Finimize - 🤯 China breaks Alipay

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Today's big stories

China announced plans to break up payment app Alipay
The hydrogen market could quadruple in size by 2050, and there are a bunch of ways you could profit from it – Read Now
Companies are spending more on new equipment than they have in years to prepare for a post-pandemic world

Crushed

What’s Going On Here?

China announced plans to break up payment app Alipay on Monday, as the country’s tech sector crackdown really starts to leave its mark.

What Does This Mean?

Alipay – which boasts more than a billion users – is known as the go-to platform for everything from ordering food to processing payments. Now, though, it might be better known as the latest victim of a regulation-happy Chinese government, which has been looking to limit tech companies’ power in the country (tweet this). And Alipay certainly isn’t short of that: its seriously profitable lending business helped issue 10% of all China’s non-mortgage loans in 2020. The government, then, has told the company to spin that segment off into a completely new app, as well as hand over its customers’ data to a new credit-scoring business that’s part-owned by – you guessed it – the government itself.

Why Should I Care?

For markets: The bigger they are, the harder indexes fall.
Make no mistake: this is bad for Alipay-owner Ant Group, whose lending business was a key reason for trying – and, uh, failing – to list on the stock market last year. That makes a second attempt pretty unlikely, at least for now. But it’s rough for Alibaba too: the ecommerce giant – which owns 33% of Ant Group – saw its shares fall 4% after the announcement on Monday, meaning they’ve now dropped 30% this year. And since no one seems to be safe from China’s iron fist, a key index tracking the biggest tech players in China fell 2% too.

The bigger picture: Don’t say they didn’t warn you.
China’s central bank did warn the online lending industry this summer that government-approved credit companies were eventually going to have to approve every lending decision they make. Now that it’s here, though, industry execs might be nervous: they’ll have extra costs in the form of extra outsourcing, and – if the credit-scoring companies rubber stamp fewer loan applications – they might make less in revenue too.

You might also like: There’s one more reason Chinese stocks could come crashing down…

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Analyst Take

The Many, Many Ways To Profit From The Fuel Of The Future

What’s Going On Here?

Hydrogen’s made a name for itself as the clean energy source of tomorrow.

And it’s easy to see why: there are so many potential applications for the humble gas that the industry’s expected to quadruple in size by 2050.

Think fuel cells that can be used in land, sea, and air vehicles, where the only waste product is water so pure you can drink it.

Think energy storage that could replace conventional batteries altogether, since hydrogen can be stored for months without losing much power.

And think industrial applications, at a time when industry accounts for a fifth of the world’s carbon emissions.

So that’s today’s Insight: the multitude of things hydrogen could be used for, and the listed companies at the cutting edge of all of them.

Read or listen to the Insight here

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