The latest: Full Truck Alliance (YMM.US), a trucking app operator, announced Wednesday that it has restored new user registrations for its “Yunmanman” and “Huochebang” apps, with the approval of Cyberspace Administration of China
Looking up: The company’s approval to register new users means that the Chinese government’s data security review has ended, which will help the company resume its business growth.
Take Note: Many Chinese cities started to introduce strict epidemic control measures at the end of March, which is expected to slow down the company’s business significantly in the second quarter, while the positive effect of new user registrations is expected to show up only in the third quarter.
Digging Deeper: The announcement of China’s cybersecurity review last July unleashed a massive wave of regulation on Internet companies, including three companies that were officially deemed to be operating applications containing sensitive information on millions of users in China and were therefore banned from registering new users during the review. However, as the new Covid-19 epidemic wave and related city closures have hit the economy, the official stance on Internet companies has shifted from “strong regulation” to “supporting the platform economy”. Earlier this month, it was reported that Chinese regulators were about to end a year-long investigation into data security and were preparing to lift the ban on new user registration for Internet companies.
Market Reaction: Shares of Full Truck Alliance jumped 7.8% to $9.93 at the opening bell in New York on Wednesday, but closed down 10.5% to $8.24. Shares of Kanzhun Limited (BZ.US), an online recruitment company that is also allowed to register new users, closed down 1.9 % as well.
Translation by Jony Ho
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