At the start of the year, China’s largest technology companies known as the Bats - Baidu, Alibaba and Tencent - looked unstoppable. Things continued to go well for the big three throughout the first half of the year, with all of the firms’ share prices hitting record highs.
But since the summer, investors in the Bats have been tearing their hair out as stock prices began to fall, ruining the decent start to 2018. Collectively, the Bats have lost around $165 billion in value year-to-date - each for their own reasons.
US-listed Alibaba and Baidu have been caught up in the broader sell-off in Chinese stocks resulting from weak sentiment because of the trade war between America and China.
Tencent, meanwhile, has been hit by regulatory woes. The Chinese government has raised concerns about eye problems in the world’s second-largest economy, citing video games as one of the causes. Beijing suggested slowing down approvals of new games. Tencent makes a huge amount of money from games and concerns over the future of this part of its business has weighed on its stock.
Looking beyond the trade war rhetoric and short-term problems, the Bats certainly have enough firepower to have market leadership. They also pose a major challenge to major US tech names known as the Fangs: Facebook, Amazon, Netflix and Alphabet, the parent company of Google.
Just look at the growth and size of their businesses. Tencent grew 30 per cent year-on-year in the second quarter of the year, Alibaba increased revenues 61 per cent, while Baidu saw 32 per cent growth.
All of these businesses are expanding rapidly into new geographies and areas. Tencent’s massive games business continues to have traction despite regulatory issues and the giant also owns WeChat, China’s most popular messaging app with over a billion monthly users. Tencent is pushing WeChat Pay, the payments service that runs within WeChat.
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Alibaba continues to grow its core commerce business, while Baidu, which has seen hits to its core search business, has been investing heavily in artificial intelligence and autonomous cars.
The Bats have also spent billions of dollars investing in other companies, to the point where they are not only technology firms, but investors too. Bernstein Analyst Bhavtosh Vajpayee recently dubbed Tencent the “SoftBank of China.” SoftBank is the Japanese firm that has its own $100bn Vision Fund, which it invests in big tech firms across the world.
While heavy investment could be seen as a negative by investors because it weighs on profits, it could also set these companies up for future growth. The investments made by the Bats could provide good returns in the event of an initial public offering or acquisition of these companies. Or the firms that the Bats have invested in could just be acquired by either one of them.
And perhaps the biggest factor working in their favour is the impenetrable nature of the Chinese market for the Fangs. Google has not been in the Chinese market since 2010 after it withdrew over concerns about censorship. Facebook is blocked, Netflix is not available and Amazon has a very tiny business in the country.
Even though recent reports suggested Google is looking to enter the market, the company will find it difficult to dislodge the dominance of Baidu. Amazon could find it a huge task to take on Alibaba. And Facebook will face an uphill battle getting its product to stick, particularly as Tencent’s WeChat is woven into the fabric of Chinese society. China still remains a huge opportunity for the Fangs but it continues to be out of reach.
With a home market of over a billion people, a push by the Chinese government into new technologies like artificial intelligence, and continued growth of digital services, the Bats may have taken a couple of hefty blows this year, but they’re certainly not down for the count.
Arjun Kharpal is a technology correspondent for CNBC in London
The National and CNBC International are global content sharing partners
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
UAE currency: the story behind the money in your pockets
The%20specs
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At a glance
Fixtures All matches start at 9.30am, at ICC Academy, Dubai. Admission is free
Thursday UAE v Ireland; Saturday UAE v Ireland; Jan 21 UAE v Scotland; Jan 23 UAE v Scotland
UAE squad Rohan Mustafa (c), Ashfaq Ahmed, Ghulam Shabber, Rameez Shahzad, Mohammed Boota, Mohammed Usman, Adnan Mufti, Shaiman Anwar, Ahmed Raza, Imran Haider, Qadeer Ahmed, Mohammed Naveed, Amir Hayat, Zahoor Khan
If you go
Flight connections to Ulaanbaatar are available through a variety of hubs, including Seoul and Beijing, with airlines including Mongolian Airlines and Korean Air. While some nationalities, such as Americans, don’t need a tourist visa for Mongolia, others, including UAE citizens, can obtain a visa on arrival, while others including UK citizens, need to obtain a visa in advance. Contact the Mongolian Embassy in the UAE for more information.
Nomadic Road offers expedition-style trips to Mongolia in January and August, and other destinations during most other months. Its nine-day August 2020 Mongolia trip will cost from $5,250 per person based on two sharing, including airport transfers, two nights’ hotel accommodation in Ulaanbaatar, vehicle rental, fuel, third party vehicle liability insurance, the services of a guide and support team, accommodation, food and entrance fees; nomadicroad.com
A fully guided three-day, two-night itinerary at Three Camel Lodge costs from $2,420 per person based on two sharing, including airport transfers, accommodation, meals and excursions including the Yol Valley and Flaming Cliffs. A return internal flight from Ulaanbaatar to Dalanzadgad costs $300 per person and the flight takes 90 minutes each way; threecamellodge.com
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Jeff Buckley: From Hallelujah To The Last Goodbye
By Dave Lory with Jim Irvin
COMPANY PROFILE
Company name: BorrowMe (BorrowMe.com)
Date started: August 2021
Founder: Nour Sabri
Based: Dubai, UAE
Sector: E-commerce / Marketplace
Size: Two employees
Funding stage: Seed investment
Initial investment: $200,000
Investors: Amr Manaa (director, PwC Middle East)
APPLE IPAD MINI (A17 PRO)
Display: 21cm Liquid Retina Display, 2266 x 1488, 326ppi, 500 nits
Chip: Apple A17 Pro, 6-core CPU, 5-core GPU, 16-core Neural Engine
Storage: 128/256/512GB
Main camera: 12MP wide, f/1.8, digital zoom up to 5x, Smart HDR 4
Front camera: 12MP ultra-wide, f/2.4, Smart HDR 4, full-HD @ 25/30/60fps
Biometrics: Touch ID, Face ID
Colours: Blue, purple, space grey, starlight
In the box: iPad mini, USB-C cable, 20W USB-C power adapter
Price: From Dh2,099
