BUSINESSINDEPTH CHINA DAILY THURSDAY MARCH 22, 200715 Retailer’s stock soars in solid weathers HK debut

HONG KONG virtual BRIEFING By Lillian Liu Online gaming process clampdown Shares in retailer Intime Department Store rose 13.2 percent in their market debut Insiders say tight supervision of in Hong Kong on March 20, after the company raised $311 online gambling won’t hurt fi rm million in a heavily oversub- Virtual Virtual 1:10,000 1:10,000 scribed initial public offering By Wang Xing the cyber environment cleaner items Game Game items in the city. and safer. coin coin The share price soared to A week later, 14 Chinese HK$6.10 in pre-opening trade, The Chinese government’s regulators including the Peo- QQ 15,000:1 15,000:1 QQ 13 percent higher than its issue 1:1 1:1 recent efforts to tighten super- ple’s released coin coin price of HK$5.39 apiece. The re- vision of online gambling and another circular against online tail portion of the offering was virtual money will not have gambling and exchanges of vir- ̞ ̞ 230 times subscribed. Third party any real impact on Tencent, tual money with real currencies e-commerce The Hangzhou-based re- according to experts, as the and properties, an unusual sign stakes from its users of some Of them, casual games account- websites tailer sold 450 million shares company’s games and revenue that experts said showed the casual games that allowed them ed for about 70 percent. And of at HK$5.39 apiece, or 30.8 are unlikely to be affected by Chinese government’s resolute to bet with game coins. And be- Tencent’s revenue from casual times 2007 earnings, which the new regulations. stance on online gambling cause the game coins could be games, about 80 percent was sources such as online advertis- facing a dilemma when it comes was a 21 percent discount to “I don’t think Tencent’s busi- and the supervision of virtual bought with Tencent’s virtual from sales of its virtual items, ing in its games business, and to virtual money, a tool that has Parkson Retail, the country’s ness will be money. money, QQ coins, using real which gave users advantages in to get itself out of long-lasting sustained China’s booming top department store chain. signifi cantly NEWS The release money, Tencent was criticized playing the games. disputes over online gambling Internet value-added service Parkson Retail trades at 39 affected by the ANALYSIS of the new for its involvement in online Cao Junbo, a senior analyst and virtual money.” industry and, to some degree, times prospective earnings new regula- regulations gambling. at research house iResearch, Earlier this month, Tencent saved thousands of Chinese By comparison, regional tions, since has put Chi- “There are professional agreed that the impact of the shut down its service exchang- Internet companies when the rival Nanjing-based Golden only a very small part of the na’s largest instant message online gamblers who play new regulations was limited. ing game coins for QQ coins, bubble burst in 2000. Eagle Retail Group trades at a company’s games and revenue service provider Tencent under Tencent games, but I think the “Tencent is likely to adopt closing the door for users who Tencent reported that 66.5 similar price-to-earnings ratio involve online gambling,” said the spotlight after reports in the percentage is very, very small,” alternatives to keep its users, had won the coins in games to percent of its 737 million of 31.5 times. Liu Bin, chief analyst at consult- Chinese media that it was in- said Liu. “And the company’s such as rewarding them with convert them into QQ coins. yuan of revenue in the third Morgan Stanley is the spon- ing fi rm BDA China. volved in online gambling and revenue from online gambling virtual items other than game quarter of last year came from sor of the offering. China’s four regulators its QQ coin sparked debate at was extremely limited.” coins or QQ coins,” Cao said. Facing a dilemma Internet value-added services, Intime’s three stores are launched a three-month crack- the end of last year. Liu said online games only “And I think the company Although the Chinese gov- most of which, according to spread across the country’s down on Internet gambling on The reports claimed that Ten- accounted for about 20 percent would see it as a golden oppor- ernment is fi rm on its online experts, were purchased with third-richest province, East February 25, aiming to make cent took a 10 percent cut of the of the company’s total revenue. tunity to explore new revenue gambling ban, it seems to be QQ coins. China’s Zhejiang, and attract younger generation customers with trendy fashions and home appliances. The stores have become a shopping hotspot for the growing numbers of young Old is gold, if marketers know how to fi nd it well-off shoppers. To meet strong demand, the company will open 10 stores MARKETING rate has dropped to less than fastest growing segment of the should not pose the challenges Healthcare and health sup- chocolates, snacks and drinks. over the next fi ve years and ex- six per 1,000 in 2004, skewing population, augmented by over that younger consumers are plement: Elders will not rely on The number of active taste pand its scale through mergers By Ashok Sethi the population more and more 100,000 every year. By 2020, able to take in their stride. their children for care, but will buds declines from 254 at 30 and acquisitions, Intime said in toward older citizens. about a third of Shanghai’s But the psychological be willing to buy it. This will to only 64 at 80. Researchers a statement. More importantly, China is residents will be over 59. changes are more signifi cant. create a huge market for elder argue foods that will appeal The retailer’s Hong Kong Major demographic and so- committed to continue the one- Even though it is only 11 per- They create a set of unique so- care homes and clinics. Other to this age group will need share sale also received cioeconomic changes have child policy, with the objective cent of the total population, it’s cial and emotional needs that opportunities are for health to be flavor-enhanced. The overwhelming demand, with been sweeping markets in to restrict the population to 1.36 a staggeringly large consumer few marketers are exploiting products and supplements. use of more exotic spices or heavyweight investors all bid- Asia, particularly China and billion into 2010 (from 1.3 bil- base — a set of consumers, today. These consumers have, Targeted services: Oppor- the addition of herbs may be ding for large orders. India. Many of these changes lion now). maybe with limited purchas- throughout their lives, bought tunity exists for many services required without increasing China Life and Hong Kong have major implications for ing power today, but still an products for their children. where elders are likely to have fat or sodium levels. luxury goods magnate Dick- marketers, offering them both Aging population enormous market if appropri- But with the children now special needs, such as travel Retail: There are implica- son Poon bought a combined unprecedented challenges and The senior population in ately targeted. leading separate lives, they and tourism. In the absence of tions for design of retail aisles, HK$390.6 million worth of unique opportunities. China is estimated to be at 144 need to look elsewhere for children and grandchildren, a and physical positioning of Intime shares, representing As a result of its one-child million — around 11 percent Special needs emotional sustenance. Rela- huge market exists for enter- products. Product labels need some 16 percent of the deal policy, China is in a unique of the total. The situation is Older consumers, many tively affl uent older consumers tainment for elders. This could to be large and easy to read issue price. position of aging before it more extreme in certain cit- of them possibly for the first often consider issues of social be in the form of TV programs, and store shelves designed to Poon operates high-end becomes well-off and society ies — in Shanghai 20 percent time in their lives, will have responsibility and altruism, shows and even gaming. provide easy access. stores selling Rolex and is able to bear the cost of of its 13.6 million people are resources and ability to spend broadening their caring gaze Special product design: Financial services: Finan- Chopard in Hong Kong, and the elders. As a result of this over 59, the offi cial retirement on themselves. Most of them beyond their children while Product design needs to be cial needs of this group are also owns Ralph Lauren and S.T. policy, China’s natural growth age there, and this group is the will be living alone or with their at the same time learning to guided by special consider- obviously unique as it needs to Dupont boutiques and counters spouses. They have special needs pamper themselves without ations for the needs of elders. weigh the possibility of running in Southeast Asia. and marketers who succeed in the gnawing feeling of guilt. Mobile phones and computers out of resources in case of a long Intime initially approached Consumers in developed and developing economies winning them over will be those Marketers need to under- — important tools for elders life and leaving a large sum be- investors with a roadshow price (%) who are able to accurately under- stand these needs and tap them to keep in touch with their hind without an opportunity to range of HK$4 to HK$5.20, but Age 0-14 15-60 Over 60 stand these needs. through thoughtfully designed children — need to have large enjoy it. Carefully designed fi - soon revised it to a higher 100 Clearly, with age, biological brand positioning and commu- buttons and be easy to use. nancial and insurance products range of HK$4.36 to HK$5.39 80 changes alone have signifi cant nication. Plug-in IP phones, without could address these concerns in response to strong investor 60 implications — special foods and getting lost in the labyrinth and tap the market. demand. 40 supplements are required, prod- ‘Gray market’ of Windows, would have a The company’s earnings this 20 uct labels and instructions need This “gray market” generates promising future. The author is chief methodolo- year are expected to jump 54 0 to be legible to fading eyesight, opportunities for products and FMCG: There are opportuni- gist, Asia-Pacifi c, Latin Amercia, percent to 315 million from the buttons on phones large and services that are especially ties for consumer products like Middle East, and Africa Region, 205 million yuan the company mainland Korea Source: The Economist Database easy to press, and packaging designed for the elders. TNS earned last year. BIZSCENE

MARKET change yesterday. Sales rose director of Gallup China, will GRAPEVINE And unpedigreed dogs cost in the United States, without 10 percent to 4.5 billion yuan. succeed Alan Hsieh, manag- at least 2,000 yuan, he said. putting in the hard work or Index up Jingkelong will speed up ing director of IDC China, who Bank’s dual listing plan “Dogs that have got prizes in paying the high tuition fee, China’s stock index rose for expansion this year by open- took the position in March China CITIC Bank may offer various competitions are the but only 3,600 yuan. a third day and hit a record ing more stores and seeking 2004. 60 percent of its planned $3 most popular ones, and travel Local media reported that high yesterday. The Shanghai acquisitions, it said. IDC has been facing billion initial public offering around the country.” a website based in Shenzhen Composite Index added 0.83 increasing challenges in the in Hong Kong and the remain- recently swindled local percent to 3057.38. A total of Tom Group to restructure Chinese market with more der in Shanghai, the South Fake certifi cates residents by offering counter- 626 companies gained on the Hong Kong-based media activities from global peers China Morning Post reported, Imagine getting a PhD cer- feit educational certifi cates Shanghai A-share market, conglomerate Tom Group and local competitors. citing unidentifi ed sources. covered his air ticket and paid tifi cate which looks just like indistinguishable from the while 151 saw losses. Turn- Ltd, controlled by Hong Kong The Beijing-based bank, him 20,000 yuan. one issued by a top university real ones. over was active, at 89.3 billion billionaire Li Ka-shing, said Yibin change owned by China’s biggest yuan. yesterday that it would take Wuliangye Yibin Co Ltd, a State-run investment com- Banking stocks are still a aggressive measures this year market leader in the spirits pany, is set to have a listing Major Currency Cross Rates favored sector because of their to restructure its business industry, announced its chair- hearing with the Hong Kong Brazil Switzerland Renminbi Indonesia India Japan S.Korea Malaysia Mexico New Philippines Russia Singapore Thailand Taiwan solid fundamentals and fast lines, including a proposed man, Wang Guochun (below), stock exchange today, the 21/Mar/07 US$ Australia $ Real Canada $ Sfr Yuan Euro Britian £ HK$ Rup Rupee Yen Won Ringgit Peso Zealand $ Peso Rouble $ Baht $ earnings growth, analysts buyout of its listed Internet has given report said. The lender will US$ 1 1.2491 2.0760 1.1632 1.2142 7.7340 0.7519 0.5110 7.8115 9135 43.515 117.72 938.8 3.4740 11.0880 1.4201 48.405 26.0458 1.5247 34.80 33.112 said. arm, Tom Online, reorganiz- up all his probably sell shares in the Australia $ 0.8006 1 1.6619 0.9312 0.9720 6.1915 0.6019 0.4091 6.2535 7313 34.836 94.24 751.5 2.7811 8.8765 1.1368 38.751 20.8510 1.2206 27.86 26.507 China Minsheng Banking ing its outdoor advertising duties in second quarter. CITIC Bank Brazil Real 0.4817 0.6017 1 0.5603 0.5849 3.7254 0.3622 0.2462 3.7628 4400 20.961 56.70 452.2 1.6734 5.3410 0.6840 23.316 12.5461 0.7344 16.76 15.950 Corp rose 1.02 percent to business, and injecting new the listed hired CITIC Securities Co, Canada $ 0.8597 1.0739 1.7848 1 1.0438 6.6492 0.6464 0.4393 6.7158 7853 37.411 101.20 807.1 2.9867 9.5327 1.2209 41.615 22.3925 1.3108 29.92 28.467 11.89, after UBS AG raised its media businesses into its TV com- China International Capital rating for the stock. and entertainment arm. pany and Corp, Lehman Brothers, Citi- Switzerland Sfr 0.8236 1.0288 1.7098 0.9580 1 6.3699 0.6193 0.4209 6.4337 7523 35.840 96.95 773.2 2.8613 9.1323 1.1696 39.867 21.4519 1.2558 28.66 27.271 Tom Group, which gets two- will be group and HSBC Holdings as Renminbi Yuan 0.1293 0.1615 0.2684 0.1504 0.1570 1 0.0972 0.0661 1.0100 1181 5.626 15.22 121.4 0.4492 1.4337 0.1836 6.259 3.3677 0.1971 4.50 4.281 Boom time for retailer thirds of its revenue from the replaced underwriters. Euro 1.3300 1.6614 2.7611 1.5470 1.6148 10.2862 1 0.6796 10.3893 12149 57.875 156.56 1248.5 4.6204 14.7470 1.8887 64.379 34.6409 2.0279 46.28 44.038 mainland, said its net income by Tang Britian £ 1.9569 2.4444 4.0625 2.2762 2.3760 15.1347 1.4714 1 15.2863 17875 85.155 230.36 1837.0 6.7983 21.6981 2.7789 94.724 50.9690 2.9837 68.10 64.796 for 2006 declined to HK$32 Qiao, HK $ 0.1280 0.1599 0.2658 0.1489 0.1554 0.9901 0.0963 0.0654 1 1169 5.571 15.07 120.2 0.4447 1.4194 0.1818 6.197 3.3343 0.1952 4.46 4.239 million from HK$260 million, currently BIZ UNUSUAL Indonesia Rup 0.0001 0.0001 0.0002 0.0001 0.0001 0.0008 0.0001 0.0001 0.0009 1 0.005 0.01 0.1 0.0004 0.0012 0.0002 0.005 0.0029 0.0002 0.00 0.004 while sales fell 6 percent to the vice- HK$2.91 billion. mayor of Yibin city. Profi table breeding India Rupee 0.0230 0.0287 0.0477 0.0267 0.0279 0.1777 0.0173 0.0117 0.1795 210 1 2.71 21.6 0.0798 0.2548 0.0326 1.112 0.5985 0.0350 0.80 0.761 Wang Guochun had been With the onset of spring, pet Japan Yen 0.0085 0.0106 0.0176 0.0099 0.0103 0.0657 0.0064 0.0043 0.0664 78 0.370 1 8.0 0.0295 0.0942 0.0121 0.411 0.2213 0.0130 0.30 0.281 managing Wuliangye from breeders are doing a roaring S.Korea Won 0.0011 0.0013 0.0022 0.0012 0.0013 0.0082 0.0008 0.0005 0.0083 10 0.046 0.13 1 0.0037 0.0118 0.0015 0.052 0.0277 0.0016 0.04 0.035 Beijing Jingkelong Co, a Hong BIZ MOVES 1985, leading the medium- trade in Changsha, Central Malaysia Ringgit 0.2879 0.3596 0.5976 0.3348 0.3495 2.2263 0.2164 0.1471 2.2486 2629 12.526 33.88 270.2 1 3.1917 0.4088 13.934 7.4974 0.4389 10.02 9.531 Kong-listed chain retailer, said sized company to become China’s Hunan Province. Mexico Peso 0.0902 0.1127 0.1872 0.1049 0.1095 0.6975 0.0678 0.0461 0.7045 824 3.925 10.62 84.7 0.3133 1 0.1281 4.366 2.3490 0.1375 3.14 2.986 its 2006 profi t rose 33 percent IDC’s new China head a market leader. But the According to Quan Yong, as rising incomes spurred US information market company’s sales growth has who runs a dog shop, the top New Zealand $ 0.7042 0.8796 1.4619 0.8191 0.8550 5.4463 0.5295 0.3599 5.5009 6433 30.643 82.90 661.1 2.4464 7.8082 1 34.087 18.3415 1.0737 24.51 23.317 spending. research fi rm International slowed down recently because performers can earn mil- Philippines Peso 0.0207 0.0258 0.0429 0.0240 0.0251 0.1598 0.0155 0.0106 0.1614 189 0.899 2.43 19.4 0.0718 0.2291 0.0293 1 0.5381 0.0315 0.72 0.684 Net income attributable Data Corp (IDC) announced of increasing competition from lions of yuan during breed- Russia Rouble 0.0384 0.0480 0.0797 0.0447 0.0466 0.2969 0.0289 0.0196 0.2999 351 1.671 4.52 36.0 0.1334 0.4257 0.0545 1.858 1 0.0585 1.34 1.271 to shareholders increased to yesterday that Michael Guo Moutai, Fen Wine, Swellfun ing season. He recently took Singapore $ 0.6559 0.8193 1.3616 0.7629 0.7963 5.0725 0.4931 0.3352 5.1233 5991 28.540 77.21 615.7 2.2785 7.2723 0.9314 31.747 17.0826 1 22.82 21.717 99.6 million yuan from 75.1 joined the company as IDC and others. Wang will stay his Afghan Hound, which Thailand Baht 0.0287 0.0359 0.0597 0.0334 0.0349 0.2222 0.0216 0.0147 0.2245 262 1.250 3.38 27.0 0.0998 0.3186 0.0408 1.391 0.7484 0.0438 1 0.951 million yuan in 2005, the China president, reporting to as chairman of Wuliangye had won the top award in a Taiwan $ 0.0302 0.0377 0.0627 0.0351 0.0367 0.2336 0.0227 0.0154 0.2359 276 1.314 3.56 28.4 0.1049 0.3349 0.0429 1.462 0.7866 0.0460 1.05 1 company said in a statement IDC North Asia president. Group, the parent of the listed national dog show, to Chengdu to the Hong Kong stock ex- Guo, former managing company. for breeding. The customer * Figures are mid-rate of currencies as quoted by Citigroup. The rates are for indication only.