Xiaomi: In Tesla’s rear-view mirror
The last thing Elon Musk needs while he’s licking his wounds from his punch-up with the president is another Chinese competitor arriving with the clearly stated intention of eating his lunch, but that is precisely what Xiaomi is doing and it’s not messing around.
It entered the electric vehicle (EV) market only in March 2021, with the announcement that it would be investing $10bn over the next 10 years, and by 2023 it had launched its first prototype and stated its goal to become one of the five largest automakers in the world.
The company is better known for being the second-biggest manufacturer of smartphones in the world, and for its comprehensive range of consumer electronics. It first launched an electric sedan, the SU7. However, the launch last year of its electric SUV, the YU7, wowed the market to the extent that it received 289,000 pre-orders in the first hour it was on sale. It’s a direct competitor to Tesla’s Model Y, but it has a range of 835km against the Tesla’s claimed 593km, and it’s cheaper and considerably better-looking.
Xiaomi will need some time to ramp up production, but together with the SU7 it looks to be on track to deliver 400,000 units in 2025.
It has bounced back from criticism received when one of its cars in self-driving mode killed three people on an expressway in China. If you fancy spicing things up a bit you can shell out extra for a Nürburgring edition of the SU7, which has set the lap record for production EVs around the legendary circuit in Germany.
New World Development: New World wobbles
All of Hong Kong’s property market was watching nervously as New World Development’s debt repayment deadlines loomed ever closer, and the executioner was practising his swing and sharpening his axe by the time it managed to get written commitments from all its bankers to a refinancing of HK$87.5bn. This will buy it some time, but the property developer is clearly not out of the woods yet after years of aggressive expansion in Hong Kong and mainland China.
The good news for New World is that with assets of HK$427.6bn it is firmly in the “too big to be allowed to fail” category, and loans to the company amount to 7% of all commercial real estate loans in Hong Kong.
Last year the company reported a loss of HK$17.1bn, its first loss in 20 years. This prompted Adrian Cheng to step down as CEO, and since then it has chewed up another two occupants of that particular hot seat.
The real estate market in the region has been in decline since late 2021, and prices of pre-owned homes hit an eight-year low in June. Demand for commercial and residential property has been depressed by higher interest rates, and the renminbi’s depreciation against the dollar has made it more expensive for mainland Chinese buyers to purchase Hong Kong property.
Amid all the doom and gloom, New World’s share price is down by 85% over the past five years. It remains to be seen whether the debt refinancing manages to keep it afloat for long enough to profit from any bounce in the market.
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