China bike-sharing firm Ofo in talks to raise $1 billion, led by SoftBank: sources

July 28, 2017

By Kane Wu and Julie Zhu

HONG KONG (Reuters) – Chinese startup Ofo is in talks to raise $1 billion in a new funding round led by Japan’s SoftBank Group, people familiar with the matter said, in what would be the largest fund-raising in the nation’s bike-sharing business.

Didi Chuxing, China’s biggest ride-hailing firm which counts SoftBank as an investor, could join Ofo’s new fundraising round,the sources told Reuters. Ofo could reach a valuation of close to $3 billion after the funding, one of the sources said.

Ofo and Mobike, China’s two largest bike-sharing startups, each has raised over $1 billion since late last year in a cash war to expand market share at home and overseas.

Ofo is seeking fresh capital less than a month after raising more than $700 million from investors led by Alibaba Group and two others, following rival Mobike, which in June announced a $600 million investment led by Tencent Holdings.

The latest Ofo investment plan has not been finalised, the sources said, who declined to be identified as the discussions are private.

SoftBank and Didi declined to comment. Ofo didn’t immediately respond to Reuters’ request for comment.

Ofo did not disclose its valuation in the last funding round. Dai Wei, Ofo’s founder and CEO, had said in April the firm was valued at upwards of $2 billion.

Mobike’s valuation reached around $2.7 billion-$3.0 billion after the June funding round, according to three sources close to the startup.

Mobike declined to comment.

Didi, already an investor in Ofo, has been increasing its influence at the company. Three of its senior executives joined Ofo this week, according to local media.

Ofo told local media on Wednesday it had named Fu Qiang, a former senior vice-president of Didi, executive president of the company but did not confirm the hiring of the other two.

For SoftBank, which recently launched a near $100 billion technology fund, an investment in Ofo would be another bet on China’s sharing-based economy that has already attracted billions in venture capital. The Japanese conglomerate in May agreed to invest $5 billion in Didi, putting an over $50 billion valuation on the Chinese company.

SoftBank’s potential investment in Ofo also comes after New York-based co-working space startup WeWork said on Thursday that it raised $500 million from SoftBank and several Chinese investors to set up a Chinese unit.

SoftBank and Didi are also investing in Southeast Asian ride-hailing firm Grab in its latest funding round, Reuters reported earlier this week.

(Reporting by Kane Wu and Julie Zhu; Additional reporting by Sijia Jiang in HONG KONG and Makiko Yamazaki in TOKYO; Editing by Muralikumar Anantharaman)

Xiaomi gains new $1 billion loan to drive retail push, expansion overseas

July 28, 2017

SHANGHAI (Reuters) – Chinese smartphone maker Xiaomi Inc said on Friday it had signed a deal for a new $1 billion loan to accelerate its drive into brick-and-mortar stores and help a push overseas.

The three-year syndicated loan comes as China’s tech giants look to diversify their businesses as e-commerce growth slows, with rivals from Baidu Inc to Alibaba pushing into new areas from cloud computing to artificial intelligence.

It follows a three-year $1 billion syndicated loan in 2014.

Xiaomi has seen a recent return to form in phone sales after being hit by competition from rival Huawei Technologies Co Ltd and brands Vivo and Oppo.

The firm shipped 23.16 million smartphones in the second quarter of 2017, up 70 percent from the previous quarter, marking a record high for its quarterly smartphone shipments, it said in a statement.

The loan, which was coordinated globally by Deutsche Bank and Morgan Stanley, involved participation from 18 banks in Europe, the Middle East, India, China, Hong Kong and Taiwan.

“The global syndicate of top-tier banks is a strong endorsement of Xiaomi by the international capital markets,” Xiaomi Chief Financial Officer Shou Zi Chew said.

The statement from Xiaomi, which also makes cameras and TVs and was briefly the world’s most valuable startup following its last round of fundraising in 2014, confirms a report from Reuters LPC on Wednesday.

(Reporting by Adam Jourdan; Editing by Edwina Gibbs)

South Korea’s LG Electronics books second quarter profit held back by mobiles

July 27, 2017

By Joyce Lee

SEOUL (Reuters) – LG Electronics Inc on Thursday said continued losses in its mobile unit limited growth in second-quarter profit to 13.6 percent, as the firm prepares to release a handset in the third quarter that it hopes will turn the tide.

The South Korean firm said operating profit reached 664 billion won ($597 million) in April-June, in line with its estimate earlier in July. Revenue rose 3.9 percent to 14.6 trillion won, also in line with its estimate.

“We will strengthen our market dominance through expanding our premium home appliance lineup in the third quarter,” it said in an earnings statement.

LG’s share price fell 2.1 percent on Thursday, compared with a 0.4 percent rise in the Kospi benchmark index.

LG’s earnings will likely fall in the second half of 2017 compared with the first as its appliances business enters a traditional off-season, analysts said. On-year growth is still likely, however, as LG continues to boost sales of high-end home appliances and TV products with wider profit margins, they said.

But views are divided on whether the mobile division can narrow losses with a high-end handset debuting in late August.

“We believe the smartphone business needs a fundamental change in strategy,” analyst John Park at Daishin Securities wrote in a research note.

“The company’s strategic model going against Apple Inc’s iPhone 8 and Samsung Electronics’ Galaxy Note 8 in the second half of 2017 is expected to fall short, making it difficult for mobile revenue growth.”

The firm’s mobile division reported a 132 billion won loss, its ninth consecutive quarterly loss, hit by lackluster sales of its flagship G6 smartphone.

LG’s appliance division reported operating profit of 466 billion won, steadied by brisk sales for high-end products such as washing machines and refrigerators, as well as lower costs of materials used commonly among its products, analysts said.

LG, the world’s second-biggest television set maker behind Samsung Electronics, said its TV business booked a 343 billion won profit, as higher panel costs were offset by growing demand for up-market sets such as organic light-emitting diode (OLED) panel TVs that offer bigger margins.

($1 = 1,111.8600 won)

(Reporting by Joyce Lee; Editing by Richard Pullin and Christopher Cushing)

Nokia beats quarterly market forecasts but lowers networks outlook

July 27, 2017

HELSINKI (Reuters) – Finnish network equipment maker Nokia reported larger than expected quarterly profits on Thursday thanks to a patent deal with Apple along with improving profitability at its network business but warned its key market would slow.

Second-quarter group earnings before interest and taxes (EBIT) rose 73 percent from a year ago to 574 million euros ($674 million), clearly above analysts’ average forecast of 447 million euros in a Reuters poll.

However, Nokia said the global network market would be more challenging in the full year than earlier forecast, citing uncertainty related to the some projects.

“We now expect a decline in the market in the range of 3-5 percent, versus our earlier view of a low-single digit decline,” Chief Executive Rajeev Suri said in a statement. Nokia’s network business, which accounts for roughly 90 percent of its sales, is expected to decline in line with the market trends, he said.

(Reporting by Jussi Rosendahl and Helena Soderpalm, Editing by Eric Auchard)

Italy’s UniCredit reveals attacks on client data

July 26, 2017

MILAN (Reuters) – Suspected hackers have accessed client data of Italy’s biggest lender, UniCredit, in two attacks over the past 10 months which affected around 400,000 Italian customers, the most serious hack ever reported by a major Italian lender.

No passwords were stolen in the attacks, which first occurred in September and October last year and then again in June and July of this year, but personal and banking details could have been accessed, UniCredit said in a statement.

The attacks were carried out through an external commercial partner, which UniCredit did not identify. It also did not describe how the intruders accessed the data or when it became aware of the first intrusion last year.

“The bank immediately adopted all necessary measures to prevent a repeat of such intrusions,” the bank said.

UniCredit shares fell about 1 percent immediately after the news. The stock fetched 16.9 euros in morning trade, down 0.6 percent.

(Reporting by Paola Arosio and Silvia Aloisi; Editing by Mark Bendeich)

U.S. treads water on cyber policy as destructive attacks mount

July 26, 2017

By Joseph Menn

SAN FRANCISCO (Reuters) – The Trump administration’s refusal to publicly accuse Russia and others in a wave of politically motivated hacking attacks is creating a policy vacuum that security experts fear will encourage more cyber warfare.

In the past three months, hackers broke into official websites in Qatar, helping to create a regional crisis; suspected North Korean-backed hackers closed down British hospitals with ransomware; and a cyber attack that researchers attribute to Russia deleted data on thousands of computers in the Ukraine.

Yet neither the United States nor the 29-member NATO military alliance have publicly blamed national governments for those attacks. President Donald Trump has also refused to accept conclusions of U.S. intelligence agencies that Russia interfered in the 2016 U.S. elections using cyber warfare methods to help the New York businessman win.

“The White House is currently embroiled in a cyber crisis of existential proportion, and for the moment probably just wants ‘cyber’ to go away, at least as it relates to politics,” said Kenneth Geers, a security researcher who until recently lived in Ukraine and works at NATO’s think tank on cyber defense. “This will have unfortunate side effects for international cyber security.”

Without calling out known perpetrators, more hacking attacks are inevitable, former officials said.

“I see no dynamics of deterrence,” said ex-White House cyber security officer Jason Healey, now at Columbia University.

The government retreat is underscored by the departure at the end of July of Chris Painter, the official responsible for coordinating U.S. diplomacy on cyber security. No replacement has been named and the future of the position in the State Department is in flux.

Some of Trump’s cyber officials have publicly highlighted a strategy to focus less on building global norms and more on bilateral agreements. Trump and the Kremlin have said Russia and the United States are in discussions on creating a cyber security group.

But at the big Black Hat and Def Con security conferences this week in Las Vegas the U.S. government will have an unusually light footprint. Past government speakers have included a head of the National Security Agency and senior Homeland Security officials.

A session featuring U.S. law enforcement officials discussing the purported theft by Russia of hundreds of millions of Yahoo account credentials was pulled at the last minute. A spokeswoman for the Federal Bureau of Investigation said the presentation was canceled because the Yahoo expert slated to talk, Deputy Assistant Director Eric Sporre, had been reassigned to run the Tampa FBI office.

The policy vacuum left by the United States is also affecting private security firms, which say they have grown more cautious in publicly attributing cyber attacks to nation-states lest they draw fire from the Trump administration.

Trump suggested in an April interview that the security firm CrowdStrike, which worked on investigating the election hack of the Democratic National Committee, might not be trustworthy because he was told it was controlled by a Ukrainian. It is not.

Cyber policy veterans are particularly alarmed about the lack of U.S. and NATO response to the destructive attack, dubbed NotPetya, in June that struck computers worldwide but was especially harmful for Ukraine, which is in armed conflict with Russia in the east of the country.

Cyber security experts, such as Jim Lewis of the Center for Strategic and International Studies, a government veteran who advised former President Barack Obama, believe Russia carried out the attack. The Russian defense ministry did not immediately respond to requests for comment.

Lewis and others predicted that Trump will not publicly accuse Russia, and NATO has only said it appears to be the work of a government agency somewhere.

“If you are not ringing alarm bells in an eloquent way, then I think you’re dropping the ball,” said retired CIA officer Daniel Hoffman, who worked on Russian issues. “When we fail to do enough, that just emboldens them.”

(Additional reporter by Dustin Volz in Washington and Jack Stubbs in Moscow; Editing by Jonathan Weber and Grant McCool)

LG Display plans to invest $13.5 billion to boost OLED production

July 25, 2017

By Joyce Lee

SEOUL (Reuters) – South Korea’s LG Display Co Ltd outlined plans to invest $13.5 billion to boost production of organic light-emitting diode (OLED) screens over the next three years, aiming to ride surging demand for the flexible panels from TV and smartphone manufacturers.

The investment comes as the Apple supplier reported second-quarter operating income soared more than 18-fold from a year earlier as it benefited from a more profitable product mix of screens for ultra-high definition TVs and other high-end panels.

The plans cover investment in domestic production facilities and includes a firm commitment to spend 7.8 trillion won ($7 billion) domestically by 2019.

“The customer base for OLED TVs and signage displays is expanding, alongside rapidly increasing OLED demand from the mobile and automotive markets,” LG Display said in a statement.

Around 2.8 trillion won will go towards a new line for large-size OLED screens while 5 trillion won is earmarked for a separate new line for flexible OLED aimed at bolstering its position in auto displays and smartphones. Both production lines will be located in Paju, northwest of Seoul.

It also said separately that it would invest in large-size OLED production in Guangzhou, China, to respond to fast-growing demand for the screens in TVs in overseas markets. The company already has an LCD panel production plant in Guangzhou that began mass production in 2014.

The new China production facilities will be established through a joint venture with 2.6 trillion won in capital, of which LG Display will hold a 70 percent share.

LG Display’s second-quarter operating profit soared to 804 billion won ($721 million) from 44.4 billion won a year earlier, although that fell slightly short of a consensus forecast of 862 billion won.

(Reporting by Joyce Lee; Editing by Edwina Gibbs)

Toyota set to sell long-range, fast-charging electric cars in 2022: paper

July 25, 2017

TOKYO (Reuters) – Toyota Motor Corp is working on an electric car powered by a new type of battery that significantly increases driving range and reduces charging time, aiming to begin sales in 2022, the Chunichi Shimbun daily reported on Tuesday.

Toyota’s new electric car, to be built on an all-new platform, will use all-solid-state batteries, allowing it to be recharged in just a few minutes, the newspaper said, without citing sources.

By contrast, current electric vehicles (EVs), which use lithium-ion batteries, need 20-30 minutes to recharge even with fast chargers and typically have a range of just 300-400 kilometers (185-250 miles).

Toyota has decided to sell the new model in Japan as early as 2022, the paper said. A Toyota spokeswoman said the company could not immediately comment on the report.

Japan’s biggest automaker is looking to close the gap with EV leaders such as Nissan Motor Co and Tesla Inc as battery-powered cars gain traction around the globe as a viable emission-free alternative to conventional cars.

Whether Toyota will be able to leapfrog its rivals remains to be seen, however, as mass production requires a far more stringent level of quality control and reliability.

“There’s a pretty long distance between the lab bench and manufacturing,” said CLSA auto analyst Christopher Richter. “2022 is ages away, and a lot can change in the meantime.” How quickly the new EVs will catch on would also depend largely on battery costs.

Having long touted hydrogen fuel-cell vehicles and plug-in hybrids as the most sensible technology to make cars greener, Toyota last year said it wanted to add long-range EVs to its line-up, and set up a new in-house unit, headed by President Akio Toyoda, to develop and market EVs.

Toyota is reportedly planning to begin mass-producing EVs in China, the world’s biggest auto market, as early as in 2019, although that model would be based on the existing C-HR sport utility vehicle and use lithium-ion batteries.

Other automakers such as BMW are also working on developing all-solid-state batteries, eyeing mass production in the next 10 years.

Solid-state batteries use solid electrolytes rather than liquid ones, making them safer than lithium-ion batteries currently on the market.

(Reporting by Chang-Ran Kim and Naomi Tajitsu; Editing by Edwina Gibbs)

Southeast Asia’s Grab to get $2.5 billion extra firepower in battle with Uber

July 24, 2017

By Aradhana Aravindan

SINGAPORE (Reuters) – Southeast Asian ride-hailing service Grab expects to raise $2.5 billion in a record round of fundraising to cement its lead over Uber Technolgies Inc in the region and grow its payments platform.

Southeast Asia has become a key battleground for technology startups vying for a market of over 600 million people, with a burgeoning middle class as well as a youthful, internet-savvy demographic.

Grab’s Chinese peer Didi Chuxing and Japan’s SoftBank Group Corp, both of which are existing investors, will contribute up to $2 billion to lead the current financing round, it said in its statement on Monday.

The firm expects to raise an additional $500 million, bringing the total to $2.5 billion in this round, which it said would be the largest-ever single financing in Southeast Asia.

Grab will be valued at more than $6 billion at the close of this round, according to a source close to company.

The Singapore-headquartered company said it has a Southeast Asia market share of 95 percent in third-party taxi-hailing and 71 percent in private vehicle hailing. It operates private car, motorcycle, taxi and carpooling services across seven countries in the region, with 1.1 million drivers.

“With their (Didi and SoftBank’s) support, Grab will achieve an unassailable market lead in ridesharing, and build on this to make GrabPay the payment solution of choice for Southeast Asia,” Anthony Tan, group chief executive officer and co-founder of Grab, said in the statement.

Building on soaring user numbers of its Grab ride-hailing app and GrabPay function, the five-year-old start-up aims to transform into a consumer technology firm that also offers loans, electronic money transfer and money-market funds.

Grab bought Indonesian payment service Kudo earlier this year, and has said it is seeking more acquisitions to support rapid growth.

“The heterogeneity of the banking system, multiple competitors in each country, and multiple regulations to meet are barriers to success,” said analyst Rushabh Doshi at researcher Canalys.

“However, given no single payment solution has been able to work across all S.E. Asian markets, Grab stands a good chance of building market share via its ride-sharing business model, and then extend the payments to other adjunct businesses,” he said.

Grab competes with the likes of Uber, the world’s largest ride-hailing service, and Indonesia’s Go-Jek. Tencent Holdings Ltd invested around $100 million to $150 million in Go-Jek, sources told Reuters earlier this month.

Grab’s fundraising comes at a time when San Francisco-based Uber has been beset by complaints about its workplace culture, a federal inquiry into software to help drivers avoid police, and an intellectual property lawsuit by Waymo, the self-driving car unit of Google parent Alphabet Inc.

Uber has been expected to increase its focus on India and Southeast Asia after retreating from China last year.

Grab’s previous investors include sovereign wealth fund China Investment Corp, hedge fund Coatue Management LLC, venture capital firm GGV Capital, and Vertex Ventures Holdings – a subsidiary of Singapore state investor Temasek Holdings (Pte) Ltd.

(Reporting by Aradhana Aravindan; Editing by Christopher Cushing)

Telecom Italia CEO says Vivendi plan to appoint new executive triggered clashes

July 24, 2017

MILAN (Reuters) – One of the reasons Telecom Italia’s (TIM) CEO Flavio Cattaneo fell out with the phone group’s top shareholder Vivendi was the French company’s plan to appoint a managing director at his side, daily La Repubblica said on Monday.

Cattaneo is expected to leave within days, sources told Reuters on Friday, adding Amos Genish, a Vivendi top executive, is set to be appointed managing director.

TIM’s remuneration and appointments committee will meet on Monday to discuss “a proposal to end the relationship (with Cattaneo) by mutual consent”.

Citing Cattaneo’s comments to a person close to the manager, La Repubblica also said he will get less than 30 million euros ($34.98 million) for leaving ahead of the time.

“The severance package I will get is not a scandal,” the paper cited him as saying.

(Reporting by Francesca Landini; editing by Agnieszka Flak)