Chinese Tech Stock Weekly Summary

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

Internet

• Netease (NTES) announced that it has initiated the construction of an R&D Center in Hangzhou. The construction followed more than a year of planning and, according to the company, involved some 300 million yuan (US$41.1 million) in investment. Netease said its R&D Center in Hangzhou will mainly focus on the development of Internet technologies for computer games and blogging services as well as the operation of new products. The center is predicted to become the largest one for the company.

• Alibaba Group revealed its decision to combine the group's human and material resources in the coming three to five years as it begins a strategy focusing on talent. The company said it is also forming a team to respond to the changing e-commerce market. Media sources appear to validate this move as they report that four executives from Alibaba, including its COO Li Qi, CTO Wu Jiong, Executive Vice President Sun Tongyu and Senior Vice President Li Xuhui, will collectively resign from their current positions and spend time studying. The leave of the four executives is said to be part of Alibaba's newly launched talent strategy. Alibaba also disclosed that it will call back Zeng Ming, president of Yahoo (YHOO) China, to work as chief of staff for the group, transfer Senior Vice President Lu Zhaoxi to work as president of Taobao.com, Senior Vice President Jin Jianhang as president of Yahoo China, and vice president Shao Xiaofeng as executive president of Alipay. The company, however, has not said anything about who will be its candidates for the positions of COO and CTO.

Media, Entertainment and Gaming

• Broadcasting in English and Japanese with Chinese captions, the International Channel Shanghai [ICS] becomes the first foreign-language TV channel in China that is not operated by China Central Television [CCTV], the state TV system. According to its spokesman, the channel, run by the Shanghai Media Group [SMG], will serve the 2010 World Expo to be held in Shanghai. The metropolis has 150,000 foreign residents and gets 6 million foreign tourist arrivals every year. The World Expo in 2010 expects visitors to top 70 million.

• U.S.-based Spreadtrum Communications Inc. (SPRD) and China-based companies Amoi Electronics Co. Ltd. and Beijing Kuro Times Tech Co. Ltd. have announced what industry observers believe to be China's first solution for music phones offering copyrighted music. The solution is specifically designed for the growing mobile music market as it brings high quality copyright protected music to Chinese mobile handset users. The solution also ushers in the convergence of the so-called 4Cs (i.e. communication, chip, content and copyright) in music phones. Kuro is a music service provider legally authorized by most record companies for millions of online copyrighted songs, providing high quality music download services. Through the cooperation, Spreadtrum will embed Kuro's services into its chipset platform, so that the mobile phones equipped with Spreadtrum's chips can enable the functions of a multimedia player and online music download services.

• Focus Media (FMCN) announced the completion of its acquisition of CGEN Technology Company Limited. Following the share purchase agreement in December 2007, Focus Media made a cash payment of US$168.4 million to the CGEN shareholders for 100% of the equity interest in CGEN. Focus Media is one of China's leading multi-platform digital media companies, operating the largest out-of- home advertising network in China using audiovisual digital displays, based on the number of locations and number of flat-panel television displays in its network. The company is also a leading provider of mobile handset advertising and Internet marketing solutions in the country.

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