|Wednesday, 5 August 2009, 22:30 HKT/SGT|
HONG KONG, Aug 5, 2009 - (ACN Newswire) - The following is the China excerpt from IRG's TMT Weekly Market Review July 27 - Aug 2. IRG is a financial advisory and investment firm focused on the core growth sectors in Asia with particular focus on the telecommunications, media and technology (TMT) sectors.
- Baidu expects its new online market platform to help boost revenue this quarter as more advertisers migrate to the new system. Net profit for the three months to June rose a better than expected 44.6 percent to US$56.1 million, with revenue up 36.7 percent to US$160.7 million. Baidu forecast revenue for third quarter would grow 15 to 18 percent to of US$184 million to US$189 million, topping the US$182 million expected by Wall Street, according to Thomson Reuters.. The company would increase staff this quarter to boost the sales team for Phoenix Nest as well as its research and development team. Phoenix Nest, similar to Google's Adwords service, will gradually replace Baidu Bidding Rank and help rebuild the company's reputation after the Bidding Rank platform was accused of promoting fake medicine products. The firm served 203,000 active customers in the second quarter, and revenue per online marketing customer was 5,400 yuan (US$790.1), up 22.7 percent from last year.
- Alibaba Group has forged a strategic long-term alliance with state-owned Bank of China Holdings to jointly pursue a range of e-commerce initiatives, including an online payment card, trust rating system and small-business financing. Jack Ma Yun, the chairman and chief executive of Alibaba, expected the partnership to directly benefit the small-business customers of the bank and the group's subsidiaries. These include online payments service Alipay.com, business-to-business e-commerce provider Alibaba.com, internet-based business-management software supplier Alisoft.com and Taobao.com, the country's largest consumer e-commerce provider.
- Alibaba.com Ltd. is embarking on a reorganization that will separate the management of its domestic and international marketplaces, and step up cooperation between sister company Taobao.com and its domestic marketplace operations. The separation of management will allow the domestic and international platforms to further differentiate their strategies and user interfaces, among other things. Alibaba.com will also establish two new divisions aimed at helping its small-to-medium enterprise customer base gain access to information technology and employees trained to handle e-commerce.
- Changyou.com Ltd. posted total revenues of US$66.6 million for the second quarter of 2009, 39 percent increase year on year and 8 percent increase quarter on quarter. Operating profit was US$39.5 million, up 42 percent from the period last year and 4 percent from the previous quarter. Operating margin was 59 percent, higher than 58 percent in Q2 2008 but lower than 61 percent in Q1 2009. Net income reached US$34.5 million, growing 9 percent year on year and 3 percent quarter on quarter.
- Sohu.com Inc. reported second-quarter profit that beat analysts' estimates on higher revenue from Web advertising and online games. Second-quarter net income was US$30.9 million compared with US$40.2 million a year earlier and beat the median US$27.8 million of nine analyst estimates compiled by Bloomberg. The company's sales increased 25 percent to US$127.1 million, exceeding its guidance. Sohu, which in April spun off unit Changyou.com Ltd. in a US$138 million share sale, is speeding up development of its Internet search engine and adding videos and blog sites to lure users as competition rises from companies including Sina, Baidu said revenue will rise to a record this quarter as the nation's economic growth helps boost advertising sales.
- The number of internet users in China grew by 40 million in the first six months of the year to reach 338 million at the end of June, a figure higher than the entire population of the U.S.. The number of broadband connections rose by 10 million to 93.5 million in the first half. About 95 percent of townships were connected to the internet via broadband as of early June and 92.5 percent of all villages were equipped with telephone lines that connect to the internet. Third generation mobile phone technology is also expected to boost rural coverage.
- The telecom industry's average price levels in China had declined 8.5 percent year on year in the first half of this year. The industry's growth begun accelerating, even though it's still at a low level, dampened by the financial crisis. In the first half, the industry's business volume totaled 1,224 billion yuan (US$179.1 billion), up 11.8 percent year on year. It also registered 417.1 billion yuan in business revenue, edging up 2.3 percent. In regional terms, the industry's development in western region was more pronounced than in central and eastern China. The industry's revenues decreased 0.3 percent in eastern China year on year, but rose 2.6 percent and nine percent, respectively, in the central and western regions.
- The number of newly-added phone users in China was 43.5 million in the first six months of this year. China had more than 1 billion telephone users by the end of June, boosted by the launch of the 3G network. In January, the country issued 3G licenses to the top three telecom operators, China Mobile Ltd, China Unicom (Hong Kong) Ltd and China Telecom Corp Ltd. The top three telecom operators have invested 80 billion yuan (US$11.7 billion) in China's 3G network so far this year. The ministry estimated that the top three operators would invest 170 billion yuan (US$24.9 billion) in 3G network construction this year.
- Huawei Technologies said 3G mobile network sales in the first half exceeded total shipments last year on strong demand from emerging markets such as China and India. The company, which has emerged as one of the top equipment vendors in the global telecommunications market, is expected to gain market share in Europe with its newly launched multimode network solution, Lu Xingang. UBS global telecommunications equipment analyst Gareth Jenkins estimates global telecommunications capital expenditure will weaken this year and next, with total spending declining 2.7 percent this year and 6.5 percent next year.
- ZTE Corporation has signed a cooperative agreement with the Japanese mobile operator Willcom to provide ZTE's 3G data card product MF633 to users in Japan. As the fourth largest mobile operator in Japan, Willcom is also the largest personal handyphone system operator in the country with 4.6 million users and great influence in the Japanese market. At the beginning of 2009, the two parties signed a memorandum of cooperation for Time Division Duplex technologies, including XGP, to implement close cooperation to boost market share in this industry.
Media, Entertainment and Gaming
- China's mobile game market size hits 520 million yuan (US$76.1 million) in the second quarter of this year, up 32.37 percent quarter on quarter. Revenues from China Mobile's charges on information reached 230 million yuan (US$33.7 million), increasing 21.3 percent quarter on quarter. The company's quarterly growth rates of information fees in the first half of this year were over 20 percent, versus the -0.06 percent average quarterly growth in 2008.China Mobile's new game operating platform contributed most of the growth in its information fees, which topped 67.86 million yuan (US$9.9 million) in the second quarter, accounting for 30 percent of the total, while the growth of the old one slackened continuously.
- Giant Interactive announced it will acquire 51 percent equity in Hangzhou-based Xuelang Software. Based on the acquisition, the 2.5D-view game Xiantu Online developed by Xuelang Software will join Giant's venture platform "Winning in Giant," while Giant invests 40 million yuan to promote the game through primary marketing activities. This comes as the fifth project housed under the "Winning in Giant" platform, which aims to provide free capital, management and other supports to talented online game R&D groups to fuel their online game development.
- Giant Interactive plans to start alpha testing of its in-house developed 3D MMORPG Long Hun. More than 20,000 gamers activated testing accounts for Giant's in-house developed 3D fantasy MMORPG King of the Kings 3 on July 7, the first day of second-round testing, and the game hit 10,430 concurrent players on the same day. King of the Kings 3 entered first-round alpha testing on March 2008.
- Shanda Games Limited (SDG) will participate in the development of online game KOF World. SDG had reached an agreement with SNK Playmore, a Japanese game developer, on their cooperation. KOF World is the online version of The King Of Fighters, the heavyweight game software developed by Playmore. SDG is licensed to operate the online game in Mainland China and several other countries.
- Perfect World has not excluded the possibility of licensing foreign MMORPGs; before, the company had always focused on operating in-house developed games. Perfect World hopes to offer players other entertainment services besides online games. Perfect World took a step toward differentiating its business by establishing literature site zongheng.com last September, and investing in a webgame company and entering the film and video field this year. Perfect World had acquired a Chengdu-based webgame company and planned to release ten to twenty webgames in 2009.
- Kaifa, a part of China Electronic Corp. (CEC), would invest 50 million euros (US$71 million) in Finnish firm Elcoteq. The announcement came as Elcoteq, a supplier to firms including Nokia, posted an operating loss of 11.5 million euros (US$16.4 million) in the second quarter and sales more than halved to 436 million euros (US$619.9 million). The deal would make the Chinese company its largest shareholder with a stake of at least 30 percent. CEC has been Elcoteq's joint-venture partner in China since 2002. Elcoteq said the total size of the investment was dependent on it successfully restructuring its debt, with a final agreement expected to be signed in the third quarter. It was not immediately clear what stakes main owners Antti Piippo, Jorma Vanhanen and Henry Sjoman would keep.
- China plans to subsidize demonstrative photovoltaic (PV) projects in the following two to three years through a program called Golden Sun. Each province is permitted demonstrative PV projects with a total capacity of 20MW. The government will subsidize 50 percent of total investment in PV power generation systems and power transmission facilities in on-grid projects, and 70 percent for independent projects.
- JA Solar Holdings Co Ltd has received US$90.8 million under two three-year term loans from the Export-Import Bank of China. The loans carry interest rates below the benchmark rate set by China's central bank. The loans will strengthen its balance sheet and allow greater flexibility for financial and business planning. JA Solar's announcement comes as funding for solar power and green technology is beginning to recover from a dramatic fall-off earlier this year caused by the global credit crisis.
- Trina Solar Ltd. raised its estimates for second quarter photovoltaic (PV) module shipments and gross margin, citing a rebound in the global solar market and supportive government regulations. Trina also forecast second quarter net revenues in the range of US$148 million to US$152 million, representing a 12 percent to 15.1 percent increase from the previous quarter and a 25.6 percent to 27.5 percent drop from the year-ago period. The company expects second quarter PV module shipments to total 63-65MW. Trina issued module shipment guidance of 90-110MW for the third quarter of 2009 and reiterated full year expectations of 350-400MW. Gross margin was forecast at 26-28 percent, up from previous guidance of 18-20 percent; operating margin is expected to be 11.5 percent to 13.5 percent.
- Yingli Group broke ground on its 6 billion yuan (US$878.1 million) Yingli Industry Park in Baoding, Hebei province. The park will include a 800MW per annum crystalline silicon solar cell project, with a completion date set for December 2010. After the project comes on-stream, Yingli will have a total annual crystalline silicon solar cell production capacity of 1,400MW, and will generate sales revenues of as much as 15 billion yuan (US$2.2 billion) per year.
- LDK Solar expects to report a net loss of US$180 million to US$200 million in the second quarter of this year, which it attributed to the sliding market prices of wafers. The company increased its guidance to revenues of between US$225 million and US$235 million and wafer shipments between 230-240MW but anticipates a write-down of US$150 million to US$160 million. LDK's fourth quarter financial results included a US$216.7 million inventory write-down. The company later updated its FY08 and Q408 results to include an additional write-down of US$87.5 million and a US$12.3 million provision for unrecovered supplier prepayments.
- Suntech Power Holdings has entered into a strategic agreement with China Energy Conservation Investment Corp. (CECIC) to develop solar projects, including large-scale on-grid, urban building-integrated, rural off-grid, and wind-solar hybrid projects, over the next five years. CECIC plans to take charge of project investment and development under the partnership, while Suntech will supply solar products, system design and technical support. Suntech's previously announced projects in Qinghai, Shaanxi, and Jiangsu provinces, as well as Shizuishan, Ningxia province and Panzhihua, Sichuan province, may be developed through the collaboration.
- SMIC announced the successful commercial production of a 130nm family of DisplayLink USB graphics chips designed by DisplayLink and manufactured at SMIC. These new products make it possible to easily connect additional monitors, and provide a high level of integration for USB graphics devices, support higher HD display resolutions, and increase overall performance for smoother video playback.
- Far EasTone Telecommunications Co. Vice Chairman Jan Nilsson said the Taiwan company and China Mobile Ltd. will start planning on forming a joint venture in China in the first quarter ending March 31, 2010. Far EasTone executives will meet with China Mobile Chairman Wang Jianzhou when he visits Taiwan late-August. During Wang's trip to Taiwan, he will visit government officials and local companies including HTC Corp., Inventec Appliances Corp., Compal Electronics Inc., MediaTek Inc., Via Technologies Inc. and Elan Microelectronics Corp.
- Chunghwa Telecom Co. is aiming for a 1 percent to 2 percent growth in annual revenue from 2010, with annual revenue targeted at NT$191.30 billion (US$5.81 billion) by 2013. This equates to an increase of NT$2 billion (US$61 million) in annual revenue per year. The company is aiming for full-year 2009 revenue of NT$183.40 billion (US$5.6 billion), and earnings-per-share of NT$4.0 (US$.122).
- BenQ Corp. registered 930 million yuan (US$136.1 million) in second-quarter sales in China, up 20 percent year-on-year and up 11 percent from the preceding quarter. H.C. Hung, president of BenQ China, attributed the double-digit growth to promotional activities and subsidies offered by China to encourage sales of home appliances in rural areas. BenQ's monitors and projectors are among China's top-three brands in the second quarter. Cumulative sales in China amounted to 1.8 billion yuan (US$259.1 million) in the first half. In addition to conventional distribution channels, BenQ has been exploring TV shopping, online shopping, and installment plans through banks in China. The company's sales through non-traditional channels reached 130 million (US$19 million) in the first half.
- Acer Inc. aims to ship 2 million-2.5 million smartphones in 2010. Acer expects shipments of its smartphones to grow to 20 million units a year by 2012-2014, which would make it one of the world's top five smartphone brands, the paper said, citing Lencquesaing. Acer set up the smart handheld business group in 2008, the paper said. It didn't give Acer's smartphone shipment target for this year.
- TSMC is expected to make its largest profit in three quarters in the second quarter, while money-losing rival UMC also returned to profits thanks to growing demand. Sales of chips used in personal computers, mobile phones and flat-screen TVs could gather speed, partly on back-to-school demand into the third quarter, while TSMC may further expand its share of the US$20 billion chip foundry market. The two companies, which supply chips to fabless chip designers and chipmakers that are stepping up outsourcing to cut costs, have benefited from China's massive stimulus package since early this year that has fuelled consumer spending on electronic devices. Cash-rich companies such as TSMC usually have the ability to spend more on new, more cost-effective production technologies, while second-tier rivals, including Singapore-based Chartered Semiconductor and China's SMIC have limited research spending that could narrow from the previous three months.
- ASE said its board approved a NT$450 million (US$13.7 million) loan to Powerchip which is struggling in the ailing computer memory chip market. ASE, which has a memory chip packaging joint venture with Powerchip, said in a statement that the loan would have a maturity of one year and Powerchip needs to use part of the shares it owns in Rexchip as a guarantee for the loan. Rexchip is a DRAM venture between Powerchip and Elpida Memory. Earlier this month, Powerchip said it was getting a US$125 million loan from two other companies.
- ProMOS had applied to the island's financial regulator to scrap a plan to issue new shares and bonds worth about US$547 million. The announcement came a day after the money-losing computer memory chip company said a technology transfer deal with bigger Korean rival Hynix Semiconductor has ended due to its poor financial health. ProMOS was looking for strategic partners for new business opportunities, including making other semiconductor products.
- Sonus Networks Inc. announced that CITIC 1616 has chosen Sonus to transform its network with next generation IP technology. The new IP-based network will enable greater capacity and efficiency leveraging the platform's centralized routing, diverse media support and secure border control for cost effective IP peering. Sonus Networks Global Services team will design and deliver a next-generation network to support the CITIC 1616 network's expanding base of over 350 telecom network operators in 60 locations worldwide. The project will provide seamless migration to a SIP core and manage the legacy ISUP connections while supporting the multitude of international standards currently in use by CITIC 1616's diverse customer base.
- Hutchison Telecommunications International Ltd. said it's in talks to sell a stake in its unit in Israel. Li may exit a market where wireless subscriptions exceed the population in favor of expanding investments in faster-growing Southeast Asia countries. Hutchison Telecom, which booked an US$8.9 billion gain in 2007 from selling control of its India unit, started a mobile-phone service in Vietnam in April. Israel had a mobile-phone penetration rate, which measures the number of subscriptions versus a nation's population, of 128.3 percent at the end of 2007, compared with Vietnam's 27.2 percent. Partner was little changed at 67.81 shekels at the close in Tel Aviv. There is no assurance a sale may result from the approaches.
Topic: Corporate Announcement
Sectors: Media & Marketing, IT Individual
From the Asia Corporate News Network
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