future, but it will become a gradual advance, and the future industry will highlight its technical advantages, and being able to better extract data is a key competitive factor in the future.
<h3>Listing in Hong Kong is just needed</h3>
36Kr: What is the impact of the revision of the Cybersecurity Review Measures on the China Stock Exchange?
Hong Jiajun: The biggest intention of the "Cyber Security Review Measures" is to determine the information sensitivity of the draft before going to the United States for listing, rather than preventing enterprises from listing in the United States. Recently, we have seen more and more companies considering returning to Hong Kong for listing, and we expect that if there are capable companies, unless they do not meet the conditions for listing on Hong Kong stocks, or their investment structure is not suitable for the Hong Kong stock market, most companies will evaluate this option.
This is a future trend, more Internet companies will turn to Hong Kong stock development, the past two years a lot of listed companies trading volume is not very good, if the future is Hong Kong and the United States listed, or the U.S. stocks after the delisting and then listed, we believe that there are many companies are taking this channel.
<h3>Next year may be a big year for IPO</h3>
36Kr: Is this year a big year for the IPO of domestic TMT companies, and what are the challenges of choosing a listing location?
Hong Jiajun: I personally judge that next year is the big year. IPOs will also be suspended until the entire internal mechanism is confirmed, and it is expected to be postponed, so there may be more IPOs next year, especially after the rules are determined.
There are some companies that are eager to go public this year, and we speculate that it is mainly the pressure of betting. Since the requirements of Hong Kong stocks are still higher than those of US stocks, it is not realistic for companies to quickly switch to Hong Kong stock listings, and even if they start now, it may take several months to IPO in Hong Kong stocks.
For enterprises, the listing conditions of US stocks are more relaxed than those of Hong Kong stocks, including profitability and other business maturity. Therefore, the priority judgment of enterprises will be such a threshold; secondly, the time point, if it is listed in Hong Kong stocks, whether it can meet the requirements of betting, or the requirements of its own funds; and finally there is the problem of valuation, the valuation of many Internet companies in the US stock market is more friendly, from the perspective of the capital market, whether hong Kong stocks can also raise the same amount of funds as the US stock market is also a consideration factor for enterprises.
So from that point of view, the number of IPOs next year should be more than this year.
<h3>The community group buying category has expanded to daily necessities</h3>
36Kr: Dingdong grocery shopping and daily excellent fresh companies have successively IPO, Ali and Meituan continue to wrestle for local life, what space is there in this market?
Hong Jiajun: Our judgment is that it is not easy to do this piece of home fresh food, the market for community group buying does not necessarily have the profit speed expected before, but platforms like Meituan that can carry out supply chain coordination have the opportunity to make a profit, and platforms with ready-made distribution systems like JD.com are also capable of operating this part of the fresh food to home business.
However, Dingdong buys vegetables and daily excellent fresh is still burning money, and if you want to continue to operate in such an industry pattern, continuous fundraising is a necessary condition, so they may be more anxious to go public, on the one hand, to alleviate the pressure on cash flow, on the other hand, to ease the pressure on investors.
In the future, the category of community group buying may expand from fresh to daily necessities, Taobao or Pinduoduo, which have a relatively high user mentality, will join the community group purchase, and the market share of supermarkets will be divided.
<h3>The opportunity still belongs to the big platform</h3>
36Kr: How do you view the continuous development of travel business by platforms such as Meituan?
Hong Jiajun: For businesses like Mobility, platforms like Meituan will continue to expand, and Didi, which originally occupied 70% to 80% of the market share, may now fall below 50%. The entire ride-hailing market needs healthier development, and one dominant company is not conducive to the development of the entire industry and user experience.
Now the opportunities for other small platforms are not very large, the opportunities are still large platforms, such as AutoNavi, Baidu, Meituan, etc., platforms such as AutoNavi and Baidu can use the advantages of user operation, and then Meituan uses their existing huge consumer groups. However, there is no conclusive conclusion on whether to build its own team, for example, meituan only has its own team in Shanghai, and other regions have not been involved. Personally, I believe that we should focus on the model of the existing aggregation platform, so that the ability to control supervision and profitability is stronger.
<h3>Capacity will be restored as soon as the end of the year</h3>
36Kr: The epidemic situation in Malaysia has not yet dissipated, how does the "lack of core" affect the production and marketing plan of the relevant industrial chain?
Hong Jiajun: Malaysia is an important producer in the global semiconductor supply chain, and the local packaging and testing capacity accounts for about 13% to 15% of the global packaging and testing capacity. Previously, it was expected that the "chip" gap in the third quarter would be narrowed or even eliminated, but at present, it can maintain a basic production capacity, the gap will still be there, I think most of it can still maintain more than 80% of the production capacity, it is expected that the fastest is the end of this year or the first quarter of next year to restore production capacity.
The fourth quarter is still the peak season of consumer electronics, so at this point in time we still have some breakthrough expectations, unless the sales of consumer electronic products like iPhones or other consumer electronics are not as expected, we must put the inventory in hand, the price of the entire industry will have a sharp drop, personal estimates that the price increase at the end of the year will tend to be stable. In Malaysia, I think the gap will continue, but it will not be broken as a whole.
<h3>Autonomous driving has not reached the bubble stage</h3>
36Kr: Is the "listing fever" of autonomous driving a bubble, and what are the investment prospects?
Hong Jiajun: From the user's point of view, the understanding of autonomous driving is still in a relatively early stage, such as the safety of buying a car. Although more L3 and even L4 models are expected to be available in the next three years, it is not a mature stage in terms of regulations, users and automobile manufacturing itself, so there will be no increase in volume.
But at this stage, everyone will have expectations, after all, safe and effective driving is the goal that everyone pursues together, at present, intelligent driving is more attractive than new energy vehicles, but the development of new energy vehicles has also exceeded the expectations of most people. Therefore, although the current cost is still at a high level and the technology is not mature, once the technical conditions are available, mass production and safety are guaranteed, automatic driving will usher in a stage of rapid development.
Therefore, everyone's expectations are still getting higher and higher, for example, a car priced at 100,000 to 200,000 yuan, according to the global 80 million cars to calculate, this market space is very large. Therefore, optimistic expectation of the market is not an excessive thing, logically speaking, this is a market of tens of trillions, everyone will find a way to participate, personally I think that it is not yet a bubble stage.
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