On December 18, 2020, the U.S. Department of Commerce issued a notice listing 77 entities on its “Entity List. KDDI is also on the sanctions list.
On February 3, China’s leading artificial intelligence company, KDDI (IFLYTEK), suffered a heavy drop at the end of the day, with its share price flashing to a halt. According to the equity calculation, the market value of KU Xunfei evaporated 10.95 billion RMB in one day. From the seat, the institution is the main force of this smash.
In the afternoon of the 3rd, the stock price of KUXUNFE crashed and touched down. By the end of the day, KU Xunfei shares were sealed down at 44.41 yuan (RMB, same below), with 16,500 closed orders, turnover of 5.608 billion yuan, and the company’s market value was reported at 98.8 billion yuan.
The opening price that day was 49.34 yuan, according to the share capital of 2.22 billion shares, the market value of KDDI evaporated 10.95 billion yuan in one day’s Time.
So who is smashing the market? According to the news of the 21st Century Business Herald, the deep stock pass seats bought 441 million, Huaan Securities bought 140 million in Shanghai Pudong South Road, China Merchants Securities trading unit bought 120 million, CITIC Securities bought 48.41 million in Xuzhou Jiefang South Road, and institutional special seats bought 45.91 million.
From the selling seats, the two institutions dedicated seats sold 142 million, deep stock pass seats sold 291 million, China Merchants Securities (a financial company owned by the Communist Party’s central enterprises) trading unit sold 153 million.
Recently, there have been rumors that “KDDI’s 2020 annual results did not meet expectations” and “the matter of non-public issuance of shares in 2021 was not approved by the shareholders’ meeting”.
In response, KDDI denied these claims in an announcement on the evening of the 3rd.
From the 2020 third quarterly report of KU Xunfei, the number of shareholder households is more than 280,000, and the big man Ge Weidong is ranked as the fifth largest circulating shareholder.
In addition, KDDI is also held by three public fund management companies, including Efatar (official institutions such as Guangdong Province-owned trust companies), Guangfa Fund (an institution owned by state-owned enterprises) and Bodao Fund.
80% of KDDI’s net profit comes from government subsidies
Although KDDI said in an online presentation to investors on the evening of the 3rd that “the net profit of FY2020 will increase by 50%-70% year-on-year,” it is backed by strong financial support from the Communist Party of China, and the company is said to have derived 80% of its net profit from government subsidies.
According to the Southern Metropolis Daily, in the evening of Oct. 26, 2020, KDDI released its third quarter report. The report showed that KDDI’s non-recurring gains and losses totaled 470 million yuan, of which the company received 202 million yuan in government subsidies, accounting for 36.46% of the net profit attributable to shareholders of the listed company.
Also according to Interface News, government grants (including deferred income related to government grants) together accounted for 80.95% of net profit in 2019, up from 26.44% in 2016.
China’s “Black Technology Governance” Sanctioned by U.S.
On December 18, 2020, the U.S. Department of Commerce added 77 entities to its “Entity List,” including KDDI.
In a statement, then-Secretary of State Mike Pompeo said the Chinese entities were sanctioned for providing DNA testing materials or high-tech surveillance equipment to the Chinese Communist government, and for participating in the persecution of Tibetan Buddhists, Christians, Falun Gong practitioners, Uighur Muslims, and other ethnic and religious groups.
Regarding the inclusion of KDXF on the list of U.S. entities, the company’s chairman Liu Qingfeng envisioned the serious consequences, “In the future, whether it is smart homes, wearable devices or all kinds of portable terminals, it is impossible to go abroad without language interaction capabilities and voice assistants, and there is a real possibility of being stuck in this field.”
KDDI has close cooperation with the Communist Party’s public security system. According to a 2016 government procurement announcement, the Communist Party named a subsidiary of Techtronic as the sole supplier of 25 “voiceprint” collection systems for police in Kashgar, Xinjiang.
According to a 2016 government procurement announcement, the Kashgar City police in Xinjiang named a subsidiary of Techtronic as the sole supplier of 25 “voice print” collection systems. In addition, it has been revealed that Tech Data is helping the CCP’s Ministry of Public Security to build a national voice print database for monitoring and tracking people. How KUXUNFE obtained the voice data of so many people has also raised concerns. It is noted that one of the major shareholders of KDXF is China Mobile, which has more than 800 million cell phone users.
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