Chinese Tech Stock Weekly Summary

by: IRG Ltd

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


• Tom Group announced the official delistment of its subsidiary Tom Online (NASDAQ:TOMO)from the Hong Kong Stock Exchange. The company explained that Tom Online's withdrawal from the stock market had been approved on August 31, 2007, with Tom Online also withdrawing from NASDAQ. Tom Group said that each of Tom Online's investors would soon receive a cash check that would be posted to them between September 7 and September 10.

• Ninetowns (NASDAQ:NINE-OLD) announced that it has entered into a definitive agreement on the acquisition of a 22 percent equity interest in Hangzhou Tophere Info-Tech, a Chinese business-to-business online food and beverage trade facilitator headquartered in Hangzhou. Tophere has built a professional food and beverage industry B2B Chinese Internet portal that offers domestic marketing services for food and beverage suppliers and manufacturers based in China. The company said it has initiated to provide integrated sourcing services for international buyers. Tophere maintains a B2B website at, where it has reportedly successfully conducted various trade transactions between domestic buyers and suppliers. Market sources noted that Ninetowns has launched various B2B initiatives this year, including its B2B search and service platform, The deal has been placed at 5 million yuan (US$663,305).

• Chinese online bookstore, a Chinese online bookstore, revealed its plans to enter into an agreement with publishing giant Wiley to sell the books on the mainland. According to Dangdang, it has an inventory of more than 2000 books from Wiley in its warehouse and these books can be delivered to consumers at the same speed as the company delivers Chinese books. Wiley is a leading publisher for the scientific, technical, and medical communities worldwide.

• Myspace China (NASDAQ:NWS) announced that it has secured an agreement with New Oriental School, one of China’s top English education institutes. Under the agreement, the two companies will offer an English-based community on the social networking site. According to Pearl Research, the new agreement will help MySpace China be popular with the youth sector where the interest on English language-acquisition is most strong.

Media, Entertainment and Gaming

• CDC Corporation (NASDAQ:CHINA) reported a net loss of US$3.2 million for the second quarter for the period ending June 30, 2007, compared to net income of US$8.0 million it has posted in the same period last year. The company, however, announced a rise of 35 percent in its total revenue to US$103.9 million from 2006, marking the first time in the company's history that quarterly revenues have gone beyond US$100 million and the sixth consecutive record revenue quarter. The company said its business, which includes the portal and MVAS business, reported a decline of 45.5 percent in its revenues US$6.3 million for the second quarter of 2007, from the same period of 2006. Its total revenue from CDC Software went up 53.5 percent to US$88.6 million from US$57.7 million in 2006. Total revenue from CDC Games went up 17.3 percent to US$9 million, from the same period in 2006.

The9 (NASDAQ:NCTY) announced the launching of the open beta for its latest MMORPG Granado Espada. The open beta is limited to selected players only. Although the game has not done well in the South, it has become a top game in both Singapore and Thailand. Having depended on World of Warcraft for its revenue stream, the company said it is looking to the diversification of its portfolio. Following this track, The9 said it would commit significant resources in the marketing and operation of Granado Espada. In a separate development, The9 said it has launched World of Warcraft expansion pack The Burning Crusade [TBC] ahead of schedule. The update added new races, maps, dungeons and other content as well as increased the maximum level limit by 10 to 70. As a result of the intellectual property lawsuit with Founder Tech, The Burning Crusade replaced all fonts under dispute.

• Shanda (NASDAQ:SNDA) announced that it has licensed South Korean casual game Free Jack, a game developed by Wise On. The casual game is about the newly emerged street ninja culture where players can choose to play in various scenarios including downtown, parks and residential areas. Shanda did not release a specific launching date in China. The company, however, disclosed that the title would be in open beta in the first half of 2008.

• CDC Games, a business unit of CDC Corporation, announced that it has launched operations in the U.S. under a new business unit called CDC Games USA. Earlier last month, CDC Games announced also the launch of CDC Games International to publish online games on a global scale. The company said CDC Games USA, a subsidiary of CDC Games International, will focus on launching new games, both directly and through publisher partners. CDC Games USA said it has already forged a memorandum of understanding with K2 Network, Inc., a leading publisher of online, free-to-play games.


• Jingwei International announced that it has entered into a new deal to exclusively provide mobile advertising services to China Unicom (NYSE:CHU). Under the deal, Jingwei will be the exclusive mobile advertising platform for China Unicom, with Jingwei helping to identify potential advertisers and the ideal target audience for the advertiser. The deal will see Jingwei conducting the SMS or Push WAP campaign on behalf of the advertiser, recognizing revenue for each message sent or banner ad launched. Part of the deal will enable Jingwei to analyze the response data and help the advertiser continually improve its media placement strategy.

• Music and video content aggregator Global Music International [GMI] announced that China Unicom NewSpace, a wholly owned subsidiary of China Unicom has initiated the offering of its collection of music content from both Chinese and Western musicians on China Unicom's cellular network. According to an official of China Unicom NewSpace, the alliance between Unicom New Space and Global Music International is “mutually beneficial." With the deal, GMI says China Unicom NewSpace is able to have access to innovative international and domestic content that is seen as helping it widen its market share.

• China Mobile (NYSE:CHL) announced that it has reached a deal with China Radio International [CRI], the third group in China that ha secured a mobile phone television business license from the State Administration of Radio, Film and Television. This agreement follows the deal that China Mobile has struck with Shanghai Media Group. Currently, China Mobile and China Unicom each has three partners for mobile phone television services. There is one difference between the two companies: China Mobile's service is run on 2.75G EDGE network, while that of China Unicom is run on CDMA.


• Global Data Solutions, HP (NYSE:HPQ) and Microsoft (NASDAQ:MSFT) announced that they have entered into an agreement to jointly invest more than 800 million yuan (US$106.1 million) to build a high availability data center in Chengdu. When completed, the center is expected to be the largest of its kind in China. The High Availability Data Center will include a disaster preparation center, data processing for enterprises and personal information arrangement services. It is also designed to serve banking, securities, insurance and government institutions. Focusing on disaster recovery services, the center is envisioned to be linked up with disaster recovery centers in Beijing, Shanghai, Guangzhou and Shenzhen to form a large network.

• CDC Software, a subsidiary of CDC Corporation, announced its plans to acquire U.S.-based Catalyst International, a provider of supply chain execution solutions and services. CDC Software explained that Catalyst's software solutions and services are highly complementary to its IMI Supply Chain product line and the company's CDC Global Services operations. The IMI suite of supply chain solutions supports demand-driven fulfillment in multi-company, multi-site and multichannel environments. The company said that once the purchase is completed, the Catalyst SAP practice business segment is expected to be merged into CDC Global Services, which provides consulting and outsourcing services across a variety of technologies and industries. An official of CDC Software sees the acquisition as boosting its global supply chain offerings and base of blue-chip customers, and at the same time, strengthening its CDC Global Services offerings by adding significant expertise and resources in large-scale supply chain execution.

• According to Changzhou National Hi-Tech District, UFIDA Software is setting up a new research and development base in the Changzhou Software Park in Jiangsu. This development marks the fourth R&D base established by UFIDA Software outside its headquarters. The company said the new base will develop the company's next generation of UFIDA Tong SMB management software, as one of its three strategic production lines. With more than half a million customers spread all over the world, UFIDA has grown into one of the largest corporate management software suppliers based in the Asia-Pacific Region.


• According to the vice governor of Henan Province Haier will set up a joint venture company with Henan Zhongcheng Computer Company to produce computers for consumers in the countryside. Media sources said the new company is expected to produce more than 300,000 computers each year, a production that is seen as releasing some 1 million computers for rural residents in three and a half years. Sources indicated that Intel will provide significant assistance to Haier in the production of computers, the first batch of which is expected to be ready by October. In a separate development, media sources reported that Haier has secured a contract with Macedonia's Education Department to sell 100,000 computers. The value of the deal has been placed at about 24 million euros (US$33 million). The 100,000 computers will be used in 164 middle and primary schools across Macedonia.

• Suning reported a 60.5 percent increase in its total business revenue for the first half of 2007 to 18.9 billion yuan (US$2.5 billion), compared with that of the same period of last year. The Chinese electronics retailer said its net profit went up 110.6 percent to hit 578 million yuan (US$76.6 million) over the same period of the previous year, with the company estimating a 70-100 percent rise in its accumulated net profit in the first nine months of 2007. By the end of June 30 this year, Suning has set up a total of 413 franchise stores in more than 103 cities across China. The company said it has filed an application with the China Securities Regulatory Commission in a bid to further improve its franchise business and boost its scale through a non-public issuance of stock.


• Industry sources said that Shanghai United Investment Co., Ltd [SUIC] has opted to withdraw from its MSN China joint venture company and is right now seeking a buyer for its 50 percent stake at MSN China. Sources said that as early as August SUIC has been looking for interested parties to purchase its stake in the joint venture. MSN China was formed by Microsoft and SUIC in May 2005. No comments were secured from either company.


• ZTE announced that it has formally secured a GSM expansion contract with China Mobile's Pakistan holding company CMPAK. Under the deal, ZTE will use its new generation All-IP V3 hardware platform based equipment for the expansion which will cover 10 million DPI core network and more than 1400 base stations. According to a ZTE official, the presence of the two Chinese telecom companies' cooperation in a foreign country indicates the rapid progress that China has achieved in the telecom industry.

Information Technology

• Hifn, a network and information security agency, announced that it has built a new office in Beijing to provide customer support, marketing and sales activities to local customers. The company has a presence in China and maintains big clients such as Huawei, ZTE and Galaxywind.

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