Huaxi Securities predicts that the global AI software market will reach $126 billion by 2025, with a compound annual growth rate of 41.02% from 2021 to 2025.

Behind the prosperity of ChatGPT lies astronomical computing power. According to estimates, a single large language model training to drive AI training servers requires about $200 million, while AI inference servers, such as those used by ChatGPT in the early stages, require about $4.5 billion.

As a result, the AI server race behind ChatGPT is also on the rise.

Computing power determines ChatGPT As the core engine of large models, the calculation formula for computing power is simple: the number of GPU chips determines the size of the computing power, and the number of high-end GPU chips directly affects the size of the computing power.

The computing power required for ChatGPT is not fixed but rather increases incrementally. The smarter ChatGPT becomes, the more computing power it requires.

According to media speculation, the training cost of GPT-3 is expected to be around $5 million per iteration, and the training cost of the GPT-3 model is about $1.4 million. Google’s PaLM model requires a training cost of about $11.2 million.

According to Microsoft executives, the AI supercomputer that provides computing power support for ChatGPT is a large top-tier supercomputer built by Microsoft in 2019 with an investment of $1 billion. It is equipped with tens of thousands of Nvidia A100 GPUs and more than 60 data centers with hundreds of thousands of Nvidia GPUs deployed.

To meet the increasing computing power demands of ChatGPT, Microsoft announced that it will launch an Azure scalable AI virtual machine series based on Nvidia’s latest flagship chip, the H100 GPU, and Nvidia’s Quantum-2 InfiniBand network interconnect technology to significantly accelerate AI model development.

It seems that behind ChatGPT is Nvidia, Nvidia, and more Nvidia.

In fact, as a hardware giant, NVIDIA not only dominates the consumer market but is also the top choice for AI server chips.

As the saying goes, scarcity leads to high prices. Currently, NVIDIA’s flagship H100 chip has increased by nearly 70,000 yuan in just one week, with a general price of around 300,000 yuan. The second flagship A100 chip has risen from 60,000 yuan to 90,000 yuan in just over three months, an increase of more than 50%.

Not only are the chips expensive and hard to come by, but the United States has also banned NVIDIA from selling chips. In August of last year, the US government issued an export control policy prohibiting NVIDIA from selling A100 and H100 chips to China.

To avoid losing the Chinese market and comply with US export controls, NVIDIA subsequently launched “performance-restricted” A800 and H800 chips. However, these two chips were also quickly snapped up by the market, and prices soared as a result.

Led by Baidu, Alibaba, and Tencent, most domestic internet companies have announced their entry into large-scale models. According to market statistics, the number of large-scale models to be launched in China after ChatGPT has already exceeded 10.

To achieve the level of ChatGPT, at least 3,000 A100 chips are needed, which would cost 270 million yuan at a price of 90,000 yuan per chip for a large-scale model deployment. Ten large-scale models would require 30,000 A100 chips, costing 2.7 billion yuan.

In addition to the astronomical cost of the chips, the training costs are also significant. However, based on NVIDIA’s current delivery time, it is not easy to buy enough chips.

In a flash, the era of mining cards has returned.

NVIDIA, once again sitting at the forefront of the trend, made a fortune of $4.8 billion in just a few years as a necessary graphics card provider for mining during the virtual currency craze a few years ago. Now, with ChatGPT, NVIDIA is living a second life and making history repeat itself.

Faced with the surge in market demand, NVIDIA, which has risen again with the AI wave, has cunningly launched “computing power leasing” services.

On March 21, 2023, at the GTC conference, NVIDIA founder and CEO Huang Renxun launched NVIDIA DGX Cloud™, which provides enterprises with the infrastructure and software needed to train generative AI models. Each DGX Cloud instance is equipped with eight H100 or A100 80GB GPUs, and enterprises can rent DGX Cloud clusters on a monthly basis in the form of “cloud leasing,” with prices starting at $37,000 per instance per month.

Does NVIDIA really have no substitutes? Why do enterprises prefer to lease from NVIDIA rather than choose other GPU chip manufacturers?

According to IDC data, the proportion of domestic GPU servers in the domestic server market in 2021 exceeded 88.4%, with over 80% of the products being used from NVIDIA.

The chips required for large AI models have higher requirements for processing precision and computing power speed. In the field of supercomputing, double-precision floating-point computing power FP64 is a hard indicator for high computing power calculations. Currently, NVIDIA’s H100 and A100 are the only chips that have these capabilities.

The restrictions imposed by the United States are not limited to the sale of NVIDIA chips, but also limit the research and development of Chinese companies in terms of technology, equipment, and materials. However, despite the heavy restrictions in the United States, Chinese companies are still producing some impressive products.

According to the latest “China Accelerated Computing Market (H2 2021) Tracking Report” released by IDC, the scale of China’s AI server market reached 35.03 billion yuan in 2021, a year-on-year increase of 68.6%.

In the enterprise-level GPU chip field, Chinese manufacturers such as Biren Technology launched the “BR100” chip in 2022, Tianzhi Chip launched the “ZhiKai 100” chip, and Cambricon launched the “SiYuan 270” chip. Among them, Biren Technology claims that the BR100 has the highest computing power in the world, with peak computing power exceeding three times that of the flagship products on the market. The 16-bit floating-point computing power exceeds 1000T, the 8-bit fixed-point computing power exceeds 2000T, and the peak computing power of a single chip reaches PFLOPS level.

Although the data is good, the lack of the crucial ability to process FP64 means that they still cannot completely replace NVIDIA’s H100 and A100 chips. In addition, NVIDIA’s CUDA platform has already become the most widely used AI development ecosystem, only supporting NVIDIA’s Tesla architecture GPU, making it impossible to replace it with domestic chips at this stage.

Although Chinese chip manufacturers are catching up in the GPU chip field, the technology gap and US restrictions are still key issues that require more effort and time.

The rise of large AI models like ChatGPT is not only benefiting the AI server and GPU chip markets but also the storage market. The running conditions of ChatGPT include training data, model algorithms, and high computing power, with the underlying infrastructure of high computing power being the foundation for completing massive data and training.

The most obvious feature is that after several iterations, the parameter amount of ChatGPT has increased from 117 million to 175 billion, nearly a 2,000-fold increase, which also brings great challenges to computing storage.

With the opening of a new era of AI, it is expected that the global data generation, storage, and processing volume will increase exponentially, and storage will significantly benefit. Computing storage is an important cornerstone of ChatGPT, and with tech giants like Alibaba and Baidu entering the ChatGPT game, the overall demand for computing storage in the market will only continue to rise rapidly.

With the continuous popularity of AIGC, the digital economy-developed areas such as Beijing, Shanghai, and Guangzhou have also introduced policies to promote the construction of intelligent computing centers. For example, Beijing has proposed to “build a new batch of computing data centers and artificial intelligence computing power centers, and cultivate them into artificial intelligence computing power hubs by 2023”; Shanghai has proposed to “layout and build a batch of high-performance, high-throughput artificial intelligence computing power centers, and promote the construction of public computing power service platforms,” and so on.

Meanwhile, all industries will face the baptism of ChatGPT. With the arrival of a new wave of artificial intelligence, industries related to AI will have broad market space.

Chinese companies are also bound to break through the constraints imposed by the United States and break free from unfair restrictions.

The Original Article:

https://www.firmknow.com/chinas-chatgpt-race-breaking-free-from-us-constraints/

To outsiders, Wang Laichun seems similar to Terry Gou, both being authoritative and patriarchal founders.

Wang Laichun always carries a low-key demeanor that doesn’t quite match her fame. In public interviews, she speaks softly with a slight Cantonese accent unique to Guangdong people. However, her voice is clear, and she narrates the story of her company’s development in an approachable and amicable manner.

Judging by her appearance, it’s hard to tell that she is the leader of a company with a market value of over 200 billion yuan. Currently, Luxshare Precision has a workforce of over a hundred thousand employees.

In the first three quarters of 2022, Luxshare Precision’s revenue exceeded 145.2 billion yuan, with a growth rate of 79.3%. Profits reached 7.18 billion yuan, a year-on-year increase of over 39%. Some institutions predict that the company’s annual revenue may exceed 210 billion yuan.

The headquarters building in Qingxi Town, Dongguan City, stands out among the surrounding factories. The 20-story complex is located on the west side of the factory area. The entrance lacks elaborate decorations, but upon approaching the front, one can see the large character “Luxshare Precision” standing tall within the gate.

This is one of the earliest factories of Luxshare Precision, where over 13,000 people work and live. There are four dormitory buildings alone. In the eyes of locals, Luxshare Precision is a company with very strict management. When mentioning Wang Laichun, those familiar with the manufacturing industry gives her a thumbs up.

From initially relying on Foxconn orders to now being a giant in the industry, Wang Laichun’s Luxshare Precision has a deeper understanding of manufacturing transformation and diversified development.

Since last year, Wang Laichun has been continuously expanding Luxshare Precision’s “ammunition depot,” entering the automotive industry chain and becoming the third-largest shareholder of Chery Holdings, an automotive manufacturing company, focusing on the intelligent electric vehicle field.

It has been reported that Wang Laichun once stated that within the next 20 years, Luxshare Precision aims to push 30% of its products into uncharted territories within various industries.

Crossing Boundaries

In 2021, Wang Laichun launched three five-year plans, comprehensively developing consumer electronics, automotive, communications, industrial, medical, and other businesses, and set a strategic goal for the automotive business to enter the global top ten Tier 1 (first-level supplier) businesses.

This is an ambitious goal.

In recent years, more and more manufacturing enterprises and leading OEM factories have shifted their focus to a “multi-legged” approach to optimizing their business models. Whole vehicle manufacturing has become a highly sought-after sector.

Wang Laichun recalled in a previous interview that she gradually understood the importance of setting short, medium, and long-term plans for the company since around 2012. With clear planning and team collaboration, Luxshare Precision entered the market with connection lines and connectors, continuously deepening its layout in core consumer electronic components, even possessing whole machine manufacturing capabilities, and expanding into different fields such as automotive.

In February 2022, Luxshare Precision signed a “Strategic Cooperation Framework Agreement” with Chery Group to engage in new energy vehicle ODM whole vehicle R&D and manufacturing. At the same time, Luxshare Limited became the third-largest shareholder of Chery Holdings through equity acquisition, officially embarking on a bold gamble in the automotive industry.

Wang Laichun stated that the reason for investing in Chery was due to the recognition of its whole vehicle manufacturing business, hoping to leverage this platform to provide strong support for the future development of both parties.

In Wang Laichun’s words, Luxshare Precision is a private enterprise with a wolf-like spirit and vigor, like a guerrilla team, possessing the ability to quickly adapt and be enterprising. Luxshare Precision is now setting its sights on conquering the automotive industry as its new target.

Wang Laichun hopes that the contribution rate of the automotive industry will increase to 30% in the next 20 years. However, the input-output of the automotive industry cannot be achieved overnight. “It will take at least 3 to 5 years for the automotive industry’s performance to land and help the company.”

She has a masculine side

Wang Laichun, 56, was born into an ordinary Chaozhou family in Chenghai, Guangdong. In 1988, she became one of the first 100 employees at Foxconn’s Shenzhen factory. Foxconn’s management philosophy, thinking mode, and emphasis on hard work resonated with Wang, and her business capabilities quickly improved with the company’s development, rising from a general worker to a grassroots cadre.

In her ninth year at Foxconn, Wang reached a turning point in her life. In the 1990s, a wave of resignations and entrepreneurship swept through China, and many workers chose to start their own businesses. Wang also saw new opportunities in entrepreneurship. Encouraged by her former boss, Guo Taiming (the younger brother of Guo Tai-ming), Wang made the decision to start her own business and founded Luxshare Precision.

Foxconn was an important driver of Luxshare Precision’s rapid development in its early days. Guo Taiming handed over unfinished orders to Luxshare, and within a few years, Wang had received Foxconn orders worth over 1 billion yuan. According to public reports, in the early days of the business, Foxconn alone contributed more than half of Luxshare Precision’s revenue.

At the same time, Wang gradually became aware of the risks involved.

As early as 2004, Wang realized that relying solely on contract manufacturing was not a sustainable strategy and that independent development of customers and research and development of their own products was the correct direction for the company’s development.

Based on her past industry experience, Wang believed that the differences in consumer electronics often centered on applications and that the core of these differences lay in the manufacturing capabilities of components and complete machines.

So, initially, Luxshare Precision only targeted two parts, connectors and cables, and invested heavily to form a technological advantage. Later, through the acquisition of Jiangxi Bosom, Luxshare completed the integration of the upstream industry chain of connector and cable manufacturing, becoming a leader in the field. Subsequently, from connectors to motors, wireless charging, and electronic modules, Luxshare Precision aimed to be a leader in every industry it entered.

At the same time, changes in the industry environment also provided opportunities for Wang Laichun. In 2011, since Tim Cook became Apple’s CEO, he insisted on finding more suppliers to improve the supply chain’s risk resistance.

That same year, Luxshare Precision acquired more than half of Kunshan Liantuo Electronics’ equity, entering Apple’s supply chain. In 2016, Luxshare Precision acquired Suzhou Meite, which specializes in acoustic technology, accurately entering Apple’s acoustic supply chain and seizing the opportunity to manufacture AirPods.

To win this opportunity, Luxshare repeatedly experimented and solved the technical problems of internal connectors through automation, greatly shortening the production cycle, and achieving a product yield close to 100%.

To outsiders, Wang Laichun is similar to Guo Taiming, a domineering founder. However, in public interviews, Wang Laichun revealed that her son described her as “hermaphroditic.” She does not reject this definition.

She admitted that during the period of rapid development of the company, the team would bear pressures that ordinary people could not understand. At this time, Wang Laichun played more of a sister or mother role, leading the company through the most difficult times. But as the head of the company, she believes that company management must have iron discipline.

From an ordinary “factory girl” to the head of a hundred-billion-dollar group, Wang Laichun’s manufacturing story continues.

China Concept Stocks ends multi-day decline

On the same day, the China Securities Regulatory Commission stated that it will continue to strengthen communication with US regulators and strive to reach an agreement on Sino-US audit supervision cooperation as soon as possible. We will promptly promote the implementation of new regulations on the supervision of overseas listing of enterprises, support all kinds of qualified enterprises to list overseas, and maintain smooth overseas listing channels.

On March 15th, local time, the China concept stock market ended a multi-day decline, with a clear rise. Several stocks rose more than 20%. Among them, Fog Core Technology led the rise, with a stock price increase of 40.16%; TouchPal’s stock price rose 36.92%, and three other stocks including Kingsoft Cloud rose by more than 20%.

Experts’ Views on China Concept Stocks

Industry experts believe that due to the release of heavy positive news at the meeting, the market of China concept stocks is expected to further recover.

“China’s concept stocks have fallen sharply recently, and the reasons come from many aspects.” Dong Zhongyun, the chief economist of AVIC Securities, said in an interview with a reporter from “Securities Daily” that the Federal Reserve will accelerate the tightening of liquidity and the overall decline in US stocks, but It is more that the market is worried about the China concept stocks themselves, and investors have lower expectations for the development prospects of the company. More importantly, based on the “Foreign Company Accountability Act” issued by the US SEC, China concept stocks face the risk of delisting, which makes US stock investors more cautious about investing in China concept stocks.

Dong Zhongyun said that the meeting released a positive signal, which will help eliminate some investors’ concerns about China concept stocks, which is expected to lead to a rebound in China concept stocks. However, it should be noted that although the domestic risks have likely bottomed out, some of the risks of Chinese stocks come from the United States, and further policy signals need to be waited for in this regard.

“For China concept stocks, the meeting has released a major positive signal, which has the purpose of stabilizing market expectations and also playing a positive role in boosting investor confidence.” Zheng Lei, chief economist of Baoxin Financial, told “Securities” A reporter from the Daily said that at present, although some China concept stocks have fallen significantly before. But on the whole, the basic market and development expectations of Chinese stocks have not changed significantly, and the market has a valuation repair market, which is expected to recover further.

Zheng Lei said, “For China concept stocks, it is recommended to list in Hong Kong, China or return to A-shares to avoid unnecessary shocks caused by geopolitical factors.”

Recently, the regulatory agencies of China and the United States are also actively communicating and frequently releasing positive signals. On March 11, the person in charge of the relevant department of the China Securities Regulatory Commission said that in recent years, the China Securities Regulatory Commission and the Ministry of Finance have continued to communicate with the American Public Company Accounting Oversight Board (PCAOB) and have made positive progress. It is believed that through joint efforts, the two sides will be able to make cooperation arrangements as soon as possible in line with the legal provisions and regulatory requirements of the two countries, jointly protect the legitimate rights and interests of global investors, and promote the healthy and stable development of the two countries’ markets. According to media reports, the US Public Company Accounting Oversight Board (PCAOB) also said recently that the committee is maintaining active communication with Chinese regulators, and has held talks several times recently, and the two sides are committed to reaching a cooperation agreement so that it can inspect Mainland China registered in the United States and some Hong Kong auditing firms engaged in Mainland business.

The China Securities Regulatory Commission continues to promote and improve the relevant systems for overseas listing of China’s enterprises

“In the context of China’s economic take-off, the rapid development of Chinese enterprises is obvious to all, and its growth potential is optimistic on a global scale. For Chinese stocks, the two countries have the ability to find solutions. As the audit and inspection issues are resolved, the China concept stocks will be beneficial in the medium and long term, and can enhance the trust of global investors in China concept stocks.” Tiger International Investment Research Team told the “Securities Daily” reporter.

In addition, the China Securities Regulatory Commission continued to promote and improve the relevant systems for the overseas listing of enterprises. At the end of last year, the China Securities Regulatory Commission solicited public comments on the Administrative Measures for the Recordation of Overseas Issuance and Listing of Securities by Domestic Enterprises (Draft for Comment), which clarified the procedures and regulatory requirements for the recordation of overseas issuance and listing of domestic enterprises, standardized the recordation of overseas issuance and listing, and ensured smooth recordation management. effective implementation.

“For a long time, the regulatory authorities have continued to expand the opening of the capital market to the outside world, constantly improve the relevant systems and rules for overseas listing, and support enterprises to list overseas in compliance with laws and regulations.” Zheng Lei said that overseas listing, on the one hand, it can make full use of the financing convenience of overseas capital markets. Enhance the sustainable financing capacity of enterprises and promote the development and growth of enterprises. On the other hand, enterprises can improve the level of corporate governance by integrating with international market rules and learning foreign advanced technology and management experience. In addition, it can enhance the influence of enterprises in the international market and create favorable conditions for developing overseas markets.

Author: Baibaoyu

The Original article is from Securities Daily, the Chinese version is here.

This is not the first time Yang Yuanqing has paid out of his own pocket. As early as 2012 and 2013, he set up the “Yuanqing Special Award”, and each gave his own 20 million bonus to nearly 10,000 employees. The attitude of sharing weal and woe with the company has calmed down the whopping salary controversy surrounding him some time ago.

In the past two years, CEOs of tech companies have increasingly stepped into the spotlight because of high salaries. The economic downturn brought on by the pandemic has even boosted their pay levels to some extent—as tech company stock prices have hit record highs during this period. The “Wall Street Journal” pointed out in a report last year that in 2020, which is plagued by the unemployment of ordinary people, the salary of CEOs has risen sharply compared with previous years. The median salary of CEOs of more than 300 largest listed companies in the United States reached 13.7 million. U.S. dollar on track to hit record high

Apple CEO Tim Cook has one of the highest pay rises in recent years, earning $99 million in compensation last year, 1,477 times that of the average worker. That drew objections from ISS, the largest shareholder proxy advisory firm in the U.S., on the grounds that Cook’s compensation was “significantly larger” than the previous year. In 2020, Cook’s salary totaled $14.77 million.

Chinese CEOs are no different than the United States. Chinese Media TMTPOST compiled a list of CEO salaries in China at the beginning of this year. Gu Hongdi, vice chairman and president of Xpeng Motors, topped the list with an annual salary of 435 million yuan, which was 2.6 times that of Yang Yuanqing last year. Xiaopeng Motors has not yet achieved profitability, a net loss of 4.9 billion yuan last year.

The company later responded that the value of the equity held by Gu was wrongly interpreted as an annual salary, and more than 99.5% of his publicly disclosed salary was equity incentives accumulated over many years, not a year’s income.

Tesla CEO Elon Musk may be the person who has received the most real compensation from the company over the past few years. Although his salary on paper is zero, due to the high equity incentives awarded each year, Forbes believes that Musk’s actual salary in 2020 is as high as $11 billion, more than 50 times the annual salary of the second person.

The trouble caused by the whopping salary of CEOs

Musk was taken to court by a Tesla shareholder over the hefty pay level. The shareholder sued Musk and Tesla’s board of directors in court, saying the latter did not disclose relevant information to shareholders before approving Musk’s compensation plan.

The legal database Plain Site shows that on April 18 this year, the case will be tried in the Justice Court of Delaware, where Tesla is registered. At that time, Tesla’s board of directors will need to be present and defend the matter.

In the past, people were used to CEOs being rewarded for their high performance levels and good governance, which was considered a legitimate and fair business practice. But at a time when the world is becoming more and more turbulent, CEOs have to face more severe scrutiny, not only from business, but also based on the huge income gap and unbalanced group sentiment.

Yang Yuanqing finally understood

Perhaps Yang Yuanqing never thought that one day his salary would become the object of criticism.

He has always been the highest paid group of Chinese listed companies. Forbes once pointed out that he has ranked first in CEO compensation of Chinese listed companies for three consecutive years. In 2013, his annual salary level exceeded 130 million yuan, which was the first time that his annual income exceeded 100 million yuan. Lenovo Group said at the time that due to the outstanding performance of the company in the 2013-2014 fiscal year, the bonus and long-term incentives given to Yang Yuanqing increased significantly.** **

After the salary of more than 100 million yuan caused controversy, he once expressed confusion to the outside. It was in 2015, and he responded in an interview with CCTV Finance, “After we acquired IBM, we were confused for a long time, domestic employees were paid very low wages, and our M&A employees were calculated according to the US market standards salary, I can’t get a lower salary than my American employees, subordinates, and executives, this is unreasonable.”

This sentence has been brought up for many years since then, as one of the “criminal evidence” accusing Yang Yuanqing. Last year, Lenovo Group attempted to be listed on the Science and Technology Innovation Board. The executive compensation disclosed in the prospectus once again caused heated discussions. The media took the trouble to point out in the article that “Yang Yuanqing’s salary has reached 1.26 billion yuan in the past ten years.”

Now Yang Yuanqing finally understood. In the company’s internal letter for the new fiscal year, he highlighted the company’s front-line grassroots employees. “In the past two years, they have overcome various difficulties caused by the new crown epidemic and other factors, rain or shine.”

In order to pay tribute to these front-line employees, he decided to distribute the long-term incentive of 80 million yuan awarded to him earlier by the company as a special reward to these colleagues. Before that, the Shanghai Jiaotong University High Performance Computing Center, which he donated 100 million yuan to his alma mater, was officially opened.

In contrast, Cook, who sparked opposition from shareholder agencies, and Musk, who went to court, are less mature in handling such issues.

Do CEOs Deserve Their Pay?

Following the ISS outcry, Apple remained as tough as ever, declining to comment.

Tim Cook is indeed worth the $99 million he’s been given if you look at it over the long term. In the early days of his succession, he was often compared with Apple’s leader Steve Jobs. People criticized him for not being geeky enough, and his innovation was too little. Even the jeans and blue shirt he wore at the press conference were the object of criticism.

But the financial figures later said it all. A document released by Apple’s board of directors shows that since Cook became CEO in 2011, Apple has brought returns to shareholders as high as 867% in the ten years. Apple’s market cap has ranged from $1 trillion to $2 trillion, and it topped $3 trillion earlier this year — the first company in the world to reach a market value of $3 trillion.

Musk’s high salary is based on a big gamble. Tesla’s board set him up with an extremely aggressive compensation plan in 2018. His salary level is zero, and he will only be granted equity after leading the company’s market value, revenue and profit to one difficult goal after another award.

This plan was hardly optimistic at the time, and it set the ultimate goal of Tesla’s market value reaching 650 billion US dollars, which was just over 50 billion at the time. If Tesla’s market cap only grows 80% to 90% over the next decade, he’s going to get nothing — even if that’s a decent number. But he is adamant that Tesla will eventually become a trillion-dollar company.

It took him a full two years to complete the first phase of the goal: a market value of more than 100 billion US dollars. But after that, everything changed. Shares of Tesla have surged 689% in 2020, the fastest growth of any company that year.

In 2021, Musk completed the final goal of the compensation plan seven years ahead of schedule. Tesla’s market value exceeded one trillion US dollars, which is higher than the combined market value of all traditional car companies in the United States.

The salary gap between the CEO and staff

The debate over the pay gap between CEOs and rank-and-file staff has been around for a long time. Whether in terms of base numbers or growth rates, CEOs are far ahead of their employees.

At some point, some CEO salaries continue to grow even when the company is in the red. For example, a US cruise company called Norwegian Cruise Line has suffered a loss of US$4 billion in 2020 due to the impact of the epidemic, but its CEO salary has still doubled to US$36.4 million.

This may make most people feel unfair. Two French economists, Xavier Gabaix and Augustin Landier, have conducted research on the compensation of CEOs of large companies. They proposed that the influence of CEOs on enterprise value is usually multiple, and the influence of their behavior will be caused by the internal company. Executed and magnified infinitely. A good CEO can make the company’s profits grow exponentially, compared with the compensation provided to the CEO is negligible.

To be more precise, the CEO and the employee are in two completely different markets, and there is no comparison between them. “It’s welfare, not fairness, that counts,” the two economists argue.

CEO’s Salary package in big tech firms

In order to compete for the best CEOs in the market, companies often offer a complex and expensive salary package. Unlike ordinary employees, the most important part of CEOs’ salary packages is often not salary (they will even refuse salary), but a series of progressive option awards – Tesla’s ten-dollar offer for Musk. The annual compensation plan is the most aggressive of them all.

For example, among the $99 million salary Cook received from apple in 2021, the basic salary accounted for only $3 million, while the equity award amounted to $82.35 million and the non equity award was $12 million. Other salaries included $1.39 million such as security and insurance premiums.

Yang Yuanqing’s salary of over 100 million yuan is also dominated by equity incentives. His basic salary only accounts for 6% of the total salary, and performance bonuses and equity incentives account for 94% of the total salary. For example, in the salary of $21.359 million that Yang Yuanqing received in fiscal year 2013, the base salary was $1.283 million, the performance bonus was $7.159 million, the long-term equity award was $12.647 million, the pension was $128,000, and other benefits were $141,000.

Some CEOs who are founders of their companies themselves refuse to be paid because they often own the vast majority of the company and their wealth growth is firmly tied to the company. Typical cases include Zuckerberg saying that he only receives a salary of 1 dollar, and JD’s Richard Liu also saying that his salary is only 1 yuan – but you should listen to these words, and don’t take them seriously.

In comparison, Cook may be the real “affordable man”. Of the $99 million in compensation he received in 2021, more than $80 million came from an equity incentive 10 years ago.

That was the 1 million shares of restricted stock that the board granted him when he first took over as Apple’s CEO. The only requirement for this gift was that Cook needed to stay in Apple’s CEO position for 10 years.

Compared with Apple’s old rival Google, Cook’s salary also lags behind Google CEO Pichai. As early as 2015, Pichai’s salary was as high as 100 million US dollars, when Cook’s annual salary was only 10.28 million US dollars.

Salary of global listed firms besides the tech industry

If you jump out of the technology industry and look at global listed companies, Cook’s salary will be surpassed by more people. On Bloomberg’s list of the highest-paid corporate executives in the U.S., second after Musk is Mike Pykosz, CEO and co-founder of medical services company Oak Street Health, with an annual salary of $560 million. In addition, Schwarzman, chairman and CEO of Blackstone, will be paid nearly $800 million a year after 2017, and his total compensation in 2021 will be as high as $1.1 billion, far exceeding Cook’s $99 million.

At a time when disputes are often caused by sky-high compensation, and may even be sued by shareholders, perhaps, like Yang Yuanqing, giving up his bonus is also giving up a hot potato.

On Thursday, April 7th, Eastern Time, the stock price of HP, a veteran personal computer and printer manufacturer, gapped up by nearly 12%. During the intraday, the stock price once rose above $41 and approached $41.50, a record high intraday, and the intraday increase was close to 19. %, and finally closed up nearly 14.8%, the largest closing increase since March 26, 2020, to close at $40.06, also a new closing high.

A day before the best share price performance in two years, Buffett’s Berkshire Hathaway disclosed in a regulatory filing after the U.S. stock market closed that it had purchased nearly 121 million shares of HP. The stakes are worth about $4.2 billion at HP’s closing price of $34.91 on Wednesday.

Based on HP’s close of about 15% on Thursday, the market value of HP shares bought by Buffett’s Berkshire rose by about $650 million in one day, and its market value rose to $4.85 billion. In other words, Buffett made $650 million in just one day after disclosing his holdings.

It was Buffett’s third big deal in nearly a month. Since the end of February this year, Buffett has spent $5.6 billion to increase his stake in Occidental Petroleum for three consecutive weeks, holding a total of 136.4 million shares, accounting for 14.6% of Occidental’s outstanding shares. In a subsequent interview in March, Buffett revealed that he had decided to increase his stake in Occidental Petroleum after reading the full transcript of the company’s fourth-quarter earnings meeting on February 25, saying the company was “doing the right thing. “. Shortly after, Buffett announced on March 21 that it would buy insurance company Alleghany for $11.6 billion in cash, a move that expanded Berkshire’s portfolio of insurance companies including Geico and General Re. Before announcing the Alleghany acquisition, Buffett had not made a major acquisition for six years.​​

It is worth mentioning that in the past six years, as the valuation of U.S. stocks has soared, Berkshire has basically not made large acquisitions. Until February, Buffett was complaining about the lack of attractive investments, writing in his annual letter to shareholders that he and right-hand man Charlie Munger found “nothing exciting for us.” After the outbreak of the Russian-Ukrainian conflict, Buffett has already shot at three companies this year.

Buffett bought Apple and judging from some of the previous public interviews, there may be factors in viewing Apple as a consumer goods company. As for this year, there may be many reasons why HP has gradually become attractive in the eyes of “stock gods”. First, based on Buffett’s style of value investing, HP’s performance has always been solid. The latest financial report data shows that in 2021, the company will achieve revenue of US$63.4 billion, a growth rate of 12%, and a net profit of US$6.5 billion, a substantial increase of 128%. Another more important factor may be the impact of the epidemic. Since the epidemic, factors such as working from home have pushed up the returns of PC manufacturers. According to HP’s performance report, the company’s performance growth last year was also mainly due to factors such as the increase in home office and the rebound in consumption in the post-epidemic period. In addition, the impact of the epidemic has also profoundly changed many people’s living habits, and the application of electronic products such as the Internet and PCs will be more extensive.

Podsights has released its “Posdsights Benchmark Report Q1 2022.” Podcast ads offer several advantages, such as ideal target audience, brand safety, and seamless integration of ad creatives within the show. Podcast ad investment is expected to grow 30.6% last year.

The Podsights report noted that the average conversion rate for podcasting events in the fourth quarter of 2021 increased from the previous quarter to 1.42%. That said, conversion rates vary by impression. For those testing the podcast medium, the best goal was to get 400,000 to 800,000 impressions, which drove an average conversion rate of 1.24% and generated about 3,348 attributed visitors.

According to Podsight’s benchmark report, it takes 2-4 million impressions to get more than 10,000 attributed visitors, and running 8-12 million impressions will yield even greater gains. The report found it to be a very effective option for brands that have verified podcast ads and want to scale.

Advertisers can also increase their conversion rates by running podcast ads across multiple publishers or networks. Data from Podsight shows that the average conversion rate increases with the number of publishers. For example, the average conversion rate for advertisers using a single publisher was 1.09%, while the average conversion rate for using more than 11 or more publishers increased to 1.45%.

Ad placement is also important. In-stream podcast ads continued to deliver the best results, with higher conversion rates (0.87%) than pre-rolls (0.73%) and post-rolls (0.48%). Additionally, while embedded podcast ads (0.96%) generally outperformed dynamic insertions (0.91%) in conversion rates, dynamic insertions had higher conversion rates in certain industries, including gambling, professional services, fashion, and home furnishing.

Download

Again, Sony’s first-party teams have been excelling over the last decade or so, and many of their games certainly pack an emotional punch. Indeed, the best PS5 games are by and large the ones produced by PlayStation Studios.

It’s possible that Ryan is alluding to something slightly different, though; what’s clear is his aim for Sony’s software lineup to be industry-leading, and that means games that are anything less are unlikely to return. Series such as Gravity Rush or Days Gone, while fine games, haven’t lived up to the same standard as God of War, The Last of Us, or Horizon Zero Dawn. It seems Ryan’s only really looking for home runs, these days.

Do you agree with his statement? Do you generally only keep you absolute favourite games in mind? Maybe you can choose one from here: VOTE BY TMTPOST

[source en.tmtpost.com]

The Original Page is From PUSHSQUARE

**Abstract：**LinkedIn China said it will launch a series of brand new offerings by the end of 2021, no longer releasing users' original contents or offering features that promote online interaction.

BEIJING, October 14 (TMTPOST)— Microsoft’s professional social network LinkedIn suffered a setback in its localization in China. LinkedIn announced on Thursday a decision to sunset the localized version in China later this year, ending its localization effort since February 2014 in a market where it just halted new signups in March to review compliance with the local law.

In his letter to all the Chinese users, Jian Lu, President of LinkedIn China, explained his company decided to readjust the current strategy and focus more on helping China-based professionals find jobs in local market and companies in the market find desirable candidates. Lu said the company will maintain its commitment to business customers and focus on providing value of “connecting job opportunities”. He expected to launch a series of brand new offerings by the end of the year, no longer releasing users’ original contents or offering features that promote online interaction though.  

While noting the decision was made amid “a significantly more challenging operating environment and greater compliance requirements”, LinkedIn senior vice-president Mohak Shroff promised to continue to help Chinese businesses create economic opportunity and unveiled the next step in China: to launch a new app called InJobs later this year. The standalone app will not offer social feed or any feature that enable users to share posts or articles.   

Owning 52 million users, LinkedIn China witnessed a recovery in the local market. Though the COVID-19 pandemic hit the job ads for most of last year, the hiring activity crossed pre-pandemic levels in the last quarter of the year and the active jobs open for recruitment in the past April created a record high, accoding to GlobalData, a leading data and analytics company. “China was first to lift lockdowns and open the market that eventually led to the increase in hires,” Ajay Thalluri, an analyst at GlobalData commented. He expects that as the domestic economic activity keeps increasing, China will see the employment growth and more hiring activity in the coming quarters.  

Linked here is table of Chinese companies listed on the NASDAQ, New York Stock Exchange, and NYSE American, the three largest U.S. exchanges. As of October 2, 2020, there were 217 Chinese companies listed on these U.S. exchanges with a total market capitalization of $2.2 trillion. Companies are arranged by the size of their market cap. There are 13 national-level Chinese state-owned enterprises (SOEs) listed on the three major U.S. exchanges. In the list, SOEs are marked with an asterisk (*) next to the stock symbol.

This list of Chinese companies was compiled using information from the New York Stock Exchange, NASDAQ, commercial investment databases, and the Public Company Accounting Oversight Board (PCAOB).

The three giants of China, Sina, Sohu, and Netease went to the United States for IPO in the new millennium, which set off the first wave of overseas China Concepts Stocks issuance around 2000. In the next 20 years, although there were occasional twists and turns, going public in the United States was a good vision for most Chinese companies. Firstly, the relatively mature and rigorous system of the US stock market can bring a certain influence bonus to the listed companies in the US; secondly, the US stock market with the world’s leading scale can also provide more abundant financing support.

However, in the past two years, the friendliness of the US stock market to Chinese companies has declined rapidly. At the same time, the domestic stock market, whether the Hong Kong stock exchange (HKEx) or the A-share market, has opened the door to overseas-listed China Concepts Stocks. More and more China Concepts Stocks have launched actions to land in the domestic stock market.

When the time span to 2021, this wave of China concept stocks in the return, still visible to the naked eye continues to heat up.

The Upsurge of China Concepts Stocks Returning to China

Roughly speaking, what will be ushered in at present can be called the third wave of China Concepts Stocks listing.

The first wave is a giant Alibaba. In April 2018, the HKEx launched the reform of the AB share system. Not long ago, Alibaba said, “we have said since the first day of listing in the United States that we will come back as long as conditions permit. Our attitude has never changed.” Before making the HKEx wait too long, at the end of November 2019, Alibaba fulfilled its promise and successfully went to Hong Kong for a dual listing. Although there is only one Alibaba family in this wave of return, they can bear the title of “one man into an army” regardless of the record amount of fund-raising or huge trading volume.

The second wave includes three giants: JD, Netease, and New Oriental Education & Technology Group. In June 2020, two Internet giants, JD and Netease, successively went to Hong Kong for a secondary listing. At the end of October, New Oriental also successfully landed on the Hong Kong stock market. Before that, in early 2020, after the financial fraud scandal exposed by Luckin Coffee, China Concepts Stocks fell into a new round of trust crisis. The turbulence of the capital market and the spread of the trust crisis make it difficult for China Concepts Stocks to move forward. In May of the same year, the U.S. Senate passed a foreign company Accountability Act, which has a very obvious meaning for China Concepts Stocks.

The third wave, many China Concepts Stocks will form a real return to the army. In the middle of 2020, according to the rules of the HKEx for dual listing, there were 19 China Concepts Stocks meeting the requirements at that time, including Baidu, Ctrip, etc. At the same time, the CSRC issued a notice to adjust the conditions for red chip companies to return to a share so that the threshold of returning to a share was significantly reduced. In short, the domestic A + H-share market has paved the way for the return of China Concepts Stocks. Now we only see whether these China Concepts Stocks have a strong willingness to return. Recently, three China telecom firms were forced to delist by the New York Stock Exchange (NYSE), which will undoubtedly greatly stimulate the willingness of China Concepts Stocks to return.

In the instinctive trend of seeking advantages and avoiding disadvantages, China Concepts Stocks generally has the intention to return to the China domestic stock market, but the specific time to return depends on the “an opportune moment”. To put it more bluntly, when the business performance is poor and the performance lacks highlights, it is a question of whether the China domestic market will sincerely welcome it and whether it can get enough financing in A + H shares.

However, I believe that it is not difficult to find a suitable opportunity in the short term for most of the China Concepts Stocks. After all, China Concepts Stocks are all local companies based on the China market, and China’s efficient response to the epidemic has made the domestic market take the lead in rejuvenating. Therefore, more and more local companies will have the opportunity to get strong support from the domestic market.

Baidu returns to China to enjoy dividends

In a number of Chinese companies that have not yet returned to China for listing, Baidu’s willingness to return is particularly strong, and now the time is ripe to return.

Baidu’s statement that it wants to return to China for listing maybe even earlier than Alibaba’s. As early as in March 2018, Robin Li, CEO of Baidu once said, “when we went to the United States for listing, it was because conditions were not allowed, but when conditions permit Baidu to come back, it is sure that we can come back to the domestic stock market as soon as possible.”

During the formation of the second wave of return army, Baidu also released a clear return signal. In May 2020, Robin Li made it clear that “Baidu is considering listing in Hong Kong for the second time”. In July of the same year, media reported that Baidu had launched the plan of listing in Hong Kong. Recently, many media reported that Baidu plans to list in Hong Kong as soon as the first half of 2021, raising at least $3.5 billion. It is reported that Baidu has hired CLSA and Goldman Sachs to assist in listing in Hong Kong. This shows that Baidu’s listing in Hong Kong is indeed being steadily promoted.

In the near future back to Hong Kong dual listing, for Baidu, the time has been more suitable. From the second half of 2020, Baidu’s mobile ecological core business began to grow. Meanwhile, the new business of artificial intelligence accelerated its landing and ushered in favorable policies. In the industry, more and more people think that Baidu has begun to “hit the bottom and rebound”, and its share price has rapidly recovered. Many investment and research institutions at home and abroad have also begun to evaluate it as “strong buying”.

Today, many investors have recognized the trend of Baidu recovery. Therefore, it is not a bad choice for Baidu to speed up the pace of return to Hong Kong in the near future, or still smoothly promote the listing back to Hong Kong. The only difference is that the latter may make Baidu more profitable.

Bilibili urgently needs to broaden financing channels

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In the current US stock market, Bilibili (NASDAQ: BILI) is still a popular star stock, has been red to purple.

The growth miracle of Bilibili in the US stock market in 2020 is comparable to that of Tesla**.** From January 1, 2020, Bilibili held a new year’s party, to the trilogy of “New Wave”(后浪), “Into the Ocean”(入海) and “Happy Meeting”(喜相逢), which caused great controversy, and then to the successful launch of “BiliBili Bili video satellite”. In 2020, Bilibili successfully broke the circle, and the stock price also soared. From January 2, 2020, to December 31, 2020, the stock price increased by 360.37%.

Judging from the performance of the stock market, the current Bilibili should not have too urgent demand to return to China for listing. But Bilibili, which has been losing money year after year, actually has a very urgent financing demand.

In fact, behind the high growth, the commercial anxiety of Bilibili has not been solved. According to the financial report of Bilibili in the third quarter of 2020, its monthly active users increased by 54% year-on-year to 197 million, and its revenue increased by 74% year-on-year to 3.23 billion yuan. The problem is that the growing cost of Bilibili is a little high. Behind the rapid growth of users and income, the incentive expenses for creators, self-made content expenses, and marketing expenses are also rising. As a result, the net loss in the current quarter increased 171% year on year to 1.1009 billion yuan.

To make matters worse, after Bilibili broke the circle and made great efforts to explore multiple aspects, and watermelon video and other competitors launched the “China Video War” against it, the competitive pressure Bilibili is facing is still rising, which means that Bilibili has to bear more and more financial pressure. Therefore, further broadening financing channels has become an alternative option for Bilibili to consider. From this point of view, the motivation for Bilibili to return to China for listing has been quite sufficient.

Recently, a number of media reported that Bilibili has formally submitted its listing application to the HKEx and plans to list in Hong Kong for the second time in March. According to the rules of the HKEx, a secondary listed company must have a good regulatory compliance record in another exchange for at least two financial years. Calculate the time, by March 2021, Bilibili will just be able to meet this requirement, and the time is ripe.

More China Concepts Stocks are on the road to return

To be sure, a new wave of the stock return boom has begun to warm up.

Moreover, not only Baidu and Bilibili, which are the two most concerned China Concepts Stocks but also the scale of the third wave of returning troops should be larger than the first two. According to the summary of the news, there are already seven China Concepts Stocks listed in the United States that plan or are arranging for a dual listing in Hong Kong. In addition, according to Nikkei News, it is known that there will be 10 China Concepts Stocks to be listed in Hong Kong for the second time this year.

In recent years, the U.S. stock market deliberately aims at the continuous and unprovoked suppression of China Concepts Stocks, which is constantly reducing the trust of global enterprises and investors in the inclusiveness and certainty of its rules and regulations. At the same time, with the increasing maturity of the domestic capital market and the further enhancement of the inclusiveness of domestic policies, these star companies that were originally in China have more opportunities to take root in China.

Today, the domestic stock market has a more mature environment and stronger capital strength. Therefore, it has become a certain trend for China Concepts Stocks to flow back.

Of course, it is not only helpful to broaden financing channels and avoid risks for China Concepts Stocks to go back to the domestic stock market for a dual listing. It can also allow more domestic investors to participate in the growth of these local innovative enterprises. There will be a chance to achieve a win-win or even multi-win result.

Author: Jack Chan/ Published with The Authority of FirmKnow

Original Link:

https://firmknow.com/china-concepts-stocks-a-new-round-of-return-in-2021/