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| Tuesday, 7 July 2009, 19:49 HKT/SGT | |
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Source: IRG | |
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HONG KONG, July 7, 2009 - (ACN Newswire) - The following is the China excerpt from IRG's TMT Weekly Market Review June 29 - July 5. 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.
Hardware
- Lenovo Group raised the compensation of former chief executive William Amelio by 54 percent last financial year, after the mainland's biggest personal-computer maker posted a record annual loss. Mr. Amelio, who resigned on February 5, was paid US$17.6 million in the year to March, including US$3.25 million as compensation for loss of office as director. The document also showed Mr. Amelio's total compensation was US$11.4 million a year earlier. Yang Yuanqing, who replaced Mr. Amelio as Lenovo's chief executive, received a 42 percent increase in total pay to US$7.2 million for the financial year to March. Mr. Yang was previously the chairman, a title now held again by Lenovo founder Liu Chuanzhi. Mr. Amelio, who joined Lenovo from Dell in December 2005, had resigned in the aftermath of the firm's first deficit in almost three years - a net loss of US$97 million for the quarter to December last year, a reversal from a net profit of US$172 million the previous year.
- Samsung Electronics' Greater China sales volume reached US$44.5 billion in 2008, while its China region purchasing volume rose 27 percent year-on-year in the period to US$27.2 billion. Samsung expects China region purchasing volume to climb to US$32 billion in 2009 and currently has more than 4,500 domestic suppliers.
Telecommunications
- Ericsson has won contracts to provide fixed broadband to China's three telecom operators, China Mobile, China Telecom and China Unicom. The initial contract will provide fiber-to-the-home (FTTH) networks for services including high-definition TV and high-speed broadband in Shanghai and eight provinces: Anhui, Guangdong, Hebei, Heilongjiang, Hubei, Liaoning, Shandong, and Sichuan.
- China Mobile Ltd. is still applying for approval from Taiwanese regulators on its plan to take a stake in Taiwan's Far EasTone Telecommunications Co. The Taiwan Affairs Office is under the State Council, China's highest executive body, and is in charge of cross-strait affairs. State-owned wireless carrier China Mobile agreed to pay about US$527 million for 12 percent of Far EasTone, which would be the first deal between telecommunications companies in China and Taiwan if it is allowed. Far EasTone shareholders have already approved the deal. Taiwan opened 100 sectors to investment by mainland Chinese companies, but didn't include the politically sensitive telecommunications sector, indicating the investment is unlikely to be approved by Taiwanese authorities.
- China Telecom's 3G brand e-Surfing opened a 3.6 million-handset tender. 70 handset manufacturers - including ZTE, LG Electronics, Samsung Electronics, Nokia, Huawei and China Wireless Technologies subsidiary Yulong Coolpad submitted bids to supply the handsets, which will retail for around 1,000 yuan (US$146.3).
Media, Entertainment and Gaming
- The9 President Xiaowei Chen has renewed her contract with the company for another two years, reports National Business Daily quoting an unnamed source close to Chen. The9 announced that its full year 2008 income, to be reported on Form 20-F on or before July 15, will be 55 percent to 75 percent lower than net income for the same period reported in its Form 6-K on February 24. The9 has incurred charges related to the loss of its operating license for 3D MMORPG World of Warcraft. Activision Blizzard division Blizzard Entertainment has licensed the game to NetEase for mainland operation following the expiration of The9's contract.
- Shanda Games Ltd., subsidiary of local online game operator Shanda, announced that it's struck a deal with Japanese peer CyberStep. Inc. to operate the latter's two MMORPGs, GetAmped and CosmicBreak, in China. GetAmped and CosmicBreak are both 3D massively multiplayer online role-playing games, with the former a combat game and the latter a shooter. CyberStep is a Japanese game developer which has been involved in the market for the past 10 years and GetAmped has been operating in over 10 countries so far.
Software
- Oracle Corp. is expected to commence its most important marketing campaign on the mainland this year following the global launch of its long-anticipated Fusion Middleware 11g suite of products. On the back of the mainland's economic stimulus initiatives, Oracle anticipated that enterprises in various industries are expected to be well positioned to adopt the software release, which includes key technologies brought by Oracle from its many acquisitions. The take-up will start in the telecommunications sector, where mainland network operators are building their nationwide 3G mobile infrastructure, and in the public sector, thanks to continued government spending. The central government announced in November last year a 4 trillion yuan (US$585 billion) economic stimulus package, including support to 10 strategic industries.
Semiconductor
- A8 Digital Music Holdings has teamed up with semiconductor firm MediaTek to target the potentially vast number of 3G handsets being produced for the domestic market. A8 Music has agreed to have its proprietary software, A8 Box, embedded in the Taiwanese firm's chipsets destined for 3G mobile telephones made on the mainland. Liu Xiaosong, the founder, chairman and chief executive of A8 Music, said the deal would boost the penetration rate of A8 Box in the mainland mobile market. The company, which owns more than 60,000 original works of music on the mainland, designed the A8 Box software to enable mobile users to easily access and buy content from its large online database and various digital music service providers.
Alternative Energy
- Yingli Green Energy has been selected by State Development and Investment Corp. subsidiary SDIC Huajing Power Holding, to supply PV modules for a 10MW on-grid solar plant to be located in Dunhuang, Gansu Province. SDIC Huajing Power Holdings and Yingli made a combined bid to operate the similar-sized government project in Dunhuang.
- LDK Solar expects second quarter shipments to come in between 220MW and 230MW, above previously issued guidance of 200MW to 220MW, while revenues are expected to be US$215 million to US$225 million. In the first quarter of 2009, LDK booked a net loss of US$22.5 million on revenues of US$283.3 million and 206MW of wafer shipments. LDK Solar has secured a one-year principal loan of 500 million yuan (US$73 million) from The Export-Import Bank of China, as well as a three-year 500 million yuan (US$73.1 million) loan from Huarong International Trust to support polysilicon plant construction. LDK Solar had more than US$250 million in cash as of June 30. The company's annualized wafer capacity reached 1.5GW by June 30. LDK saw strong demand for wafers in the second quarter and plans to resume wafer plant expansion to reach 2GW of annual capacity by the end of 2009.
- ReneSola Ltd. announced that its operating subsidiary, Zhejiang Yuhui Solar Energy Source Co. Ltd., has qualified as a high technology enterprise and will receive a reduced income tax rate of 15 percent for three years, starting January 1, 2009. The current statutory tax rate is 25 percent. China's central government awards the high technology classification on the basis of the number of patents and propriety technologies held by the company, as well as its R&D facilities.
- Trina Solar Ltd. has secured a new credit line of US$57 million from Standard Chartered Bank (China) Ltd., bringing Trina's total credit to roughly US$520 million. The company aims to use the credit for raw material procurement and product sales.
Taiwan
- D-Link Corp. expects revenue this year to continue to decline as enterprises and telecom operators slow their spending, but growth in China's third-generation mobile market should help support its business. D-Link President and Chief Executive Tony Tsao told the Dow Jones Newswires in a recent interview the company expects its revenue to fall less than 20 percent this year from NT$33.02 billion (US$1.0 billion) posted in 2008. He forecasts the global networking equipment industry to experience a 20 percent decline in revenue. The company competes with Cisco Systems Inc. and Juniper Networks Inc. of the U.S. in the network equipment market. As China is still experiencing robust demand because telecom operators there are working to upgrade their networks, D-Link hopes to gain a strong foothold in the mainland and is aiming to make China one of its top three markets after the U.S. and Russia.
Hong Kong
- PCCW Ltd. Managing Director Alex Arena said the company has no plans to revive a proposal to a sell a stake in its media and telecommunications unit that was shelved last year amid the market downturn. The company shelved the sale in October after receiving bids from private-equity companies that weren't sufficiently attractive.
Topic: Research / Industry Report
Source: IRG
Sectors: Media & Marketing, IT Individual
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From the Asia Corporate News Network
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