Seeking Alpha
Profile| Send Message|
( followers)  

The following is excerpted from IRG's weekly stock report:

• • •

Alternative Energy

LDK Solar Co., Ltd. (NYSE:LDK) has signed a three-year "Take or Pay" contract to supply multicrystalline solar wafers to a U.S.-based energy solutions supplier. Under the terms of the agreement, LDK Solar will deliver approximately 90 MW of multi-crystalline silicon solar wafers over a 3-year period, commencing in 2009 and extending through 2011. As part of the agreement, the customer will supply a minimum of 300 MT of polysilicon and make a down payment representing a
portion of the contract value to LDK Solar.

Hardware

Apple Inc. (NASDAQ:AAPL) will appoint Qiu Qiuliang as general manager for Apple China. Mr. Qiu, the previous vice president for HP Imaging & Printing Group (NYSE:IPG), will succeed Ye Peng.

Media, Gaming and Entertainment

Due to gloomy stock markets, China's publicly-traded online game operators successively kicked off share buyback plans, in a bid to ensure stable investor confidence. Companies that bought back their shares included Perfect World (NASDAQ:PWRD), NetEase.com, Inc (NASDAQ:NTES). The9 Ltd. (NASDAQ:NCTY), Kingsoft Corporation Limited, and NetDragon Websoft Inc. (OTC:NDWTF).

China's online game developers are overtaking their South Korean peers in the formidable competition in China. Sales in the booming Chinese market rocketed from 170 billion won (US$128 million) in 2003 to 2.1 trillion won (US$1.5 billion) since the beginning of 2008, approaching the size of the South Korea online market in the entire 2007. China's online game developers are brewing an overseas expansion after taking the majority share of the domestic market, which was once dominated by South Korean developers. In 2007, Chinese online game developers managed to lift their combined share to 65 percent in China, leaving a slice of 20 percent to their South Korean counterparts. China's Perfect World, for instance, has launched its popular role playing game Perfect World II in more than 40 European countries in cooperation with a U.K. game operator. Shanda Interactive Entertainment (NASDAQ:SNDA) is working together with online game giant THQ Inc. (THQI) to develop Company of Heroes Online. Meanwhile, Shanghai-based online game operator ICE Entertainment has formed a joint venture with THQ to bring the casual game Dragonica to the U.S.

Telecommunications

China Netcom merged with China Unicom in Beijing. The new company will be named as China Unicom Network Communications Company Limited. It is a sign that the biggest ever asset transaction and merger in China's history has been completed. To ensure sustainable healthy development of the telecom industry in China, the Ministry of Industry and Information Technology, the Ministry of Finance, and the State Development and Reform Commission jointly initiated the sweeping telecom regroup. The establishment of the merger turns a new page in China's telecom industry. The new company will make it the priority to step up unified operation of business of the two companies, integrating across the board wireless and fixed line networks and strengthening its efforts to build
broadband network around the country.

China Mobile Ltd. (NYSE:CHL) intends to carry out mergers and acquisitions abroad. China Mobile will be cautious about overseas expansion in face of the global economic recession. The emerging markets will be considered first. Companies in emerging markets like countries in Asia and Africa will be the preferred targets, instead of those in the booming European and North American markets. It is crucial for an acquirer to bring its experience at home and nourish a local management team after tapping a market abroad, pointed out the chairman. China Mobile has abundant cash supply to ride over the global financial turmoil, noted the president, as to the impact of the global recession. The telecoms service provider had had 122.3 billion yuan (US$17.9 billion) bank deposits and 89.4 billion yuan (US$13.1 billion) cash and cash equivalents.

China Mobile Communications Corporation (CMCC), parent company of China Mobile, plans to keep on expanding its GSM network as the related business is still growing rapidly. Although the construction of the TD-SCDMA network is going on, the company will not quickly transfer the application of 2G to TD network, as annual telephone traffic of GSM is still growing fast, and market demand can not be satisfied without expanding 2G network construction. CMCC expects to accelerate the development of TD users through more convenient switch between 2G and 3G networks and some other services. The group will invest 70 billion yuan (US$10.2 Billion) to upgrade and enlarge the capacity of its GSM network this year, with 20 billion yuan invested in the first half year and 50 billion yuan (US$7.3 Billion) to be invested in the second half.

• China Unicom (Hong Kong) Ltd. (NYSE:CHU) had reshuffled its board to add two executives from China Netcom group following a merger. Executive directors Li Gang and Zhang Junan had resigned from its board to make way for two new members from China Netcom. The new Unicom directors are Lu Yimin, who had been with Netcom's parent company, and Zuo Xunsheng, who had been with the
listed Netcom company.

ZTE Corp. (OTCPK:ZTCOF) admitted that the actions of a subsidiary employee led the Norwegian telecom operator Telenor (OTCPK:TELNY) to freeze ZTE out of all its tenders for the next six months. The employee's unspecified actions led to a breach of Telenor's code of conduct. The breach was related to a procurement process. The individual concerned has been disciplined and ZTE is reviewing possible legal action against the individual. It hopes to maintain a positive relationship with Telenor. The ban on ZTE participating in tenders applies to all Telenor subsidiaries worldwide and will last until March 3, 2009. Telenor's tender freeze will have limited impact on the financial performance of ZTE, a firm that focuses on China and emerging markets.

Fixed-line users of China Netcom continued to withdraw their subscriptions in September, with the total number dwindling 472,000 to 107.3 million. The saving grace is that the company's broadband subscribers increased 607,000 in the month, boosting the total number to 24.9 million. China Netcom was delisted from bourses in Hong Kong and the U.S.

Software

IBM has bought a 20 percent stake in Hisense TransTech. Hisense TransTech is engaged in the development of solutions for urban traffic, public transportation and logistics in China. With the help from Hisense TransTech, IBM will be able to improve its intelligent traffic solutions that have been widely used by many cities such as London, Stockholm, Singapore, and Brisbane. IBM has formed a special team to develop various technologies and solutions.

Source: Chinese Tech Stock Weekly Summary (Oct. 13-19, 2008)