Japanese Tech Stock Weekly Summary

by: IRG Ltd

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

Media, Entertainment and Gaming

• According to a company spokesperson, Nintendo (OTCPK:NTDOY) has decided to stop repairing the Famicom for reasons that stocks of spare parts are running out. Famicom was the console that became famous with Super Mario Brothers and Dragon Quest. The family computer, which was sold as the Nintendo Entertainment System in the U.S. and Europe, made its world debut in Japan in 1983. It went on to sell some 62 million units worldwide. The decision to stop providing repair services for the Famicom is seen by industry observers as bringing about the end of the product.

• Sony Corp (NYSE:SNE) disclosed that its Sony Pictures Entertainment division is looking into the possibility of selling or forging equity partnerships for half of its animation studio and an even larger portion of its digital-effects company. Sources estimate that the outright sale of the animation studio and the digital-effects company could bring in around US$500 million. Other mediasources indicated that Sony Pictures had asked investment bank Houlihan Lokey Howard & Zukin to assess the value of the two divisions.


• Casio Computer Co. Ltd. (OTC:CSIOF) announced its plans to launch W-CDMA cell phones in Japan during the six months from October 2008 to March 2009. Currently Casio makes CDMA-based phones and supplies them to Japan's KDDI Corp., Verizon Wireless in the United States and South Korea's LG Telecom Ltd. KDDI has CDMA-based networks, while NTT DoCoMo Inc and Softbank Corp. both offer cell phone services based on W-CDMA technology. Casio posted a 40.8 percent decline in its operating profit to 13.7 billion yen (US$119.6 million) in April-September from a year earlier. The company said it looks to an operating profit of 37.2 billion yen (US$324.2 million) in the current business year, compared to the consensus of 36.1 billion yen (US$314.6 million) in a poll of 13 analysts by Reuters Estimates.

• According to industry sources, IP Mobile Inc. gave back its mobile broadband license and filed for bankruptcy. The move is seen by industry observers as the termination of what was supposed to be a new data-based telecom venture. Sources placed IP’s debt at about 900 million yen (US$7.8 million). The company was given a license in 2005 with the condition that it would launch the service within two years. At a certain point, Mori Trust Co. decided to be its largest shareholder in a bid to give the company creditworthiness but the firm continued to show instability. Its efforts to generate fresh funding from new sponsors also failed.


• Kyocera Corp. (NYSE:KYO), Japan's largest electronics component maker, reported a 7.4 percent rise in its operating profit to 67.8 billion yen (US$591 million) in the first half to September compared to a year earlier’s operating profit of 63.3 billion yen (US$552 million). The company said its revenue climbed 3.4 percent to 636.5 billion yen (US$5.5 billion) and attributed the performance to the profitability of its cellular phone business at home. However, it’s net profit reported a 5.4 percent decline to 50.6 billion yen (US$441 million)


• Citigroup Inc. (NYSE:C) announced that it has signed an agreement to acquire all of Nikko Cordial Corp. (OTC:NIKOY), Japan's third-largest brokerage, paying about US$4.6 billion for the 32 percent it does not already own. Earlier this year, Citigroup, invested about US$8 billion to acquire 60 percent of Nikko this year. Nikko Cordial is Japan’s third-largest brokerage and owns more than a quarter of online brokerage Monex Beans. One of the consolidated subsidiaries of Nikko Cordial is Nikko Beans, Inc., which specializes also in on-line brokerage services.

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