Chinese Tech Stock Weekly Summary

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

Internet

• East Star Air, a private airline company in China, has announced plans to enter into a partnership with the online third-party payment service provider YeePay to introduce the latter's e-payment platform to its ticket distribution network. The cooperation between the two parties is expected to enable users to easily book an air ticket online or through a phone call. The introduction of YeePay's online payment service is seen as putting the company in a more advantageous position in the aviation travel market.

• Sohu.com (SOHU) announced the media collaboration and other key programs the company has set up in relation to Sohu's role as the Official Internet Sponsor of the Beijing 2008 Olympic Games. As the sole Internet Sponsor and operator of the official website of the Beijing Olympics, Sohu thus becomes the only Chinese online media company to have exclusive access to premier Olympic content. Under this plan, Sohu is announcing an exclusive collaborative agreement with the nation's top 15 newspapers in setting up a media alliance for the Beijing 2008 Olympic Games. The members of the alliance can thus be part of Sohu's journalist team and share their resources to provide extensive Olympics-related coverage and reporting.

• IPC announced its completion of what it described a “resilient” international network ring connecting Hong Kong, Shanghai and Beijing. The completion of the ring is seen as boosting domestic communications between trading partners in Shanghai and Beijing and facilitates global connectivity into and out of mainland China. Combined with On-Net domestic connectivity, the resilient architecture assures sub-second service restoration in the event of any network fault. IPC is committed to providing highly available connectivity services across its wholly owned secure global network. More than 105,000 traders worldwide rely on IPC products and services every day to ensure continuity of voice trading. IPC Network Services now has 20 PoPs in Asia Pacific alone including Hong Kong, Shanghai, Beijing, Taiwan; two in Singapore, Tokyo, Seoul, Kuala Lumpur, Bangkok, Jakarta, Manila, Auckland, Wellington, Melbourne, Adelaide, Brisbane, Perth; and two in Sydney. For this most recent project, IPC partnered with China Telecom Corporation to build the infrastructure and deliver On-Net services.

Media, Entertainment and Gaming

• A group led by China Mobile (CHL) that includes a number of wireless value-added service providers such as Sina.com (SINA), Tom.com (TOMO) and Kongzhong.com (KONG), announced the formation of a non-profit institution called Monternet Credit Consensus Alliance. The group said they have released a public letter expressing their aim to promote the healthy and sustainable development of Monternet through this alliance. Monternet Credit Consensus Alliance will implement three concrete measures following their foundation. One of these measures is the creation of a complete agent supervision mechanism to keep track of and identify problems existing in the industry and hand over the supervision results to the alliance members for a solution. The group also aims to keep their information transparent and to be open to the media and the public.

• NewMarket China, Inc., the China regional subsidiary of NewMarket Technology, Inc. announced that it has secured a contract with Energy Source Communications of Shanghai, China. Energy Source is a leading high-tech multimedia company providing computer graphic design and interactive advertising and marketing campaigns in China for major multi-national companies. Under the agreement, NewMarket China and Energy Source will provide multimedia-outsourcing services to customers in North America and other places. NewMarket provides certified integration and maintenance services to support the prevailing industry standard solutions to include Microsoft, Cisco Systems, SAP, Siebel, Oracle and Sun Microsystems. NewMarket China, Inc. is a leader in the rapidly developing Chinese software engineering market providing high quality outsourcing services to global customers. In addition, the firm is a systems integrator and value added reseller of major global hardware brands in the Chinese domestic market.

Software

• Shanghai Baosight Software Company released a statement indicating its plan to enter into a strategic cooperation agreement with Microsoft (MSFT) in April, making the Chinese software company the sixth strategic partner for the global software giant in China. The other five strategic partners Microsoft has signed with are Digital China, Lanchao, Chinasoft International, Powerise and Insigma Technology. Baosight was established in April 2000 and became a listed company in April 2001. The headquarters of the company are located in Shanghai Pudong Zhangjiang High-Tech Park.

• AsiaInfo (ASIA) announced its signing of contracts that will allow it to upgrade the business and operation support systems of China Mobile’s Jiangxi, Tibet, and Inner Mongolia subsidiaries. Designed in compliance with China Mobile's BOSS 2.0 specifications, the new system offers end-user oriented service management while supporting handset management and prepaid users' default risk control. AsiaInfo said it will continue to offer leading technology and services to our customers as they evolve their platforms to support next generation networks and services.

• UFIDA, a software maker, announced that it is working with IBM (IBM) to boost its presence in new global markets. Under its program, IBM is looking to deploying its business application on open technologies and is tapping into IBM's global network of sales and marketing experts. IBM said it aims to discover new business opportunities in several places including Hong Kong, Japan and Singapore. One of the key challenges facing companies that are looking to expand their presence globally is the need to build on their open standard technologies. Proprietary software hinders the ability to sell in global markets due to IT, government and language restrictions. Before this agreement with IBM, UFIDA's business solutions were based solely on Microsoft's .NET/SQL technology. To continue growing its business, UFIDA says it identified the need for an open platform as a key factor in achieving global success.

• CDC Corporation (CHINA), a company working on global enterprise software and China New Media, which includes mobile applications, online games and a portal for the China market, announced that its total revenue for the fourth quarter of 2006 went up by 43 percent to US$89 million from US$62.3 million in the fourth quarter of 2005. The company posted a 34.8 percent rise in its total revenue from CDC Software for the fourth quarter 2006 to US$68.1 million from US$50.5 million in the fourth quarter of 2005. Total revenue from the China New Media Business Unit for the fourth quarter of 2006 was US$20.9 million, an increase of 78.6 percent from US$11.7 million in the same quarter in 2005. Online game revenue was US$10.7 million in the fourth quarter of 2006.

Hardware

• Gome, an electronics retailer, revealed its plan to stop its expansion and with it the cancellation of its decision to open more stores in the Southeast Asia region. A Gome official said that with the change in strategy, the company is also closing 40 stores in different cities. These stores have been reportedly making losses. Following its acquisition of Yongle last year, Gome opened more than 200 new stores in a short period of time, but the company has decided not to focus on the task of increasing store numbers and instead, to pay attention to increasing its profit. The company is aiming to have its sales volume hit 100 billion yuan (US$13 billion).

Semiconductors

• STMicroelectronics (STM) announced entering into a five-year agreement with the Chinese Academy of Science's Institute of Computing Technology [ICT] to sell China's homegrown Loongson processor in markets around the world. Under the agreement, the first chip to be offered by STMicroelectronics will be ICT's Longsoon-2E, a 1GHz processor that is manufactured using a 90-nanometer process. Before the agreement, ICT relied on a spin-off company, BLX IC Design Co., to market the Loongson chips to customers. Marketed as offering the same performance as Pentium III and Pentium 4 processors, the Loongson processor family has been having difficulty finding its niche in the market, partly because the chips do not use the x86 instruction set used in chips from Intel and Advanced Micro Devices. Instead, the Loongson chips use an instruction set based on MIPS, which is not able to run the full version of Microsoft's Windows operating system and other software commonly used on PCs. Over and above this hitches, STMicroelectronics has signed a licensing agreement with MIPS Technologies for the MIPS64 architecture as part of plans to sell the Loongson chips around the world.

• Following the announcement in the media about Intel’s (INTC) plans for Dalian, the global chip maker made a formal announcement for its plans to build a 300-millimeter wafer fabrication facility in the coastal city. According to Intel president, the US$2.5 billion investment for the factory designated Fab 68 will become Intel's first wafer fabrication facility in Asia. Intel has been involved in China for more than 22 years and over that time the company has invested more than US$1.3 billion in assembly test facilities and research and development. This new investment will bring Intel’s total investment to just under US$4 billion, making Intel one of the largest foreign investors in China. Construction on Fab 68 is scheduled to begin later this year with production projected to begin in the first half of 2010. Initial production will be dedicated to chipsets to support Intel's core microprocessor business. When completed, Fab 68 will become part of Intel's manufacturing network that includes eight 300mm factories in 2010 with other fabrication facilities located in the United States, Ireland and Israel.

• ON Semiconductor (ONNN) announced its decision to set up a joint power laboratory to develop efficient and energy-saving power solutions for LCD, plasma and CRT TV series with China's Hisense. The laboratory is located at Hisense's research and development center in Qingdao, the lab will focus on leveraging ON Semiconductor's strengths, expertise and experience in innovative, energy-saving solutions for Hisense TV products, especially LCD TVs. ON Semiconductor will assign resident field application engineers to the joint lab to work closely with Hisense product R&D and power supply teams to enable timely TV power solutions to be developed and utilized. Hisense is a top brand in electronics and ON Semiconductor says Hisense has recognized that power management is one of the key technology enablers for future success.

Information Technology

• CCID Consulting Co., Ltd, China's leading research, consulting and IT outsourcing service provider, the first Chinese consulting firm listed in Hong Kong, announced the release of its 2006-2007 Annual Report on China's Data Communications Market. The report mentioned about six core elements related to the growth of data communications in China. It noted that Broadband has become the core driving force for data communication services. It underscored SMS as a new driving force for data communication services. CCID said IPTV has become very popular, with operators starting trial operations. Fixed operators have been noted to search for new technologies to develop mobile data services. The report also stated that Mobile operators have entered the media field seeing its potentials. CCID Consulting Co., Ltd is the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange [GEM] of Hong Kong. The company is a direct affiliate of China Center for Information Industry Development. Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen and Harbin, with over 300 professional consultants and industry experts. The Company's business scope has covered over 200 large- and medium-sized cities in China. Apart from home market development, CCID Consulting is establishing international cooperation links across the United States, the Asia-Pacific region and Europe, by setting up agents in the U.S., Japan, South Korea, Australia, Singapore, Italy and Russia, with the aim of going global.

• ObjectVideo, Inc., the leader in intelligent video, and Texas Instruments Incorporated [TI] announced a strategic win with Hangzhou Hikvision Digital Technology, the leading provider of video surveillance products in China. Through this partnership, Hikvision will incorporate ObjectVideo's award-winning smart analytics technology running on a TI digital signal processor-based [DSP] platform into its video products. The technology is licensed through WPG System, the ObjectVideo OEM distribution partner for the Asia Pacific region. Hangzhou Hikvision Digital Technology is headquartered in Hangzhou, with subsidiaries in Beijing, Shanghai, Guangzhou, Shenzhen, Chendu, Xian, Shengyang, Wuhan, Shijiazhuang, Nanjing, Chongqing, Zhengzhou and offices all over China. Hikvision is dedicated to the continuous research and development of video encoding/decoding, and video processing technologies, as well as to provide the market with highly reliable digital surveillance products. With more than 700,000 channels of video analytics sold worldwide, ObjectVideo is the leading provider of intelligent video software. WPG System, a member of Singapore-based WPI International and Taiwan's WPI Group, is a technology development company specializing in identifying emerging technologies for vertical and horizontal markets.

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