Chinese Tech Stock Weekly Summary

by: IRG Ltd

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


The CEO of Alibaba's B2B business and vice president of Alibaba Group revealed plans to focus more on the Beijing market in April. Alibaba will set up three service centers in Beijing, Tianjin and Shijiazhuang, respectively, next month. Alibaba will then select some industry web sites, particularly clothing, chemical and electronics, for cooperation even as the official did not reveal details of that pending cooperation. Alibaba has historically maintained its focus on the Shanghai and Hangzhou areas.

Media, Entertainment and Gaming

PacificNet, Inc. (PINK:PACT-OLD), a leading provider of Customer Relationship Management [CRM], mobile Internet, e-commerce and gaming technology in China, announced that it has become the official designated telecom and mobile provider for the 2007 World Series of Mahjong, which is organized by World Mahjong Ltd. [WML]. PacificNet said it plans to promote the World Series of Mahjong, which will be held in Macao in June, online and via mobile Internet portals with many of its operating subsidiaries and Internet/mobile partners such as PacificNet Games (PacGames),,,, GZ3G,, and among others. PacificNet's subsidiary,, is a leading mobile Internet portal in China with 11 million registered users and boasts one of the top-ranked mobile Internet sites, featuring mobile social networking, mobile games, and entertainment. According to industry forecasts, mobile online games will become vastly more popular with the advent of 3G networks in China. The forecasts predict strong growth for WAP, JAVA and BREW, while the proportion of SMS-enabled games will drop. Shanda Interactive Entertainment Limited, a leading interactive entertainment media company in China, announced that it has entered into an exclusive agreement with leading Korean online game developer Wemade Entertainment, Co., Ltd. for the license to operate the highly anticipated 3D MMORPG Changchun Online in mainland China. The game is expected to enter open-beta testing in China in the second half of 2007. Changchun Online is a unique fighting game based upon the popular Chinese novel ''The Romance of Three Kingdoms,'' which is one of a collection of four classic novels with an extensive reader base in China. The game has finished the second round of closed-beta testing in Korea, which attracted over 100,000 applicants for only 2,000 accounts. As of March 20, 2007, Changchun Online was voted as the most anticipated game by Korean gamers on, one of the largest game portals in Korea. Wemade Entertainment, Co., Ltd. is a South Korean online game developer founded in 2000. The Company developed the highly popular MMORPG games Legend of Mir II and Legend of Mir III. In addition to Changchun Online, which is currently in open-beta testing, Wemade is developing Chung in and Creamph. As one of the first South Korean online game developers to enter the Chinese market, Wemade has accumulated expertise in online game development and marketing in China. In 2005, Wemade established a Shanghai branch focusing on developing games for the Chinese local market.

Industry sources are indicating that Focus Media (NASDAQ:FMCN) will soon begin another round of acquisitions with the purchase of four Internet companies. The reports said that Focus Media is making acquisition plans regarding four online media companies, two of which are located in Shenzhen, one in Beijing and another in Zhengzhou in Henan Province. Sources said Focus Media has chosen them because each has a leading position in their respective sectors and has made remarkable achievements in wireless value-added services.

According to its officials, next month Asia Media Co., a Beijing-based provider of TV program guides, is set to become the first company from mainland China to launch an IPO in Japan. The Tokyo Stock Exchange approved the company to list its shares on the Mothers market for emerging companies. Asia Media plans to make an initial public offering of 4.7 million new shares. The company is not listed in China or any other market. Industry sources said the company will use proceeds from the listing to expand its operations in China, and will most likely expand into Japan. Analysts see the listing as possibly setting a precedent for other Chinese companies to list on stock exchanges in Japan as retail investors in Japan begin to aggressively buy Chinese and other Asian stocks.


Ninetowns (NASDAQ:NINE), a software service provider, reported a 33.2 percent drop in its total net revenue for the fourth quarter of 2006 to US$4.5 million, compared to US$6.5 million in the same period last year. Ninetowns said its net revenue from enterprise software sales for the fourth quarter was US$2.5 million, representing 55.6 percent of total net revenue, as compared to 88.4 percent for the fourth quarter 2005. It reported net revenue of US$2 million from software development services for the quarter represent 44.4 percent of total net revenue, as compared to 11.1 percent for the prior year period. The company said its net loss for the fourth quarter 2006 was US$0.8 million, compared to net income of US$3.4 million for the fourth quarter 2005, with total net revenue for the full year 2006 went down 36.1 percent to US$19.6 million, compared to US$29.7 million for the full year 2005. Its net revenue from enterprise software sales for the full year 2006 was US$15 million, representing 76.2 percent of total net revenue, as compared to 84.7 percent for the full year 2005. Net revenue from software development services for the full year 2006 was US$4.6 million, representing 23.8 percent of total net revenue, as compared to 15 percent for the full year 2005. Ninetowns said its net income for the full year 2006 was US$5.9 million, compared to net income of US$18.8 million for the full year 2005.


Dell Inc (NASDAQ:DELL) said it has unveiled a low-cost computer specifically designed for the Chinese market and expected to help new users learn how to get online. The Dell EC280 is priced at between 2,599 and 3,999 yuan (US$335 and US$515) and was developed by engineers at Dell's China Design Center located in Shanghai. Earlier this month, Dell disclosed a 33 percent decline in its fourth-quarter profits. The company, however, is still ranked No. 3 in computer shipments in China and saw a 26 percent increase in revenues in Asia's second-largest economy last year. Dell, the world's number-two computer maker behind Hewlett-Packard, has manufacturing plants in China, Malaysia and India. Western computer companies are looking to Asia to offset weaker growth at home. To show how it values the Chinese market, Dell said it has also opened a corporate blog in Chinese.

Suning, a home appliance retailer, announced the setting up of its new administrative head office in southern China, in Guangzhou, Guangdong Province. The company said the new office will be responsible for the administrative issues of three provinces including Guangdong, Guangxi and Hainan. Zhou Xiaozhang, with the president's assistant at Suning, is to assume the position of Executive President of Suning's administrative head office in southern China. A company official said that the aim of the new Guangzhou head office is to complete the network of chain stores in Guangdong, Guangxi and Hainan to further expand its business, with the company saying that Suning plans to have more than 100 chain stores in these three provinces by the end of this year.


Axcelis Technologies, Inc. (NASDAQ:ACLS) announced the opening of its new, expanded national headquarters in Shanghai. Industry observers see the new facility giving Axcelis' rapidly growing customer base in China complete access to its industry-leading semiconductor manufacturing equipment, services and support. These resources include tool and applications expertise, spare and consumables parts management, productivity-enhancing upgrades, training and advanced process development. In 2006, Axcelis opened a major new Technology Center in Beijing, one of the fastest growing regions in China's burgeoning semiconductor industry. In addition to its operations in Beijing and Shanghai, Axcelis maintains a local presence in Zhangjiang, Tianjin, Suzhou and Wuxi. Axcelis also has facilities throughout the Asia-Pacific region, with direct offices in Taiwan, Korea, Singapore, Malaysia and Japan. Axcelis Technologies, Inc., headquartered in Massachusetts, provides innovative, high-productivity solutions for the semiconductor industry.

Applied Materials (NASDAQ:AMAT) announced the opening its new Xi'an China Global Development and Technology Support Center with the aim of boosting its reach into China's electronics sector. Applied Materials has been in China for some 22 years and has seven offices located in Beijing, Kunshan, Shanghai, Suzhou, Tianjin, Wuxi and Xi'an, employing more than 500 people. The company provides sales and services for both domestic and international chip manufacturers at these locations. In Xi'an the company will perform product development, system localization, engineering and software support and sourcing throughout Asia-Pacific. The Center will also serve as a customer demonstration facility for 200mm wafer processing and Applied Materials' most advanced metrology and inspection products.


Industry sources indicated that China Unicom (NYSE:CHU) has secured a deal with Russia's TransTeleCom to jointly build an overland Sino-Europe optical cable with bandwidth of 10G bits. Sources said the cable is expected to help effectively counter the communications collapse risks brought by seaquakes. At the beginning of 2007, much of Asia's bandwidth capacity was negatively affected by quakes off the coast of Taiwan. Under the agreement, China Unicom and TTC can each deal with the end-to-end international service along the cable in their own country. The agreement is seen as helping China Unicom bring its service to Europe.

Disclaimer: IRG is not responsible for the accuracy of the news compiled within this article, which is based on publicly available information.