When I checked the back-end today, I saw that many readers left a message last night with the same question: Meta Inc. has no business in China on its two major platforms, Facebook and Instagram, so why are they cooperating with the Chinese government's law enforcement?
Let's not even mention that China also has deterrent measures such as extraterritorial jurisdiction and blacklist sanctions. Although Meta doesn't have Chinese users on the surface (although quite a few do use VPNs), it has a large number of Chinese customers. Last year, Chinese companies spent nearly $20 billion on advertising on Meta's two major platforms, accounting for about 12-13%, making China the world's second-largest source of advertising revenue.
Companies like Xiyin, Temu, Alibaba, Tencent, Xiaomi, OPPO, Vivo, and Lilith Games, when expanding their overseas businesses, cannot avoid meta tags in order to acquire traffic and users. You can think of meta tags as the global version of Tencent.
If it were you, you wouldn't defy the Chinese government's administrative order for a mere manus.
Today's market discussion begins with a ghost story from last night's US stock market.
The WSJ published an article stating that OpenAI failed to meet its revenue and user growth targets at a crucial moment in its IPO push.
For example, the target for weekly active users was 1 billion, but the actual number was only 900 million, a shortfall of 100 million, and the growth momentum slowed significantly. Additionally, there were only 15 million paying users, and a high churn rate was observed.
Revenue is currently $3.7 billion, $300 million less than the expected target of $4 billion, and monthly targets for the first three months of this year have not been met.
The main reasons for its predicament are industry competition and cost pressures. Gemini, Anthropic, and Meta have developed increasingly aggressive models, severely impacting the enterprise market. Meanwhile, the cost of computing servers is skyrocketing, resulting in a loss of $8 billion last year, and the loss is expected to double this year.
The original goal was to go public by the end of 2026, with an expected market capitalization of over $800 billion. Now it's only around $600 billion, and the market outlook is pessimistic.
As a global benchmark company in this round of AI boom, OpenAI's cooling down will significantly undermine everyone's confidence in the industry. This is because the US stock market had been steadily rising, and now it has suddenly stumbled, raising concerns about a chain reaction.
This article was published at 10 PM Eastern Time on the 27th, after the US stock market had closed, while the A-share market had just opened, which poured cold water on our AI sector. Today, the technology sector as a whole corrected, with funds flowing back into traditional sectors. The tech sector finally had a rare moment of triumph, but their joy won't last long.
The first-quarter reports released tonight show that Luzhou Laojiao's profits fell by 19% year-on-year, and Gujing Gongjiu's fell by 31%. I took a close look at the financial reports, and the main reason was that they actively controlled inventory to reduce stock. But the first-quarter reports are really disheartening. The downward trend is endless. Wuliangye and Yanghe shares, which will be released tomorrow and the day after, should also be prepared.
1. The UAE's announcement of its withdrawal from OPEC is the biggest global energy news today. The reason for the withdrawal is simple: the UAE repeatedly proposed increasing its share of oil production, but these requests were rejected by OPEC (led by Saudi Arabia). The conflict was irreconcilable, leaving no choice but to part ways. The sheikhs wanted to take advantage of the current high oil prices to extract more oil and make more money. Furthermore, this aligned with US interests, and with the tacit approval of its powerful backer, they went ahead with it.
In the short term, it can release 500,000 to 800,000 barrels of production capacity, and next year it will reach 5 million barrels per day, becoming the world's second largest net exporter.
My first reaction upon seeing this news was that Iran had blocked the Strait of Hormuz, meaning even if the UAE increased production, they wouldn't be able to ship their goods out? Later, I checked and found out they have a pipeline leading to the port of Fujairah, transporting 1.8 million barrels daily, and it's currently operating at full capacity. I've attached a picture with two red lines; I'm referring to the shorter one on the right.
The UAE's increased production will have a certain restraining effect on oil prices, but it will not be able to decisively cool down oil prices in the short term.
2. Star stock Shenghong Technology released its Q1 report, showing revenue of 5.5 billion yuan, up 28%, and net profit excluding non-recurring items of 1.257 billion yuan, up 36%, with a gross profit margin of 34%. After the report's release, retail investors on stock forums and online communities were fiercely debating whether it fell short of market expectations. I compared it with the previous Goldman Sachs research report's expectations, which were 5.7 billion yuan in revenue, 1.3 billion yuan in net profit, and a gross profit margin of 37%, which are basically in line with expectations.
3. BYD also released its Q1 report, with revenue of 150.2 billion yuan, down 11% year-on-year, and net profit excluding non-recurring items of 4.1 billion yuan, down 49% year-on-year. Gross profit margin was 18%, a slight increase compared to the previous quarter. Compared with previous institutional expectations, it was not very good. The expected net profit excluding non-recurring items for Q1 was 4.6-5 billion yuan, but the actual profit was only 4.1 billion yuan. However, BYD's stock price has not surged this year, so it might be a little better.
4. Ping An Insurance also released its first-quarter results tonight. Revenue and profit both fell by about 7%, slightly worse than market expectations, but basically in line with the range. Ping An had a brief period of brilliance at the beginning of the year, but now it's back to the bottom. It seems like they've changed the staff, and the time off are quite humane, damn it.
As I write this article, Nvidia has already rebounded from -3% in pre-market trading to -1.7%. Popular sectors tend to see a surge in buying as soon as they dip slightly.
Finally, here are two more updates on readers' trips with their parents.
Li Bai wrote, "In the third month of spring, amidst the fireworks, I descend to Yangzhou." Thank you to the blogger for organizing this trip for my parents; it was very meaningful. Since my father-in-law passed away, I haven't taken my mother-in-law on many trips in years. So, three generations of our family organized a trip to Yangzhou before the May Day holiday. On the first day, we visited the Yangzhou Grand Canal Museum, a national first-class museum, which I highly recommend, especially for children. It comprehensively showcases the Grand Canal's value as a World Cultural Heritage site. In the afternoon, we visited the former residence of an elder on Dongguan Street. Advance reservations are essential, as many tourists are unfortunately turned away. On the second day in Yangzhou, a visit to Slender West Lake was a must. We took a boat trip to the Twenty-Four Bridges, and the scenery was picturesque. I'd been to Yangzhou before, but always for business trips, so this trip was a welcome addition thanks to my friend.
I think this event by Cat Bro was very meaningful. It encourages us to take our parents out more often, and regardless of whether we win or not, we should all make time for our families!
"A huge thank you to Brother Cat and Miss Cat for making this trip possible! (I almost gave up.) This was also my first time traveling with my elders, so I felt a little pressure. To balance my vacation with my spouse and child, I took half a day off for a two-and-a-half-day trip to Chimelong in Qingyuan. As for food, we ate chicken several times in Qingyuan, but we didn't find any truly delicious Qingyuan chicken or any other local specialties, which was a bit of a shame. Regarding activities, even on a regular weekend, Chimelong in Qingyuan was packed with people. Unless you're a huge animal lover, it's best to avoid Chimelong in Qingyuan. However, there are some advantages. There's a forest hot spring downstairs, which the kids really enjoyed playing in. I hope to have more time this summer to take them further afield, see more scenery, and try more delicious food."
That's all for tonight, launch!
Original Article: View Chinese Version
