Asian Tech Stock Weekly Review (September 14-20, 2009)

by: IRG Ltd


Mobile/ Wireless

Willcom Inc. planning to ask creditor banks to allow a delay in the payment of some 100 billion yen (US$1 billion) in debts due to a decline in subscribers. In order to revive its business, Willcom will have to apply for a type of private rehabilitation which combines features of both a court-mandated liquidation and a voluntary liquidation. The company will aim to turn itself around with the help of a third-party body specializing in private rehabilitation while continuing PHS mobile services. On a net subscription basis, fresh subscriptions minus cancellations. Willcom has suffered continuous drops in contracts, registering a net subscription loss of 30,900 in August.


NTT DoCoMo Inc. (NYSE:DCM) will sell its 16.5 percent stake in Malaysian mobile telecommunications firm U Mobile Sdn. Bhd. to the latter's major shareholder U Television Sdn. Bhd. for US$100 million. U Mobile provides third generation, or 3G, mobile phone services in Malaysia with technological support from DoCoMo and South Korea's KT Freetel Co., which also bought a 16.5 percent share of the company. DoCoMo, whose overseas investment is mainly in Asian telecom businesses, also withdrew from a capital tie-up with Dutch firm KPN Mobile NV in 2005.

KDDI Corp. (OTC:KDDIF) will be on the hunt for more acquisitions in Asia as it seeks to boost overseas sales. The firm will take a majority stake in DMX Technologies Group Ltd. through a S$188.4 million (US$133.1 million) investment. KDDI Director of Global Business Development Yasunori Matsuda told the paper that DMX's strong China business was a big draw, as the country is the most important market for KDDI's Asian business.


Renesas Technology Corp. and NEC Electronics Corp. (OTC:NELTY) said their parent firms plan to inject a total of 200 billion yen (US$2.2 billion) as they move toward a merger next April. The merged entity, expected to be called Renesas Electronics Corp., will likely become not only Japan's largest semiconductor maker, surpassing Toshiba Corp. (OTCPK:TOSBF), but also the world's No. 3 chipmaker, trailing Intel Corp. of the U.S. and Samsung Electronics Co. of South Korea. Before the merger, loss-making Renesas will first issue shares to its parent firms, Hitachi Ltd. (HIT) and Mitsubishi Electric Corp. (OTCPK:MIELY) to raise 78 billion yen. The merged entity will then issue shares worth 122 billion yen (US$1.3 billion) to NEC Corp., Hitachi and Mitsubishi Electric.

Sanyo Electric Co. Ltd. (OTC:SANYY) and Dutch navigation device maker TomTom NV (OTCPK:TMOAF) said they will team up to produce multimedia navigation systems. Sanyo, which is unprofitable, said that through collaboration with TomTom it can tap into potentially lucrative growth in North American and European markets as the auto industry shows signs of recovery while other Sanyo businesses suffer from weak consumer demand. The firms aim to produce multimedia devices that combine navigation-based functions with other features, such as a DVD player. While navigation systems built into vehicles are commonplace in its home market, portable navigation devices such as those produced by TomTom, often fitted separately to cars after they are sold, are more popular in Europe and North America.



LG (OTC:LGERF) aims to double its market share for handset sales in Thailand this year through expansion using a new direct distribution channel and the entry into the untapped mid-end mobile phone segment. The South Korean handset manufacturer expects to sell up to 600,000 units this year for a market share of 8 percent, up from 300,000 units sold last year. Pavich Wasanasomboon, marketing manager of LG Electronics Thailand, said fast-growing smartphone demand would fuel the sales. The smartphone market in Thailand is expected to grow by 6-10 percent this year with a total sales volume of 1.5 million units, including phones such as Apple's (NASDAQ:AAPL) iPhone, Research in Motion's (RIMM) BlackBerry and handsets based on Microsoft's (NASDAQ:MSFT) Windows platform. LG will focus on easy-to-use and affordable smartphones because existing smartphones are expensive and difficult to use.


Com2uS Co. said the company made it onto U.S. magazine Forbes' list of the best 200 Asia-Pacific small and medium enterprises for the second consecutive year. Com2uS has been listed in Forbes Asia's 200 Best Under a Billion in 2009. The list is an annual compilation of the Asia Pacific's 200 best public-listed corporations with under US$1 billion in revenue. The list was published in Forbes Asia's magazine edition dated September 2009. Com2us was recognized as one of 23 corporations from South Korea on the list, which was culled from an evaluation of 25,326 public-listed corporations across the Asia Pacific.


Samsung Electronics has partnered with Sigma Designs (NASDAQ:SIGM) to provide the SMT-E7200 line of set-top box products. The new set-top boxes are based on Sigma's SMP8654 media processor system-on-chip (SoC) and support Microsoft's Mediaroom client. The new set-top boxes are initially targeted for deployment in Europe.

The joint venture between Korea's Samsung SDI and Germany's Bosch will have to invest 500 billion won (US$407 million) in an electric vehicle battery plant as part of its bid to gain 30 percent of the global market by 2015. SB LiMotive has broken ground on its factory to produce lithium ion batteries used to power hybrid and pure electric vehicles in the southeastern city of Ulsan. The plant will start production in 2011. The market for eco-friendly vehicles is expected to grow rapidly, boosting demand for batteries to power electric vehicles. Samsung SDI expects the lithium-ion battery market for electric cars to reach US$20.4 billion in 2020 from US$180 million in 2009. Lithium ion batteries are currently mainly used in notebook computers, cell phones, MP3 music players and other portable devices but are increasingly being used to power electric or hybrid cars.

An analysis report said that Korea's top 3 export items, semiconductors, LCDs and mobile phones—are likely to enjoy being the sole leader at least for six months in the global market. The Federation of Korean Industries released a report of its survey conducted to 92 analysts in Korea about the period of Korean export items enjoying strong competitiveness. In the report, no one has picked six months or less for semiconductors, LCDs and mobile phones, while 37.5 percent said that both semiconductors and LCDs will enjoy the current strong competitiveness for 6 months to 1 year. Those who said that mobile phones will continue to be competitive for 6 months to 1 year accounted for 62.5 percent.

Alternative Energy

Samsung Electronics Co. will step up efforts to develop its solar power business, aiming to become a leader in the global solar power market by 2015. The company said it has commenced the operation of a 30 MW-preliminary production line of photovoltaic (PV) cells. Photovoltaic cells, also known as solar cells, make up a photovoltaic module, which is used as a component in a larger system to convert solar energy into electricity for commercial and residential applications. While South Korean electronics makers started their research and development on solar cells a few steps behind their competitors in the U.S. and Japan, they are expected to catch up soon. South Korean manufacturers can easily utilize technologies used in semiconductors and liquid crystal displays (LCDs), as their manufacturing processes are similar.


Internet will record transaction volume of 200 billion yuan (US$29.3 million) in 2009. The company will break even this year. Transaction volume was up by 97 percent year-on-year, having a 80.9 billion yuan (US$11.8 billion) in the first half of 2009.

A total of 63 million Chinese were running Internet businesses at the end of June, as traders turned to the Web due to its low cost and wide reach amid the global crisis. The number of new Internet shops has jumped by at least 5,000 a day since a year ago. China has at least 338 million Internet users, more than any other country in the world. 11 million people opened online shops or sold goods on the Internet last year. A total of 74 million people were shopping on the Web in 2008, up 60 percent from 2007. 30 percent of China's white-collar workers had run an Internet shop and 60 percent were interested in starting such a business to make extra money amid the crisis.

Alibaba Group's (OTC:ALBCF) business-to-business (B2B) e-commerce site will have negotiations for an Indian joint venture (JV) to be complete in a few months and that the company hopes to unveil the JV within a year.


Sales of 3G cell phones in the Chinese mainland market numbered 600,000 units from January to July of this year, accounting for 0.64 percent of the nation's total cell phones sales. Of the three types of 3G-standard terminals, accumulative sales of mobile phones of CDMA EV-DO model took the lead to grab 45.3 percent market share. During the reporting period, world's leading cell phone manufacturers Samsung Electronics, LG Electronics, and Sony Ericsson (NASDAQ:ERIC) respectively snatched 21.3 percent, 20.3 percent, and 18.7 percent market shares in China, ranking top three.


TCL Communication will have sales of handsets and accessories increase by 24.55 percent year-on-year to 1.38 million total units in August, while the sales total for these products in the first eight months of 2009 fell 11.93 percent year-on-year to 7.97 million units. TCL Multimedia sold 807,561 LCD TVs in August, up 176.3 percent year-on-year, and 563,395 CRT TVs, down 39.1 percent year-on-year. The company sold 2.6 million A/V products in August, up 49.8 percent year-on-year, while A/V sales in the first eight months grew 18.8 percent year-on-year to 13.83 million units.

Media, Entertainment and Gaming

· Shanda Interactive (NASDAQ:SNDA) and its subsidiary Shanda Games will have a combined 63 million American depositary shares between an estimated price of US$10.50 and US$12.50 each. Shanda Games will offer 13 million ADS. Its parent company will offer 50 million ADS to take 78.1 percent of the unit's outstanding Class A and B shares and 97.3 percent of the voting rights. Shanda Games has applied to list on the NASDAQ Global Select Market under the symbol "GAME."

· Anhui Satellite said satellite TV stations will increase ad charges by more than 10 percent following the publication of the State Administration of Radio, Film and Television's (SARFT) new TV and radio ad regulation. The new regulation, which forbids satellite TV stations from running TV shopping ads between 6 p.m. and 12 p.m. will impact TV stations in China's western regions heavily. Many western TV stations air TV shopping ads after 10 p.m. and that TV shopping advertising accounts for around 50 percent of their total ad revenues.


CDC Software (CDCS) has signed a framework agreement to acquire 51 percent stake in enterprise resource planning software provider Beijing Hejia Software Technology. Hejia will be CDC Software's major strategic partner in China, said the report. Under the partnership, the parties will jointly develop software products, promote Hejia's software globally via CDC Software's international network, and sell CDC Software products in mainland China via Hejia's network. The acquisition will be conducted in phases and paid for in cash.

Kingdee International Software (OTC:KGDEF) has granted 30 million share options on 17 September 2009, with an exercise price of HK$1.37 (US$0.18) apiece. The validity period will commence from September 2009 to September 2019. The grantee is not a director, chief executive or substantial shareholder of the company, nor an associate of any of them.