EqualOcean Sector Quarterly Report - Sci-Tech Innovation Sectors

Intro

According to the National Bureau of Statistics of China, scientific and technological innovation now contributes to over 60% of China's GDP growth in 2021. Some experts believe that 60% is obviously not the endpoint. China wants to build an innovative country in the future, and the contribution rate of scientific and technological progress is expected to be higher in 2022. In the process of steadily improving the capacity for independent innovation and breakthroughs, the contribution of both innovative startups and giant companies is indispensable. 

To help worldwide investors keep track what is happening in each industry or sector and the related hot spots, we launched the EqualOcean Sector Quarterly Report series, which gathers the notable information and statistics in each quarter.

The report has three sections: In the first section, we listed 13 leading players in China's Sci-Tech innovation sectors and their current tech-related updates in Q1 2022; in the second section, we gathered the investment and financing events in sci-tech innovation sectors that happened in the past three months; in the third and the last, we demonstrated other relevant events in sci-tech innovation sectors that drawing people's attention, some of them may more focus on the tech policy side.

Main Players Updates

Alibaba (BABA: NYSE)

 Nokia signs DAC sales deals with Alibaba, Atos – as private 5G shifts up a gear. Nokia has announced go-to-market deals for private LTE and 5G with the cloud division of Chinese web giant Alibaba and with French cloud services company Atos. Both companies will integrate and resell their Digital   Automation Cloud (DAC) private wireless solution, which is driving much of the Finnish firm's growth in the enterprise space. The deals with Alibaba   Cloud and Atos mark a step-up in Nokia's go-to-market strategy. On February   25, the firm also announced a major pairing with New York-based managed infrastructure services provider Kyndryl, separated from IBM late last year,   to jointly sell and develop private networking and edge computing solutions for the Industry 4.0 market.

Tencent (0700: HK)

 Tencent sells USD 3 billion stakes in Singapore tech group Sea. Tencent Holdings has sold 14.5 million shares in Singapore-based gaming and e-commerce firm   Sea at USD 208 each to raise USD 3 billion on January 4, 2022. According to the company, the share sale unlocks a portion of the value of Tencent's investment in Sea, which has seen significant growth and expansion in its global business operations. The divestment provides Tencent with resources to fund other investments and social initiatives.

 Huawei

Huawei launches a rival to the Amazon Kindle to revive the consumer business.   The company launched a slew of new products on February 27 2022   including MatePad Paper, a rival to Amazon's Kindle, as the Chinese tech giant looks to inject life into its consumer business. MatePad Paper is the company's first e-reader device and features a 10.3-inch display. Huawei is positioning this as a product useful for the work environment. It is compatible with the Huawei M-Pencil, which can be used across other products.   According to Huawei, the MatePad Paper is the most interesting product in Huawei's new range with extremely long battery life, ultra-thin designs and easy-to-read screens that are said to be less fatiguing than traditional LCD   displays.

 Xiaoxi (1810: HK)

 Xiaomi Redmi K50 series: Dimensity 8100 and Dimensity 9000 models to launch simultaneously. Xiaomi unveiled two smartphones at its Redmi K50 series event on March   17, 2022. Seemingly powering the Redmi K50 Pro, the Dimensity 8100 features an octa-core CPU, an ARM Mali-G610 MC6 GPU and support for UFS 3.1 storage plus LPDDR5 RAM. In comparison, the Dimensity 9000 utilises the more powerful   Mali-G710 MC10 GPU, which has 10 GPU cores. Xiaomi also showcased a new 'nano-microcrystalline process' that gives at least one Redmi K50 series handset an eye-catching back panel.

China Mobile (600941: SH)

China Mobile Hong Kong was responsible for exclusive VR broadcasting rights to the Beijing 2022 Winter Olympic Games. In early January,   the local arm of the Chinese telco giant secured virtual reality (VR) broadcast rights to the Winter Olympics,   offering Hong Kong viewers a new immersive perspective of the Games. During the whole game series, China Mobile provided on-demand competition highlights in a VR 360 panorama format, giving viewers an 'unprecedented' experience of key Olympic moments.

China Unicom (0762: HK)

 China Unicom chief pegs joint 5G capex savings at USD 33B. China Unicom chairman and CEO Liu Liehong highlighted the vast financial and energy reductions a 5G   network built jointly with China Telecom had delivered to date, placing the total combined CapEx savings at USD 33 billion. He said the shared network also saved the operators USD 3.1 billion in OpEX and 17.5kWh of electricity in 2021. Jointly operating 690,000 5G base stations across China reduced carbon emission by 6 million tonnes or the equivalent of planting about 3.3   million trees. China Telecom president Li Zhengmao pegged its total CapEx savings at USD 16 billion and OpEX reduction at around USD 1.6 billion a   year. He noted that after partnering with China Unicom, its 5G coverage and speeds doubled, highlighting that each operator's core network runs independently for the differentiated operation of services.

China Telecom (601728: SH)

China Telecom officially announces 5G SMS for commercial use. China Telecom, one of the big three Chinese mobile operators, officially announced on Jan 25   that its 5G Short Messaging Service (SMS) has entered commercial use, with individuals receiving messages for free but paying to send them, an official from the company said during a conference on 5G messaging. Experts noted that as an SMS upgrade, customers can use it not only to send text, pictures,   audio and video, but can also enjoy services such as buying tickets, checking express logistics, and paying for coal, electricity, water and gas.

LONGi Green Energy Technology (601012: SH)

 LONGi Green Energy Technology unveils a 415W solar panel with 21.25% efficiency. Chinese module manufacturer Longi has unveiled a new 54-cell solar module based on M10   wafers with a size of 182mm, for commercial and industrial rooftop systems.   The Hi-MO 5m module has a rated power of 415W and a power conversion efficiency of 21.25%. 'Hi-MO 5m 54-cell modules feature PERC gallium-doped,   p-type half-cut cells with the highest resistance against light ageing   (lowest LID) for maximum energy yield and are backed with a 25-year   performance warranty,' the manufacturer said in a statement. 'This technology   has won performance and technology awards from the Renewable Energy Testing   Center (RETC) and PV Evolution Labs (PVEL).'

Hikvision (002415: SZ)

 Hikvision introduces audio and strobe light AcuSense camera. Hikvision continues to build on its popular line of AcuSense surveillance cameras with the introduction of the new AcuSense Audio and Strobe Light Camera Series.   The new camera series combines advanced machine learning with integral strobe lighting and audio warnings in a single unit, providing an effective autonomous solution for deterring intruders. Unlike conventional security systems that rely on multiple devices for visual surveillance and visual and audible alerts, the Hikvision AcuSense Audio and Strobe Light Cameras deliver an all-in-one solution. Equipped with Hikvision's 2nd generation AcuSense intelligence, these new cameras help reduce false alarms by up to 90% by accurately classifying humans and vehicles, and filtering out innocuous motion events caused by animals, inclement weather, or foliage. Users can customize audio responses with pre-recorded audio messages that play at up to   60dB from a built-in speaker. The cameras come equipped with 10 audio sound options, with the ability to easily adjust the pattern and frequency of the strobe light.

SMIC (0981: HK)

 SMIC names Gao Yonggang as chairman in the leadership reshuffle. China's Semiconductor Manufacturing International said on March 18 it appointed Gao   Yonggang as its chairman with immediate effect, as part of a leadership reshuffle that saw its vice-chairman Chiang Shang-Yi resign last November.   Gao, who was appointed as the acting chairman last September, has been the chipmaker's chief financial officer since 2014. SMIC is experiencing huge demand for its mature node chip technologies amid a global semiconductor shortage. Gao said last month that SMIC's priority in 2022 was 'to keep up with the industry's development and fill the gap of the structural shortage',   referring to the fact that its capacity was insufficient to meet demand.

Luxshare (002475: SZ)

Luxshare's Shares Rally as It Confirms Entry into NEV Market.  As per a company announcement, Luxshare and   Chery New Energy intend to build a joint venture specializing in the R&D   and manufacturing of new energy vehicles (NEV) and providing a cutting-edge   R&D design, mass-production platform and export gateway for Luxshare's core auto part business. The goal, ultimately, is to meet the company's medium-to-long-term goal to become a top-tier supplier of car components,   said the statement. Annual reports filed in recent years by Luxshare show that the company specializes in building special-purpose wiring harnesses and connectors, telematics control units (TCUs) and central gateway modules for   NEVs. Luxshare said the ODM business has been up and running and production will begin in about 12 to 18 months. Under the ODM model, the new joint venture is expected to not just make cars exclusively for Chery, but also supply its manufacturing capacity to traditional foreign carmakers and domestic NEV brands.

SenseTime (0020: HK)

 SenseTime launches a powerful AI computing centre in Shanghai. The first mega artificial intelligence (AI) computing centre in East China operated by Chinese emerging   AI firm SenseTime officially started operation in Shanghai on January 24,   which is set to become one of the largest AI computing centres in Asia. The   AI computing centre located in Lingang New Area in Shanghai is designed to have a peak computing power of up to 3,740 petaflops, with a petaflop being a   quadrillion floating-point operations per second, according to a statement sent to the Global Times by SenseTime. The AI computing centre will form an ecosystem that lowers the barriers for various industries to entry for large-scale AI applications and continuously expand the boundaries of the industrialization of AI. Meanwhile, it will contribute to the local research and development of the AI industry in Shanghai and the Yangtze River Delta region.

DJI Technology

Figma starts cutting ties with DJI on grounds of compliance with US   sanctions. San Francisco-based software firm Figma started to cut ties with   Chinese drone unicorn start-up DJI on March 14, in order to ensure compliance with domestic sanctions. Figma's Chinese competitors, JsDesign and Lanhu,   confirmed the report. Founded in 2012, Figma is a graphics editor and prototype design tool, which mainly works based on web pages. Figma focuses on user interface and experience design. In an email sent to DJI, Figma said that it has learned that the Chinese drone firm is named in U.S.-issued   sanctions and it can no longer provide the company with access to its software in order to comply with laws. For designers and enterprises banned by Figma, the only way to deal with it is to change design tools. Lanhu,   JsDesign, and other Chinese design firms started research in 2018, and their products were intensively launched after the second half of 2020. Lanhu and   JsDesign have swiftly responded with a helping hand to minimize the impact of the access ban. JsDesign offered to help individuals and businesses hit by the measure with the transfer and backup of Figma files. Lanhu said its affiliate, MasterGo, has officially packed the functionality of importing   Figma documents to help after the access ban.

BOE (BOE: NYSE)

 BOE may supply OLED Panel for iPhone 15 in 2023. BOE, the major panel manufacturer in China, is prepared to supply high-end OLED panels for Appl's iPhone 15 series in 2023, according to South Korean industry sources.   According to people familiar with the matter, BOE has already supplied around   10% of the panels used on the iPhone 13 series. Along with the blockbuster   Apple 13 released in 2021, flexible OLED has become the main growth driver for BOE. As per the company's performance forecast, the net profit after the non-recurring gains and losses is expected to jump by approximately 800% in   2021. BOE attributed this fast expansion to 'growing production, closer   relationships with customers, and its advanced technologies.' OLED panel shipments of mainland Chinese manufacturers in 2021 were about 140 million pieces, a year-on-year increase of 60.1%, and the growth rate is twice the global average. BOE, with 60 million units, ranks second in the world and first in China.

 Capital Market Calendar

Key Events

• China plans to increase the contribution of core digital economy industries to 10 % of GDP by 2025

China's State Council published a blueprint on Jan. 12 for the development of the digital economy that aims to increase the contribution of core digital economy industries to 10% of gross domestic product (GDP) by 2025. The document's targets were drawn up in line with the country's 14th Five-Year Plan that runs from 2021 to 2025, capturing China's ambitions to boost its global competitiveness in advanced technologies such as semiconductors and artificial intelligence.

Expected growth in the digital economy's share of GDP will be driven primarily by next-generation technologies like the 6G internet and big data. According to the plan, China anticipates users of gigabit broadband, the current fastest internet connection speed, to increase from 6.4 million in 2020 to 60 million in 2025. Alongside promoting the commercial deployment and large-scale application of 5G, China will boost support for 6G research and development and aim to play a more central role in shaping international standards surrounding the nascent technology.

• Innovation China Conference 2022 held in Beijing

The conference reviewed the Innovation China program in 2021, summarized the achievements of pilot projects, organizational innovation and platform construction of the program, and demonstrated a number of exemplary cases of 'Innovation China' boosting the development of science, technology and economy in local areas. Wan Gang awarded certificates to the 24th CAST Qiushi outstanding young talents achievement transformation winners. 10 young sci-tech talents who have made outstanding achievements in the transformation of sci-tech achievements into real products were awarded. The 2021 'Innovation China' expanded its awarding items into 7 series. The candidates were recommended by the national societies and provincial and municipal associations for science and technology, and evaluated by more than 150 academicians and experts in relevant fields in the preliminary assessment and final evaluation. 100 leading technologies, 10 key technologies, 100 successful start-ups, 10 organizations integrating industries, universities and research institutes, 10 S&T venture capital firms, 70 open-source products, communities and institutions and 90 young entrepreneurial talents were selected and awarded in the conference. 

Wan Gang, vice chairman of the national committee of the Chinese People's Political Consultative Conference (CPPCC) and president of CAST, Zhang Yuzhuo, secretary of the leading Party members group, vice president in charge of daily work and chief executive secretary of the Secretariat of CAST, Wang Xiaomo, co-chairperson of the advisory committee of 'Innovation China' and academician of the Chinese Academy of Engineering (CAE), Zhou Ji, chairperson of the Alliance of 'Innovation China', former president of the CAE and academician of the CAE, Jiang Xiaojuan, co-chairperson of the advisory committee of 'Innovation China', and all members of the leading Party members group and Secretariat of CAST attended the conference.

• Wrap-Up Meeting of WAIC 2021 and Launch Ceremony of WAIC 2022 Successfully Held

On the morning of February 16, 2022, the Wrap-Up Meeting of the 2021 World Artificial Intelligence Conference and the Launch Ceremony of the 2022 World Artificial Intelligence Conference were held in Shanghai World Expo Exhibition & Convention Center. After the WAIC 2021, a number of AI achievements have left a deep impression on the industry, and the preparations for the WAIC 2022 have been kicked off on the occasion of the fifth anniversary of the conference. 

2022 WAIC will be held from July 7 to July 9, 2022, and the main venue will continue to be located in the Shanghai World Expo area. WAIC will continue to uphold the concept of 'Intelligent Connectivity,' always adhere to the approach of 'high-end, international, professional, market-oriented, intelligent,' and play the important role of 'technology leader, application showcase, industry accelerator, and governance council.' At the same time, through the combination of online and offline, it is designed to join multiple resources and create a platform for international cooperation and exchange.

• NPC & CPPCC 2022: the metaverse development should be spearheaded by the central government, delegates propose

A number of delegates have published their metaverse proposals for the gatherings of the National People's Congress (NPC) and Chinese People's Political Consultative Conference (CPPCC), sharing their views on how China should embrace and regulate the metaverse. It signalled an increasing interest in the concept of a shared, immersive virtual space that some consider being the next evolution of the internet. 

Tan Jianfeng, Honorary Chairman of Shanghai Information Security Industry Association, suggests that regulators should be cautious of the current metaverse hype in China evolving into a 'new form of economic bubble', and asks for stricter regulation against metaverse and NFT transactions. Although the operators of the metaverse community claim that it is a decentralized society, the rules of governance and transactions are tightly controlled by corporate giants. Blockchain technology-based NFTs are already prevalent in the metaverse, but regulation is difficult to implement, which may breed a new channel for money laundering, said Tan Jianfeng.