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.    

Apple Is Pushing Store Openings In China

Apple Inc.’s is devoted to establish almost 40 retail stores in the Chinese market. The company has eyed October 2016 as the potential month to achieve its target. The company has now established its 33^rd outlet now in Qingdao. Apple Insider, which is considered to be a credible source for Apple related news, has confirmed that the launch of the store is scheduled for January 31^st. This will be the fifth store opened by the company in a time span of a month which is in compliance with their expansion plans.

It now looks like that the tech giant is solely devoted by the potential of China due to its strong consumer market and growth. This will help the company to grow in the long run. The Apple iPhone giant has been successful in opening stores in the Chinese market in cities like Hong Kong, Dalian, Nanjing, Chengdu, Beijing, along with the “Green City of Nanning” so far.

The recent store by Apple will now be located in Qingdao’s MixC Mall that is located at 6A Shandong Road, of the Shinan District that will have a massive showroom. As per the speculation, the new store will be having several tutorials right after its opening. The idea behind these tutorials is to equip the users about how to use the Apple products.

The move certainly gives birth to curiosity about the look of the upcoming Apple Store along with when it will actually become operational. The reason why Apple has narrowed its focus to China is because it considers the region to be the best market for the company in the times to come. Moreover, it has also assisted the company in adopting an innovative architectural hierarchy at all the company’s stores in the region.

This has actually become possible because of Jony Ive along with Angela Ahrendts who is the chief retail officer at the tech giant; both these individuals are trying their best to ensure that all Apple Stores remain consistent and have the same persona like all other Apple Stores all over the globe. This will help them to be a class apart from all international and local competitors.

All the stores that are currently being launched in China have been aided with tools that are found in all Apple Stores. This includes Genius Bars, JointVentures, and workshop along with other services present at their retail store. Considering the pace with which new Apple Stores are being established in the Chinese market, it now seems that the tech behemoth will become successful in meeting its goal of having 40 stores in the region before October arrives.

Hence in a nutshell, AAPL is playing quite smart by coming up with more stores in the Chinese market as the region has immense growth potential that will assist them in churning revenues in the long run. Moreover, Apple is also trying its best to make a mark in India considering it to be an emerging market with immense potential of growth.

Alibaba's China Charm Fading Away

Due to obstacles in the way of Alibaba in its homeland, China might not be an asset to Alibaba anymore

It is a well known fact that Alibaba Group Holding posted a record breaking Initial Public Offering (IPO) in history two years ago. IPO of the Chinese tech giant was the biggest ever. During that time, the company profited from being a ‘proxy’ for a Chinese economy that shareholders and investors were counting on. This majorly contributed towards the IPO back then. However the reason of as to why Alibaba posted a massive IPO is now considered as a liability just 16 months later than that.

It cannot be denied that Alibaba Group is a giant of a company not only in China but the world. Currently, the firm is valued at a massive $230 billion or more in the market. But Bloomberg reports that it has lost nearly $29 billion in market capitalization in January alone. It was not only because of the company’s push for market capitalization but investors and shareholders were whining over the dependence of the e-commerce market on China. China’s economy was growing at its slowest pace since 2009 and this resulted in slowing growth, falling market, and weakening the value of its home currency.

It is believed that the shares have returned to the price of IPO and as of now it is not performing well in the New York Stock Exchange Composite Index as well as Bloomberg China US Equity Index. For the first time in a very long time, Alibaba stocks were said to be underperforming in the market and this worried the investors and shareholders. They were concerned whether Alibaba is threatened with the recent entry of JD.com in the market or the charm of domination the Chinese e-commerce industry is fading away.

Alibaba is expected to announce its quarterly earnings come Thursday and it is believed that the company will post a revenue growth of 27 percent only which is the lowest since June 2012. The sales that the company made in China increased in the last three months to a massive 83 percent. This further urged the owner of Alibaba, Jack Ma, to continue with its international market expansion which also included Lyft Inc. which is a ride sharing service. Also, the Chinese giant recently acquired the leading newspaper, South China Morning Post.

According to an analysts at Arete Research Service LLP based in Hong Kong, Li Muzhi, stated “Investors largely see Alibaba as a proxy for China’s economy, and right now there’s just not a lot of good news. Alibaba has been trying to branch out revenue streams, but that takes time to develop.”

The government, investors, and the company officials knew that Alibaba was likely to be hit by a storm due to the dying economy of the country. As JD.com is a new entry which is also covering the loopholes left by Alibaba, it is performing way better and the revenue growth is promising regardless of the country’s economical and financial situation.

Jack Ma already warned the shareholders in November that the coming one year can be a rough patch for Alibaba. Several tech giants in the region would struggle to perform in the market as the Chinese government just tried to rebalance its economy. In an exclusive interview to Bloomberg, Jack Ma stated that he is looking for opportunities where the Chinese online retailer generates half of its revenues from the international markets. As of now, Alibaba has little or no presence in the international markets and it is trying to make its name in the foreign countries.

The founder and chairman also announced that the strategy to improve its revenue growth and international expansion included 28 deals which were valued at a massive $17.3 billion.

Bloomberg reported “The company invested in the movie ‘Mission: Impossible - Rogue Nation,’ appointed directors for its operations in France and Germany, and expanded its online payment system Alipay to more than 100 countries.” Alibaba is now focused to include a few of the largest American brands on its online marketplaces in the near future as Chinese online shoppers prefer buying international products. It is believed that the international expansion strategy can be done using acquisitions and deals as well as organic growth through its services.

This is the reason of as to why Bloomberg reported that China might not be the same market for Alibaba as it was previously. The market and economy is not helping the company to do wonders whereas Alibaba is focused to improve its foreign market status and position.