FDA Suspension Plummets Down Ali Health Stock

The largest e-commerce business; Alibaba has faced a set back when its unit met with suspension

 On Monday, in Hong Kong trading, China’s largest e-commerce company, Alibaba Group Holding Ltd.’s health-care unit, Alibaba Health Information Technology Ltd. reported a decline in its stock by 14%. The shares plummeted down when the country’s officials put off the state-owned drug monitoring system which was created and operated by Ali Health and was put into operation to create, by online tracking and selling of prescription drugs, the world’s fastest growing medical markets.

The unit, Ali Health, was put into operation in 2014. The unit was formed when Alibaba and Jack Ma’s private equity firm, Yunfeng Capital Ltd. acquired around 54% holding in a company known Citic 21CN whose objectives include managing pharmaceutical products data. The newly formed company launched an app that brought the patients closer to the community hospitals and doctors. The unit also took over Alibaba’s over the counter online sales. The unit performance soared as according to Deloitte, a consultancy firm, around $100 billion had been generated through the sale of Chinese prescription drugs.

The suspension of the unit, however, came in when China’s Food and Drug Administration receive numerous complaints with respect to Ali Health’s intrusion in the FDA’s system of tracking the data of drug’s composition, manufacturing, regulatory, and expiration.  However, that wasn’t the first time that the FDA had received the complaints against the Hangzhou e-commerce organization. Earlier in January, a pharmacy chain, headquartered in Hunan’s central province, Yontinhe Group sued FDA and blamed it for forwarding biased competitive authority to Alibaba’s Ali Health. As a reaction to the filed lawsuit, FDA had then replied that it “support the drug-monitoring system.” However, now, FDA opined that it has been paying attention to the complaints.

Rico Ngai, Alibaba spokesman didn’t comment on the issue while the statement released by the company only said that it would look closely into the matter and come up with a way to solve the confliction raised between Ali Health and China’s FDA. It was also further revealed that at the moment, the unit is deprived of ample information which can help it to analyze how much will the recent suspension impact on Ali Health. The unit told that for the year ended March 31, 2015, Ali Health tracking system post around $4.8 million revenue which roughly makes up 37 million Hong Kong dollars.

According to health care experts, the China’s growing company has been an answer to various problems clung to China’s ailing healthcare sector. Serious issues like hospital overcrowding and overreliance on drugs looks at the company’s think tank for a coherent solution. A consultancy firm, Bain & Co. had analyzed that the 80% of hospital revenue is comprised of the drug sales in China’s mainland.  

The company disclosed that it has encountered a lot of skepticism since it has entered into online drug sales. A technology head at Zhongshan Hospital, Yin Yiqin, said: “Alibaba is not fighting on behalf of patients. It’s fighting on behalf of Alibaba.”

However, a minor setback will not tarnish company’s aim for growing its online pharmaceutical business. On Sunday, Ali Health released a written statement which says that the unit will continue the development of its medical service unit and pharmaceutical e-commerce business.

The company’s spokesman Mr. Ngai also endorsed the unit’s statement by adding the following: “We are working toward making the system better with all parties concerned.”

Huawei Supports Apple Inc. In Dispute Over Security

China's leading smartphone company has extended its support for the tech giant.

Last week’s order from U.S. Department of Justice asking Apple to help the FBI in unlocking the iPhone 5C owned by Syed Rizwan Farook, one of the terrorists in San Bernardino attack, disrupted the calm in the Silicon Valley. Uncertainty and confusion erupted when Apple CEO Tim Cook announced that the tech giant will fight in the court against the government order of impairing the security of its devices. A lot of Silicon Valley tech companies came forward to back Apple’s firm stance. Now, the support for tech titan has been extended to China when China’s largest smartphone maker, Huawei Technologies Inc. announced that it stands with Apple Inc. –the company who is about to enter in a legal battle with the law enforcement agencies in an attempt to keep the privacy of the consumers intact.

 Richard Yu, who leads the company’s fast growing consumer devices division, was present in Barcelona at the Mobile World Congress to reveal the company’s first laptop which comes in with a detachable screen. While talking to the Bloomberg Television Richard Yu strongly supported Apple and said that maintaining the privacy and security of the customers is the key. On being asked about the recent riff between Apple and the government and the tech giant stand even though the subject device has been linked to a terrorist attack, the CEO answered that he “personally supports Tim Cook’s idea.”  He said: “We should really protect the consumers’ privacy and security.”

Cook’s “idea” is rational. He has expressed his concerns that once a backdoor for the device is created; hundreds of thousands of devices’ security will be put in jeopardy. Although the FBI has counter argued that the government has only been asking to create an exception for one particular device and not to invent a master key which can, on general level, impact all the devices. Tech analysts agree that a backdoor is “too dangerous to create.” The thought is well endorsed by Yu who has labeled the privacy to be “the top one” matter. This makes Huawei the first Asian company to record its support for the iPhone maker.

Giving the insight about how far the company has come, Yu rejoiced over the fact that a short time ago, the Chinese company stood at top 10 and now it is standing firm at top three. The CEO suggested that it is more likely that the company will become No.1 in few years. He also highlighted that even though, currently, China’s market plummeted down and had a very slow pace however, Huawei still managed to increase its market share.

Yu also noted that for the first time since its inception in 2009, the company, in 2015, was able to ship more than 100 million smartphones in the overseas market. The fastest growing smartphone maker is also reported to grab 70% of the consumer sales from overseas.

The CEO further added that the largest, by revenue, mobile market, U.S.’s has also cordially welcomed Huawei with number of consumers opening up to the Chinese brands. Although, the company’s products networking equipment had been subjected to political conspiracies however Yu chimed about the consumers: “They will become more open. Our products sell worldwide, in over 170 countries, for so many years.” He also added that the response to the consumer electronic products have been much better as the company has been learning from U.S. based Alphabet Inc.’s Google Android to develop its products.   

GoPro Expected To Launch Karma Drone and Hero 5 During The First Half Of 2016

The action camera maker needs to up its game as investors and shareholders of the company are getting frustrated with its slow growth.

In a year, GoPro Inc.’s stock has fallen by as much as 80% due to the slow sales and badly priced products. The founder and chief executive of the action camera maker, Nick Woodman, wanted to transform the camera industry; turns out that just backfired quite badly in his face.

In 2015, the stock lost 73%; while year-to-date, the shares roughly lost as much as 45%. This news is probably worse for the people involved with the company, including its investors. The action camera maker giant reported its fourth quarter earnings last week after which it stopped trading in the after-market hours.

For the fourth quarter, the investors and the shareholders were ready to hear the bad news but the company painted a worse picture for the current quarter (Q1FY16). Analysts had predicted that the company would at least expect to generate revenue of $298.04 million but it has managed to post the guidance for the first quarter revenue generation at $160 – 180 million.

Sales for 2015 rose by 16% while the growth in 2014 was about 41%. Similarly, in 2013, it was 87%. For the current year, analysts are expecting a continuation in the downward trend as it is predicting the sales to slide to 15%. However, the camera manufacturer is confident that the launch of its Karma Drone and Hero 5 will help it to get its growth sales back. The corporation has not provided any details for the launch and specifications for the products yet.

In an effort to simplify its product line, CEO Nick Woodman stated during the conference call that it will be discontinuing a number of its products, including Hero, Hero+ and Hero+ LCD cameras, and will only carry the Hero 4 Session, Silver and Black. He added during the conference call that the Karma Drone would be on the shelves during the first half of the current year.

Additionally, it is believed that the Karma Drone will not have a built-in camera as earlier during the Consumer Electronics Show 2016, Nick stated that the drone would be ‘backwards compatible’ with the previously developed devices by the business. The latest product will only be launched after the above-mentioned three products are discontinued so it will be launched somewhere between May and June. However, CFO Jack Lazar told that it has not been confirmed whether the device will be launched by June or not.

GoPro stock is presently being traded at a share price of $10.99 indicating an increase of 10.34% in the stock price. During the previous trading session, the stock of the action maker was seen hit a higher end of $11.69 and at a lower end of $10.01. The one-year high of the stock is at $65.49 while at a lower end it was seen at $10.44. The market capitalization of the business is currently at $45.74 billion with earnings per share of $1.19.

McDonald's "Create-Your Taste" Outlets Come To China

Under the leadership of CEO Steve Easterbrook, the world's largest fast-food chain treads on the path to growth

McDonald’s Corporation announced its intention of opening up 150 new outlets in China. The clients will need to be able to customize the burgers according to their taste. Dubbed under “Create-Your-Taste,” this offer has a great selection of ingredients for the customers to make their burgers from. The concept had been initially introduced in U.S. and after receiving the positive feedback from satisfied customers, the fast-food giant intends to introduce it across the world too.

The largest fast-food restaurant already has 11 such outlets in Beijing, Shenzhen, Guangzhou, and Shanghai. McDonalds senior Communication Director, Regina Hui, plans to extend the outlets in mainland China. In the fourth and last quarter, the company was able to increase its same-store sales from China by 4%. The most popular fast-food brand also declared better than expected revenue from U.S.

Reuters reported Ms. Hui that the restaurant has received overwhelming response from its already running outlets. This opens the possible potential for the U.S. based restaurant to have growth in China where it had witnessed slumping sales after the food safety scandal. But the world’s famous fast-food chain bounced back in its last two quarters and the future is likely to boost company’s profits and revenues. This initiative is also fruitful to gain the trust and confidence of the customers who are conscious about their health.

Earlier in 2015, McDonald’s gets a new leadership, the current CEO Steve Easterbrook joined the organization and vowed to bring it back on track. Frankly, the leadership proved beneficial for the fast-food titan and it immediately started showing the signs of improvement.

China is the essential market for the organization. Yum Brand Inc.’s subsidiaries Pizza Hut and KFC have 1,572 and 4,563 outlets respectively. McDonald’s has more than 2,000 outlets in the country. The health conscious consumers in China have become picky while choosing their preferred meal. Therefore, through this initiative, the $112 billion organization gives the option to the customers to pick the ingredients for their meals on their own.

One of the Easterbrook’s strategies for the turnaround is to provide simpler menus for the customers and the charismatic leader looks forward to having favorable results from this new step. His turnaround plan also includes improving the timing of the service and improving the wages of the workers. With new strategies the company is set to touch its once claimed image of the fast-food behemoth. At the market which closed on Friday, McDonald’s Corporation stock price stood at a strong $123.72. The 52 week price range stock is estimated at $87-$124.