Chinese Tech Stock Weekly Summary

by: IRG Ltd

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


Telecom Communications, Inc. (OTC:TCOME), a total solutions provider, announced that its subsidiary, online education net signed a joint venture agreement with Beijing License Services Corporation [BLSC], a China- based franchise development and marketing company, to distribute, market, and support Mystaru' Star Dram Program in China TV and film market. The system is a prototype for state-of-the-art delivery of streaming video performing education courses in the music and movie industries in greater China. The new courseware was developed using the Guangzhou TCOM’s EDU v5.0 Education Management System and is delivered to viewers via the Mystaru platform. Telecom Communications, Inc. [TCOM] offers integrated communications network solutions and Internet content service in universal voice, video, data web and mobilecommunications for interactive media applications, technology and content leaders in interactive multimedia communications. TCOM does business in Asia via its wholly owned subsidiaries, Alpha Century Holdings Ltd., IC Star MMS, Ltd., Guangzhou TCOM Computer Technology Limited and majority owned subsidiary HRDQ Group, Inc., a Chinese domain name registration and virtual hosting service provider, announced the formal launching of its domain name sales transaction center. The transaction center, which includes a domain name buying section, domain name selling section, domain name maintenance section, and domain name assessment section, has received more than 10,000 domain names for sale. A top official of the company explained that, together with receiving the domain names sent in by the sellers, the center will also work with international buyers.

Media, Entertainment and Gaming

Industry sources said Electronic Arts Inc. (ERTS) has agreed with The9 Ltd. (NASDAQ:NCTY) to acquire a 19 percent stake in the Chinese online game operator in a deal estimated at about US$200 million. Under the deal, analysts see The9 as getting rights to run more casual games with sports themes from EA, the world’s top video game publisher, as the alliance would enable EA to gain access indirectly to China’s online game market.

Following the release of the document Guide Opinion on Cable TV Network Two-Way Transformation, the country’s State Administration of Radio, Film and Television said it will initiate the promotion of the two-way transformation of cable TV networks around China. The basic premise of the guide is that the two-way transformation of cable TV networks will speed up and cable TV networks will be led to a direction of interaction and multi-functionality. At present, most of the TV networks in China are one-way broadcasting networks, with about 140 million such cable TV users in China. It is estimated that SARFT will invest more than 50 million yuan (US$6.4 million) on the transformation. The change is expected to bring about such services as video program ordering, video communications, cable voice service and broadband.

NewMarket China (OTC:NMCH) announced signing of a two-year agreement with Shanghai ArtCoding Company in a bid to provide outsourcing services to game development customers. Under the plan, NewMarket China will initially target customers in North America, but will look for customers in other global markets as well. In 2006, NewMarket Technology, the holding company for NewMarket China, completed the independent public listing of its Chinese operations which expect to report over US$20 million in revenue for 2006. For this year, NewMarket China is looking to a 100 percent increase in revenue to US$40 million. ArtCoding is a company that has provided offshore development services to a variety of customers, including international game publishers and independent studios. Their capabilities extend not only to the PC platform, but also to Sony's (NYSE:SNE) PlayStation, Microsoft's (NASDAQ:MSFT) Xbox, and Nintendo's (OTCPK:NTDOY) GameCube.

Industry sources said Focus Media (NASDAQ:FMCN) has entered into an agreement with, a local real estate web site. The deal follows Focus Media’s acquisition of Allyes, a Chinese online ad firm. The reports said Focus Media is forming a strategic partnership with, with the two parties carrying in-depth cooperation for their respective information platforms and resources. Earlier, Focus Media said it has already completed the acquisition of Allyes. The company also looking to a rise in its income in 2007 to US$390 million-400 million from the previous US$350 million-360 million. The value of the deal was not disclosed.


Hurray! (HRAY), a mobile value-added services company, announced the signing of an agreement with Beijing TV [BTV] to establish an exclusive partnership for delivering wireless services. BTV is one of the major TV networks in China, with a wide audience of more 250 million viewers and a partnership with BTV is seen by Hurray as an opportunity for creating new distribution channels and gaining access to TV and video content. Hurray said the contract is bringing it nearer to its aim of becoming a leading digital entertainment content production and distribution house in China. With the agreement, BTV’s channels will gain access to services that will enable its channels and programs to reach their respective audiences. The two companies said the terms and conditions of the partnership will be put in details in the definitive agreements to be entered into by both parties.

With a service called Express News, Motorola (MOT) announced that it has become the first handset manufacturer in China to support China Mobile's (NYSE:CHL) news content service. The service is a feature that lets consumers get the news, sports, entertainment, and other information they want directly from their mobile device screen.


China Netcom Corp. (CN-OLD), China's second-biggest phone company, reported a 6.7 percent decline in its 2006 profits to 12.9 billion yuan (US$1.6 billion), down from 13.8 billion yuan (US$1.7 billion). The company posted a 1 percent rise in its revenues to 86.9 billion yuan (US$11.2 billion). China Netcom said its number of subscribers registered114.9 million, representing the first decline in Netcom's history. China has the world's biggest telephone market, but traditional fixed-line carriers have seen growth slow sharply as potential customers increasingly opt for mobile service. Netcom and its bigger rival, China Telecom Corp. (NYSE:CHA), are promoting Internet, web-based television and other new services in hopes of reviving revenue growth. The company said it is attempting to become a broadband communications and multimedia-services provider as it posted a 31.6 percent growth in its sales of broadband, business and other services last year, increasing their share of Netcom's total revenues to 26 percent, up 5.8 percent from 2005.

According to the Management Commission of Dongguan Songshanhu Science and Technology Zone, Huawei is initiating the second phase of a new factory project in the Songshanhu area within the year. The project is part of the deal signed by Huawei with Songshanhu Science and Technology Zone in 2006. The deal is valued at some 4 billion yuan (US$517.6 million). The agreement estimates the total output capacity of this factory as reaching 60-70 billion in goods upon completion. Huawei Technologies is a leader in providing next generation telecommunications networks.

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