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On October 17th, according to the Financial Times, Anthropic is offering Blackstone Group a yield exceeding 10% to raise funds to support its latest chip deal. This $60 billion debt financing program, dubbed "Project North Star," will help Anthropic procure approximately 1.5 gigawatts of custom semiconductors, or TPUs, developed by Google. It is expected to be the largest chip financing deal to date and a key test of investor demand for AI-related debt. Sources familiar with the matter revealed that Blackstones funds will invest $9 billion to purchase debt backed by Anthropics chip lease payments over the next five years, representing half of its approximately $18 billion in subprime loans. Blackstone has received a coupon rate offer of 10%, and the total yield will be even higher after accounting for new debt issuance discounts and other fees. According to the Intercontinental Exchanges Bank of America BB-rated U.S. High Yield Bond Index, borrowers with similar credit profiles typically pay around 7% yields when financing in the public bond market.According to the Financial Times, Anthropic offered Blackstone Group a double-digit yield in its latest chip financing deal.In an executive order, U.S. President Trump stated that he would waive certain sanctions, restrictions, and tariffs applicable under the Graham Act on sanctions against Russia and Iran, effective immediately.On October 17th, Russian President Vladimir Putin stated on the 16th that, in response to attacks by Ukrainian authorities on Russian industrial enterprises and fuel and energy complexes, the Russian armed forces continue to strike Ukrainian military-industrial complexes and related facilities. Putin stated that the Russian military is accelerating its offensive across the entire front, and the "safe zone" along the border with Ukraine has significantly expanded in recent months. One of the main tasks on the ground remains the "liberation" of Donetsk. The Russian militarys control of Dobropilya was a landmark event in the special military operation, opening up a passage to Donetsk.On October 17th, German Chancellor Merz stated in Brussels, Belgium, on the 16th that the EU should exercise fiscal restraint in negotiating the next long-term budget, opposing a significant increase in its size and emphasizing that limited funds must be prioritized for defense and competitiveness. Following the conclusion of the two-day EU summit, Merz explicitly opposed the proposal to increase the next budget by approximately 50% at a press conference. He said that drastically increasing the EU budget is "fiscally unfeasible," and the final budget figure must be significantly reduced based on the European Commissions proposal. Merz posted on social media on the 15th that Europes funds are limited and clear priorities must be set. "We must invest funds in key areas that will determine Europes future—defense and competitiveness."

Chinese giant Alibaba Next target: Southeast Asia

LEO

Oct 25, 2021 14:08

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Alibaba Group

Alibaba Group (NYSE: BABA, Hong Kong Stock Exchange: 9988) was established in 1999, and Jack Ma is the main founder. It is a Chinese company that provides an online trading platform for e-commerce, with dual headquarters in Hangzhou and Beijing. The scope of services includes B2B trade, online retail, shopping search engines, third-party payment and cloud computing services. The group's subsidiaries include Alibaba B2B, Taobao, Tmall, Yitao, Alibaba Cloud Computing, Juhuasuan, AliExpress, Alibaba International Trading Market, Ele.me, Flying Pig, Youku, Hema Fresh, Ali Pictures, Cainiao Network, Gaode Maps, Lazada, Daraz, etc.


Performance increased by 30% year-on-year

Based on the performance of the entire fiscal year, the group's revenue increased by 41% year-on-year to 717.3 billion yuan, and the adjusted net profit was approximately 172 billion yuan, an increase of 30% year-on-year.


Chief Financial Officer Wu Wei said that the total annual revenue in fiscal year 2022 is expected to exceed 930 billion yuan. In view of the market potential and the proven strength of the group’s profit and cash flow, it plans to increase all incremental profits and additional profits in fiscal year 2022. Capital investment is used to support platform merchants, and to invest in new businesses and key strategic areas, which will help increase consumers' consumption share and enter new potential markets.


Last quarter, Alibaba's core business revenue rose 72% year-on-year to 161.4 billion yuan, and adjusted EBITA (earnings before interest, tax and amortization) increased 9% year-on-year to 30.68 billion yuan. Alibaba Cloud turned losses at the end of last year and maintained profit in the last quarter. Adjusted EBITA recorded 308 million yuan. Cainiao Logistics achieved positive operating cash flow in fiscal 2021.


CMB International issued a report earlier, stating that Alibaba’s core e-commerce transaction volume in the past fiscal year is expected to be stable, but profit margins will continue to be diluted. Because Alibaba is currently focusing on potential market expansion rather than profitability, I believe This trend will continue this year.


Alibaba was fined RMB 18.228 billion by the China Municipal Supervision Bureau for its involvement in monopolistic behaviors such as "choose one out of two". CMB International believes that the result of the punishment was better than expected. Because of the lack of asset disposal or other major adjustments, it was fined by the China Municipal Supervision Bureau. Alibaba has less business impact.


Invest in Vietnam to expand business in Southeast Asia

In May 2021, Alibaba and its partners will invest US$400 million (equivalent to HK$3.12 billion) in the retail division of the Vietnamese conglomerate Masan Group Corp. The transaction will expand the online grocery business of the Chinese e-commerce giant in Southeast Asia.


According to Bloomberg, Alibaba and Baring Asia Investment Fund lead a consortium that will hold a 5.5% stake in The CrownX. The CrownX holds Masan Group’s interests in Masan Consumer Holdings and VinCommerce; Masan will own an 80.2% stake in The CrownX after the transaction.


According to a statement, this transaction means The CrownX's pre-investment valuation was US$6.9 billion.


As part of the transaction, the Vietnamese retail company will cooperate with Alibaba's Southeast Asian subsidiary Lazada to expand its digital business in the country. As competition in China's domestic market and regulatory scrutiny intensify, Jack Ma's company is seeking to expand its business in Southeast Asia, a region with a population of 650 million.