PrivateEquityChina

CLSA Invests in Scud

ARIA Investment Partners II, a fund managed by CLSA Private Equity Management Ltd, has invested US$ 10 million in China's Great Speed Enterprises Ltd, a holding company of Scud (Fujian) Electronics Co Ltd.

Scud (Fujian) Electronics

• one of the largest mobile phone Li-ion battery makers in China
• has more than 200 wholesalers managing over 100,000 points of sale and covering all the provinces and large cities across China
• has been conducting independent research and development on batteries for notebooks as well as for other digital devices, such as PDAs and digital cameras since 2002

'Scud' is a strong and trustworthy brand with a leading market position. We hope that with our expansion capital, we will be able to assist the company to build on its already strong platform,' Alvin Ho, director of CLSA Private Equity, said in the statement.

Speaking from Hong Kong, Ho said that the size of the stake acquired had yet to be determined, although it would range from 10 to 20 pct.

Online Gaming Booming & Profitable (2004)

September 23, 2004; SHANGHAI, HONG KONG - Profits in China's booming online gaming industry are not limited to the industry's top tier operators according to media and research boutique Pacific Epoch. At least 10 mainland online game operators boast between 50,000 and 100,000 peak concurrent users asserts Pacific Epoch in its latest report: China's Second Tier Online Games.

"With investor interest focused on Shanda, The9, Netease and Optic/Optisp, the second tier players have largely missed out on attention from foreign venture capital firms and media," said Pacific Epoch research editor Elias Glenn. "Our latest report slams home the point: these companies are profitable and have as much potential as the market's leaders - 20 million Yuan a month is not small change."

"Some of these second tier companies just jump out at you when you look at the industry," adds Glenn. "I would not be surprised if we see one or more IPOs out of the group in the next year."

China's Second Tier Online Games is the first in a series of reports Pacific Epoch will release before year-end. All the reports are aimed at investors trying to get some clarity on the direction of China's emerging technology, media, and telecommunications sectors. Pacific Epoch's next report covers the rapidly changing mobile gaming industry in China.

Red Innovation Report Sept 2004

TCL Gets Approval For Listing

BEIJING, Aug. 19 Abridged:

(Xinhuanet) -- TCL Corp, one of China's leading consumer-electronics makers, is making substantial progress on its plan to list its mobile handset unit in Hong Kong by obtaining approval from the China Securities Regulatory Commission (CSRC), analysts say.

The CSRC announced last Thursday a new regulation standardizing the issues related to overseas listing of subsidiaries of domestic listed companies.

According to the regulation, the net profit of the subsidiary in the latest fiscal year should account for no more than 50 per cent of the parent company's total. Meanwhile, the subsidiary's net asset should be less than 30 per cent of the domestic-listed parent company's total.

For TCL Corp, the mobile unit contributed 42.4 per cent to its net profit, while the mobile unit accounted for 14.97 per cent of TCL Corp's net asset.

However, the listing plan is yet to be approved by the shareholders of TCL International Holdings Ltd and the Hong Kong Stock Exchange.

Analysts believe that the split-off and listing plan will help the company to become much more focused on its mobile business and find a new way to raise funds from the international market.

"The split-off of its mobile phone business won't have much impact on its domestic listed parent company," said Dai Chunrong, an analyst from China Securities.

"As there is no new share offering by way of introduction, the company's overall performance will not be diluted," she said.

TCL Corp announced early this week that it is to list its mobile phone business via introduction instead of plans for an initial public offering exposed to unfavourable market conditions.

An introduction listing means the company will not offer new shares to the public."

China IVR Mobile Market Size and Players

IVR Market Size
China's IVR market in 2003 reached 200 million yuan (US$24.10 million).
Concerns re impact of recent crackdowns by regulators/mobile operators have caused analysts to downgrade forecasts of 2004 revenues to 1.35 billion yuan (US$162.6 million) down from 1.5 billion yuan (US$180 million) previously forecast.

Sina
- Q2 IVR service revenues with China Mobile accounted for about 7% of its revenues from mobile value-added services, or approximately 4% of its total revenues for the quarter ended June 30, 2004.
- Q2 US$49.2 million in net revenues.

Tom Online
- increased its SMS revenues by 3% in Q2.
- 49.5% share of the IVR market, estimated Zhou Yi, an analyst with Beijing-based research house Analysys International.
-revenues from IVR products and services grew 43 per cent, to US$8.19 million, compared with the first quarter.
-IVR services accounted for 28 per cent of Tom Online's total wireless Internet revenues. That compared with 10 per cent during the same period last year, and 24 per cent in this year's first quarter.
- Its wireless service contributed 93 per cent to Tom Online's total revenues.

Sina Corp
- 19% IVR market share

Rock Mobile Corp
- 12.5% IVR market share
- Siemens and Acer's venture capital arms are investors

Unihub Global Network
- 9% IVR market share
- Beijing-based

Tencent Holdings
- 7% IVR market share
- Hong Kong-listed

Sohu.com and NetEase.com
- newcomers to the IVR market, are still minor players little effected by the recent crackdown.

source: China Daily

More on IVR Crackdown

China daily reports Chinese Web portals (eg Sina) are facing a crackdown by mobile operators, over irregularities in their IVR (interactive voice response) offerings. This follows stricter regulation of SMS services that have impacted revenues in recent months.

IVR services allows mobile phone users call and listen to prerecorded voice content, such as songs and jokes, or chat with friends online. Industry observers believe the crackdown largely resulted from adult (pornographic) offerings in Sina's IVR services. IVR users are charged 1 yuan (12 US cents) per minute.