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Gurus Corner: China?s Technology-Media-Telecom Front
By William J. McMahon
(3/8/2000) The rush of foreign investment into China-related high tech and telecom companies, and the push by these firms to tap investment pools via overseas listings, has captured the world?s headlines the past several weeks.
The recent acquisition by Internet startup Pacific Century CyberWorks (PCCW) of old economy stalwart Hong Kong Telecom, and last week?s meteoric Nasdaq initial public offerings by two China high tech companies, UTStarcom and Asia Info Holdings, are only some of the most recent examples.
Beyond the current wild market enthusiasm for China IPOs, and the "hot stock" tip lists that have proliferated on the Web, questions remain as to how to identify the best companies from the herd.
The gurus from the global investment houses have been asking themselves this question: Which companies will emerge after the hype dies down?
Getting over the hype
ABN AMRO Asia says that China already is the eight largest Internet market in the world. According to the latest estimates by International Data Corp. (IDC), Internet subscribers in China will hit 13.6 million by the end of this year, and 52 mln by 2003. This is up from virtually zero Chinese Net surfers five years ago, and up from official Internet statistics of 8.9 mln users at the end of 1999.
Others offer even more bullish forecasts. Credit Lyonnais Securities Asia (CLSA) estimates China?s Internet users will reach 20 mln by the end of this year, skyrocket to 45 million by the end of 2001, and top 100 million within five years time. Japan?s Softbank puts this number at 300 million subscribers by 2005.
ABN AMRO says three factors will support the growth of China?s high tech/Internet market: rapid growth in the Internet sector, the country?s huge market, and supportive government policies.
The ultimate goal behind the China Internet hype is to tap into the ballooning numbers of people getting online in China. With such tremendous growth and in such a vast Internet landscape, the question remains: Where is the best place to invest? |
