The group's revenue rose threefold to 329.4 million yuan (HK$375.9 million) for the first half of the year, and gross profit almost trebled to 135.8 million yuan.

This significant growth came largely because of an increasing number of mobile phone users in China, and it is common for them to personalise their phones by using original songs downloaded from the internet. China Mobile's interim results this year showed that the ring-back tone subscription increased 99.8 per cent to 600 million times, and mainland mobile subscribers rose 24.7 per cent to 414.6 million.

A8Digital Music made greater use of the internet and mobile handsets, and promoted its UGC platform on television and radio.

One of the most popular songs Ji Mo Cai Shuo Ai was downloaded more than 11.7 million times in the first half of this year, almost 50 per cent more than the most downloaded song last year. The platform held more than 60,000 songs in its library.

To promote the songs, the group encouraged singers by putting their songs on the UGC platform for a free download to raise awareness among its target market of young people. Then, the group would sign contracts with singers and composers to promote their work, showing their support by organising more than 600 concerts in different cities each year. This would lead to these popular singers representing A8Digital Music, Mr Liu said.

The group also jointly organised the 2007 Annual Original Music Competition with the Shenzhen municipal government which ended in June. About 4,000 original independently created entries were received, and 20 songs from the finalists will be promoted on its UGC platform.

Mr Liu said the main difference between original independently produced music content and a conventional music producer is that the UGC platform freely allows various styles of songs to be promoted.

He said the group would also create different themes for promoting original songs and concerts in festivals, such as the Lunar New Year, Valentine's Day, and Christmas. The group was the sole organiser and promoter of a 'Happy Chinese New Year' event held from January to March this year.

'Use Music to Move Olympics' was another event that A8Digital Music participated in to promote Olympic-related ringtones. In the second half of the year, the group said it was going to further develop A8Box, a music playing software designed by A8Digital Music. The A8Box can be downloaded to mobile phones on the UGC platform to personalise the music-playing settings of the handsets.

A8Digital Music works with handset manufacturers, design houses and mobile chip producers to support different mobile and Smartphone platforms, such as MTK, Nokia Symbian and Spectrum.

New functions of this software include humming song recognition technology, a PC version with auto synchronisation, A8Box's Symbian touch screen version, music video and music related news support. It will be 3G compatible and support the popular Nokia S60. The A8Box will be embedded in three million to five million new mobile handsets during the second half of the year.

Mr Liu expects restructuring of China's telecoms industry and the launch of 3G services to create a business environment for digital music development.

He said that with more mobile related services, the competition among phone services companies could raise the standard of the entire industry. He expects mobile music to continue to be very popular.

The launch of 3G services provide diversified channels for digital music promotion. He said the operators would depend more on content and service providers in competition of high-quality and personalised services to end-users.

Mr Liu said the group would conduct more music research and upgrade its personalised recommended playlist in the first half of next year.

He said the mobile music business was not influenced by the external economic factors such as global inflation. The demand for new songs and ringtones increase as more Chinese people purchase new mobile phones, especially in the youth market.

'We are also looking for potential merger and acquisition targets whom we can create synergies with,' Mr Liu said.

A8Digital Music listed on the main board of the stock exchange in Hong Kong in June.