The following is excerpted from IRG's weekly stock report:
• 51job.com (NASDAQ:JOBS), a Chinese online job recruitment web site, announced its unaudited financial results for the second quarter ending June 30, 2007, with its total revenues posting a 21.1 percent rise year on year to 209.9 million yuan (US$27.7 million). The company said its print advertising revenues went up 10.8 percent to 107.6 million yuan (US$14.2 million) compared with the 97.1 million yuan (US$12.8 million) it posted for the same quarter in 2006. Its operating expenses climbed to 72 million yuan (US$9.5 million) from 62.4 million yuan (US$8.2 million) for the same quarter last year. 51job reported a 19.5 growth in its net income to 31 million yuan (US$4 million) from 26 million yuan (US$3.4 million) for the same quarter in 2006. The company also announced that it has entered into an agreement with Recruit Company of Japan to set up a new business independently incorporated and aimed at providing coupon-advertising services in China. The new entity is expected to have a total capitalization of up to US$10.8 million provided through multiple funding stages spanning several years, with Recruit expected to provide 60 percent of the funding in cash, and the remaining 40 percent to be financed through convertible bonds to 51job.
• Sina.com (NASDAQ:SINA) posted its unaudited financial results for the quarter ended June 30, 2007, with its net revenues registering an 11 percent year-on-year rise to US$59.8 million. The Chinese Internet company said its advertising revenues for the second quarter of 2007 went up 40 percent to US$41.2 million from the same period last year. Its non-advertising revenues for the second quarter of 2007 went down 23 percent to US$18.6 million from the same period in 2006. The company said its net income for the second quarter of 2007 was US$14.5 million, compared to US$10.4 million in the same period last year and US$8.6 million last quarter. Its MVAS revenues for the second quarter of 2007 went down 24 percent to US$17 million from the same period last year and 7 percent from last quarter. Sina attributed the year-over-year decline to the changes in mobile operators' policies over the past year, such as decline of revenues from interactive voice response, which decreased 39 percent sequentially to US$2.1 million as a result of reduced promotional efforts. The company estimates total revenues for the third quarter of 2007 to be between US$63 million and US$65 million. As of June 30, 2007, Sina's cash, cash equivalents and short-term investments totaled US$415.2 million, compared to US$312.5 million and US$382.7 million as of June 30, 2006 and March 31, 2007, respectively.
• Ctrip.com (NASDAQ:CTRP), an online travel booking firm, reported a 52 percent year-on-year climb of its net revenues to 288 million yuan (US$38 million) as part of its unaudited financial results for the quarter ended June 30, 2007. For the second quarter of 2007, Ctrip reported a 53 percent growth in its total revenues to 309 million yuan (US$40.8 million). Ctrip said its air ticket booking revenues for the second quarter of 2007 went up 67 percent to 117 million yuan (US$15.4 million), from the same period in 2006. The company reported 95 million yuan (US$12.5 million) as income from operations for the second quarter of 2007. As of June 30, 2007, Ctrip said its cash balance have risen to 978 million yuan (US$129.1 million), compared to the 866 million yuan (US$114.4 million) as of March 31, 2007.
Media, Entertainment and Gaming
• Sina.com (SINA) announced that it has secured the Chinese online broadcasting rights for the English Premier League and Italian Series A soccer matches. Under the deal, Chinese soccer fans will be able to watch English Premier League matches live either via paid TV or the Internet. With the limited availability of paid TV in the country, Sina said it will offer Chinese soccer fans more options by offering live, online broadcast of the games. No financial details of this deal were disclosed. In a separate development, Sina said it has also obtained the rights to provide live, online broadcast of the Italian Series A in China. Details of the deal were not reported.
• Beijing Unicom announced the launching of a new service dubbed Financial New Space, an offering which is seen as a response to the queues always seen in front of ATMs and at banks. Bejing Unicom’s Financial New Space utilizes a Unicom CDMA card and a CDMA wireless communications module embedded in the wireless ATM and assures a safe, reliable and speedy connection between the mobile communications system and bank system through CDMA1X network and wireless UPDN network. Beijing Unicom's CDMA network allows financial institutions to freely install a wireless ATM without the need of setting up a network or new lines. There are currently more than a dozen financial institutions using the CDMA network as a data transmission route.
• AsiaInfo (NASDAQ:ASIA) announced entering into an agreement with Zhejiang Mobile to optimize its Business Operation Support System. Back in 2002, AsiaInfo deployed the BOSS system at Zhejiang Mobile to support 10 million subscribers. Under the agreement, AsiaInfo will restructure and optimize the BOSS system, which remains the single largest in China and the second largest in the world, to allow Zhejiang Mobile to continue to rapidly expand its subscriber base. Five years after the installation of the system, Zhejiang Mobile's subscriber base has grown over threefold to 34 million subscribers.
• AT&T (NYSE:T) announced that it has entered an agreement with China Netcom Group Corporation (CN-OLD) [CNC] to provide telecommunications services between China and the U.S. during the 2008 Olympic Games in Beijing. Under the agreement, AT&T will be able to provide a dedicated network through which NBC can transmit digital television coverage of the Games, back to the U.S. for national broadcast throughout NBC's television network. CNC was selected by Beijing Olympics Organizing Committee as the exclusive fixed-line telecommunications partner in China for the 2008 Olympic Games.
• Industry sources said Lenovo Group (OTCPK:LNVGY) of China is in talks to gain control of the European computer maker Packard Bell. A Lenovo spokesperson confirmed the talks. According to IDC, the acquisition is seen as helping the company beat Fujitsu Siemens Computers as the fourth-largest vendor in Western Europe. At present Lenovo is No. 3 following its acquisition two years ago of International Business Machines' personal computer business. According to estimates from Cazenove Asia in Hong Kong, Packard Bell, which posted 1.5 billion pounds (US$2.1 billion) in sales last year, may be acquired for US$770 million. This acquisition in Europe is expected to bring Lenovo beyond China and is seen as boosting its sales directly to consumers worldwide.
• Lenovo (OTCPK:LNVGY) announced that it has signed an agreement with Novell (NASDAQ:NOVL) to provide preloaded Linux on Lenovo ThinkPad notebook PCs and to provide support from Lenovo for the operating system. Under the deal, the two companies will offer SUSE Linux Enterprise Desktop 10 from Novell to commercial customers on Lenovo notebooks beginning in the fourth quarter of 2007. The ThinkPad notebooks with the Linux-preload will also be available for purchase by individual customers. Lenovo also said that this marks the first time that it will give direct support for both the hardware and operating system. Novell will provide maintenance updates for the operating system directly to ThinkPad notebook customers. Even before this agreement, Lenovo and Novell have already worked together on R&D for some years.
• Industry sources reported that Digital China has begun to distribute Intel's (NASDAQ:INTC) CPU processors, with the first batch of Intel's processors reportedly already in Digital China's warehouses. Observers find this development interesting, as Digital China is also the distributor for AMD, a long time rival of Intel. There are reports that the company, in deference to Intel, may choose another channel to distribute Intel's CPU product. No comment from Digital China could be secured regarding this development.
• China Unicom (NYSE:CHU) said it has entered into an alliance with Gtel to launch a new enterprise communication service called 1010-1010 Brand Gtel. The service is described as an innovative national distribution call center platform offering brand communications, calling distribution, client management and oriented marketing services for enterprise clients. By calling 1010-1010 plus an enterprise's brand/trade name, users can easily find the registered enterprise and get through to their phone. Industry sources have identified Dongpeng Ceramic and Yadi Electric Bicycle Factory as some of the domestic companies that have reportedly begun to use the 1010-1010 Brand Gtel service. The service will be promoted all over China beginning in Shanghai.
• Qimonda (QI), a memory chip supplier, announced the opening its new development center in Suzhou, which was described by a company official as “another strategic step to expand our activities in the Asian market.” Qimonda ascribed to the market more than 30 percent of its revenues in the last quarter. The company said the additional development capacities will serve Qimonda's target to further expand and diversify its product portfolio. It will be installed in the existing facility for the assembly and testing of memory ICs in the Suzhou Industrial Park. The Qimonda Memory Products Development Center (Suzhou) Co. Ltd will be an independent entity wholly owned by Qimonda AG whose total investment is expected to amount to US$20 million.