Chinese Tech Stock Weekly Summary

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 |  Includes: CDCAQ, LNVGY, NTES, PACT-OLD, TOMOY
by: IRG Ltd

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

Internet

• Netease (NASDAQ:NTES), the largest email service provider in China, announced its plans to offer a new email service that features unlimited capacity. Industry observers note that the offering from Netease follows China Yahoo’s own “Lifetime Emailbox. According to Netease, all the users of its email services can upgrade to enjoy this new service.

• CDC Corporation's (NASDAQ:CHINA) gaming subsidiary CDC Games announced that it has initiated the Online Games Alliance Against Piracy [OGAAP] in a bid to counter the piracy of online games in China. According to CDC Games, the goals of OGAAP are to establish a platform for industry participants and stakeholders to exchange ideas and share experiences; conduct market and technology research; propose industry-wide policies and practices; and lobby relevant government bodies and lawmakers to enact anti-piracy legislation. Part of the aim of the group is to promote public awareness of copyrighted online game usage and educate online game players about copyrighted content. The alliance is composed of the leading game developers including CCP of Iceland; Ons On Soft Company, Sonokong Company, T3 Entertainment, and Wemade Entertainment of South Korea. CDC Games is also actively recruiting others in the online game industry to join OGAAP in this united front against piracy. OGAAP, with headquarters in Beijing, plans to work closely with the country’s governmental organizations including the China Game Publishers Association as well as authorities overseeing press and publications, copyrights, and intellectual property rights implementation

. • Industry sources said that businesses in Chongqing have set up a Credit Archive on Alibaba's e-commerce platform. The move is described as a way to counter risks coming from dubious online transactions. Media sources quoting Alibaba has described the Credit Archive as indicating the credit records of foreign trade enterprises. By combing the traditional credit certifications and the interaction on the Internet, the credit archive shows the credit situation of each enterprise. The process makes the information more accessible to clients and exposing potentially hazardous companies at the same time.

• Industry sources are quoting Sol Trujillo, CEO of Telstra Corp (OTCPK:TLSYY), who disclosed that Soufun, an online real estate service provider, will expand its business to 100 cities by the end of 2008. The report also said that Soufun will then be preparing for an IPO. Telstra holds 51 percent stake in Soufun. Telstra acquired the stake in Soufun in a deal valued at US$254 million, which paved the way for Telstra to be in the Chinese market.

• McDonald (NYSE:MCD) China announced that it is available now by way of a special section on Chinese online auction site Taobao.com. According to McDonald, the rapid development of online shopping was one of the factors that pushed the fast-food giant to consider serving the Chinese consumers through online platform.

• YeePay, a Chinese online payment company, announce that it has entered into a partnership with EachNet, an online auction web site. Under the partnership, YeePay will provide payment solutions for Eachnet's newly re-launched consumer-to-consumer online marketplace. The new EachNet setup is a joint venture of eBay (NASDAQ:EBAY) and Tom Online (NASDAQ:TOMO). The arrangement will see YeePay as the sole payment provider for EachNet, where the YeePay’s payment service will be integrated with EachNet’s escrow service called An Fu Tong. The arrangement will enable YeePay to manage the money flows for EachNet's escrow payment service, which allows buyers and sellers to send and receive payments. YeePay will also provide user identity verification service for EachNet.

Media, Entertainment and Gaming

• PacificNet, Inc. (PINK:PACT-OLD), a provider of Customer Relationship Management [CRM], mobile internet, e-commerce and gaming technology in China, announced that its PacificNet Games subsidiary has entered into a strategic alliance partnership agreement with Advansys, a casino management system provider. Under the agreement, PacificNet Games will deploy Advansys products in multiple Asian markets, customize existing products to meet local gaming requirements and co-develop new casino management systems for Asian casinos. As of the end of 2006, Macau has become the largest and fastest-growing gaming market in the world, and has surpassed the Las Vegas Strip in total revenues. According to statistics provided by Macau government, in 2006, Macau's gaming revenues reached US$7 billion, surpassing the Las Vegas Strip gaming revenues of US$6.6 billion. PacificNet, Inc. is a provider of gaming and mobile game technology, e-commerce, and Customer Relationship Management [CRM] in China. PacificNet's gaming products are specially designed for Chinese and Asian gamers with focus on integrating localized Chinese and Asian themes and content, advanced graphics, digital sound effects and popular domestic music, with secondary bonus games and jackpots. PactGames is based in Macau, with offices and operations in China, Hong Kong and the Philippines.

Software

• Cisco (NASDAQ:CSCO) China announced that it has secured an agreement to work with the Xiamen Municipal Government on the promotion of the development of Xiamen's information and communications technology. The agreement will particularly focus on the software industry and will be aimed at setting up a long-term and mutually beneficial strategic tie between Cisco and Xiamen. Under the agreement, Cisco will deploy its advanced TelePresence communications solution in Xiamen. Cisco TelePresence, underpinned by intelligent Internet Protocol based networks, helps enable people in different corners of the world to have unique and "in-person" communications with each other.

Hardware

• Media sources announced Lenovo’s (OTCPK:LNVGY) launching of a solar power-based desktop computer ThinkCentre A61e, reportedly much more environmentally friendly than past offerings. The computer has energy-saving features and is small in size. One outstanding thing about the computer is that Lenovo has set a low speed fan for the computer, which lessens the noise from the device. The report said 90 percent of the components of the computer can be recycled.

• Hewlett-Packard (NYSE:HPQ) announced its plans to speed up its expansion in other Chinese cities and get more Chinese to work for the company in the coming months. Industry observers see HP’s move as a response to the big demand the company is experiencing in the country. According to the senior vice president of HP's Personal Systems Group for Asia Pacific, the company sees its growth outside of the big cities while the company maintains strong presence in Beijing and Shanghai. By the end of August this year, HP had 8000 employees in China. According to IDC, HP has 13.4 percent of the PC market in the country.

Ventures/Investments

• Kingdee announced its signing of a joint operation agreement with YGL that will see the two parties jointly looking into the management software and market in Southeast Asia. Following the agreement, Kingdee and YGL will set up a joint venture company called Kingdee Southeast Asia Software Group Sdn Bhd. The agreement expects Kingdee Southeast Asia Software Group to implement Kingdee's localization plan in Southeast Asia and build systematic distribution partnerships in a bid to boost Kingdee's position in the market. Kingdee International Software Group is an enterprise management software and e-business solution supplier in the Asia Pacific region. It maintains corporate headquarters in Shenzhen, China and Asia Pacific headquarters in Hong Kong.

• British Telecom (NYSE:BT) announced its plans to widen its investment in China. According to BT International’s president, BT looks to investing at least US$70 million in the coming years to set up two R&D centers in China. The centers are to be set up in Dalian and Shanghai, respectively. The Dalian R&D Center will provide software development, service delivery and a range of support service to BT, serving the company's clients in China, South Korea and Japan. The Shanghai Center will be engaged in the development of new services and products. The two centers are valued at about US$100 million. BT currently maintains only two representative offices in the country; one is in Beijing and another in Shanghai.

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