☕️ Good morning friends,

We're back in Shanghai and Chancellor Merz back in Germany. His visit to Unitree has gone viral all over the world.

We're happy that the topic of robotics is getting the attention it deserves.

In today's issue:

• Iran: China condemns "unacceptable" attacks

• Luckin Coffee: 31,048 locations, $7.1 billion revenue – but delivery eats into profits

• Vietnam's AI law: Southeast Asia's first – deepfakes must be labeled from March

• Korea extends hand: Lee used Independence Day for a conciliatory speech to Japan

P.S. Only 2 spots left for our robotics expedition in May. Friedrich Merz was definitely impressed. More details here.

Asia pulls money home as oil risk spikes: Asia’s investors are bringing their money home. Bloomberg warns of destabilization as more and more Asian capital flows out of US and European assets back into domestic markets.

At the same time, Asia’s largest oil importers are preparing for a worst-case scenario. China, Japan, South Korea, and India are reviewing their strategic reserves and looking for alternatives to the Middle East. Crude is set to open above $70 when trading starts on Monday.

TOP BIT

China condemns "unacceptable" attacks – Asia on high alert

The death of Iran's leadership through US-Israeli airstrikes has left Asia in a state of shock.

Beijing condemns the attacks as a violation of international law, and in the economic metropolises from Tokyo to Seoul, fear is growing of a total supply shutdown.

Diplomatic rupture

Beijing and Moscow sharply criticize the military escalation and the attempted "regime change." Concern is equally great in Southeast Asia:

• China: Describes the targeted strikes as unacceptable and calls for an immediate ceasefire to prevent a wider conflict in the Persian Gulf.

• Southeast Asia: Malaysia and Indonesia warn of a global catastrophe and see the stability of the entire "Global South" at risk.

• Japan: Caught in a dilemma between loyalty to ally USA and massive dependence on Iranian energy sources.

Economic consequences

Brent crude could rise from $73 to $100 if Iran permanently blocks the Strait of Hormuz. This would increase global inflation by 0.6-0.7 percentage points.

• Japan particularly affected: 90% of crude oil imports come from the Middle East. Nomura Research estimates a GDP drop of 0.65 percentage points with an oil price jump to $140.

Summit meeting in Beijing

The planned meeting between Donald Trump and Xi Jinping at the end of March is gaining massive significance. China will likely use the crisis as leverage to force concessions on trade tariffs.

📊 All details & data: CNA, Politico, Japan Times

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MARKET BIT

Luckin Coffee surpasses 31,000 stores, but the price war is eating into profits

$7 billion in revenue, 31,000 stores, but the delivery bill is coming due

The numbers Luckin Coffee reported last week tell two stories at the same time. One sounds like the greatest success story in Chinese coffee history. The other sounds like an expensive problem.

The success story

Luckin generated annual revenue of 49.2 billion yuan, $7.1 billion, in 2025, up 43% year over year.

• Net profit rose 22% to 3.6 billion yuan, $525 million.

• 8,708 new stores opened, bringing the total to 31,048.

• 160 international locations: 81 in Singapore, 70 in Malaysia, 9 in the United States.

Of the 31,048 locations, 20,234 are company operated, the rest run by franchise partners. That gives Luckin more stores than Starbucks worldwide.

For context: 4.1 billion freshly made drinks in one year. From June onward, monthly active customers exceeded 100 million for five consecutive months. Same store sales swung from minus 17% back into positive territory, averaging +7.5% for the year.

The problem: delivery is eating the profits

Q4 2025 tells a different story. Quarterly revenue rose 33% to 12.8 billion yuan, but profit dropped 39%.

The reason: a subsidy war between China’s delivery platforms Meituan and Ele.me starting in Q2 sharply increased delivery volumes in China. More customers ordered via app instead of buying in store.

• Delivery costs surged to 1.6 billion yuan, up 94.5% year over year. Same store growth slowed to just 1.2% in Q4, down from 14.4% in Q3.

Why this matters

Luckin is living proof that China can build homegrown consumer brands at global scale.

But the Q4 numbers highlight the dilemma: growth in China’s hypercompetitive delivery market does not come for free. 2026 will be the year Luckin has to prove whether its international expansion can scale fast enough to offset margin erosion in its home market.

👉 Sources: Yicai Global, DealStreet Asia, Caixin

FOUNDERS INSIGHTS

At that moment, Irving (25) almost gave up. Instead, he took out a loan of 2 million CNY ($291,000) and started from scratch.

Before founding Takway AI, he built guide dogs at Unitree Robotics, then worked at SenseTime and the Shanghai AI Lab. He dropped his guaranteed PhD at USTC to go all-in on emotional AI.

After his first flop, he developed Sweekar, a physical AI pet that hatches from an egg, grows through stages, and develops its own MBTI personality depending on how you treat it.

At CES 2026, investors and media representatives were thrilled by the new Tamagotchi from Shenzhen.

Here's the full episode:
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HIGHLIGHTS 

🇻🇳 Vietnam enacts Southeast Asia’s first AI law: Since March 1, AI-generated content such as deepfakes must be clearly labeled, and customers must be informed when they are interacting with AI instead of a human. The government is planning a national AI data center and developing its own Vietnamese-language models. South Korea activated the world’s first AI law in January, while the EU is rolling out its framework step by step through 2027.

🇨🇳 China’s green sector now as large as Brazil’s economy: The clean energy sector generated 15.4 trillion yuan, $2.1 trillion, in economic output, equal to 11.4% of GDP. Chinese companies dominate the global supply chain, accounting for over 80% of solar production and more than 70% of EV manufacturing. Analysts see massive export potential as the world is expected to invest an estimated $94 trillion in green infrastructure by 2040.

🇰🇷 Korea extends a hand to Japan on Independence Day: President Lee Jae Myung used the anniversary of Korea’s independence struggle against Japan for a surprisingly conciliatory speech. Instead of the usual criticism of the colonial era, he spoke of a “friendly new world” and reciprocal state visits. Following his trips to China and Japan in early 2026, Lee has been pursuing a more pragmatic diplomatic approach.

📱 Honor’s robotic camera steals the show at MWC: At the Mobile World Congress in Barcelona, Honor unveiled a smartphone with a retractable camera arm mounted on a three-axis gimbal. The camera tracks movement, follows objects, and can even “nod” via AI voice command. The device is set to launch in China in the second half of the year. Honor also introduced a humanoid robot as a shopping assistant on the sidelines of the event.

MORE ASIABITS

• Free guide: AI Automation for Beginners

• Humanoid Robotics Report: The $6 Billion Bet

• Interactive tool: China Dependency Index™

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