Chinese Tech Stock Weekly Summary

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

Internet

• NetEase.com (NTES) announced its unaudited financial results for the quarter ended September 30, 2007, with its net profit for the quarter reaching 260.2 million yuan (US$35.1 million), compared to 312.6 million yuan (US$42.1 million) it posted for the preceding quarter. The Internet portal reported total revenues of 571.1 million yuan (US$77 million) for the third quarter of 2007, compared to 558 million yuan (US$75.2 million) for the preceding quarter. Revenues from online games, advertising and wireless value-added services revenues were 468.7 million yuan (US$63.2 million) and 85.5 million yuan respectively, compared to 475.1 million yuan (US$64.1 million) and 65.3 million yuan (US$8.8 million) for the preceding quarter. Total operating expenses reached 179 million yuan (US$24.1 million), compared to 142.8 million yuan (US$19.2 million) for the preceding quarter mainly to the rise in the spending on the promotion of promotion of Westward Journey Online III and Fantasy Westward Journey.

• Ctrip.com (CTRP) reported a 55 percent year-on-year rise in its net revenues to 323 million yuan (US$43.5 million) for the quarter ended September 30, 2007. The Internet travel services firm reported its hotel reservation revenues posting a 40 percent increase to 176 million yuan (US$23.7 million) and air ticket booking revenues went up 76 percent to 138 million yuan (US$18.6 million). As of September 30, 2007, Ctrip said its cash balance went up to 1.2 billion yuan (US$162 million), compared to 978 million yuan (US$132 million) as of June 30, 2007.

• China International Travel Service has entered a new cooperation with online payment service provider PayPal. The agreement will allow customers of CITS to use their personal PayPal account, debit card, bank card or credit card to fulfill travel-related payments. CITS is a company that provides hotel reservation, air ticket booking and other travel related services to tourists from both home and abroad.

• According to media reports, Baidu (BIDU) may consider listing shares in Hong Kong, with the reports quoting the top company official as saying that the listing would enhance the company's profile and help fund expansion into new areas such as online auctions. Industry observers see the comment as following the successful IPO of Alibaba.com.

• China.com, a Hong Kong listed subsidiary of CDC Corporation (CHINA) announced that it has secured an advertising contract with Giant Interactive Group Inc. (GA), one of the leading online games developers and operators in China. The advertising campaign for Giant will run on China.com’s newly enhanced game channel. The China.com game channel is designed as a comprehensive game portal and an interactive gaming platform. It provides game players with detailed information about popular multiplayer online games and enables them to form game communities. The game channel also provides operators with a platform to advertise their MMO (Massively Multiplayer Online) games to millions of game players in China and allows domestic and overseas game operators to launch their browser-based games. Giant Interactive Group, Inc. focuses on massively multiplayer online, or MMO, games that are played through networked game servers. China.com was chosen as the first company to host Google's Video Adsense which serves video ads targeted at China's English-speaking audience.

Media, Entertainment and Gaming

• NCsoft Corporation and Shanda Interactive Entertainment Limited (SNDA) announced entering an agreement, which gives Shanda an exclusive license to operate NCsoft's 3D MMORPG AION: The Tower of Eternity [AION] in mainland China. The closed beta testing for AION began in October, 2007 in South Korea, and closed beta testing in China is expected to begin in the second half of 2008. NCsoft and Shanda also announced a strategic alliance that will make Shanda a strategic investor of NCsoft's Chinese subsidiary, NCsoft China. NCsoft Corporation said it has been working toward expanding the global markets and today has its own development and/or publishing offices in North America, United Kingdom, Japan, China, Taiwan, and Thailand.

Mobile/Wireless

• Beijing Mobile announced that it has recently launched four types of call billing inquiry services for its consumers. The four are paper bills, electronic bills, short message based bills and multimedia messaging service based bills, all of which are free for clients. The services are expected to provide clients more choices in how they want to be informed of their payment details. All of them are free for consumers, and give consumers more choices in how they want to be notified of payment issues. Beijing Mobile is an affiliate of China Mobile (CHL).

• China GrenTech Corporation Limited (GRRF), a China-based radio frequency [RF] and wireless coverage products and services provider, announced for the third quarter ended September 30, 2007 a 45.5 percent rise in its revenue to 273.2 million yuan (US$36.5 million) over preceding quarter. Its revenue from base station RF business and wireless coverage products and services went up 19.6 times to 78.7 million yuan (US$10.5 million) over same quarter last year and revenue from wireless coverage products and services increased to 194.5 million yuan (US$26 million). Net income also registered a 7.8 percent rise to 33.1 million yuan (US$4.4 million).

• Responding to the report about China Mobile being broken up, the company’s chairman said the company expected the government to consolidate the telecom industry but not the break up of China Mobile. The chairman also stressed that China Mobile will in fact be stronger and bigger. The government, however, has not announced anything yet about the reorganization of the telecom industry.

Software

• AsiaInfo (ASIA) announced that it has secured a contract with China Telecom (CHA) to develop a customer relationship management system in Xinjiang. The CRM system is a part of Xinjiang Telecom's next generation Business Operation Support System [BOSS]. Under the agreement, AsiaInfo will develop a CRM system to cover 14 cities and regions of Xinjiang. AsiaInfo will also supervise the integration of the entire BOSS system consisting of CRM, Billing and Operation Support System and other peripheral systems.

Ventures/Investments

• ZTE Corporation announced that it has begun the setting up of an industry base in Tianjin's Binhai New Area, which involves an investment of some 5 billion yuan (US$674.6 million). According to the company, the ZTE's Tianjin facility will work on the development of RFID, laser TV and laser display technology, and Wimax. The center is expected to have an annual output value of more than 10 billion yuan (US$1.3 billion) and is scheduled to be finished by 2011.

• Digital China, an ERP (Enterprise Resource Planning) business provider, announced that it has set up two joint venture companies, each of them carrying an investment of some 10 million yuan (US$1.3 million). The joint venture in Heilongjiang was formed between Digital China and Harbin Science & Technology Developing Company, one of the largest IT companies in the province. The venture in Anhui was formed between Digital China and Anlian, a major computer provider in Anhui Province.

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

Comments

[omooc:]

Any news on LDK? omooc

2007 Nov 14 09:48 PM

[frenchtycoon:]

your analysis is most enlightening...sheds light on our decision making process. Merci

2007 Nov 14 11:09 PM

[frenchtycoon:]

your analysis is most enlightening...sheds light on our decision making process. Merci

2007 Nov 14 11:09 PM

[frenchtycoon:]

your analysis is most enlightening...sheds light on our decision making process. Merci

2007 Nov 14 11:09 PM