The following is excerpted from IRG's weekly stock report:
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- Baidu Inc. (NASDAQ:BIDU) has entered into a mobile search tie-up with Nokia Corp. (NYSE:NOK). Baidu will provide a China mobile search platform for Nokia's new "Widsets" service, and the product will be pre-loaded in Nokia handsets. Financial details of the tie-up were not provided. The report quoted an analyst as saying that the Widsets service has over 4 million subscribers in China, with the partnership bringing Baidu more mobile customers.
- Telstra (TLS) announced its acquisition of 55 percent stakes in two Chinese online companies, in a move that extends its online business in China. Telstra acquired the stakes in Norstar Media and Autohome/PCPop. Norstar Media operates the popular Chinese automobile device portal Che168.com, while Autohome/PCPop operates an automobile portal, Autohome.com.cn, and a digital devices portal, PCPop.com. All three sites offer information to prospective consumers, including price comparisons, new product reviews and industry news, and each derives its revenue from advertising. Telstra now owns majority interests in three of the leading Chinese companies operating in the three key online advertising industry segments: real estate, auto and digital devices.
- Oak Pacific Interactive Corp., China's second-largest operator of social networking Web sites, may buy more Internet companies before seeking an initial share sale in about two years. Oak Pacific plans to use the US$100 million it received from Japan's Softbank Corp. (OTC:SFBTF) for acquisitions. Oak may target publicly traded Chinese Web companies that have underperformed and generate annual revenue of about US$50 million to US$100 million. Chen aims to take advantage of a stock market rout that wiped out about US$6 trillion in value worldwide last month to expand in a country that the Chinese government estimates to have the world's largest number of Internet users.
- China Mobile (NYSE:CHL) will likely expand its TD-SCDMA network coverage to 20 cities before the end of this year, and to 90 percent of the population within three years. The remainder of the population in remote and undeveloped areas will likely use China Mobile's existing GSM network, he said. TD-SCDMA subscribers traveling to these areas can have uninterrupted services by using TDSCDMA/GSM dual-mode phones. It is currently rumored that China Mobile is expected to launch a new TD-SCDMA equipment tender worth 30 billion yuan (US$4.37 billion) in October this year. China Mobile has already spent 14.2 billion yuan(US$2.07 billion) building TD-SCDMA trial networks in eight major cities. It is also set to acquire TD-SCDMA trial networks set up by China Telecom (NYSE:CHA) and China Network (CN-OLD) in Baoding and Qingdao.
- China Mobile has applied for membership in the TD-SCDMA Industry Alliance. China Mobile, which is dealing with related procedures, will become the first telecoms operator in the nation to take part in the alliance if its application wins approval. However, the news has not been confirmed by China Mobile yet. As a TD-SCDMA network operator, China Mobile will be able to familiarize with the upper stream of the TD-SCDMA industry and straighten out R&D, manufacture and operation, said market observers. China Mobile has been working on the scheme of building a nationwide TDSCDMA coverage.
- According to statistics released by the Ministry of Information Industry, China had more than 950 million telephone users as of the end of May, with the mobile and fixed-line telephone users accounting for 592 million and 358 million respectively. As a result of the cut in communications fees, China posted a new high in the volume of mobile phone users since the beginning of 2008. In the first five months, its mobile phone users increased by 44.8 million, with the average monthly addition at 9 million, setting a new record. However, the volume of fixed-line telephone users continued to drop in the period, with the reduction at 6.5 million and the average monthly decline at 1.3 million.
- China Unicom (NYSE:CHU) will transfer 30,000 base stations, which were built in the name of CDMA, and sell another 10,000 ones to China Telecom. The sales, which were included in the final price of the transaction, would be valued at 4.5 billion yuan (US$657 million). Upon merger of China Unicom and China Netcom, China Unicom will continue to be the investment holding company of the China Unicom Group, and the stake it holds then will be diluted to around 33 percent. The only asset of China Unicom is a 82.1 percent equity in China Unicom [BVI] Ltd., and China Unicom [BVI] Ltd. holds a 71.18 percent equity in Hong Kong listed China Unicom. After the merger, China Unicom [BVI] Ltd.'s equity in new China Unicom will lessen to around 40 percent.
- China Unicom will delay the release of documents relating to its planned merger with China Netcom and the transfer of its CDMA business to China Telecom, marking complications in the industry's current restructuring. Under Hong Kong Stock Exchange regulations, China Unicom was required to send out documents on the merger to China Unicom and China Netcom shareholders by July 7, 35 days after the companies jointly announced their merger in accordance with the government's telecom restructure plan. China Unicom has applied to the Hong Kong Stock Exchange to postpone the release of the documents until Sept. 16.
- Beijing Telecom announced that it will be incorporated into China Telecom's Hong Konglisted company China Telecom Corp. and also released its 2007 financial report. The report shows that Beijing Telecom generated 2.5 billion yuan (US$364.6 million) in business income in 2007 and 470 million yuan in net profits. China Telecom previously announced that its extraordinary shareholders meeting voted and approved the proposal to acquire Beijing Telecom, which will be injected in the Hong Kong company.
- Hurray Group (HRAY) announced the launch of its own entertainment agency, marking further inroads by the company into the entertainment industry. Hurray plans to sign up several Chinese stars to the agency under a plan to develop itself into a digital entertainment company with rich original content, multiple integrated distribution channels and advanced core software technologies. The agency arm will mainly focus on music production and promoting Chinese artists.