China is Rolling out Policies to Stablize the Economy
From December 8th to 10th, the Central Economic Work Conference was held in Beijing. Stabilizing the economy has become the core issue raised in this conference. In the same time, seeking progress while maintaining stability will become the main policy line for next year. It can be predicted that in 2022, all regions and departments will actively introduce policies to ensure economic stability. China will also continue to strengthen policies designed to support market entities. The economists interviewed by Caijing believe that these policy signals are clearly a correction of the excessively strict macro policies rolled out this year. Regarding the current macro economy, the Central Economic Work Conference’s consensus is that China’s economy faces triple pressures of shrinking demand, supply crunch, and weakening expectations on economic growth.
In addition, the emergence of Omicron variant has added uncertainties to the recovery of the global economy. Furthermore, geopolitics and the restructuring of the industrial chain will also impose heavy impacts on the lifeline of China’s economy.
In China, Beef Noodle Chain Brands Have Become VC’s New Favorite
In 2021, led by noodle restaurants, the Chinese catering industry, especially the fast-food chain brands are booming and have become the new favorite of the capital. Among these chain restaurants Ma Jiyong, Zhang Lala, and Chen Xianggui are the three most mentioned brands. Their headquarters are all based in Shanghai, and they are considered high-end catering brands. In these chain shops, a bowl of Lanzhou beef noodles could be priced up to about 27 yuan. These companies have also been sought after by well-known investment institutions.
Over the years, many Lanzhou beef noodle brands have been born in Gansu, but most of them have been running within Gansu Province. Today, these new brands in Shanghai have surpassed their predecessors and opened branches in many cities across the whole country. VC’s interest in noodle restaurants is not limited to Lanzhou beef noodles. In the past three years, the speed of investment and financing in the traditional flour food sector has accelerated significantly.
Finalizing of SEC Rules Will Pose Risk of Delisting of China Concepts Stocks
Recently the SEC finalized rules of the Holding Foreign Companies Accountable Act (HFCAA) which allows it to delist foreign stocks for failure to meet audit requirements in three consecutive years. The rules being adopted indicates that the framework for the law’s implementation is finalized and the direct impact is that more than 200 China concepts stock companies are facing the risk of being delisted. For this reason, these companies will be forced to embark on a path of re-choice. Some of them are already relisting in Hong Kong.
Throughout 2021, China concepts stocks have been on their downhill, and their market value has continued to fall. One of the fundamental reasons for the sharp drop is the forthcoming implementation of the HFCAA. At the same time, back in China, strong regulatory policies have been continuously introduced. These factors together cast a shadow over the future prospects of China concepts stocks. Some institutions are still optimistic about China’s growth, such as JP Morgan Chase; but most investors still choose to sell or wait and see.
Anxiety for Hair Loss is Fueling China’s Hair Transplant Market Boom
On December 13, 2021, Yonghe Medical was listed on the Hong Kong stock market. As of the close of the day, the stock price rose slightly. This indicates that capital market holds high hopes for the hair transplant industry. The reason that Yonghe Medical has become the best performing company in the hair transplant industry is based on its high-speed expansion, strong advertising and low R&D expenses.
According to surveys, more than 250 million people in China are suffering from hair loss. But the paradox that hair transplant companies are facing is that few people actually buy their services though the market appears large. This is because not everyone with hair loss is suitable for hair transplants. In addition, the price is extremely high. Ironically, advertisers may become the biggest winners in the entire hair transplant business chain.
