The much-hyped next-generation (4G) technology of WiMAX is quickly losing ground to the alternative technology of Long-Term Evolution (LTE). Large telecom infrastructure equipment makers are gradually shifting from WiMAX to LTE, and as a result the WiMAX field is getting less crowded day by day.

This gives the smaller gear makers like PureWave Networks and Airspan Networks a chance to enter the WiMAX market.

Hardware

• NEC Corp. (NELTY.PK), Hitachi Ltd. (HIT) and Casio Computer Co. (CSIOY.PK) plan to merge their mobile handset operations. This will create the country's second-largest cellphone maker by shipments after Sharp Corp. (SHCAY.PK). The Japanese cellphone makers aim to boost profitability by consolidating operations to save money in a domestic market nearing saturation. A consolidation of the three players would help lessen their spending on development costs and ride out the tough local market. This would also trigger an expansion overseas. That prospect encouraged the investors to snap up shares in the three companies.

• China.com’s (CHINA)revenue was down 31 percent year-over-year but up 27 percent quarter-over-quarters. Net profit was HK$0.6 million (US$.09 million) in the period and a net profit of HK$14.6 million (US$2.1 million) in the year-ago period. The company’s revenue was HK$42.64 million (US$6.2 million) and loss HK$5.49 million (US$803207) in the first six months.
• ChinaCast Education Corp. (CAST) entered into a definitive agreement to purchase the remaining 20 percent interest in The Foreign Trade and Business College of Chongqing Normal University for US$17.6 million. The Company will pay an additional US$2.3 million for a one-time profit distribution bringing the total purchase price to US$19.9 million. ChinaCast attained the acquisition of 80 percent of Hai Lai Education Technology Limited for US$65.8 million. ChinaCast will pay 50 percent of the consideration within 10 days of signing in return for 20 percent of the remaining interest of the holding company of FTBC. The balance of 50 percent of the consideration will be paid by ChinaCast after the registration of the transfer of ownership with the authorities.
• China saw its online shopping market transaction volume hit 56.36 billion yuan (US$8.2 billion) in the second quarter of 2009, increasing 20.7 percent quarter on quarter and surging 91.9 percent year on year. The transaction volume growth was mainly driven by the purchasing peak season and a list of the vendors' promotion strategies. Online shopping has become the hottest industry in the nation's whole Internet market. China's largest online consumer-to-consumer (C2C) marketplace Taobao.com still led the platform-model online shopping market with an 82.7 percent marker share in the quarter, and BOE Technology Group Co., Ltd. took 28.8 percent of the B2C shopping market.
• Alibaba.com Ltd. booked 260.7 million yuan (US$38.2 million) in net profit attributable to equity holders in the second quarter of 2009, down 16.9 percent year-on-year, while revenues grew 23.6 percent year-on-year and 12.6 percent quarter-on-quarter to 908.3 million yuan (US$133 million). Registered users rose 31.5 percent year-on-year and 6.3 percent quarter-on-quarter to 42.78 million by the end of June, with 33.32 million users in the China marketplace. China storefronts grew by 46.1 percent year-on-year to 4.38 million by the end of the second quarter. Paying members were up 44.4 percent annually and 10.4 percent sequentially to 531,471 by the end of June. Subscribers consisted of 70,453 Gold Supplier users, 19,219 International TrustPass users and 441,799 China TrustPass users.

• The number of people accessing the internet through a mobile phone in China stood at 151.82 million at the end of the second quarter, up by 183.44 percent year-on-year and 9.39 percent from the first quarter. China Mobile (CHL) is the largest provider of mobile internet services with 67.5 percent of user volume, followed by China Unicom (CHU) with 26.7 percent and China Telecom (CHA) with 5.8 percent.
• KongZhong Corp.’s (KONG) net profit for the second quarter of this year increased 41 percent from a quarter earlier to US$355 million, with earnings per share hitting US$0.09. The company recorded US$32.3 million in total revenues in Q2 2009, representing a quarter-on-quarter growth of 9 percent and a year-on-year growth of 37 percent, higher than the firm's previous estimates of between US$30.5 million and US$31.5 million. Total gross margin during the period was 51 percent, compared with 49 percent recorded in the first quarter. KongZhong will conduct a long-term investment to Kong.net. The company aims to build it as a 3G mobile portal combined with social networking services. The firm predicted its total revenues would be between US$34 million and US$35 million in the third quarter of this year.

• Huawei Technologies and Ericsson (ERIC) beat out other telecom equipment manufacturers to win contracts in China Telecom's 50 million yuan (US$7.3 million) project to update the 10 Gbps DWDM backbone network connecting the Yangtze River Delta cities of Shanghai, Nanjing and Hangzhou. Huawei took about 80 percent of contracts. China Telecom plans to improve network speed from 10 Gbps to 40 Gbps. Product delivery is on the third quarter. Commercial operation of the updated network is slated for late 2009.

• The actual sales of China's self-developed online games had reached 11.01 billion yuan (US$1.6 billion), increasing 60.1 percent over the previous year, and the sales accounted for 59.9 percent of China's online game publication market. Though the administration encourages foreign companies to jointly develop online games with Chinese companies, it strongly prohibits these companies from online game operations with their own companies or joint ventures. Chinese online game companies gained rapid development in overseas markets.
• The World of Warcraft has resumed services with an open testing program which partly resolved the conflict triggered by the game's operating right transferring from The9 (NCTY) to Shanghai Netease (NTES). The General Office of the Chinese Ministry of Culture requires a reapplication of the approval number for a game when there is a change in ownership of operation rights. The WOW service stopped until July 30. But as the two operators continue to sell the game cards has led to a lot of dissatisfaction and anger among the WOW players in China. China's online game industry’s sales in 2009 are forecast to be 24 billion to 27 billion yuan (US$3.51-3.95 billion), which would bring about 67 billion yuan(US$9.5 billion) in incomes for telecommunications, IT and other related industries.
• NetEase booked net profit of 468.1 million yuan (US$68.5 million) for the second quarter of 2009, improving over 438.2 million yuan (US$64.2 million) in the year-ago period and 416.7 million yuan (US$61.0 million) in the first quarter of 2009. Total revenues grew on annual and quarterly bases to 872.1 million yuan (US$127.7 million) in the second quarter of 2008 and 781.7 million yuan (US$114.4 million) in the first quarter of 2009. Online game revenues were 781.5 million yuan (US$114.4 million), up annually and sequentially from 595.0 million yuan (US$87.1 million) and 724.0 million yuan (US$106.0 million), respectively. The company increased its technical and customer service staff by about 500 to support the Battle.net platform and World of Warcraft.
• Hurray! Holding Co., Ltd. (HRAY) reported the resignation of director Mr. Robert Mao from the Board, effective July 31, 2009. Mr. Niu is the publisher and creator of 'The Founder' magazine and a professional industry commentator.

• LDK Solar (LDK) booked a net loss of US$216.9 million, or US$2.03 per diluted ADS, for the second quarter of 2009 versus net loss of US$22.5 million, or US$0.21 per diluted ADS, for the first quarter of 2009. An inventory write-down, of about US$175.8 million, and a loss on firm purchase commitments of polysilicon materials, approximately US$16.7 million, negatively impacted gross margin and results from operations. Net sales for the second quarter fell to US$228.3 million from US$283.3 million in the previous quarter and US$441.7 million in the year-ago period. LDK shipped 231.7MW of wafers, up 20.9 percent year-on-year, during the three-month reporting period. For the third quarter, LDK is forecasting revenue of US$240 million to US$270 million with 260-300MW of wafer shipments and 10-20MW of module shipments. Demand for solar wafers is beginning to turn more positive.

Taiwan

• Chunghwa Telecom Co. (CHT) said three of its undersea cables across the Luzon Strait that provide international voice calls and Internet connectivity have been damaged by undersea landslides caused by Typhoon Morakot. The company has repaired one of the cables, but damage to two others has limited international voice calls between Taiwan and Singapore, the Philippines and Hong Kong. Chunghwa Telecom is discussing alternative connection routes with China Telecom Corp. and other foreign telecommunications companies. Companies whose voice connections have been affected by the cable damage will have 50 percent of their service restored, while those whose Internet connectivity has been affected will have 60 percent of the service restored.

• Compal Electronics Inc. shipped 3 million notebook PCs and scored combined revenue of NT$53.206 billion (US$1.61 billion) in July, with the latter hitting the highest this year and sharply growing 44 percent from last July. Netbook PC still accounted for over 800,000 units, indicating that launch of CULV platform-based laptops hasn’t eroded the segment for netbook PCs. The firm has scored aggregate notebook PC shipment of 17.3 million units very close to the corresponding figure of 17.8 million units posted by its major rival Quanta Computer Inc., the leading notebook PC supplier.

• MediaTek is expected to ship up to 100 million chipsets in the third quarter alone and achieve earnings per share of NT$32 (US$0.969) for entire the year. MediaTek ranked as the No. 2 IC chip designer in the world, only trailing Qualcomm (QCOM) of the U.S. The firm is very likely to see its single-month sales revenue break the NT$10 billion (US$303 million) mark in August. With handset IC chips contributing over 70 percent to its sales revenue. Strong market demand in emerging markets, like China, India and Brazil, will help to strongly boost its sales performance in the remaining months of the third quarter.
• Taiwan Semiconductor Manufacturing Co. (TSM) and United Microelectronics Corp. (UMC) have received more orders for ARM-based processor chips since late July. Qualcomm, Texas Instruments (TXN), Nvidia (NVDA), Freescale Semiconductor and a unit of Via Technologies all placed orders for the chips, which will be used in smartbooks. The increase in orders will raise the capacity utilization rates for TSMC's 65-nanometer and 55-nanometer technology to 100 percent by November, while UMC's rates will reach that level by the end of August.
• Inotera Memories raised NT$10.2 billion (US$310 million) without much difficulty by issuing global depository receipt (GDP). Inotera raised from the GDP issuance 10 percent more capital than expectations, with each share trading at NT$16.02 (US$.487). Inotera is the first Taiwanese DRAM chipmaker to smoothly raise capital from the international market during the economic downturn. Nanya Technology Corp., FPG’s other DRAM subsidiary, received NT$12.2 billion (US$369 million) from the group through a private-equity placement. Industry executives point out that new capital will help facilitate the two companies’ 50-nanometer process development.

• TOM Group has net profit of HK$11.67 million (US$1.5 million) with revenues of HK$1.19 billion (US$153 million). Profit increase 16 percent year-on-year on revenues with 4 percent year-on-year. The company's share of losses in e-commerce platform Eachnet, a joint venture with eBay, narrowed 44 percent. Average revenue per Eachnet buyer increased to 22 percent during the period. Eachnet opened a marketplace for imported Taiwan goods in June. Other revenue segments include publishing, which brought in HK$404.0 million (US$52.1 million) in first half revenue, outdoor media, and TV and entertainment.

Internet

Chunghwa Telecom (CHT) (Analyst Report), the largest integrated telecom operator in Taiwan, recently gave a snapshot of its financial results for the second quarter of 2009. Quarterly revenue from the parent company fell 3% year-over-year to NT$45.2 billion and net income was NT$11.54 billion, down 7.8% from the year-ago quarter.

Chunghwa’s second-quarter revenue was also below our expectations of NT$49 billion. This was primarily due to lower phone calls and utilization of internet data services by consumers as a result of the general economic downturn together with lower call tariffs imposed by the Taiwanese Government.

* * *

Internet

Mobile/Wireless

Telecommunications

Media, Entertainment and Gaming

Hardware

Alternative Energy

by Maz Jadallah

This is the 4th Quarter 2008 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings preface.

Next up is Jim Simons' Renaissance Technologies, ranked 4th in Alpha's 2008 hedge fund rankings. Rentec, as they are commonly known, was started by Simons in 1982 and has around $25 billion in assets total. They employ mathematical and statistical methods to execute their investments and trades. Their flagship $7 billion Medallion fund has averaged annual returns around 35%.

This is the Third Quarter 2008 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F filings here.

The other funds we've already covered include:

Q3 FY08 Earnings Call

October 30, 2008, 06:00 AM ET

Some folks follow the strategy of selecting stocks that outperform other stocks in the same industry. The idea here is to select the winners in a particular sector for a given time period.

The following are four such stocks that have outperformed the industry by over 50% year-to-date:

Here is a list of the best performing American Depository Receipt [ADR] stocks Year-To-Date:

Q2 FY08 Earnings Call

August 28, 2008, 7:00 AM ET

The table above (click on image for full-screen view) presents the 40 active component stocks among 99 total companies included in my Foreign Telco Services BULLISHares Index. All such companies must have market caps greater than $1 billion US Dollars and derive the majority of their revenues from telco services from outside of the United States [US] and Canada.

In this time of difficult credit conditions, it could make sense to evaluate companies with plenty of cash.  One way to measure cash is to subtract all liabilities and see if there is any cash left (Net Cash).

If a company has Net Cash, they could pay off any and all debts and other reported liabilities, and have money left over.

As we start to dissect and analyze sectors as part of our forecasting for the second half of 2008 Zacks senior telecom industry analyst David Weissman, CFA stopped by to help us out.

Have we noticed a somewhat more favorable light being cast on the telecommunications industry these days?

Keeping an ear toward the telecom industry these days (as I was unable to resist a bad pun), we sat down recently with Zacks senior telecom analyst David Weissman, CFA to see how earnings season is progressing for companies under his coverage.

How have telecom companies in your coverage been performing this earnings season thus far?

Q1 FY08 Earnings Call

April 29, 2008, 6:00 AM ET

As we start to gain a better perspective on the way 2008 is beginning to shape up, one group that looks to benefit from its attractive valuation at this point are the telecoms. But which stocks in this group are the best Buys? Zacks senior telecom industry analyst David Weissman, CFA stopped by to help us out with this.

Have we noticed a somewhat more favorable light being cast on the telecommunications industry these days?