Japanese Tech Stock Weekly Summary

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

Internet

• According to the Tokyo Stock Exchange, ITmedia Inc., an Internet service company, has secured an approval to list on the Tokyo Stock Exchange's Mothers market on April 19. The company will offer 5,392 shares to the public in its initial public offering. Of those, 5,000 are newly issued shares and 392 are shares currently held in private. The company will offer all the shares through the book-building method. The company said it expects to net 2.2 billion yen (US$18.6 million) from the IPO. For the current fiscal year through March, the company forecasts a group pretax profit of 461 million yen (US$4 million) and net profit of 268 million yen (US$2.2 million). It forecasts a group pretax profit of 550 million yen (US$4.6 million) for the next fiscal year to March 2008. Shinko Securities is the lead underwriter of the offer.

Software

• Pacific Systems Corp., a system integration service firm, said it has received approval to list on the JASDAQ Securities Exchange on April 19. The company will offer 200,000 shares to the public in its initial public offering. Of those, 100,000 are newly issued shares and 100,000 are shares currently held in private. The company will offer all the shares through the book-building method. Under that method, the underwriter gauges the degree of demand for the shares among institutional investors by accepting orders from fund managers, who indicate the number of shares desired and the price they are willing to pay. The company expects to net 160.8 million yen (US$1.3 million) from the IPO. For the current fiscal year through March, the company forecasts a group pretax profit of 453.5 million yen (US$3.8 million) and net profit of 262.9 million yen (US$2.2 million). Last fiscal year, the company posted a group pretax profit of 360 million yen (US$3 million), net profit of 233.8 million yen (US$2 million), and revenue of 7.5 billion yen (US$63.5 million). Mizuho Securities is the lead underwriter of the offer.

• Fuji Xerox Co. Ltd. and Microsoft Corp. (MSFT) announced a broad patent agreement for the purpose of allowing access to each company's respective patent portfolios and to accelerate research and development. Fuji Xerox, which is owned by FUJIFILM Holdings Corp. (FUJI) and Xerox Corp. (XRX), is a leading investor in research and development related to document management systems and maintains a broad patent portfolio in the U.S. and in Japan. Like Fuji Xerox, Microsoft has a long history of research and development and maintains many patents related to software and computer hardware innovations. Under the agreement, Fuji Xerox will obtain access to Microsoft patents for Fuji Xerox's existing and future product lines, including products that incorporate proprietary source and open source software, such as Linux. Likewise, Microsoft will gain access to Fuji Xerox patents for Microsoft's existing and future proprietary product lines, including Microsoft Office. The agreement contains monetary and non-monetary provisions that allow both companies to receive compensation from their patent portfolios. The terms of the agreement are not being disclosed at this time.

• According to NEC Corporation (NIPNY), effective next month, the company will establish a new organization structure in a bid to strengthen its system integration, software business and research and development capabilities to accelerated execution of its growth strategy. Under the plan, NEC is merging the NES Solutions Group Business Unit and NE Software Development Group Business Unit to form a Systems Integration and Software Development Group Business Unit. The new business unit covers 12 software-related consolidated subsidiaries, including NEC Soft, Ltd., NEC System Technologies, Ltd., and NEC Communication Systems, Ltd. NEC said it will merge its Solutions Development Laboratories, which cultivates new business in the area of IT/network solutions, into its Central Research Laboratories, which develops advanced fundamental technologies.

Hardware

• General Electric Co. (GE) disclosed its plans to make a tender offer worth up to US$1.1 billion for Japan's Sanyo Electric Credit Co., with the board of the credit service company reportedly supporting the tender offer. Sanyo Electric Credit Co. is a financial unit of Sanyo Electric Co. (SANYY.PK), the electronics maker. GE said STV Partners, a wholly owned unit of GE, will offer 3,250 yen (US$27.5) for each Sanyo Electric Credit share. Goldman Sachs Group is Sanyo Electric Credit's top shareholder, controlling an estimated 40 percent of shares. Sanyo Electric currently holds a 16.7 percent stake in the financial services company. Goldman Sachs Group acquired its stake in December 2005, when Sanyo sold a portion of its 52 percent stake as part of a restructuring drive.

• Hitachi (HIT) announced its plans to sell the world's first high-definition TVs with removable hard drives. The product can expand high-definition recording capacity with the new hard drives. Hitachi expects the feature as a factor that will push up its sales. Hitachi has promised to bring its flat TV business into the black in the January-March quarter. The company said it will equip plasma TVs and liquid crystal display (LCD) TVs with 250-gigabyte internal hard drives and removable 80-GB or 160-GB drives starting April 20th in Japan, with the aim of deploying the products overseas within one to two years. The hard drives, called “information versatile disks for removable usage” is programmed to prevent duplication of copyright high-definition material while allowing content to be transferred.

Semiconductors

• NuFlare Technology, a semiconductor developer, said it has received approval to list on the JASDAQ Securities Exchange on April 25th. The company will offer 18,500 shares to the public in its initial public offering. Of those, 10,000 are newly issued shares and 8,500 are shares currently held in private. An additional offering of 2,500 existing shares is expected under an over-allotment arrangement in the event of exceptional demand. NuFlare Technology will offer all the shares through the book-building method. The company expects to net 1.9 billion yen (US$16 million) from the IPO, which it plans to use for capital investment in its production facilities. For the current fiscal year through March, the company forecasts a parent pretax profit of 1.7 billion yen (US$14.3 million), net profit of 1 billion yen (US$8.4 million), and sales revenue of 23 billion yen (US$194.8 million). Nomura Securities is the lead underwriter of the offer.

Disclaimer: IRG is not responsible for the accuracy of the news compiled within this article, which is based on publicly available information.