Huake Weekly Viewpoint (2022.1.17 - 2022.1.23)

1.1. News of investee companies

1.1.1. Liangxuan Technology launched the world's first portable quantum computer, the “Gemini mini”

On January 22, Liangxuan Technology held a new product launch and launched the world's first portable quantum computer, the “Gemini mini,” which redefined the quantum computer model and is more suitable for quantum computing education and popularization. Liangxuan Technology believes that quantum computing should not be limited to higher education at this stage. It hopes to maximize its commitment to quantum computing education and popularization, help students and teachers at all levels of education, and help establish a dynamic and diverse future quantum computing talent system. The “Gemini mini” has a wider audience. It is suitable for educational institutions, primary and secondary schools, science and technology pavilions to carry out popular science education. It is also suitable for quantum technology enthusiasts to learn on their own, so that audiences with different knowledge backgrounds can quickly master the basic knowledge and programming operations of quantum computing.

Huake's comment:

Huake Capital (the “Company”) fully entered the quantum technology field through investment in quantum technology in December 2021 to help industrialize sub-computing. With the continuous development of the quantum computing industry, there is a serious shortage of quantum computing talents. The launch of the “Gemini Mini” portable quantum computer will greatly reduce the cost of education on quantum computing technology, which is of positive significance for developing popular science education on quantum computing.

1.1.2. Guardforce AI Co., Limited plans to expand robotics business in China's Greater Bay Area

On January 14, Guardforce AI Co., Limited (“Guardforce AI”) (NASDAQ: GFAI) announced plans to expand its robotics business through the acquisition of Shenzhen Keweien Robot Service Co., Ltd and Guangzhou Kewei Robot Technology Co., Ltd., in the Greater Bay Area of China. The proposed acquisition plan will be in 2022 Completed in February. The purchase price is approximately $10 million and will be paid in cash and restricted shares of the company. Lei Wang, CEO of Guardforce AI, said, “This strategic acquisition reflects Guarforce AI's growth strategy to acquire outstanding companies with leading positions in the industry. This acquisition will help us scale up our business and quickly enter a rapidly growing market.”

Huake's comment:

Huake Capital invested in the Guardforce AI project in 2019 to seize the investment opportunities brought by the rapid development of the artificial intelligence industry. Since November 2021, Guardforce AI has successively announced its business acquisition and expansion plans in Macau, Malaysia, and the US, demonstrating its aggressive expansion strategy in the AI robotics business. China is paying more and more attention to robot development and artificial intelligence applications, and the overall market potential is broad. It is believed that this acquisition plan will further expand and consolidate the scale of Guardforce AI's artificial intelligence robot business.

2. Huake Focus

2.1. digital assets

According to CoinMarketCap data (January 17 to January 23), the total value of the cryptocurrency market fell by more than 20% to 1.63 trillion US dollars. BTC and ETH had fallen to around the levels of 34,000 and 2,300 US dollars. The sharp sell-off was the worst weekly performance of cryptocurrencies since May 2021. The market believes it is related to the uncertainty of the Federal Reserve and the sell-off in the stock market; total sales on the NFT chain reached a record high of 28 billion US dollars last week.

2.1.1. The US Financial Industry Supervisory Authority is considering amending crypto regulations to better protect investors

Robert Cook, CEO of the US Financial Industry Regulatory Authority (FINRA), said that as cryptocurrency applications grow, the self-regulatory agency will study potential changes to cryptocurrency regulations this year. The US Financial Supervisory Authority does not intend to completely revise the current rules, but rather plans to issue “early-stage, concept-release type notices”, particularly in terms of advertising and disclosure.

2.1.2. Ryder plans to launch an ETF focused on blockchain technology

Global asset management giant BlackRock (BlackRock) is planning an ETF focused on blockchain technology. The iShares Blockchain and Tech ETF will track investment results from the NYSE FactSet Global Blockchain Technology Index. The index is made up of companies involved in developing and deploying cryptographic technology in countries such as the US.

2.2. metaverse

2.2.1. Shinsekai K11 ATELI King's Road launches Project ALPHA project to promote the metaverse and Web 3.0-based creator economy

K11 ATELIER King's Road, a subsidiary of New World Development, launched the industry's first creator hub concept and entrepreneurship development laboratory called “Project ALPHA” to provide future creators with a 16-week nurturing and community pilot program to promote the development of the creator economy in the metaverse, create commercial and social influence, and achieve a win-win situation. Project ALPHA is dedicated to connecting creators from all walks of life and future industries from Web 3.0, helping them prepare for the metaverse, and use industry-leading networks, learning opportunities, and resources to create commercial and social impact.

2.3. New energy

2.3.1. The Mainland will lift restrictions on the purchase of new energy vehicles to support green transportation consumption

Seven departments, including the National Development and Reform Commission and the Ministry of Industry and Information Technology, issued the “Implementation Plan to Promote Green Consumption”, which proposes to vigorously develop green transportation consumption, including new energy vehicles, and gradually lift restrictions on the purchase of new energy vehicles in various regions. According to the “Plan”, the goal is that by 2025, the concept of green consumption will become deeply entrenched in the hearts of the people, and a green and low-carbon circular consumption system will initially be formed; by 2030, green consumption methods will become the public's conscious choice, and green and low-carbon products will become mainstream in the market.

2.3.2. Sales have ranked first in the world for 7 consecutive years, and NEVs are expected to accelerate growth

The Mainland has vigorously developed new energy vehicles in recent years. Last year, sales reached 3.521 million units, ranking first in the world for 7 consecutive years, with a market share of 13.4%. The China Automobile Association and other various agencies predict that production and sales of new energy vehicles in the mainland are expected to exceed 5 million units this year, completing the target set 3 years ahead of schedule. Since March of last year, the monthly sales volume of new energy vehicles in the Mainland has exceeded 200,000 units, in August, 400,000 units in November, and reached 530,000 units per month by December.

2.4. AI

2.4.1. Tackling climate change is imminent, how can mainland artificial intelligence algorithms solve problems

Taking artificial intelligence as an example, it can provide accurate short-term weather forecasts using continuously mature algorithm models and related cloud technology applications to help society effectively meet the challenges brought about by extreme weather. Alibaba's DAMO Academy launched a cloud-based artificial intelligence short-term weather forecasting platform earlier, and it has been used domestically. The artificial intelligence prediction platform algorithm can predict the weather conditions within the next 6 hours with high accuracy within a fine range.

2.5. Major capital markets (January 17 to January 21)

• The three major A-share indices mainly closed down, not boosted by favorable factors of interest rate cuts. The Shanghai Stock Exchange Index fell 0.54% weekly, the Shenzhen Stock Exchange Index fell 2.33% weekly; the GEM index fell 4.28% weekly;

• The strong performance of Hong Kong stocks was not affected by the “double attack on equity and debt” in the US financial market. The Hang Seng Index rose 3.09% in a week to close at 24,965.55 points. The news suggests that the Central Bank of China is becoming more and more obvious in speeding up the release of water to save the market, which is contrary to the US and EU central bank raising interest rates to collect water;

• In terms of US stocks, technology stocks experienced an “avalanche”. The three major US stock indices all fell. Summarizing the week, the Dow, the Standard Index, and the NASDAQ fell -3.12%, -3.91%, and -5.09% respectively;

2.5.1. A share

The central bank's “interest rate cut” was implemented this week, and a 7-day reverse repurchase operation was launched a week

The central bank has accumulated a net investment of 450 billion yuan, the largest net investment scale in three weeks. Specifically, from January 17 to January 21, the central bank carried out continuous 7-day reverse repurchase operations of 100 billion yuan, with interest rates of 2.10% compared to 2.2% previously. On January 17, the central bank overpaid the MLF and cut MLF interest rates after a lapse of 21 months. On January 20, the central bank announced that the latest 5-year LPR was 4.60%, down 5 basis points; the 1-year report was 3.70%, compared to 3.80% last time, down 10 basis points.

2.5.2. Hong Kong stocks

Taiwan's “Financial Management Council” allows people to borrow money to buy US and Hong Kong stocks, which will be released in the second quarter as soon as possible

Taiwan's “Financial Management Council” is planning to allow people to borrow foreign currency from brokerage firms to invest in stocks and bonds in US and Hong Kong stocks, and release them as soon as the second quarter of this year; the Securities Association has put forward proposals, including focusing on the two major markets of the US and Hong Kong, and financing targets for those with high liquidity, such as the US Dow Jones Industrial Index, NASDAQ 100 Index, S&P 500 Index, Hang Seng Index, etc., or US-Hong Kong ETFs, foreign bonds, etc.

2.5.3. US stocks

NASDAQ fell more than 1% for four consecutive days as the new law passed

On Thursday, the Senate Judiciary Committee voted to advance the “American Innovation and Choice Online Act.” The market feared that the introduction of the antitrust bill might cause a heavy blow to tech giants, and the NASDAQ closed down by more than 1%. Previously, the NASDAQ had fallen more than 1% for two consecutive days. Since entering 2022, the NASDAQ trend suddenly changed and began to decline at an accelerated pace, falling 7.6% throughout the week, making it the worst weekly performance since October 2020.

About Huake Capital (1140.HK)

Huake Capital Limited (1140.HK) is a cross-border cross-border investment platform listed on the main board of the Hong Kong Stock Exchange. Its portfolio covers listed and unlisted companies in various fields, and has excellent investment, financing and industry integration capabilities. According to different holding cycles and strategies, Huake Capital uses different methods such as long-term core holdings, portfolio management, and short-term transactions to flexibly construct cross-cycle investment portfolios to create diverse and steady investment returns for shareholders.

Disclaimers

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