Chinasoft International Ltd.
| Company: |
Chinasoft International Ltd. |
| Industry: |
Information Technology - Software & Services |
| Sector: |
TMT |
| Investment period: |
Current |
| Turnover: |
HKD166 million (as at 31 December 2007) |
| Employees: |
4,363 (as of 31 December 2007) |
| Initial investment date: |
2000 |
| Country/Region: |
China / Hong Kong |
| CEO: |
Dr. Henry CHEN |
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Chinasoft International Limited (Chinasoft) (HKEx: 354) is a China-based global leading premier solutions developer and outsourcing provider that offers a full range of IT services and leading-edge solutions to government departments, state-owned enterprises, the banking and finance industry, manufacturing enterprises and well-known international high-tech corporations. It has 26 worldwide subsidiaries covering advanced IT countries such as the United States and Japan, and first-tier cities in China such as Beijing, Shanghai and Dalian. It ranks second in the "Top 10 China Offshore Development Software Vendors in Europe and North America, 2007," according to IDC's Report of China Offshore Software Development 2008-2012 Forecast and Analysis. IDC is the premier global provider of market intelligence, advisory services and events for the information technology, telecommunications and consumer technology markets.
As early as in the year 2000, three years before Chinasoft's listing on the GEM board of Hong Kong Stock Exchange, we had the foresight to invest in this company for a low price of HK$0.28 per share. After its listing, we sold part of the shares at its record price on 26 January 2007. Twenty million shares were sold to independent investors for HK$35.4 million, at an average price of HK$1.77 per share. That represented a 5 times growth in returns in just over 3 years' time.
Since its listing in 2003, Chinasoft has been able to maintain its net profit to the tune of millions. In 2007, an exceptionally outstanding annual performance enabled net profit to top RMB100 million for the first time. On 29 Dec 2008, Chinasoft transferred its listing status from GEM to Main Board of HKEX, which signified a new chapter for it. The strong performance reflects our ability in identifying potential investment opportunities in China. In the long run, we will further boost our profits by selling shares only when the anticipated share price is met.
As of July 2008, market capitalization was approximately HK$1.2 billion which represented a 23 times growth from HK$51.2 million since its listing in 2003. As at 30 September 2008, we held a 13.33% equity interest in Chinasoft.
Chinasoft has attracted prominent strategic shareholders from around the world, including Microsoft and IFC. This shows that Chinasoft is gaining increasing international recognition. Looking forward, there are more mergers and acquisitions in the pipeline. Chinasoft will likely become a top 3 IT firm in the world, aiming to reach a turnover at US$500 million in the next 3 years.
For more information, visit www.icss.com.cn
Golden Music Resources Management Company Limited
| Company: |
Golden Music Resources Management Company Limited |
| Sector: |
TMT |
| Investment period: |
Current |
| Initial investment date: |
2008 |
| Country/Region: |
China |
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In the year of the 2008, we acquired a 65% equity interest in Golden Music Resources Management Company Limited (Golden Music Resources) at a consideration of HK$40 million, targeting the piped music equipment for public space and authorized music licensing market in China.
Golden Music Resources has signed an exclusive agreement with the Music Copyright Society of China (MCSC), making it the only legal organization to collect license fees for musical works. The MCSC is formed by the National Copyright Administration of the People's Republic of China and the Chinese Musician Association. Currently, the MCSC is the sole organization managing the copyright of all musical works in China. It has over 5,000 members, including composers and artists. The MCSC is authorized to handle a wide range of rights issues, such as reproduction, copyrights and online transmission inside and outside China.
Since April 2008, Golden Music Resources has been authorized to administer and collect copyright fees for authorized use of musical works and install piped music equipment in various public spaces in China for 20 years. Except for the background music system and copyright tax, companies using musical works in China have to pay license fees for the authorized use of musical works. The amount of license fees differs, depending on the scope and nature of business, a standardized and simple payment plan has been adopted. The simple payment plan helps promote the awareness of intellectual property rights protection across China, and we are confident of the prospect of the market and Golden Music Resources' related businesses in China. Our users include local and multinational enterprises such as Starbucks, Motorola, Siemens, Watson's, Jusco, CCTV and China Eastern Airlines.
To facilitate the collection of licence fees, Golden Music Resources has developed a piped music equipment which can be further modified to meet the needs of individual customers. It is expected that approximately 10,000 installation points will be set up by March 2009 and 100,000 points by March 2011.
Current MCSC customers will automatically become customers of Golden Music Resources upon the expiry of the contract with the MCSC. To speed up business and clientele expansion, Golden Music Resources focuses on signing agreements with industry chambers and major chain stores. We are optimistic towards the music license fee market in China and the business of Golden Music Resources. There's been growing awareness of intellectual property rights in China thanks to the Beijing Olympics and the release of related law and policies.
The MCSC has also successfully signed an agreement on authorized use of musical works with the Beijing Tourism Industry Association (BTIA). Pursuant to the agreement, over 300 member hotels under the BTIA will pay a license fee to Golden Music Resources in exchange for piped music equipment.
We held interests in Golden Music Resources through our wholly-owned subsidiary Golden Star Investment Limited (Golden Star), which had 100% interests in Wealth Trend Investment Limited (Wealth Trend). Wealth Trend had 65% interests in Golden Music Resources. In the extraordinary general meeting on 28 November 2008, all independent shareholders attending the meeting agreed to lower the interests of Golden Star in Wealth Trend to 68.43%, and to increase the interests of Wealth Trend in Golden Music Resources to 95%. Our 65% interests in Golden Music Resources remain unchanged. This will increase the flexibility for future funding raising or separate listing of the Golden Music Resources.
For more information, visit www.goldenmusic.cn
Orbit Networks Limited
| Company: |
Orbit Networks Limited |
| Industry: |
Software |
| Sector: |
TMT |
| Investment period: |
Current |
| Employees: |
30 |
| Initial investment date: |
2008 |
| Country/Region: |
China / Hong Kong |
| CEO: |
Mr. LAM Wing Kwan Ringo |
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The technology market in China is enjoying steady growth, thanks to higher incomes and education levels in China. The application of technology, especially in the mass media, is very likely to have an impressive market share due to improving living standards. The new generation has a demand for better entertainment with the assistance of technology. Orbit Networks is a young, energetic firm focusing on innovative software development which attracts our attention for investment.
Orbit Networks was incorporated in Hong Kong in January 2008 as a private company. A recent signature product is "Touch3", a software for downloading high resolution movies and TV programs from websites. In this century of digital living, the software offers its users a groundbreaking experience of watching different entertainment and news programs online with high resolution and full screen mode. We are pleased to invest in this manifestation of quality lifestyle which we believe will generate an increasing demand in the booming China market.
For more information, visit www.touch3.cn
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