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| Wednesday, 14 October 2009, 18:46 HKT/SGT | |
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Source: IRG | |
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HONG KONG, Oct 14, 2009 - (ACN Newswire) - The following is the China excerpt from IRG's TMT Weekly Market Review Oct 3 - Oct 11. 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).
Internet
- E-House's CEO Xin Zhou has stepped down and became executive chairman of the company and CEO of China Real Estate Information Corporation (CRIC). Gordon Jianjun Zang was appointed as temporary CEO and has been given a seat on the board.
- Baidu will establish a business-to-consumer (B2C) online shop alliance and has launched a "Morning Star 100" plan to provide B2C search sales solutions to small and medium enterprises (SMEs). Morning Star solutions are based on Baidu's "One Box" search engine and will initially target 100 SMEs.
Telecommunications
- LTE will give ZTE a chance to penetrate more developed markets in the future as the OFDM-based technology does not have much to do with the past. The company has an around 35 percent share of the Chinese 3G market. Its global 3G market share was up over the past year. The market is converging on LTE, although operators are questioning the vendors regarding the deployment of the technology and the resolution for the issue of voice over LTE. China Mobile wished to deploy TD-LTE as soon as possible. The company aims to consolidate TD-LTE and FDD LTE into the same set of network and handset requirements by 2011 or 2012.
- The launch of 3G service in China has provided good opportunities for global telecom giants, such as NTT Corp. The Japanese group will tap the China market by cooperating with China Mobile, the largest cell phone carrier in China. NTT group unit NTT Solmare Corp will begin to distribute e-comics in Guangdong and Jiangsu provinces as early as next month with the price set at 0.5 yuan per instalment. NTT Solmare, also partnering Tata Teleservices, has launched an e-comics service in India last month. China is in strongly growing demand for mobile phone content along with the growth in subscribers and the launch of 3G service.
- The state-run enterprises in eight of the nine large industries in 2008 have seen their profit fall year on year. The eight industries suffering from sliding profit were the petrochemical, steel, electricity, machine manufacturing, telecommunication, air transportation, shipping, and construction industries. Only the state-run trade companies realized a profit increase. CNPC, Sinopec and CNOOC had losses in 2008 because of the unreasonable pricing mechanism. The company earned 22.6 percent year on year, but their profit was 29.4 percent less than in the previous year. BaoSteel, Wuhan Steel, Baotou Steel and Angang Steel, had profit declined by 37.3 percent year on year due because of the financial crisis, even though the sale revenues climbed by 19.9 percent.
Media, Entertainment and Gaming
- Giant Interactive Group Inc. forecasted net revenues of 272 million yuan to 291 million yuan (US$39.9 million to US$42.7 million) for the third quarter of 2009. The company would seek net revenues of US$50 million in July-September 2009. The company is scheduled to unveil its third-quarter financial results in mid November 2009 and launch four online games in the fourth quarter of the year.
- The General Administration of Press and Publication (GAPP) has issued a circular that prohibits foreign companies from investing in and operating online games in China in such forms as sole investment, equity joint venture or non-equity cooperation. Foreign investors are also banned to control and participate in Chinese enterprises' online game operation by indirect means such as establishing related joint venture, contracting agreements or offering technology supports. GAPP and the National Copyright Administration, aiming at further enhancing the pre-approval of online games as well as the approval and control of imported online games, jointly released the circular.
Hardware
- Amoi Electronics Co. Ltd. had a restructuring plan in November hoping to turn a profit this year and avoid getting de-listed on the domestic A-share market. The Shanghai Stock Exchange suspended trading of Amoi stock as the company had its third consecutive year of net losses. Amoi must have profit for 2009 or it will be de-listed from the exchange. Amoi's restructuring efforts will be led by a team of officials from the Xiamen Municipal Government, lawyers from the Chinese firm of King & Wood and employees from Tebon Securities Co. Ltd.
Alternative Energy
- Trina Solar Ltd. has extended its eight year supply agreement signed last year with GCL-Poly Energy Holdings subsidiary Jiangsu Zhongneng Polysilicon Technology Development by another five years to a total of approximately 8,500 MW of solar modules. The agreement also contains a price adjustment clause that offers a market-linked price formula.
Taiwan
- Chunghwa Telecom will add 200,000 mobile Internet service subscribers next year. The forecast is attributed to the rising demand for mobile broadband and smartphones in Taiwan. The smartphone market is accelerating across developed markets because of the increased availability of mobile data services and the rapid increase in business users. The company sees to sell around 390,000 smartphones this year, of which 240,000 will be bundled with contracts for the company's mobile phone and broadband service plans.
- Chunghwa Telecom Co. had unaudited net profit for the January-September period NT$33.18 billion (US$1.03 billion), down 9.1 percent. Revenue for the nine months ended Sept. 30 fell 2.5 percent to NT$140.06 billion (US$3 billion). First-half net profit is NT$22.26 billion (US$478.5 billion). Third-quarter net profit was down 17.8 percent.
- Chunghwa Telecom Co., Ltd. will march into the value-added service market in Mainland China by its Hami value-added service platform and e-book store. The company introduced the Hami platform at the end of 2008, and Apple Inc.'s iPhone, Microsoft and Google-platform smartphones all have established their inner Hami platform. Most Hami users would keep using the platform, which would drive the growth of operating revenues from its value-added service. Chunghwa Telecom is now developing smartphone reading software and an e-book downloading platform named Hami bookstore, which will be launched by the end of this year.
- HTC Corp. had an 18 percent fall in third-quarter net profit despite increasing marketing costs which may continue pressuring profit into next year. The company had net profit for the three months ended Sept. 30 lessened to NT$5.76 billion (US$179.0 million). Revenue fell 10 percent. The company had ramped up spending on marketing despite intensifying competition in the smartphone market which made prices fall. Global handset makers have been focusing on their smartphone lineups as they see the shipment climb in double digits this year.
- MediaTek Inc. dethroned Qualcomm Corp. as the world's No.1 supplier of mobile-phone chips in terms of shipment volume in the third quarter of the year, with shipments topping 120 million chipsets for 2.5-generation mobile phones. Qualcomm delivered around 110 million sets for 3G mobile phones while Nokia Corp. shipped alike volume of chipsets. Industry executives point out that MediaTek's chips mostly target emerging economies like mainland China, India and Brazil as its prime markets whereas Nokia and Qualcomm mostly pinpoint at developed markets like the United States and European countries. Global market for mobile phones has accelerating growth from third-quarter shipments of the three chip vendors. Industry insiders estimated MediaTek's revenue for last month to set new high after the company saw revenue stay above NT$10 billion (US$303 million) in July and August.
- United Microelectronics Corp. (UMC) raked in revenue of NT$9.5 billion (US$288 million) in September, helping increase its revenue for the third quarter by a sequential 21 percent to NT$27.4 billion (US$830 million). The September revenue result had 5.23 percent rise from August and the highest revenue level in 23 months. Its third-quarter revenue growth is estimated to be only slightly lower than that of No.1 foundry player Taiwan Semiconductor Manufacturing Co. (TSMC), whose revenue growth for the same period is forecast at quarter-on-quarter rate of 22.6 percent with projected result of NT$90.9 billion (US$2.7 billion). UMC saw its capacity utilization rate surge all the way to 90 percent in the third quarter from 60 percent in the second quarter.
- TSMC's third-quarter sales were up by a fifth from the previous three months, matching its own forecast due to the growing chip demand. TSMC and UMC will show slight declines in fourth-quarter sales from the strong third quarter. TSMC shall keep reducing costs by sharing R&D efforts with its clients. TSMC is also diversifying into the energy-saving solar industry and beefing up its presence in the power management chip segment to ensure future growth. The company could issue a forecast for a 2 percent sequential decline in its fourth-quarter sales at its quarterly investor conference later this month.
Topic: Press release summary
Source: IRG
Sectors: Media & Marketing, Electronics, IT Individual
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