In today’s briefing:
- Alibaba’s $53 Billion Bet on an AI and Cloud Expansion Windfall
- China Healthcare Weekly (Mar.2) – NewCo Model, Pfizer-Summit Deal, Henlius to Enter HK Stock Connect
- [Trip.com (TCOM US, BUY, TP US$74) Review]: Steady Domestic Supports for Venturing in Overseas
- Mercedes-Benz China Confirms Layoffs in a Changing and Challenging Market
- Monthly Air Cargo Tracker | January: Soft Demand, Low LFs | Ocean Growth > Air Growth (March 2025)
Alibaba’s $53 Billion Bet on an AI and Cloud Expansion Windfall
- Alibaba Group Holding Ltd. is making a record-breaking bet on artificial intelligence (AI) and cloud computing, announcing on Monday that it will inject more than 380 billion yuan ($53 billion) into cloud and AI infrastructure over the next three years — more than its total capital expenditure over the past decade.
- The Chinese tech giant said in a statement that the investment marks the largest private-sector commitment to cloud and AI hardware in China.
- Since its 2014 initial public offering, Alibaba’s total capital expenditures from 2015 to 2024 have amounted to approximately 376 billion yuan.
China Healthcare Weekly (Mar.2) – NewCo Model, Pfizer-Summit Deal, Henlius to Enter HK Stock Connect
- The NewCo model can be considered as an “intermediate state” for Chinese biotech companies when they hopes to enter overseas markets, rather than a real success in internationalization.
- After the announcement of Pfizer-Summit cooperation, share price of Summit plunged. Pfizer is clearly the beneficiary. The possibility of Summit being acquired could be reduced, which make investors unhappy.
- Shares of Henlius surged. Thanks to Lin Lijun’s dissenting vote, investors have the opportunity to profit at a higher price.Next goal is to be included in Hong Kong Stock Connect.
[Trip.com (TCOM US, BUY, TP US$74) Review]: Steady Domestic Supports for Venturing in Overseas
- TCOM reported C4Q24 revenue 5.4%/3.6% higher than our estimate/consensus, and non-GAAP operating profit 11.2%/6.2% higher than our estimate/consensus, supported by strong domestic travel rebound;
- Even though C1Q25 margin guidance was soft due to commitment to overseas expansions and a couple of one-time events affecting outbound,
- We keep the stock as BUY rating and keep TP at US$74/ADS.
Mercedes-Benz China Confirms Layoffs in a Changing and Challenging Market
- Mercedes-Benz China confirmed Thursday that it is implementing business adjustments, including layoffs, to improve operational efficiency in a challenging and changing market.
- The Chinese subsidiary of the German auto giant said restructuring and downsizing were unavoidable, but it pledged to comply with legal regulations and offer affected employees severance packages above market standards along with help finding alternative work.
- While the company did not disclose which departments or what percentage of employees would be affected, sources told Caixin that Beijing Mercedes-Benz Sales Service Co.
Monthly Air Cargo Tracker | January: Soft Demand, Low LFs | Ocean Growth > Air Growth (March 2025)
- January air cargo activity moderated; timing of LNY holiday also made for tough comps
- January Int’l air cargo tons at US gateways grew far less than inbound (ocean) TEUs
- Data from Asian carriers & US gateways indicates low utilization, softening growth
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