Japanese Tech Stock Weekly Summary (Jan. 5 - 11, 2009)

The following is excerpted from IRG's weekly stock report:

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Hardware

• Casio Computer Co. (CSIOY.PK) plans to open satellite offices in its domestic sales division to provide better sales support to electronics mass merchandisers in areas far from existing support locations. The company will open satellite offices in Hokkaido this spring, to be followed by similar offices in Tohoku and Kyushu. The satellite offices will hold product training classes for sales staff from mass merchandisers to check the progress of sales campaigns and help construct sales displays. They will be staffed by personnel from sales support subsidiary Casio Field Marketing Co., who will telecommute. Most sales support personnel are employees of Casio Computer itself. The company's plan is to increase satellite office staffing while also reducing its own employee count through retirement and attrition.
• Panasonic Corp. (PC) will come close to meeting its target to sell 11 million flat-panel televisions this fiscal year, according to Daiwa Institute. The research firm’s comments contrast with Sony Corp.’s (SNE) prediction that it may miss its sales target for liquid-crystal-display televisions because of slacker-than-expected revenue in North America and Europe. Global LCD-TV shipments by value will probably fall 11 percent to 6.2 trillion yen (US$66 billion) in 2009, while that for plasma TVs may slide 12 percent to 1.9 trillion yen (US$68.7 billion). The research firm predicted a recovery in electronics demand won’t occur during the fiscal year starting April 1.

Telecommunications

• The Nippon Telegraph and Telephone Corp. (NTT) group, Toho Co., and Kadokawa Group Holdings Inc. have agreed to join hands in distributing digitized movies to theaters via fiberoptic networks. Operating 31 and 14 affiliated movie theaters, respectively, Toho and Kadokawa boast a total of 407 screens. They plan to start replacing conventional film projectors with digital servers and projectors starting this spring, and will use the broadband fiber-optic networks of NTT East Corp. and NTT West Corp. to distribute digitized movies to theaters. Going digital will allow Toho and Kadokawa to eliminate the cost of copying movies onto film, delivering copied films to theaters and disposing of those no longer needed.
• India's Tata Teleservices Ltd. said that NTT DoCoMo (DCM) and Tata Sons Ltd. were still awaiting regulatory clearance in India for their open offer for a 20% stake in its listed unit. The Securities and Exchange Board of India has said the joint holding of Tata Sons and NTT DoCoMo shouldn't cross 55% in Tata Teleservices. NTT DoCoMo in November 2008 agreed to buy a 26% stake in unlisted Tata Teleservices for about US$2.7 billion. It also agreed to make a joint open offer with Tata Sons for shares in the Tata Teleservices unit, Tata Teleservices (Maharashtra) Ltd. The offer, at INR24.70 a share, was to open Jan. 8 and close Jan. 27.

Semiconductor

• Elpida Memory Inc. (ELPDF.PK) said brokerage Nomura Holdings had converted US$65 million worth of its convertible bond, leaving the PC memory maker to redeem the remaining US$487.7 million. Elpida raised 50 billion yen (US$554.2 million) through the bond last year for investment purposes to help it shrink its chips and pack in more power at lower cost. But its share price tumbled due to concerns of a massive dilutive effect from the bond, forcing Elpida to redeem it under an agreement with Nomura. Elpida shares have rebounded since its announcement of the redemption in December. They ended up 11.2 percent at 598 yen (US$6.6) against the conversion price of 509 yen (US$5.63).

Internet

• Rakuten Inc. said it would book a loss of 65.6 billion yen (US$726 million) on its stake in Tokyo Broadcasting System Inc. and other holdings that would lead to a net loss for the year ending December 31, 2008. The company, which is scheduled to announce annual results in mid-February, has not provided guidance for the year to end-December. Rakuten would likely post a group net loss of 20 billion yen (US$221 million) to 30 billion yen (US$332 million) this business year due to the valuation loss, though pretax profit is expected to jump 19-fold to more than 45 billion yen (US$498 million) thanks to strong growth in its business. The company did not disclose a breakdown for the valuation loss, though most of it likely comes from its stake in TBS.