Chinese Tech Stock Weekly Summary (4/28-5/4)

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

• • •

Technology

• A group of leading Chinese consumer electronics [CE] companies announced the formation of an industry consortium whose mission is to build and drive the adoption of the next- generation interactive television and home CE networking interface. This technology was tagged as DIVA, or Digital Interface for Video and Audio. DIVA technology embeds a reliable, high-speed bi-directional data transmission channel to allow the consumer to locate, connect and control various CE devices from a DIVA-enabled digital television [DTV]. DIVA interface will help streamline and simplify the connections among all technologies. Leveraging a single interface, DIVA standard promises to upgrade home networks to a new level-making DTVs the center of the home entertainment network.

Telecommunications

• China Mobile (CHL) and Samsung Electronics contributed products and services for the Beijing Organizing Committee for the Olympics. The two companies delivered 15,000 units of TD- SCDMA mobile phones, the required SIM cards and almost 3 million yuan (US$0.4 million) worth of communications fees and provided the relevant communications services. Officials and staff will use the mobile push-to-talk services during the Games, enabling them to receive information, watch mobile television and video-on-demand programs and enjoy the color ring back tones and wireless broadband Internet surfing services.

Mobile/Wireless

• China passes India in 2007 by adding the most new mobile subscribers in a single year. The world's populous nations are also among the fastest growing mobile markets, producing some 320 million new mobile phone subscribers in 2007 alone, an increase of more than 25 percent. China's mobile operators added about 2 million more new subscribers than India's wireless carriers, making China the fastest growing mobile market in 2007 by subscriber volume, and helping the country maintain its position as the world's largest mobile market.

Software

• China's software outsourcing market was worth 3.927 billion yuan (US$562 million) in the first quarter of 2008, an increase of 25.27 percent from the comparable period one year ago, but down 8.26 percent from last quarter of 2007. Shenyang-based enterprise resource planning software developer Neusoft took the first place of China's outsourcing market, with HiSoft and Insigma Technology ranking close behind it. The top ten software outsourcing companies held 35.6 percent of the market, slightly down 0.1 percent from the fourth quarter of 2007.

Internet

• The Nanhui District Government in Shanghai Municipality signed an agreement with Shanghai Mobile on the joint establishment of the District as a wireless city, with the project slated to be completed before the end of 2009. The project, which aims at offering informative wireless services to the local residents, includes the provision of wireless services for government affairs, which will ensure the provision of high efficiency services by the local government to the people, as well as a wireless business service, which will allow businesspeople to access various opportunities regardless of time or location. Finally, the project includes a wireless education service that will allow network users to share high quality educational resources.
• The gay and lesbian media company Gaydar is expanding its empire into China with a social networking portal that will target a gay population of more than 50 million people. The new brand GaydarNation China will launch later this year for the gay and lesbian communities across China, Hong Kong, Singapore, Taiwan and Malaysia. Gaydar's parent company, QSoft Consulting, is launching the site as a joint venture with the web and mobile media firm GoConnect. Go Connect has provided support for advertising on Gaydar's Australian website for six years, but will be using their existing relationships and market knowledge of China to set up GaydarNation China.

Hardware

• Apple (AAPL) has opened a new retail store in Shanghai, China, in partnership with Best Buy (BBY). The company will soon open a new store in Virginia, US, thus expanding its presence in various parts of the world. The Chinese store is Apple's first store-within-a-store in the country. China Tech News has quoted Apple as saying that it will soon open its own stores in the Sanlitun area and the Qianmen area of Beijing.

Internet

• U.S.-based CyberSource Corporation (CYBS) and China-based PayEase Technology Ltd. are collaborating to remove technical and logistical barriers in China’s eCommerce market. With a rapidly growing population of online consumers, the Chinese market is a key target for many leading eCommerce brands around the world. However, issues pose significant challenges for merchants wanting to enter the market. For instance, only 6 percent of Chinese citizens hold credit cards. The common electronic payment vehicles are Chinese debit cards, offered by over 20 different key banks in the country. Merchants seeking broad access to the market are required to integrate with each of these disparate institutions, in addition to satisfying regulatory requirements regarding licenses and domicile.
• BroadVision OnDemand Ltd., one of the wholly-owned subsidiaries of USA's BroadVision, Inc. (BVSN.OB) has signed a strategic cooperation agreement with HiChina. HiChina is one of China's largest Internet service providers. It will adopt BroadVision OnDemand's flagship product, the CHRM solutions, in its enterprise service projects, which means that the latter company will have a new channel to promote and sell its workforce relationship management platform in China.
• A recent sales force reorganization in response to competition is likely to hurt the growth prospects of mainland e-commerce company Alibaba.com at a time when international trade is declining. The company made the move in response to a recent initiative by rival Global Sources, which also provides online sourcing information and a transaction platform to bridge overseas buyers and mainland suppliers. Global Sources, historically, has been a high-end player with annual membership fees of as high as US$80,000. Alibaba.com's premier "Gold Supplier" membership costs 50,000 yuan (US$7,154) per year.

Semiconductor

• Semiconductor Manufacturing International Corp. (SMI) posted a bigger-than-expected net loss in the first quarter as the contract chip sector headed into a downturn and memory prices plummeted. The quarter loss included a US$44 million provision taken against its dynamic random access memory [DRAM] inventory and could deepen further if the company books a loss on the DRAM business that it plans to exit. SMI is focusing on higher-end logic and flash memory chips, used in gadgets such as digital cameras and portable music players. The commodity DRAM business carries a value of US$1.2 billion.

Media, Entertainment and Gaming

• The State Administration of Radio, Film and Television [SARFT] will attempt to expand its mobile TV standard, CMMB (China Mobile Multimedia Broadcasting), into foreign countries, as well as submit it for international mobile TV standard selection. SARFT is now cooperating with Middle Eastern telecom operator S2M in its effort to provide the standard abroad. S2M is a United Arab Emirates-based operator that provides mobile TV services to the Middle East and North Africa.
• Alcatel Shanghai Bell [ASB] recently won a contract from China Cable Television Network Co. to upgrade the dense wavelength division multiplexing [DWDM] system of the Beijing-to- Shanghai segment of its backbone optical transmission network. ASB received a 50 percent share of the project while Huawei Technologies received the remaining 50 percent.

Comments

[weng ho teng:]

Many of the trends discussed in this summary can be taken advantage of by owning MYST.OB.

One of the gems for 2008.

Do your reseach and be rewarded.

2008 May 07 02:54 PM