China's Growth Outlook Slashed; Nvidia Earnings Underwhelm | Bloomberg: The China Show 8/29/2024

We're expecting Q3 to have more supply than Q2. We're expecting Q4 to have more supply than Q3 and we're expecting Q1 to have more supply than Q4. And so I think our supply our supply condition going into next year will be it would be a large improvement over this last year. There's only one top store across global markets right now. And video CEO Jensen Huang there speaking exclusively about the outlook for supplies of its Blackwell A.I. chips. Welcome. You're watching the China show. I'm David Inglés. Your top stories today. We have more, of course, coming up from the Nvidia boss after individual sales forecasts failing to live up to these very lofty expectations. Now, those results playing out in markets right now with the outlook for tech stocks sending Asian shares and Nasdaq futures, as you can see down in the Thursday session. Also ahead here in show is Chinese earnings in Focus with a big jump in profits for BYD and also May one in focus after sales there also beating expectations. Plus, China's foreign minister and the US national security adviser discussing while setting up new talks between their presidents to manage this strained relationship. All right. Welcome to the show. A quick glance at the market action right now. So in case you missed the dramatic moves in the after hours session, here is how things effectively ended up. And I guess your starting point, when you look at U.S. equity markets for a Thursday, is in video trading at about 30 times earnings based on this current share price. And when you look at forward EPS adjusted going into next year, it's pulled down. As you can see the the broader chip complex also in after hours trade. So the iteration of this in the Asia Pacific and TSMC is just coming on line right now. Let's have a look at that. Some of its biggest suppliers in the region traded in Taiwan. Western is one of them, two, two and a half percent to the downside. SK Hynix down about 5%. Samsung I'm not on your screen is also feeling quite a drag there too, on the back of the guidance or at least a lack of it as far as details go on. BLACKWILL We'll unpack more of the sort of multiple angles to the individual story in a moment here, how the market is looking. Of course, you have some of these big and very heavily weighted chip stocks weighing on their respective benchmarks, like the cost. Be on your screens like the TAIEX index, 1.3% to the downside. Overall, though, when you look at the the damage, the benchmark, not really a whole ton. Right. So 3/10 of 1%. This is a normal day at the office. S&P futures, as you can see that that's probably where we should be paying attention to as we move into the Thursday session here. Now, the setup going into the Chinese market open is we had a very big drop in the Golden Dragon index overnight. As you can see, three and a half percent. We are getting futures coming online in Singapore, about 2/10 of 1% to the downside. It's extremely busy on the earnings front as well today. So we'll be looking at earnings reaction, the buyback stories starting to emerge. This may be the top earnings team for the season dollar. China 713 there against the US dollar 33 100 was the level we were watching on the CSI 300. We took that out yesterday. We'll see if we do get some of the state support and some of the state funds coming back in to boost that benchmark above that level. Find out in 27 minutes from now. Let's bring in Stephen Engle, of course, our chief North Asia correspondent is our co-pilot for these next 2 hours or so. Steve, it's Nvidia Thursday. Obviously, you know, they met or beat expectations analyst expectations on just about every measure. But investors want more. They're used to those blowout results. So we're going to kind of have to break that down and see why the stock sold off considerably. There's some concern, obviously, over its new chip. BLACKWELL So we'll talk about that coming up. We spoke exclusively to a video CEO, Jensen Huang, who says he's optimistic about 2025. We're going to have lots and lots of supply and we will be able to ramp starting in Q4. We have billions of dollars of revenues and we'll ramp from there into Q1 and Q2 and through next year. We're going to have a great next year as well. Mark Cranfield is with us right now, our AM live strategist in Singapore for us. Mark, good morning ends I think we started talking about Nvidia about four or five weeks back and finally we're here. Finally we have the numbers and as Steve was pointing out, it beat almost all. But can you understand, Mark, why the market was I guess in somehow disappoint by by the lack of details. Well, actually, we had to we had critique doctor on TV yesterday in London saying that in theory, something like an A style student. So every time it does a piece of work, people expect it to produce a perfect result. So it just the expectations were probably just ridiculously high going into it and video. So anything less than a totally wonderful outcome is a slight disappointment to everybody. It remains to be seen how it plays out in the US markets later today, but obviously the indications from the after hours is not pretty, is not good at all. If a stock slides badly like that, it suggests we're going to have a pretty rough day in US markets. Even though Nasdaq futures are only down modestly so far in Asia, it could well be that the month end effect is helping to moderate this to some extent. And then you've got some switching into other parts of the market anyway. So the difficult part is probably going to be over the weekend. This is the Labor Day weekend in the US, and it's not unusual for that period to be the time when people reassess how they feel about markets between now and year end. And it is often the time when if there's going to be bearish stories, they come out during that week. And so by the time the US markets come back next Tuesday, it could well be that people have a more negative outlook. Even though the Federal Reserve is expected to lower interest rates, people may have decided the Fed is too far behind the curve. They're not doing enough. It could look quite different by the beginning of next week, and that's when we may see the real effects of what it means when the markets are near a top. And if an NVIDIA is marking a high for US equities, that obviously will have a bearish read across for Asia and the rest of the world. Well, Mark, how much does this or does this tamp down the frenzy and what does it mean for the other magnificent Seven? It's probably more a question of it, people being a more realistic assessment of it. But the ISE story probably has a long way to go. It's probably going to spread to most parts of the world as it's been doing already. But it's more a question of what does it mean in terms of valuations and revenues. So it may well be that people reassess and decide to actually the best has already occurred. We've seen the biggest outperformance, the greatest relative gains already behind us now. And from here it's going to be more like a normal story. It's a bit like Apple. If you remember, there was a time when Apple could do no wrong. Every quarter was better and better and better until finally people realized that Apple was just becoming a normal company, a very profitable company, but no longer able to surprise people quarter after quarter with extraordinary results. And Vidya maybe is on that path as well. Mark Cranfield Fantastic context here. Big picture out of Singapore for our analyse strategist. So with the information we have right now, the question I'm putting to you guys is would you buy it very at this valuation at 30 times earnings, that's based on earnings going into next year, end of next year, and the price in the after hours of 117 a pop. Apart from that, though, if it's no longer Nvidia that floats your boat, what could replace the stock as the main driver for equity markets? It's a question our team is putting, of course also to our Bloomberg clients. More on the Nvidia story. Let's get the analysis right now and bring in Mario Morales, VP of Enabling Technologies and semiconductors at IDC. Mario, good morning from the Asia Pacific. Thanks for joining us right now. I mean, you're the expert in the room here, sir. Amid the the multiple storylines and the multiple interpretations of the storylines, what do you think our key takeaway should be here? Well, I think the key takeaway is that that we're still seeing phenomenal growth in AI and also foreign video. When you look at in video, by the end of this year, Nvidia's revenues will reach a level that no other semiconductor company has ever reached. And if they're still committed to very good growth in 2025, you can continue to see the growth of being a big part of this. I look at the numbers and why they're down here. I think a lot of it has to do with the fact that they were expecting the ramp for Blackwell to be faster and if it's delayed by a quarter, I don't see any competitive impact around that. But but you're still seeing the rest of the portfolio still looking very strong. Mario Stephen Engle here. Are you concerned, though, by this blip glitch, if you want to call it, for production of Blackwell? I think in our interview with Jensen Huang, he kind of alluded to I thought I answered those questions and alleviated those concerns of investors on the analyst call. He's convinced that they're going to ramp up, ramp up, ramp up, and they're going to have hyper scalability. What do you think? I think so. I mean, when you look at this and you look at Blackwell, the next generation platform, it's a very complex platform and it requires many chiplets and that is just getting more and more complex to design and make, not just at the front end when you when you're thinking about TSMC, but also at the back end, because most of the integration of this capability now is happening in Chiplets in advanced packaging. So there's so many levers that that are going on that they have to manage and control across the supply chain. So you're going to have hiccups like this. I think you'll see other companies the same go through the same situation, but I'm not concerned. I think if you look at Nvidia, they still control this market and will continue to, I would say, dominate this space over the next 3 to 5 years. You know, they own over 95% of this market today. Mario, we want to play a part of the interview that we had with Jensen Huang earlier. I think he talked about Sudhir Point there, the demand for A.I. accelerators beyond Hyperscalers. And I want to get your thoughts on whether or not you think the company's moving toward a broader customer base that's played it out. Guys, please. Hyperscalers represent about 45% of our total data center business were relatively diversified today. We have hyperscalers, we have Internet service providers, we have sovereign ice, we have industries, enterprises. So it's fairly fairly diversified. Mario, to many viewers, that was Greek. Could you translate that to us in simple English, please? Well, what he's saying is that we're still at the early start of a I think what they've benefited from so far, it's been the expansion across the data center. But now what you're going to start seeing is the expansion across vertical industries, things like markets like health care and retail, you know, the automotive industry, all of these market segments are just beginning now to experiment where they are. And I think you're going to continue to see growth over the next couple of years that will benefit not just in video but other players that are vying for a position in the space. I think one of the other things too, that I think no one is talking about is that so far most of the growth that Nvidia has has enjoyed has come from the data center. I think the bigger opportunity on a longer term basis will be bringing AI to the edge. So think about your smartphone, your your PC and your wearables. All of these different devices across, across the edge are going to become a infuse and it becomes a lot more intelligent, generating a lot more data. So I think we're just still at the beginning. I think that's where it's going to become more of a challenge for Nvidia, though, because a lot of the the solutions and platforms that they have today are catered to very, very large infrastructure. And when you're playing in the edge, you're now having, having to optimize these sources in order to meet the power, the cost envelope and the bottom of these very low, low end systems that are getting more intelligent. Well, Mario, as you talked about there, most of I think 40% of their revenue comes from those large data center operators like Alphabet and like MARTA, and as they broaden out. Should we expect, perhaps, as we saw with the stock today, came off? Should we expect perhaps a slower pace? You know, not as fast a pace of growth and lower those expectations that they saw today? Well, I think the demand from the cloud service providers will continue to grow on a longer term basis. But it does it is lumpy demand. So they might order for four or five or maybe up to six quarters, but then you see a pause effect for them and then, you know, but but at that point in time, we're going to expect to see the telco industry and large enterprises begin to also invest in their on prem capabilities because they're sitting on a lot of data and they're trying to figure out at what point in time can they extract more value from that data and they don't want to give that away to a cloud service provider to manage and and control that that potential value. So I do see an opportunity to expand in those spaces. Mario, the the the question over competition, I mean, does the company face stiff competition now or I mean, do you see it in for a couple of quarters from now? Do you think the bigger problem still for the company is supply chain more than competition or the other way around? Absolutely. I I think the competition will will probably become more pronounced over the next couple of years. I still think this is a and various market to continue to control. I mean, like I said earlier, they probably control about 95% of the datacenter space. And one of the things that you're starting to see is that they're talking more about not just their GPU, but you're looking now at Grace Hopper and their CPU and you're looking at Bluefield, which is their data processing unit. So they're expanding their compute capability and that means a lot more silicon any system for them that they can continue to to prosper in mine and grow. Right? So I think the next wave for them is going to continue to be growing in the networking infrastructure space because that is also prime for or change with with a I coming into that domain. And if you look closely at their numbers, the networking business for Nvidia is growing by strong over 100%, while most of the rest of the industry is is at flat to down because of elevate of inventory. So they are already gaining share in that space. And I think that's going to be the next big sector before we start getting into some of the enterprise and vertical segments. Mario, how do you view the issues with China? Obviously with the executive orders and the export controls on the export of most advanced chips to China, how must Nvidia walk that tightrope? Well, it's going to be tough not only for Nvidia but for the entire industry. I think when you look at that, the deregulation, the export controls are only going to get tighter. And the reality still is that most of the semiconductor industry is still very exposed to China. And so you're going to have to figure out different supply chains that will get your products to customers working through other parts of Asia Pacific. I mean, that's what you're seeing today with a lot of the semiconductor companies, too, trying to find a way to get their parts still to customers. But the US and Europe will definitely put a lot more clamps on this. And I think this is going to be one of the wild cards for the industry moving forward I think, over the next couple of years. Mario, thank you for the time, sir. Mario Morales there, VP of enabling tech and semiconductors at IDC. Right. Bottom of your screen. So, of course, you just saw that the midpoint of the day on the currency coming up to and shows you we'll get the latest and some of these earnings coming through. Out of China's tech firms grapple with concerns over the state of the economy. That's coming up next. And as we count down to the open of trade and the drag we're feeling across tech, some stocks are likely moving against the grain like May one indicated, substantially higher on the back maybe of that buy back. It announced more details on that story. And the open 15 minutes away. You're watching the China show. Welcome back. You're watching the China show. Opening bell 11 minutes away and you're probably see a massive pop up in shares of Meituan at the open. Couple of minutes, we'll probably see that. Also the initial pricing there. So that's one stock to watch data as far as Macau goes, hotel occupancy numbers, yet a very big drop in the likes of expanding overnight. So we'll watch that close. The airlines are leading your earnings parade today. We'll get more more and more of these names coming out. It's not just in the airline space. Adds some specific levels to watch. Of course, Odyssey is a three. And of course we're looking at may want of course. Yeah, you mentioned that, Dave of course may Taiwan the big food delivery giant in China seeing a better than expected revenue. Operating profit also is beating expectations as people in China in that sluggish economy, they are ordering out, ordering in, what do you call it, delivering to their homes instead of going out and paying for the overhead in the restaurants. So we also have other obvious earnings coming out of China. Let's bring in Anabel Jewelers, our tech correspondent, who has the break down May one. What stood out there, Bell? Well, I think, as you say, Steve, we've seen a lot of Chinese tech companies coming through with their earnings. But but Mae, Taiwan really stood out from the pack. And the reason they managed to do that is because even despite all the risks around the consumer in China and the headwinds that they're facing, not just from people not dipping into their wallets, but also just the intense amount of competition that we see across a lot of different Chinese tech companies. Meituan delivered here and actually did better than had been expected. So what we saw, for instance, was cool local commerce rising a better than projected 19%. The estimate had been for 17% overall revenue, up 21% on the year as well. And the company as well announcing a $1 billion share buyback. So these are all positives for the share price, which actually when you take a look at the share price, it has been outperforming a lot of others in the space that shop there just puts it in perspective. You've got Alibaba, JD.com at the bottom there over the course of this year, Meituan very much outpacing its biggest rivals. Yeah. BELL To your point, we're up 7% in your pre-market substantial upside there going the opposite way. I know you're looking at other earnings too so be why it is down 2% li auto also out with earnings that stock is just going off a cliff right now. We're down 11% in your pre markets. Get us up to speed bell and be widely auto. Yeah, we might start with Law Order then given that significant share price reaction. And actually when you take a look at how the idea performed, that sort of drop that we've got so far is pretty much expected because we saw Li Auto, for instance, down around 15%. That's made one there. You're seeing a pop. But Li Auto, we had the numbers out and we did see weakness coming through. Overall, we actually actually saw revenue climbing. But what's important is that Li Auto is really being affected by that margin squeeze. The competition amongst Chinese TV makers is so tight now. And so to try and lure in more customers, the offering these price discounts and that's very much weighing on Li Auto's bottom line because actually when you take it shipments, they came in toward the upper end of the range for the latest quarter and going into the next quarter, the third quarter of this year as well. They're looking to deliver more vehicles and had been anticipated by analysts, but still not enough given margin squeeze and how much that is affecting their overall bottom line. Well, thank you so much, Bell in Sydney for us, our tech correspondent there right going into the open today, 8 minutes away, Hang Seng index your A50. Futures might be getting an additional support here coming off some of these stocks coming on line here and we'll leave you with a look at meituan in the pre markets delivering the goods as they say. This is the china show. Right. Some names we're tracking into pre markets and we'll continue to track how these things trade, how these stocks trade going into the Thursday session. So the big story, at least to the upside, is made on after the well, for one you had an earnings as far as results are concerned. And also I think this is really emerging as another subplot in this earnings season is is that buyback. Right. $1,000,000,000. And that's simply the latest company to announce that after and to sports you had JD.com you had which is the dairy maker. Before that, of course, Tencent has been buying back stock and inhaling back into Treasury shares recently, be widely out with earnings to be weighed, electronic missing estimates as far as that companies concerned. And Li Auto, of course, was also the margin squeeze we were talking about there with Bell just in the last segment or so. So we're looking at EVs very specifically, too, because he had a very big drop. Those names actually led to drop overnight, not on your screens. I imagine that's also going to feel some pressure going into going into the open today. Right. Looking at analyst actions and some changes here, some Morgan Stanley on May one, upgrading the stock to to buy. And we're also looking at overweight rather that price target on your screens 125 higher smart home being cut and by the way higher smart home has seen substantial downside from its peak. So 25 bucks is a price target from the folks at Jefferies. And we're looking at futures right now. Please see if we can pull the page if we can. And the overall read through is fairly negative. There we go, 1.7%. And it's really in wages story. It's a tech story, too. And just getting spooked if in video, once the top, as Mark Cranfield put it, if it is marking a top of the S&P 500, then you will get a bearish read through across these markets. By the way, since that's done, I guess we can over obsession over the jobs report. That's coming up as well. Plus PC numbers out of the Fed anyway that's for next time, The China show. You're watching that. Welcome back. You watching the China show? Counting down to the open of trade. As you can see, we're poised for a lower open. And certainly the reads here from the Nvidia results in the drop of about 7% pulling down your some of your U.S. contracts as well. And probably that's your story going into the the thick of the Thursday session. In between, though, we're looking at earnings as well coming through it out of mainland China. You have a lot on deck today. Everything from Bank of China, Great Wall Motor Air. China's also leading some of the earnings parade in Greater China. We're coming off, of course, some decent numbers coming out of AT&T. Also be. The buyback stories always emerge as something that I think of late has been paid, I guess, paid dividends, just a bar upon their returning wanting to shareholders. He measured by return on equity, I guess more than simply just price appreciation. Speaking of earnings out with earnings two was wuliangye yesterday. That should be coming up bottom. Obviously I think it's up 12% year on year. The open right now is 30 to 72. I know that's a very specific level, but we did close below 3300. I know. That's a very nice round number. I'll show you why that's material in just a moment, though. 3/10 of 1% of the downside as well here on the Shanghai Corp., The latest on the growth, an equal front here. UBS changed their forecast and changed a page, please. When I talk about UBS, 4.6%, the latest bank here to downgrade their thinking as far as China go. So we'll see what happens with that. Of course, four and 5%, by the way, is where we are on the official growth target to. Okay, let's have a look at Hong Kong, please. If we can h tax should be coming up on your screens and that's where we are seeing there we go, 2% declines at the open, not completely out of the blue given the drop we're seeing in the likes of Tencent and Alibaba. The Golden Dragon index overnight was down about 4% led by some of your names like X Pong, for example, which you'll see very, very shortly against the grain. Of course, it's meituan up 7% in your pre markets. We're coming off a little bit, but as you can see, still substantially to the upside. Again, the buyback story there. Morgan Stanley raising that stock to overweight. Okay. I promise you, Xpeng should be coming up there. Air China Great Wall and Bank of China are coming out with earnings today down 6.7%. Li auto not on your screens was down 11% in your premarket. So we're looking at the entire ev space today. Okay. The other thing i promise before i go was the why 3300 relevant on the CSI 300 wire was 28 3040 roughly speaking. Okay important on the Shanghai 2850 to be more specific. That seems to be in line when below which when we're starting to test those levels that we get, we start to see some of the state funds coming through in terms of the ETF purchaser. So the fact that we close below that might indicate that might be. Steve, something to watch going going into today's session as well. All right, Dave. Well, geopolitics at the core today, this Thursday as well. Let's take you to Beijing right now where U.S. National security adviser Jake Sullivan is meeting with Chinese military officials. We're seeing live pictures of the vice chair of the Central Military Commission of China, Jiang Yoshihara. Also, I understand U.S. Ambassador Nicholas Burns is there, along with national security adviser Jake Sullivan. Lots to discuss, obviously, as they're trying to put a floor on what some describe as deteriorating relations. Obviously, mil to mil discussions have been fraught over the last several years, including through the Trump administration and the Biden administration. So having face to face dialogue with military officials with such sensitive topics as Taiwan, as well as the war in Ukraine. It's good that they're meeting face to face. This was a US readout following the meetings between Wang Yi is the Chinese foreign minister and Jake Sullivan. The U.S. said they both sides welcomed ongoing efforts to maintain open lines of communication, including planning for a leader level call in the coming weeks. Our China correspondent Vindman Low will be here later to run through what Jake Sullivan accomplished in his current meeting in Beijing. Well, Dave. Yeah. Back to the other big story which is in video and in case you missed it, down 7% in the after hours session here if deliver the company at least when you look at the narrative here, underwhelmed as far as forecasts and details of the forecast also admitted that production snags here with its highly anticipated Blackwell Chip. We spoke with the CEO, Jensen Huang, exclusively a few hours back. He actually tried to ease some of these investor concerns. Have a listen. We made a mass change to improve the yield functionality of Blackwell's. Wonderful. We're sampling Blackwell all over the world today. We show people giving tours to people of the Blackwell systems that we have up and running. You can find pictures of Blackwell systems all over the Web. We have started volume production. Volume production will ship in Q4, Q4. We will have billions of dollars of Blackwell revenues and we will ramp from there. We will ramp from there. The demand for Blackwell far exceeds its supply. Of course, in the beginning, because the demand is so great, but we're going to have lots and lots of supply and we will be able to ramp starting in Q4. We have billions of dollars of revenues and we'll ramp from there into Q1 and Q2 and next year. We're going to have a great next year as well. Jensen What is the demand for accelerated computing beyond the HYPERSCALERS and matter? Hyperscalers represent about 45% of our total data center business were relatively diversified today. We have hyperscalers, we have Internet service providers, we have sovereign ice, we have industries, enterprises. So it's fairly fairly diversified. A site outside of Hyperscalers is the other 55%. Now, the application use across all of that, all of that data center starts with accelerated computing. Accelerated computing does everything, of course, from well, the the models, the things that we know about which is generative AI and that gets most of the attention. But at the core, we also do database processing pre and post processing of of of data before you use it for generative AI, transcoding, scientific simulations, computer graphics, of course, image processing, of course. And so there's tons of applications that people use our accelerated computing for and one of them is generative AI. There we go. We were trying to figure that out. It was a black jacket. I'm not sure it was leather, though. That was not leather. It didn't seem like it was all right. That was not leather. It's okay. Maybe that's why they had a sign. I don't know. We should ask Ed Ludlow. Of course. That was him. Of course. With the weather invaded Boss earlier. Earlier on. Okay. See, there are too many too many storylines to this individual story. Tommy Fang is here with us on set, head of China Global Markets at at UBS. How me. Nice to see you. Good morning. We're down on the CSI 300. Your colleague Wang Tao and the team downgraded the growth their growth forecasts for China 4.6%. The reads four in markets is if China's a longer going at call it 7% earnings growth suffers hence the market is where it is. Yeah how do we how do we come up with a strategy when China's going in for four and a half percent of it? Well, David and Steve, great to be here. Yeah. So you was not planet I so some of my colleagues released that but but I think the downward trend for the macro environment is quite obvious. So for equity investor, what we look at it is the really the expectation versus reality. So I think overall economic growth is a little bit touch below the expectation, so to say the least. And the second is relative performance, right? So in many ways China versus the rest of the world, the US, Japan, India and all that and the last but not least is really on to the corporate earnings how the policies. So overall I would give China probably B minus C plus year today. You know, it's not a knock out performance to say the least, but you know, there's some positive within there. Well, again, I've been poring through the your downgrade or your team's downgrade. Obviously, the ongoing and lack of clarity and lack of success on some of these piecemeal property measures have not necessarily propped up the growth trajectory. And one of the lines I saw that UBC's downside risks further downside risk to that 4.6, which is lower than the consensus estimate for growth this year because there's persistent deflation, obviously. And that makes it much harder for companies to pay down their debt. So how does that translate to that, obviously profitability and their viability going forward? And how long does this last? There's some silver lining. First and foremost, we have been pounding the table to Beijing and the policy maker over the past 18 months. So you have to stimulate and then you have to stimulate fast. So it's like all ying strategy because because when you when certain things are facing a sort of a trend movement or downward pressure pressure. So when you push it up at the initial stage, the force is limited. But when when they have its acceleration force by itself, the, you know, the counter force would need to be a lot harder in terms of policies and all that. So so that's number one. But on the other side, the positive side for equity investor is really hopefully the return on earning or the profitability for the winners will grow because when you have a high growth economies, so there are just hyper competition, right? There is a lot of it. And then the barrier to entry is lower in China. So therefore everybody is compete with a much lower profitability scenario. When the growth is sub say 5%, it's it's a decent but but not as high as seven or whatever you mentioned. So then you weed out the the the medial curse and hopefully the better performers and will return to the equity investors. I also want to get your thoughts and since we're talking earnings like buybacks have come up as you know as a viable alternative or of use of cash for for for companies, do you think buying companies that are buying back their stock, is that a viable investment strategy? Again, I think it's it's case by case. Well, where being, you know, behind us and being where be on the pitch to many of those companies doing well. So what is buyback what is dividend payout which, you know, insurance companies loved it. But ultimately you just need to get the earning and the profitability up and then hopefully return to the investors. What's really your outlook for the A-SHARE markets? They've been obviously extremely subdued. And and in that trend, you've also seen southbound connect the Hong Kong increase in the most recent quarter. So it looks as though investors who have very few avenues to get returns on their money in this down economy in China are looking abroad. They're coming down south to Hong Kong. When you're going to see the catalyst to get the a-shares going in Shanghai and Shenzhen and you're having a conference coming up right now in Shenzhen to talk about this. Yes. So so we're having this next Monday in Shenzhen. We have, by the way, a record sign up in terms of the investors and Asia corporates and also CEOs. So so that reflects people's. Care about China. They wanted to find a winners. But I think, Steve, to answer your question, it's not it's not easy. Right. So we have to look at the fundamentals, but at the same time, really, hopefully the policy will come in and to really stimulate the economy. What are the best tactical opportunities right now in the Asia market? Sure. I think the high dividend and also the buyback company is one. Obviously, China continue to be greener, wealthier and healthier. So those are the sectors which have obviously very strong potential to grow. But but we really have to look at a company specific. So that's why I think what I accompany our conference is for. I was more than 111 listed company. They all keen to come to our conference to talk to the global investor to tell them their stories. Okay. Is it and I'm wondering whether to your point, it's a stock pickers market. You know, maybe you pick one or two of the best in a in a certain segment as well. Are you concerned over margins, for example, and is end is price war? I think, you know, one thing drive this sort of a lack of confidence is in our own quote unquote deflation. So when price coming off along was a weaker demand. So that drives the profitability, Right. But at the same time, as to Steve's point, we have seen a positive sign of M&A and the weaker players exiting different industry in the markets. Right. So so for us to protect a healthy profitability for corporates and then to really have that local hero, whether is state owned or private sector, is the key, right? So we need to have the beauty of the world for China and we had those before and we definitely need more of those to lead the equity market. Well, Tom, we have have a great conference and we'll see you again next time you're back here in town. Tommy Fang, their head of China Global Markets there, that's at UBS. Right. A very quick weather update, Steve, you might know more about this. Of course, this massive typhoon that's literally made landfall in Japan earlier on. Yeah, they've downgraded the emergency warning issued for Shima. But that being said, I think it was the highest that they've ever issued. It was in a certain prefecture in the southern island. It's expected to slow down a little bit as it goes over land. But it's really if you see the trajectory of sunshine, it is going right up through Kyushu, Shikoku and then Honshu and it's disrupting, obviously, flights, rail services, it's disrupting car plants. I think Honda has a factory in Kyushu, in Kumamoto, which is a big silicon, the old Silicon Island, and now is being revitalized with a TSMC plant, Nissan, two plants in Kyushu also being closed. Toyota motor suspending operations at 14 plants there based in Nagoya, in Honshu. So this storm is going to go right up the archipelago. It's you know, it goes from west to east, and that's sort of southwest to northeast. It's going to follow the chain of islands. So we have to watch this closely. Absolutely. There we go. Live pictures out of Tokyo, of course, Not to mention, hundreds of flights have also been canceled and as a precaution, of course, given given the weather there. Plenty more ahead. This is Bloomberg. All right. Who bought made one yesterday. Beers on you. Right. We're up nine and a half percent. We were down 3.2% yesterday, so might there might be some people there who were itching to buy that dip. Past tense and glad that you did if you did. We're up about nine and a half percent right now. 112. We close at 102 and then we had the company earnings. And then you had that buyback, of course, on your screens. There we go. Quite a nice pop there in shares of Made Want. And just in case you're curious, some of the chip makers too, on your screens anyway. Yeah, where I think we're talking geopolitics now. Yeah too bad we can't have delivery here this morning, but too early for bears right there. All right. Well, changing gears, obviously, China and the U.S. president, Xi Jinping and Joe Biden, they're going to talk in the coming weeks. It follows the trip to Beijing by U.S. National security adviser Jake Sullivan as tensions simmer over a range of trade and geopolitical concerns. Obviously, China correspondent M.n. Lowe joins us now here in the studio. So what's the big takeaway, the fact that they're talking is progress? Well, yes. Well, look, President Biden is the only president since Jimmy Carter who hasn't visited Beijing during his time in office. Obviously, the pandemic was a part of that as well. So the two sides now setting up a potential talks for them. We don't know if it will be in Beijing if he doesn't travel to Beijing. There's still a couple of opportunities in Brazil during the G20 summit or in Peru during the APEC summit. And remember the last time when they met at the sidelines of the Apex summit in San Francisco, you were there. It was an extremely consequential meeting that until now you keep hearing the Chinese foreign ministry referring back to that meeting, the meeting where both sides really pledged to stabilize relations after that spy balloon incident. Another very key outcome from this meeting is the fact that the two countries have now agreed to deepen military to military dialogue down to the theater command level. And this is a direct line of communication that Washington has been pushing for for a long time since Nancy Pelosi visited Taiwan and is seen as very critical to avert any sort of accidental crises that could blow up in the Taiwan Strait or the South China Sea. Okay. Let's turn to the climate, because that's really one area where there's probably the best or the biggest overlap between the two. I think John Podesta is headed to Beijing next week. Yes. So that is one of the outcomes of the marathon talks over the last two days. The two sides agree to cooperate on climate change and also artificial intelligence and anti narcotic and enforcement as well. So Podesta going to visit Beijing sometime in the first week of September. The goal here is for the two sides to discuss how to reduce a range of greenhouse gas emissions beyond just carbon dioxide. And they're also set to make new pledges by 2035. And again, Beijing is under pressure to do a little bit more given that is the largest greenhouse gas emitter. And also given the timing here just ahead of the US election. So, you know, a lot of uncertainty about what President Trump would do if he wins office. So the two sides also looking to foster connections of non-state nongovernmental institutions so that their cooperation can sustain beyond a change in administration. I just want to add to I've met Leo, Jen, then the new China envoy, and he has a very affable, very friendly demeanor, which can very much help in these repairing of relations. Someone like Wang Yi, much more stern presence, you know, on the geopolitical level of Jake Sullivan. But Leo German is a very affable, friendly individual. So that could really help build relations. Yeah, hopefully it last beyond the transition of the US administration. Okay. Thank you so much, Mimi Lo there, China correspondent there with what happened and of course, what to watch next week with that visit coming through at the capital. Plenty more ahead. And a management, are we seeing some massive moves in these markets right now? More on that in a moment. And welcome back. You're watching, of course, the China Show. Here are some of the big corporate stories we are following today. Berkshire Hathaway has become the first U.S. firm outside the tech sector to top $1 trillion in market value that all Warren Buffett's conglomerate has rallied this year on strong insurance results, outperforming beating the S&P 500 with a 30% gain. Berkshire joins an exclusive club dominated by tech giants, including Alphabet and other platforms. And, of course, that little company known as in video shares of Salesforce, they jumped in extended trading after the company reported a strong profit outlook. The maker of customer management software sees profit exceeding $10 per share for the fiscal year That tops estimates. Salesforce also announcing that CFO Amy Weaver will step down from her position once the successor is chosen. And HP slipped in extended trading after cutting its full year profit outlook on a continued downturn in its printer unit. Printer supply revenue is seen as Hpe's leading profit driver. The disappointing forecast eclipse a first revenue gain in two years, suggesting an end to a long slump in demand for personal computers. Dave. Yeah, let's. HP was on four and a half percent. Nothing quite some of these moves we're seeing and double digits. Okay, so let's start things off with why don't we go to Li Auto first and some of the earnings coming through there. Also disappointing. So we're down 13% on shares up li auto be widely electronic as opposed to of course that used to be widely but of course related their 14% drop. That's also an earnings related story first half net income also missing estimates as far as BYD electronic is concerned. Third one on your board is a textile manufacturer, Essential International. Also disappointing as far as the revenue growth was concerned. Net income coming in above estimates. So that seems to be more the top line concern and may Taiwan is a well that's an earnings story. And within that earnings story of course it's also that buyback story, eight and a half percent coming off highs a little bit. But certainly you do see that there are bright spots amidst what is really mostly a sea of red. Okay. The just to pivot here asset classes and look at some of the and by the way, when this next one's coming up. Just keep in mind we did we are coming off a decent what, two three day rally and some of these metals and as you can see weighing quite heavily right now, we're down 1.4%. That's your musical genre today. Steve Yeah, Heavy metal. Iron Maiden. Iron Maiden, your pick. Black Sabbath. Black Sabbath. Yeah. Excellent. Yeah. We have to go all the way back there. Party of the Garth Metallica, Guns N Roses. Anyway, use Your Illusion three when you look at these markets, plenty more ahead. This is Bloomberg. I'm not concerned. I think if you look at India, they still control this market and will continue to, I would say, dominate this space over the next 3 to 5 years. You know, they own over 95% of this market today. Delivering chips at this rate, at this scale is fantastic and unprecedented. I don't think there's much of a revenue issue here of a growth issue here. I think that little bit of a push back is probably more around the margin situation. That type of growth isn't necessarily realistic or sustainable in the long term too. It's not necessary in the long term either. But three, there are also supply constraints, right? And so India can only grow as quickly as as it supply allows it to. At the end of the day, we still sense enormous and urgent demand across the board. And that really mitigates, in our view, the risk of a pause in shipments as customers wait for the next generation of chips to be available in volumes. Yeah, I guarantee you that. That's simply a partial list of all the commentary on the world's most watched set of earnings, which came through out of Nvidia a couple of hours back. Shares, as you can see, closed in the after hours session. Your starting point, of course, going into the session in the US today, 117 a pop. Welcome back to the show. You're watching the China Show. In fact we're still feeling the Nvidia effect here. TSMC Samsung Electronics and some of these other chip related stocks on your screens. They're feeling the pinch from what really took place and it's just not in video, right. You look at the likes of ARM AMD also fell in the after hours session here Asia outside of China outside of this, if that's even possible, to sort of disentangle the pull up we're getting from chips, we're down about 6/10 of 1%. The additional leg down is from the Hong Kong Open and you're getting the likes of things like Li Auto, for example, and some of the other big constituents on the is I pulling the index down even further. Nik is off 4/10 of 1%. We'll get you guys an update on the weather and the typhoon that's hitting Japan as we speak. Taiwan, of course, feeling the drag out of TSMC. Nothing much to tell you about apart from. Yeah, I mean, the individual story so far has Trump all things macro, which is in itself of course, also a macro story. Now, we spoke exclusively with the boss at Nvidia, Jensen Huang, of course, and he told us he's optimistic about the outlook for next year. We're going to have lots and lots of supply and we will be able to ramp starting in Q4. We have billions of dollars of revenues and we'll ramp from there into Q1 into Q2 and through next year. We're going to have a great next year as well. Let's bring in the team Micron Field in Singapore for us and also Robert Lee here and senior analyst at Bloomberg Intelligence. Mark, I'll start with you. Mark, the curse of being a public company. Yeah. I mean, it's just like I'm not just a public company, but as he was saying yesterday, a public company. So what a nice style student only produces a nice paper. Then people get disappointed. And that's that's the trouble is it's all about expectations and maybe unrealistic expectations. You've had a company which has produced incredible results for quarter after quarter. The numbers themselves are probably still amazing, and I'm sure Robert will enlighten us on exactly what that all means. But it's all about relativity and whether this compared to where people were looking, maybe it's not quite good enough. It makes you wonder whether or not media is on the verge of becoming Apple. For years and years, Apple beat forecasts, beat expectations, had a fantastic outperformance in the market, and then eventually it just became an ordinary big cap stock maybe. And video is on the verge of becoming that very profitable by just somebody who slips into the general format of the market and is no longer the superstar that people got used to. Well, Mark, you know, someone told me the definition of in video, it is someone who didn't get into the video craze. I mean, is this stock still going to propel the S&P 500 through what some say could be a soft landing if the Fed starts lowering rates? Or is this tech sector in the Magnificent Seven still going to propel things? I suspect that we're about to go into a period that could be tricky for for US equities and for global equities. We're coming into the Labor Day weekend. Often it's a period when people reassess what they think about their outlook for markets between then and the end of the year. This year is a bit special because you've got the US elections, you've got some geopolitical things going on in the background and markets are already pretty fully priced as well. It wouldn't be a huge surprise if people come back from Labor Day and think, well, the outlook is not as perfect as we previously thought and start getting a bit defensive. If people start getting defensive, that only means one thing for equities. It means they're going to grind a bit lower property, go a bit defensive into treasuries and you get maybe a bit of a move into the US dollar as well. It's hard to see how people come out of this period thinking that the Fed is doing enough to achieve all it can do with just a 25 basis points cut basis. They could well seem to be behind the curve already. So some investors and the push for 50 basis points is going to get greater and greater, especially if the employment data next week is not perfect. Robert, I'll bring you in your your thoughts on these results. Yeah. I just want to say very briefly, Mark has stolen some of my thunder there, but I completely agree with everything he's just said. Again, I think the fundamental outlook for from video in this sector in the near term is you cannot supply constrained during effective monopoly. You know, where things go into next year. We have questions about monetary monetization with hyperscale customers is another thing. But do you know the reaction we've seen in the market? Again, when I saw this whole clichéd statement when a stock's price to perfection, when has such high expectations built in, you know, and trading on punching valuations, you know, the risk is to the downside. So I think of three things in brief. The scale of the beat is diminishing. So I think that's been widely reported. Also the growth, you know, it's still pretty stellar growth, but the rate of growth for slowing the top line growth for this quarter was at 122%. That's great, isn't it? But last quarter to quarter before that did 262 and a quarter before that, they did 265. Looking forward into the coming quarter that the growth will slow to 76. So that's still a great number, but it's a significant slowdown and where they were. It's growth, Jim, but not as we knew it, I think is the best thing to say. Well, Robert, what about Blackwell? Is it going to be the cash cow that Jensen Huang says it's going to be regardless of whether China is going to get its hands on it? Yes, this will help them extend the market leadership. I mean, which is already significant. It's a major product driver for next year. But I just want to stress there still is residual execution risk on that because they're sampling to customers at the moment. It goes into volume production from the end of this year. These things are non-trivial. Again, you're working at the cutting edge of physics. Few atoms out here or there can can create an issue. So whilst there's been production delays, which they seem to have overcome in the near-term. I do want to you know, I wholeheartedly stress there is still residual risk on Blackwell because it's such a complex product. So I'm in no way saying there will be problems, but there is a significant residual risk that could impact their rollout into next year. And Robert, you brought up something interesting. So would you agree that the problem now still is a supply chain issue more than competition? Oh, no, no. Yeah, absolutely. I completely agree on that. They've got you know, the demand is not an issue whatsoever. These companies are fighting over themselves to clamoring for chips. So the view on the demand side through into early next year looks good. Okay. And just quickly on that, too. So if when do we start worrying about competition? When does competition trumps supply chain and when does he said effective monopoly? When does antitrust become an issue or antitrust? That's an interesting one. I'll skirt that question for a moment. I mean, there are a number of interesting start ups coming with some very innovative technology. They're nowhere near going into production, so I don't think that's a near-term risk. The company that is, you know, arguably chasing the hills at the moment is similar R&D. But again, if Blackwell is executed properly, then that will enable NVIDIA to extend its lead. The issue, though, is usage and monetization in the customers. I think that's the key issue. Steve, I think you've a question for Mark. Well, I was just going to give Mark the opportunity since obviously Robert agreed with everything Mark said prior. Anything that he said. Could you hear him? Did you agree with him or is there anything you want to pick apart? Yeah. Apologies for taking some of Robert's. Nothing but a great to be on the same page for a change. That's really nice. I think that the big issue for markets in the in the short time will be the rotation effect. There's surely going to be some spinning out of Embiid here and maybe some of the other air stories into other parts of the market. And it's whether or not that is a positive move or whether the outflows from some of these air names is too overwhelming and the market just can't handle it. So next week we're probably going to see some, some decent rotation. Let's see whether it works out well or not. Considering that the Fed is in the background, then they're going to do something. But is it enough? Is it this time? But the market finally decides they've been waiting too long and if they don't get 50 basis points, they're just going to take it badly. Tim, thank you so much. Fantastic insights and banter. All right. Mark Cranfield in Singapore for us. Robert Lee here on set. Just very, very quickly, of course, where are we on Nvidia just to take stock here? Very, very simply. Would you buy NVIDIA at these multiples? 30 times earnings? We're using the after hours session 117 to pop. And of course, you extrapolate that with the graphic that we show shows. Is that so 30 and a half is the price to add price to earnings, forward earnings. And we talk about earnings, its adjusted EPS fiscal 2016. Guys, we have that. Can we show the place it's coming? I heard. Okay. Yeah. So the question is from 38 times, would you buy it now at 30 times earnings? When you look at the current share price, that's number one. Number two is if it's not Nvidia that floats your boat anymore. The question that our team has floated for our viewers is what to take in their displays as the equity market driver. So chime in, of course, on both those things. You know where to find us, of course. Right. Coming up here in the the man of the hour himself, Jensen was without the leather jacket. I should note his thoughts on sovereign A.I. coming up next. And also, we'll look at whether Maitland can continue to support games through the rest of the year despite weak consumer sentiment in China. That is next. Yep. And, of course, an update here on the typhoon over in Japan. We're now getting some numbers coming through. Three casualties. One missing from Typhoon Shanshan. An update to on where we are on the story just ahead. This is former. One stop We're tracking very closely. And the price action alone tells you why may turn out with earnings out with the buyback up 9% in the first 42 minutes of trade. Let's unpack the earnings story with our Bloomberg intelligence senior analyst Catherine Lim, joining us now out of Singapore. Yeah, Catherine, the date the company delivered the best set of results that we could have imagined. Well, you know what? At least the revenue beat at for even though it was just a small 1.3%. But really, I think it is a guidance as we look out into the rest of the year. Judah, as we talk about the weak consumer sentiment in China, this is a company that's telling you that they've got to services, you know, they've got, you know, products for some of the very value conscious customers on the mainland that can actually help them drive up, you know, better spending on their platforms. So it is the guidance out there that's really driving the optimism that missing in stock today. Well, Kat, the company also announcing $1,000,000,000, $1 billion share buyback last night, too. Seems, dare I say, a little small. I would never want to say $1,000,000,000 is so small. But compared to Alibaba and JD, how would you assess this buyback compared to the others? I hear. I hear you, Stephen. Well, you know, you're talking about like, you know, Alibaba, who buys like 5.8 billion USD you in a quarter and JD.com announced that, you know, they've got a new 5 billion planned, you know, in the pipeline. So 1 billion but you know it doesn't look big. And in a scheme of things itself, you know, as we continue to roll into it, you know, the end of the year, I don't refute the possibility that me one's going to complete this like, you know, by December and they can actually announce small. Really, I think, you know, the company where they are right now. But, you know, they have not spoken anything about their overseas expansion plan. Kita, for that mentioned. So, you know, that's something that we need to actually watch out for and see whether there is a use for the funds as they go into markets outside of Hong Kong like Middle East, which they've talked about in the past. But we're still waiting for updates from that. All right, Catherine Lam, Bloomberg Intelligence senior analyst, thanks for joining us. Well, here are some of the other stories we're following this morning on the China show. HP slipped in extended trading after cutting its full year profit outlook on a continued downturn in its printer unit. Printer supply revenue is seen as HP is leading profit driver. The disappointing forecast, though, eclipsed the first revenue gain in two years. That suggests an end to a long slump in demand for personal computers. Well, French prosecutors have charged Telegram's CEO Pavel Durov with complicity in criminal use of the app, including for drug trafficking and sharing images allegedly of child sexual abuse. They say Telegram also refused to help run wiretaps on criminal suspects. The billionaire has been ordered to post €5 million bail and banned from leaving France. Telegram didn't immediately respond to a request for comment on those charges. Just ahead here on the China show, Typhoon Shanshan making landfall in Japan. You're looking at live pictures of Oshima there. It was so forcing the weather agency to issue an emergency warning, although that has been downgraded a notch in the last hour or so. The latest in a couple of minutes. This is Bloomberg. And welcome back. You watching the China show here on Bloomberg. The head of the world's largest vaccine maker says governments need to invest early in health to protect their economies as well as their people. Serum Institute of India CEO Adar Poonawalla spoke to our colleague Haslinda Amin for the latest edition of Latitude. And here's a preview. I think a healthy population is always going to be a more productive population, and that's good for the economy. It's good for everything. I think it's common sense. It's just that sometimes the political will isn't there in some of these countries to prioritize. They want to do it, but, you know, they have these other priorities. So I hope that they can keep this as a priority because a workforce that is, you know, 20 or 30% down during a pandemic or an outbreak or is suffering from endemic disease in certain areas, there's certain diseases that, you know, keep spreading is not healthy, it's not productive. And, you know, if you want everyone to perform at their best and you want health care costs to be down, you don't want to be burdened with insurance costs and other costs. I think it's important to invest early in health, in child health, in women's health, and I hope that continues both in India and other parts. We know COVID took the world by surprise, and some say Disease X is coming sooner than you expect. Is there a sense when Disease X might hit the world? No, I'm I'm not losing sleep over which day and when is going to come out. But we're definitely prepared. You know, we have a huge testing infrastructure in India, for example. We can detect now, you know, new diseases that can come about. And if they're spreading, then, you know, we can take action. We've got a huge vaccine and pharmaceutical industry in India. So India is very well, I think, poised. But when the crisis comes, we stick to what we've committed. I think that's important. So let's see what happens. Okay. If you're itching to see more, you can catch two full episodes of Latitude, which has Lind, of course, premiering today on Bloomberg Television at those times on your screens, 8 p.m.. If you're watching out of Hong Kong, Singapore, Beijing. There we go. You can catch it also on YouTube any time. All right. From that, let's just get you guys an update of the typhoon situation in Japan. And quite a rare one, too, in terms of the strength. And when you look at the path of this, it's looking like it's going to barrel across the country here, Steve. Yeah, it's going to barrel up the entire production hinterland, if you will, of Japan. Third is going to be closing and or has closed 14 of its factories in and around Nagoya, a couple of factories from Nissan, another one from Honda down in Kyushu being closed. This is considered a rare typhoon according to the Japan Meteorological Agency. They did issue last night the highest emergency warning for Kagoshima Prefecture. I believe they've downgraded that. But still, this is a powerful storm that, according to Bloomberg, they use this size and scope. It is moving at a pace of a bicycle. It's really slow and bringing tons of rain. Thousand milliliters of rain expected are exceeding that. And again, to 240,000 buildings across seven prefectures in Kyushu have lost power. So it is a tough one. Let's well, let's let's get a sense of how things are on the ground in Tokyo. Gareth Allan, our breaking news editor, is, in fact, with us out of our Tokyo studios. Gareth, how's the weather outside? Yeah, it's fine. It's fine in Tokyo for the moment, although there are there are forecasts that even quite a long way away from Kyushu. And there's been some rain throughout the country, so quite heavy rain in the areas around the R and B Prefecture and sort of in the western region of Japan. And they're expecting that later this evening. Tokyo could be affected as well. So we are watching out for for any impact of that. The typhoon made landfall this morning in Kagoshima Prefecture at about 8 a.m.. It was still a what was what's categorised as a very strong typhoon at that point. And as it has made landfall now, it's it's been slightly weakened. It's now categorized as a strong typhoon. But the authorities are still saying it's a it's a formidable storm that still bit the strength while it has made landfall And is it very, very, very slowly crawl and cross Kyushu at the moment and heading towards Shikoku, probably reached there by by tomorrow. The gara Stephen Engle here. What kind of economic impact are we talking about here? They usually are short term events. Obviously, this is a slow moving storm, so it's going to go right up the island chain there, as you just said, Shikoku. Then it's going to hit Honshu. It's going to hit production bases of Japan. That's right. I mean, Kyushu itself is a very major manufacturing center in Japan. And as I said before, Honda, Nissan yesterday said that this has been suspended operations for today and tomorrow. Toyota has actually suspended its operations not only in Kyushu, but across the entire country. And they say they'll be suspended to midday today. We're expecting a decision from them over whether they're going to resume operations. At this point, probably looking relatively unlikely given the situation. And Kyushu right now, other impacts include, as you said, it's about a quarter of a million households without power in Kyushu at the moment. Transport links have been hit. Both the big airlines, JAL and Ana, have cancelled more than 400 flights today and there'll be more tomorrow. Rails been hit, transport has been hurt. Deliveries aren't being made at the moment. So yet the impact from this is going to be quite, quite major. It is, of course, a relatively short period of time. It's only going to be a couple of days of a lot of lost production, but some given the problem Japan's automaker automakers already had this year with with production suspensions. You know, this ongoing impact is certainly going to be felt. Gareth, thank you so much. Gareth Alan there with the latest, our breaking news editor in Tokyo for us. Right. And some of these some of the related stops, of course. And we're just flashing bottom of your screens. The latest here out of Japan Airlines in terms of the number of flights that have been that have been cancelled here. Can we get the number back, please? So I can just read it to and our viewers can see it can be the graphic right before this at the bottom of the hour, please. Thank you so much. 275 domestic flights on Thursday. Japan Airlines on your screens going into the Tokyo lunch break and also, of course, the Shinkansen, of course, the bullet train also seeing some some disruptions there. The announcement came in early, early this morning. Okay. From that, Jerry West, thank you so much. The we're looking at some of the entertainment related stocks over in Korea. At the center of this is SM Entertainment. So two things here, just a downgrade out of Morgan Stanley and there's well, reports of sexual offence allegations involving one of the artists of some entertainment can say that's unfortunately I can't say that's that, that's, that's, that's a new thing as well. We'll continue to track this story of course. And as you can see, the markets are reacting to that, too. Okay. Speaking of airlines and back back to airlines here. So Qantas was out with earnings earlier on Air New Zealand, too. And coming up on today's Air, China and China Southern are set to report earnings later today. As you can see, not a lot of not a lot of earnings coming through. We just showed any, haven't we, where it's Air China in there. Can we get Air China in place there so we can see that to air China China southern anyway? Well, we'll show that to you later, I promise, in fact. Now, speaking of Qantas, we will be speaking with the boss at Quantas and that while he's not the the rival Air New Zealand. So Greg Foran joins us on Bloomberg Markets Asia on this time. So on your screens later in the next hour. And still ahead, we're looking at education for senior citizens in China. You come on. Y. Online learning services provider Quantum Singh is banking on the market for growth. Will be speaking with its CFO in a few minutes. This is Bloomberg. Japanese markets going into the lunch break. And in as we were just talking in the last segment, the skies are still relatively quiet and the weather seems to be still clear. But we are expecting, of course, a the typhoon that is currently in the country's south to start making itself felt there in the capital as far as disruptions go to to things like transport, We are already seeing that, in fact, in terms of some preemptive measures to begin a preemptive, you probably saw chip stocks on your screens that show that again, please, going into the session today. Certainly an area of focus given the earnings out of NVIDIA. Right. Speaking of Nvidia, earlier on on the China show, we spoke with an analyst from IDC in videos admitting, of course, some of the production snags there around its Blackwell chips. Well, we spoke with IDC and they're not worried have a look. They're expanding their compute capability, and that means a lot more silicon in each system for them that they can continue to to prosper in mine and grow. Right. So I think the next wave for them is going to continue to be growing in the networking infrastructure space, because that is also prime for for change with with A.I. coming into that domain. And if you look closely at their numbers, the networking business for NVIDIA is growing quite strong over 100%, while most of the rest of the industry is is at flat to down because of elevated of inventory. Mario Morales of IDC. Now, in an exclusive interview with Bloomberg Technologies, CEO of Nvidia Jensen, Huang told us that the government deals driving so-called sovereign A.I. unnecessarily. Sometimes it deals with a particular regional service provider that's been funded by the government, and oftentimes that's the case in the case of in the case of Japan, for example, that the Japanese government came out and offered subsidies of a couple of billion dollars, I think, for several different Internet companies and telcos to be able to fund their infrastructure. India has a sovereign initiative going and they're building their infrastructure. Canada, the U.K., France, Italy are missing somebody. Singapore, Malaysia, you know, a large number of countries are subsidizing their regional data centers so that they could become able to build out their infrastructure. They recognize that their countries knowledge their country's data. Digital data is also their natural resource, not just the land they're sitting on, not just the air above them, but they they realize now that their their digital knowledge is part of their natural and national resource, and they are to harvest that and process that and transform it into their national digital intelligence. And so this is a this is what we call sovereign air. You could imagine almost every single country in the world will eventually recognize this and build out their infrastructure. Jensen You use the word resource, and that makes me think about the energy requirements here. I think on the call you talked about how the next generation models will have many orders of magnitude greater compute needs, but how will the energy needs increase and what is the advantage you feel NVIDIA has in that sense? Well, the most important thing that we do is increase the performance of and increase the performance and efficiency of our next generation. So Blackwell is many times more performant than Hopper at the same level of power used. And so that's energy efficiency, more performance worth the same amount of power or same performance at a lower power. And that's number one. And the second is using look of cooling. We support air. We support air cooling. We support cooling. But liquid cooling is a lot more energy efficient. And so so the combination of all of that, you're going to get a pretty large, pretty large step up. And that was Jensen Huang, the The Boss, of course at end video with, of course, our Ed Ludlow. That exclusive conversation earlier a few hours back from Bloomberg Television Rights just ahead. We'll be speaking with learning services provider Quanta Singh about their latest earnings and their outlook and what they're seeing and the opportunities as they address China's silver, quote unquote, economy. That's coming up next. This is Bloomberg. Welcome back. You watching the China show? You're looking at the stock of China Online, An online learning services provider, Quanta Sing listed in the U.S.. The company reported earnings very recently. It's now, in fact, become profitable for the full year net profit of $53 million. Now, of course, it is, as we mentioned, listed on the Nasdaq. So in case you are not too familiar with the company, the company offers financial literacy, personal interest courses, learning effectively for adults and addresses also the the silver economy. And I guess just to highlight to the other side of the coin of this demographic challenge in China, right over 1.2 billion people are over the age of 15. So all you have to do in your head is fast forward 30 years and imagine how inverted this gets. That being said, that is also an opportunity for companies like want to sing. Joining us exclusively is the CFO, Tim Sia, joining us out of Beijing today. Tim, good morning and thanks for thanks for coming on the show. You guys recently reported Good morning profits. And I'm wondering whether you think the company can remain profitable from here on. Know. Thank you for having me. Good morning, everyone. Qantas is a lifestyle solutions provider. The catering, the demand for the downs in China currently and mainly focusing on the middle and elderly people. So for our business, we commenced our operation since July nine, 2019, and over the past five years we have accumulated over one 1.28 pealing of three over 128 million registered users, and we have accumulated also solid infrastructure to so such kind of population. So I think during the past two years of operation, we accumulated both the experiences and the technological infrastructure to keep our operation both profitable and efficient so that we can extend the lifetime value of our users to provide valuable services and products for our users, to keep our platform grow and both for our users and the platform. Tim. Steve Here, let me ask you about that. Let me just ask you about the demographics behind your business, and that is the silver economy, the the elderly. And I use that very loosely because I'm probably classified as elderly as well, because in China, the official retirement age for women is less than men. It's in the mid fifties, I think, and then 60 for men. I think they're talking about extending that. How how much can this demographic of society in China contribute to the economy at a time of a slowing economy? Yeah, I think for the Chinese economy, I think at this stage we are reaching a high level of the development. So for each sector of the economy, we should, uh, we should see that based on the structural wheel. I think there are a lot of even though we have some difficulties and challenges, we have a lot of opportunities facing each our, each of our companies and the economic elements for our to develop and to tie in to for I think for the for the sewer economy, because especially for the people who were born after the 1960s, there are many, maybe over 20 million new retiring people joining in this demographic. I think for this kind of population, we they have they have experienced a very high speed economic growth. And also they enjoyed a very high level of living standard. So they have time and they have they are well educated. They have the demand for both of the products and services for this kind of population. So for our company, I think are starting our own started our business from the interest base that all are learning many of our doubts and focusing on the middle age and other people. So this kind of population will grow in the, you know, in the future and in the next couple of years. And that is our mission and vision to serve this kind of population better, using our technology and our experiences to cater to their demand for their growth. Yeah. Tim, you make a very good point because this is a growing market. Just to pick up on that, I'm looking at some of the figures and you mentioned the 128 million total registered users. This is as of June. This is for your company. Yeah. I noticed though, that off of that 128 million, only 400,000 are actually paying customers. That's 1.00003%. And I'm wondering what the company's doing to increase that ratio of paying customers. Yeah, sure. I think that both means the challenges we face and also the big opportunities in the in the time ahead. That's why we just to transform our mission from just offering the lifetime learning to a holistic lifestyle solution provider recently. So because in the past two five years, I think we are still a young company. We are using our early stage of the development and we see the market opportunity to serve the silver economy, the demographic we have accumulated and we have invested a lot to acquire the customers, many through the livestreaming, broadcasting and livestreaming business model which were developed by our own company. So during the past of five years, we have accumulated the technology base and we have accumulated a large pool of users, even though there are already stories with our platform and many of them have seen our live livestreaming free livestreaming courses. That means they have the interest and they have demand for our services. And also we have developed, we have cultivated a methodology and infrastructure to serve this demand, but also we should in the future, we should enlarge the base to provide more tailor made, both the products and services to cater to their demand, to make the pay users number grow in the future. So that's why we transformed our mission from a purely online learning platform to the to the holistic lifestyle solution provider for such kind of population. Tim Given the demographics challenge in China, I'm seeing that the government is pretty supportive of services like you're providing. Premier Li Chung telling a State Council session just Monday that China should draft targeted policies to help with the ageing population. On the flipside of that, we also saw in the last couple of years a crackdown on online education. Would you say that your business is pretty safe from that and that you do have government support? Yeah, sure. I think I think the first is that we are doing the right thing because we we see the market opportunity and we serve the market demand and based on our own technology, using our advantage. And also I think all of the things we are doing is supported by the government policies, especially for the silver economy, because I think we do the right thing and we are currently actually we are cooperating with the local community to serve the local elderly people. So that is a very good uh, I think it's very it's both good for the company and the community, and the government will support these kind of activities to help the to have the society. So that will benefit both the company and the community. Yeah. Tim looking at this isn't simply annual revenues are you're about a half a billion US dollar company. What would be your conservative estimate of annual revenues in five years? I think because in the past we only practice in the online learning area, especially for the for the doubt learning. But you know, for adult learning, there's a very I think there's some some we need to provide more services and products to serve the adults, especially the senior people, except the purely learning. So I think in the future, I think it definitely will grow our revenue based on the customers needs and demand. That is why we enlarge and we transform our mission from just learning to the lifestyle solutions. So that's our aim to extend the holistic business model and the lifetime value of our users. So that's why we do that, and that's because we believe the revenue will grow based on our products and services deliver to our customers and to users. I think maybe in the next five years we will grow maybe times of this of terms of revenue more than the existing level. Kim Ting, thank you so much for taking the time. And we'll we'll see you here in Hong Kong at some point. All the best to the company CFO, Dan Quanta Quanta saying if you're a Bloomberg subscriber, you can catch up with that interview in case you missed it. And some of the others that took place earlier here on the show us and of course, the other one that we had earlier on was Jensen Fong of Nvidia. Catch Conversation. If you have any questions for our guest, you know how to reach us for a client. That's IBM, of course. Check it out. TV Gold. This is Bloomberg. And welcome back to the China show. We're in the home stretch here of the two hour show. China and the US say President Xi Jinping and Joe Biden will talk in the coming weeks. It follows the trip to Beijing by U.S. National Security adviser Jake Sullivan. As tensions simmer over a range of trade and geopolitical concerns. China correspondent Vindman Low is now joining us here in Hong Kong. So again, they're talking. It's good. Any fruitful outcomes? Yeah, well, I would say actually, I want to draw your attention to the meeting today between Sullivan and the vice chair of the Central Military Commission. CHANG down because I think that is a big breakthrough. The last time that we saw such high level military dialogue was in 2016 when Susan Rice was the national security aide. And look, last time when Lloyd Austin asked for, you know, high level talks with the military, China has always feel that the defense minister, who is someone who has a diplomatic position but doesn't really have an influence, a meaningful influence over the military. So the fact that they sit down with the vice chair of the Central Military Commission, I think it's big. It's a you know, they've had a change in the military hierarchy within the PLA as well. Lisa And Fu is no longer the top general now. Right. So has that offered a new platform, if you will, for dialogue? Yeah. I mean, the fact that they sat down, I guess it is almost like a return to president to, you know, the time of Barack Obama's time, you know, before the spy incident, before the Nancy Pelosi incident. And I think this is a very critical time. You know, it's just months before the US elections. What are you thinking? That, yes, she was winking at me and like there's no other meaning to that. Okay. No, I would say is it's a very critical window of opportunity here because we're months away from the U.S. election where we could see a transition in the US administration. So I think this is a time when both countries really want to seize the opportunity to ensure that the waters are calm, that, you know, there isn't any potential crisis that could brew over the next few months, that could kind of set the tone for the next four years. So this is a time where they want to, you know, just stabilize things and make sure everything goes smoothly before that transition. I know you guys have can chime in on this, too, Right? John Podesta's coming to Talking Climate two. And you've had some comments around the climate conversation. Well, Leo Jackman is the new China envoy for climate and he's going to be meeting Podesta. Leo went to Washington, met with Podesta there, and now it's a continuation of the meeting that they last had some Podesta that is going to Beijing in the first week of September. So sometime next week, I suppose. And they're going to discuss, you know, how to reduce a range of greenhouse gas emissions going beyond carbon dioxide. And they're going also to discuss, you know, the new pledges that they're going to make, the goals that they will try to hit before 2035. And again, Beijing has always been facing pressures from all these developed countries to do a little bit more, given that they are the biggest greenhouse gas emitter, given that although I have to say that China has been making big strides on this front, you know, with their adoption of electric vehicles, the adoption of green energy here, and again, timing is of the essence here, because if President Trump comes into power, it could, you know, kind of, you know, just dismantle all these agreements. So the two sides are also looking to foster connections between the non-state non-governmental institutions to ensure that any sort of cooperation could last beyond a change in the U.S. administration. Thank you so much, Benjamin Lau, China correspondent there. Here's you know, in fact, just we'll take that as a jumping off point for a China brief today. And some of the headlines that we're seeing across national media. And I fear looking at news, of course, the news on Jake Sullivan and the visit there, you won't find it on the front pages of Chinese domestic media. It's a below the fold. On page three, the Communist Party's official mouthpiece, The People's Daily. Now, the article describes the meeting with the Foreign Minister, Wang Yi, as candid, substantive and constructive. Quoting Wang, It says that the US and China should treat each other as equals for the relationship to be to be smooth. Now, elsewhere, there is criticism of the US, where an official said the military was open to escorting Philippine vessels during resupply missions in the South China Sea. This is according to the Global Times, where the headline says that the US is fanning the flames. After this, US Indo-Pacific commander Samuel Paparo made those comments and cites an unnamed military expert who says Washington does not want to see tensions easing because it supposedly needs the Philippines at the front line. Steve hear of its plan to contain China. Well, now a quick look at the business papers. The Security Times says selling pressure in the corporate bond market is manageable and there's little risk of more declines and fund redemptions sight stable liquidity near the end of this month and support. Sort of monetary policy and Taecyeon reports that some local districts are seeking to tap government assets as new revenue streams to ease debt pressures, says one district in Chongqing plans to form a so-called cell, everything to save the day task force to help monetize state owned assets. A city also up in northwest Gansu has also called on local government backed financing vehicles. LGA vs. To step up asset disposals right back to market and some individual movers. It's earnings. Earnings. Earnings. Earnings. Earnings. That big theme today as if holding here profit growth is coming in slightly above the expectations you have seen in the stock price. That's a buy back story 8.7% substantial gains there. Bocom. That's a profit, Miss. And Will Young. Yeah, that's a 12% pop in net income from last year. Also maintaining some of its sales momentum some of the other earnings coming through Li Auto that was a big mover still is to the downside substantial losses. I think we were looking at 15% drop there. Let's just get a sense of where we are on that. Li auto story earnings missing estimates were down only 9% or ten and a half percent. Be widely electronic. Same story, same headline missing estimates. Shenzhou international, a textile producer here, down about 9%. That's also similar sales disappointing, although let's end on a positive note here would make Taiwan, of course, and that income beat there. Plus, of course, to back the buyback, too. Steve, let's take you to last minute to Kagoshima and the storm that is hitting there with sustained winds of 75 knots, 139 kilometers, three dead, one missing right now. This is Bloomberg.