• 51job.com (JOBS), an online recruitment web site, released its unaudited financial results for the first quarter of 2007 ended March 31, 2007 indicating that its total revenues has climbed to 200.5 million yuan (US$26.1 million). The results follow the guidance announced by the company. The company said print advertising revenues for the first quarter of 2007 went up 6.5 percent to 113.6 million yuan (US$14.7 million) compared with 106.7 million yuan (US$13.8 million) for the same quarter in 2006, which the company ascribed primarily to a greater volume of advertisements in 51job Weekly which was partially offset by lower average revenue per page. Its online recruitment services revenues for the first quarter of 2007 went up 26.9 percent to 61.6 million yuan (US$8 million) from 48.5 million yuan (US$6.3 million) it posted for the same quarter last year. Operating expenses for the first quarter of 2007 were 62.7 million yuan (US$8.1 million) compared with 56.1 million yuan (US$7.3 million) for the same quarter last year. Its net income for the first quarter of 2007 increased 21.3 percent to 32.2 million yuan (US$4.1 million) from 26.5 million yuan (US$3.4 million) for the same quarter in 2006.
• Baidu.com (BIDU), the largest Chinese search engine service provider, announced that it is offering a large scale website ranking program that will provide web site certification rankings for its 110,000 partner web sites. Observers see the launching of the new service as a way for Baidu to face its rival Google (GOOG). According to Baidu’s preliminary quarterly results, its partner web sites have earned more than 70 million yuan (US$91.1 million) in 2006. With the launching of the service, the partners even forecast to derive more income share from Baidu.com.
• Ninetowns (NINE) announced the launching of tootoo.com, the company’s new business-to business vertical search platform. According to the company’s top official, tootoo.com will be the cornerstone of Ninetowns' new B2B strategy of providing vertical search and trade services. Ninetowns said tootoo.com is built upon its market intelligence in business-to-government trade processing and its experience in evaluating supplier capabilities for companies ranging from small businesses to large multinational corporations. Industry observers state that, by leveraging this foundation with the recent acquisition of Ample Spring and strategic partnership with ThomasNet, tootoo.com is positioned to become a leading edge B2B search and service provider. In addition to the core search services, tootoo.com will also offer value-added services such as MeiMaoTong, which is a customized catalog solution provided through Ninetowns' recent strategic partnership with ThomasNet.
• PacificNet (PACT-OLD) announced that it will sell its entire 51 percent ownership in Guangzhou 3G IT Company to HeySpace International Limited in a deal valued at US$6 million. According to the CEO of PacificNet, the “strategic” sale is in line with its “new focus on gaming.” The sale will be paid in cash in five installments over seven months. PacificNet acquired 51 percent of controlling interest in Guangzhou 3G in March of 2005 for US$5.5 million, which was paid partially in cash and mostly in PACT stock. Based in Guangzhou and Hong Kong, HeySpace International Limited is one of the many social network services and virtual community service providers operating in China.
• Sohu.com (SOHU) reported its unaudited financial results for the first quarter ended March 31, 2007, declaring total revenues for the first quarter declining to US$33.1 million, compared to revenues of US$34.4 million for the fourth quarter ended December 31, 2006, and up from US$30.4 million for first quarter ended March 31, 2006. Sohu posted net income of US$4.5 million for the first quarter of 2007. Non-GAAP net income for first quarter of 2007 was placed at US$7.0 million compared to non-GAAP net income of US$8.1 million and US$7.8 million for first quarter of 2006. Sohu said its advertising revenues for first quarter of 2007 totaled US$25.6 million, representing a 27 percent year-on-year increase and a 3 percent quarter-on-quarter increase.
Media, Entertainment and Gaming
• CDC Games, a business unit of CDC Corporation (CHINA) and pioneer of the "free-to-play, pay-formerchandise" model for online games in China, announced the launching of its open beta program for Special Force, the first free-to-play, pay-for-merchandise FPS (first person shooter) game in China. Industry sources said that Special Force was recently ranked as the top online game in Korean Internet cafes for more than 50 consecutive weeks and provides CDC Games with first-mover advantage in securing significant market-share in the FPS category of online gaming in China. Special Force, which was developed by Dragonfly, has been deployed into 9 Internet Data Centers in China in Anhui, Dongguan, Xian, Qingdao, Zhengzhou, Shenyang, Shanghai, Tianjin and Chengdu on China Telecom and China Netcom. Users from around the country can download the client for free, which is available via China content distribution networks. The open beta of Special force will also be promoted in over 1,200 Internet cafe events in more than 100 cities across China during May. Special Force is a first person shooter online game that originated in Korea. CDC Games is targeting the commercial launch of Special Force before the end of the second quarter 2007. The CDC family of companies includes CDC Software is focused on enterprise software applications and services, CDC Mobile is focused on mobile applications, CDC Games is focused on online games, and China.com is focused on portals for the greater China markets. CDC Games is one of the market leaders of online and mobile games in China with over 46.5 million registered users.
• China Unicom (CHU) said it has finally introduced its new IM (Instant Messaging) software called Chaoxin, a comprehensive instant communications service. It enables users to enjoy instant messaging services, including emoticons, graphics and voice communications through BREW-enabled devices, PCs, short message terminals, WAP client terminals, and IVR client terminals. There are currently many instant communications software on the Chinese market, including QQ, MSN, POPO, and ICQ. China Unicom was the first to announce its plan to launch its instant messaging service although China Mobile got to launch its competing IM system called Fetion.
• Qualcomm (QCOM) and Lenovo Mobile, a subsidiary of Lenovo Group (OTC:LNVGY), announced entering into a subscriber unit license agreement to cover WCDMA subscriber products. An official of Lenovo Mobile declared that “this license agreement with Qualcomm, the leader of CDMA technologies, will help us deliver the best mobile-product experience possible, while enabling Lenovo to offer new and more flexible products to fulfill consumers' diverse connectivity needs.” Under the terms of the worldwide royalty-bearing agreement, Qualcomm granted Lenovo Mobile a patent license to develop, manufacture and sell WCDMA subscriber units for high-speed broadband wireless access. The royalties payable by Lenovo Mobile are at Qualcomm's standard worldwide rates. Additionally, the two companies intend to cooperate in the development of certain subscriber unit products incorporating CDMA technology.
• Nokia (NOK) said it has secured a phone order valued at US$2.5 billion from China’s largest distributor China Postel for deliveries during 2007. Nokia said some of the phones have already been delivered. Nokia and China Postel also said the companies’ look to enhancing their strategic ties. China Postel has already distributed more than 37 million Nokia mobile phones across China since 1998. The Finnish firm, which sells more than a third of all mobile phones across the world, maintains a strong position in emerging markets like China. According research firm GfK, Nokia’s share of the Chinese market topped 35 percent in late 2006.
• Even as companies are opting to place Linux in their computers, Lenovo has announced its move to work with Microsoft (MSFT) to promote the benefits of validly licensed Microsoft software products through joint sales, marketing and training programs in China and around the world. Under the agreement, the two firms are continuing their strategic business partnership with the aim of protecting intellectual property. Industry observers also see the agreement as allowing customers to enjoy the Windows capabilities they expect, and take advantage of ongoing system improvements that let them do more with their PCs. Lenovo sells pre-installed genuine Microsoft software on its PCs sold in more than 65 countries and regions around the world.
• TechnoConcepts, Inc. (TCPS.OB) announced that its Chinese subsidiary, Jinshilin Techno Ltd. (Jinshilin), has signed an expanded Memorandum of Understanding [MOU] with Changzhou Xingqiu Electronic Co., Ltd. (Xingqiu). Xingqiu is one of China´s largest Home Entertainment manufacturing companies, concentrating on the design, sale and production of high-quality communication devices, high-volume electronics, and other audio and video products. Under this expanded MOU, Xingqiu has agreed to assist in the development of Jinshilin´s IPTV set-top box by providing manufacturing engineering and design of IPTV product cases and circuit boards. Both parties have agreed to co-develop marketing and engineering plans for the development of next generation IPTV set-top boxes. Additional functionality that the parties intend to include in their products includes: High Definition, 5.1 Stereo Surround Sound, ‘Last Mile’ access via WiMAX, and Femto Cell capability and adoption of China´s new AVS standard for video communications. Xingqiu has also agreed to provide the financial resources necessary to fulfill contractual production obligations.
• Semiconductor Manufacturing International Corporation's (SMI) reported sales for the first quarter of 2007, climbing to US$388.3 million from US$383.8 million in the fourth quarter of 2006. The company also posted a decrease in capacity to 177,150 8-inch equivalent wafers per month and a utilization rate of 86.2 percent in the first quarter of 2007. It declared a net income of US$8.8 million in the first quarter of 2007, compared to a net loss of US$9.6 million in the first quarter of 2006 and a net income of US$0.1 million in the fourth quarter of 2006.
• Tsinghua Science Park Development Center announced a RMB10 billion-fund support (US$1.3 billion), which is aimed at excellent enterprises dubbed "diamond enterprises." To pursue this, Tsinghua Science Park said it has set up branches in Kunshan, Xi'an, Nanchang, Beijing, and Shanghai and is contacting high-tech zones in Shenzhen, Dalian and Weihai to promote the support policy to each of these branches. An official said to be part of the “diamond enterprises, enterprises should be marked by self-innovation and possess self-owned intellectual property rights. Other requirements include that they must be a leader of their sector and must have reciprocal relations with institutions of higher learning. The first batch of ten "diamond enterprises" include GigaDeivce Semiconductor Inc, THUNIP Holdings Limited Company, Sumavision, Spreadtrum, Highlander, ChineseAll.com, Smartdot, Trry, Net.cn, and Cttnet.cn. According to an official, there are more than 400 innovation firms in Tsinghua Science Park, and 45 of them have applied to join the Diamond Plan, but these ten became the final winners. Tsinghua Science Park looks to training from three to five diamond enterprises that possess world-class technology and have them listed on NASDAQ or main boards in the domestic Chinese market.
• Chinese electronics retailer Suning disclosed its investment of some 730 million yuan (US$95 million) in the acquisition of two properties in Shanghai and Wuhan, respectively, for flagship store construction. The two properties Suning purchased are located at Shanghai Pudong Yuandong Plaza and Tower B and Tower C of Gonghang Square at Wuchang in Wuhan. Excluding tax, Suning said it has spent 532 million yuan (US$69.3 million) on the Shanghai property and 204 million yuan (US$26.5 million) on the Wuhan property. The company said that it would use most of the two properties for building flagship stores and lease the rest to other businesses. Suning said that they would develop franchise stores and boost their brand awareness in core business areas of key cities in the future through self-building and purchasing properties.
• Industry sources said that China Unicom, the second largest mobile service provider in the country, is planning to make an investment worth some 70 million yuan (US$9.1 million) in order to build a WiMax experimental network in 21 provinces in China. The reports noted that that China Unicom started WiMax a long time ago and is now testing on some relevant nodes on the network. No details were released as to when the full roll-out of the service will begin.
Disclaimer: IRG is not responsible for the accuracy of the news compiled within this article, which is based on publicly available information.