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China further eases Covid-related travel controls by loosening rules on travel tracker

China’s Ministry of Industry and Information Technology (MIIT) announced on Wednesday that it will stop applying asterisks to names of cities that have recently seen Covid-19 outbreaks on its travel tracker, in a sign of a further easing of the country’s Covid-19 controls. On Tuesday, China announced that it will cut the quarantine time required […]

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Luckin’s Q1 results exceed expectations despite impact of Covid-19

Luckin on Tuesday posted better-than-expected results for the first quarter of this year. The company’s revenue soared 89.5% year-on-year to RMB 2.4 billion ($379.3 million), easily beating the high-end $310.8 million estimate compiled by Yahoo Finance. The Xiamen-based company also announced a total of 6,580 stores as of the end of the reporting period, including 556 new store openings, which represents a 9% growth on a quarter-over-quarter basis. Net income was RMB 19.8 million for the period, compared to a net loss of RMB 232.5 million a year ago. While the company’s shares are still reeling from the negative impacts of the financial fraud scandal revealed in April 2020, the company is gearing up for a comeback in the Chinese market. However, new Covid-19 outbreaks, increasing competition, and its infamous fraud history may factor in this turnaround.

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Ele.me to offer $75 million in incentives for merchants in Covid-hit Shanghai

On May 22, Ele.me rolled out a new support program designed to help merchants in Shanghai to resume operations as the city’s months-long lockdown winds down. The Alibaba-backed food delivery giant plans to allocate RMB 500 million ($75 million) in incentives to merchants during the first two months after the lockdown is lifted in the city. At the same time, the firm will distribute initial incentives of RMB 70 million for drivers. Ele.me already launched an RMB 20 million initiative program to alleviate pressure on merchants after the pandemic resurged in Shanghai in March. Ele.me and rival Meituan are heeding the state’s call to cut fees for restaurants suffering amid ongoing coronavirus outbreaks.

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Shanghai opens “green channels” for key industries during Covid-19 lockdown

Shanghai will open “green channels” for the semiconductor, biotech, and auto industries, in an effort to simplify administrative procedures during the ongoing Covid-19 lockdown, as announced by the local government at a press conference on Wednesday. For key semiconductor companies, the government will temporarily cancel sample tests of photoresists, which will speed up import procedures. Shanghai also plans to accelerate import and export procedures for whitelisted auto manufacturers like Tesla and FAW Group. [Economic View]

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Tencent’s total revenue stays flat, profit drops in Q1 amid regulatory and Covid headwinds

Tencent has missed market expectations after effectively reporting flat revenue growth for the first quarter of this year. The Chinese tech giant reported RMB135.5 billion ($21.2 billion) revenue for the first quarter of 2022, compared with 135.3 billion in the same period last year. The company’s profit for the period was RMB26.3 billion, a decrease of 24% year-on-year, while net margins decreased to 19% from 26% last year. Tencent’s worst performance since its IPO in 2014 is mainly being attributed to clients’ shrinking ad budgets and intensified rivalry from competitors like TikTok owner ByteDance. In a Wednesday conference call, Tencent president Martin Lau warned that the impact of regulatory crackdowns will linger despite the state signaling a releasing pressure on tech majors because it will “take time for specific regulators to translate direction into real action.” The company’s shares slid 8% in Hong Kong today. [Tencent release]

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Zero cars sold in Shanghai in April as city went into Covid-19 lockdown

A new wave of Covid-19 infections slammed the brakes on new-car sales in Shanghai in April, as figures from the Shanghai Automobile Sales Trade Association showed that zero new cars were sold during the month, Chinese media reported Tuesday. Shanghai accounted for China’s biggest demand for electric vehicles last year, with sales of 254,000 units, around 7% of all EV sales in the country in 2021, according to the industry group. Automakers such as Tesla and Volkswagen suspended production at their local factories, with showrooms and dealer stores closing their doors temporarily due to an ongoing citywide lockdown that began last month.

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Shanghai plans for gradual reopening as Covid-19 cases subsides

Shanghai plans to gradually reopen its offline businesses such as shopping centers, drug stores, wet markets, and restaurants from Monday, the city’s deputy mayor Chen Tong announced at a government briefing held on May 15. The announcement came as Shanghai’s daily new cases dropped to their lowest level in nearly two months and after the city asked local residents to stay indoors for a strict three-day “silent period” in order to avoid a wider spread. Some airlines, including Spring Airlines and Juneyao Airlines, will gradually resume services in the financial hub from today. Shanghai’s weeks-long lockdown has immobilized more than 25 million residents in the metropolis since late March.

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Covid lockdowns increased demand for tablets in China: report

IDC released a report on Wednesday showing that tablet shipments have grown by 8% to 6.8 million units in China since Q1 of 2021, compared with a decline of 5% in global markets in the first quarter of this year. Guo Tianxiang, a senior analyst with IDC said that China’s epidemic situation and accompanying lockdown measures have boosted consumers’ demand for tablets. Guo also noted that lockdowns in Shanghai and surrounding areas haven’t had any impact on the supply chain and production of tablets. [IDC, in Chinese]