Chinese Tech Stock Weekly Summary

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

Internet

• China Finance Online [CFO] (JRJC) announced that it has formed an alliance with China Telecom (CHA) to deliver a variety of financial information services to more than 40 million broadband users across China Telecom's Internet platform and offline distribution network. Under the agreement, CFO and China Telecom will establish and maintain a co-branded financial channel on China Telecom's broadband portal Vnet, which also serves as the payment platform for China Telecom's broadband subscribers for various Internet value-added services. China Telecom will distribute CFO's products through the Vnet portal as well as its over 10 thousand business halls. The two companies said they will share the revenues according to the agreed-upon scheme under the agreement.

Mobile/Wireless

• ROK Entertainment Group, a British firm, announced that through its China subsidiary, ROK New Net, it has signed a cooperation agreement with Beijing Fone Net Information & Technology Co., Ltd. to provide mobile TV content to China Mobile customers. Under the agreement, ROK will provide video content to Beijing Fone Net, who is responsible for operating and implementing China Radio International's (CRI) mobile TV service. CRI is one of the nationwide mobile TV license holders in China and provides a streaming media mobile TV service to China Mobile customers.

• Linktone (LTON), a Chinese wireless value-added services company, announced that its shareholders have approved a plan to accept investment from Indonesia's PT Media Nusantara Citra Tbk. The company’s CEO stated that the deal will allow the two companies to undertake advertising and WVAS cross-selling initiatives in China as well as in other Asian countries. Earlier, Linkstone announced that the Indonesian firm will launch a partial tender offer in the U.S. The tender offer will be for up to 6 million of Linktone's outstanding American Depositary Shares.

• Kyocera (KYO) disclosed its decision to withdraw from the Chinese mobile market, a move that follows similar decisions from Japanese mobile phone manufacturers including Panasonic, Sony, Mitsubishi, Toshiba and NEC. With the decision, Kyocera will terminate the agreement with its Chinese partner China Zhenhua Technology with whom it set up a joint venture in China and transfer its stake in the venture to China Zhenhua Technology and a Hong Kong company, free of charge, in March. The decision will also see Kyocera giving up its creditor's right valued at 57.6 million yuan (US$8 million). In 2001, the Japanese company set up Kyocera-Zhenhua Communications Equipment Company with China Zhenhua in which it has invested more than 300 million yuan (US$41.7 million). After the withdrawal, Kyocera said it will concentrate on the North America Market.

• BroadWebAsia [BWA] disclosed that it has presented a formal proposal for investment in Linktone. Under the proposal, BroadWebAsia’s Brad Greenspan, the founder of MySpace.com, BWA or its affiliates will acquire not less than 60 percent of Linktone's outstanding shares using a combination of a tender offer for approximately 25 percent of the total shares outstanding of Linktone. The agreement also carries with it a commitment to purchase US$10 million of ADSs on the open market. The announcement said that BWA has proposed to contribute certain BWA media assets and strategic partnership arrangements to Linktone that it believes will diversify Linktone's current business, boost revenue streams and generate incremental cash flow. In the proposal, Brad Greenspan will serve as chairman of Linktone and BWA will elect four additional directors to the Linktone Board proposed by BWA.

• TD Tech Ltd, a joint venture between Huawei Technologies and Nokia Siemens Networks [NSN], announced its decision to offload its marketing, sales and service units to focus on research and development. The venture is working on the Chinese 3G wireless technology TD-SCDMA. Under the agreement, TD Tech will develop radio access products, which Huawei and NSN will integrate into their TD-SCDMA solutions. The report indicated that the two parent companies will take over marketing, sales and services previously done by TD Tech, a 51-49 joint venture formed by Siemens Communications Group and Huawei in 2004.

Telecommunications

• There are rumors in media that indicate China Telecom is undertaking efforts in promoting its C Net program. The rumor said that China Telecom is in frequent talks with the top management of China Unicom while it is also busy recruiting talent of CDMA network. A source from China Telecom disclosed that since last year, China Telecom has been focusing its eyes on the acquisition of China Unicom's C network. According to industry observers, China Telecom would soon announce the acquisition of China Unicom's C network in the middle of March, and complete the fund settlement of C network between March and August.

• China Netcom (Hong Kong) Operations Limited, an affiliate of China Netcom (CN), revealed its plans to launch an enterprise global network optimization solution in Hong Kong. According to its CEO, the solution will include network upgrading, Internet high-speed access, one-stop ICT outsourcing, software development, IDC and material backup. The company expects these services to contribute more to the company’s profit in 2009.

Software

• Cloakware, a U.S.-based security solutions company, announced its entering into a partnership with China-based MobileTech Limited to provide data safety services. Under the partnership, the security solutions firm will provide its Cloakware Server Password Manager [CSPM] to markets in the Greater China region; it allows enterprises to boost the protection of critical data, and complete identity management and compliance programs. CSPM delivers automated, cost-effective and auditable management of privileged and application-to-application passwords. This enables organizations to comply with the standards and legislation which require all passwords be updated on a regular basis. Earlier, Cloakware was acquired by Irdeto, which now enables the company to better develop and support this product globally.

Semiconductors

• WJ Communications (WJCI), a supplier of radio frequency products and solutions for the wireless infrastructure and radio frequency identification reader markets, announced it will start the shipment of TD-SCDMA Multi Chip Module chipsets to China in the first quarter of 2008. The company said additional deliveries are anticipated later in 2008 to support China's TD-SCDMA roll-out. Time Division-Synchronous Code Division Multiple Access is a 3G mobile telecommunications standard used in China.

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