Virtual China: Information Technology - Press Reviews, April 26, 1999

Weekly Press Review

April 26, 1999

Announcements from two major Chinese portal sites over the past two weeks suggest a growing interest in IPOs to help fuel growth. Wang Shidong, president of market leader Sina.com, said an initial public offering was a certainty for his company, and that Nasdaq would be their first choice. Sina.com has a current capitalization of 85 million dollars, with the majority of investment coming from non-Chinese firms including Walden Group of the United States, Goldman Sachs, Chase Manhattan, and Japan's Softbank. The site has invested some 35 million dollars in expansion and last month lured Netscape's e-commerce strategist Jim Sha to be its CEO. Last week, Hong Kong's largest ISP Interactive Multimedia Services (IMS), announced plans to enhance its popular Netvigator web site to become a portal for the Greater China area. "The launch of the enhanced Netvigator.com demonstrates our determination in taking the global lead as a provider of Chinese Net content and services," said IMS president Allen Ma. The company is rumored to be gearing up for a listing on Nasdaq. Surprisingly, there has been very little activity for Internet IPOs in China's own stock exchanges. To date, China's only publicly listed online content and services company is Xiamen Xindeco, producers of the ChinaVista web site. Xiamen Xindeco went public in February 1997 on the Shenzhen Stock Exchange.

Last week China's State Development Planning Commission approved the China Express Networking Demonstration Project, the country's third national telecommunications company after China Telecom and China Unicom. The new company will be owned by the Chinese Academy of Sciences, Ministry of Railways, State Administration of Radio, Film, and Television, and Shanghai Municipal Government. The company will make use of wideband fiber optic networks operated by the Ministry of Railways and the State Administration of Radio, Film, and Television and will be a player in the Internet access market. The addition of a third domestic competitor and increased foreign competition will put pressure on China Telecom to improve service, according to Beijing Telecom deputy-director Jia Yong. Jia noted it takes China Telecom an average of 20 days to install a new telephone line, compared to 3 to 7 days for foreign firms.

In other news, NDS, a provider of digital broadcast technology, announced an agreement with Sichuan New Tech Digital Equipment (NTC) and LSI Logic to produce digital set-top boxes in China. The prototype is scheduled to be complete mid year with mass production commencing in the third quarter. China's set top market has heated up since Microsoft announced its Venus project, a new TV-based Internet access technology, in Shenzhen last month.

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