Japanese Tech Stock Weekly Summary (4/28-5/4)

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

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Semiconductor

• Eiko Trading Corporation [EIKO] announced that it signed a sales contract to Yingli Green Energy Holding Company (YGE). EIKO is engaged in the development and installation of PV systems in Japan and consulting, trading and investing in renewable energy projects with global partners. Under the terms of the contract, Yingli Green Energy will supply 17.35 MW of PV modules to EIKO for planned projects in Germany. The shipment will be delivered between April and November 2008. EIKO is looking into moving into overseas markets, and Germany stands out as one of the most important long term markets, according to the company.

Telecommunications

• Softbank (SFTBF.PK) has acquired a 14 percent stake in privately owned Chinese internet company Oak Pacific at a cost of US$96 million. The aim is for Softbank to create a stronger presence in China's internet market. Under the terms of the deal, the Japanese operator will also has the right to exercise stock warrants for another 30 billion yen (US$288 million) a year. This option would allow Softbank to raise its stake in Oak Pacific to 40 percent, making it the largest shareholder.
• NTT DoCoMo Inc. (DCM), Japan's largest mobile-phone operator, plans to sell about 100 billion yen (US$958 million) of bonds in its first issuance in five years, to fund dividend payments and share buybacks. The debt sale will help DoCoMo meet its pledge to pay about 200 billion yen of dividends and buy back as much as 150 billion yen of shares in the year ending March 31. The company's inflow of cash is shrinking after the wireless carrier began allowing customers to pay for mobile phones in installments.
• Nakayo Telecommunications releases its financial results for fiscal year ending March 31, 2008. Sales amounted to 17.8 billion yen (US$169.9 million) exceeding the company’s forecast by 3.2 percent. Operating loss reached 218 million yen (US$2.1 million) which is better than the expected 380 million yen (US$3.6 million). Net income is valued at 116 million yen (US$1.1 million), an increase of 16 percent over the company’s forecast.
• KDDI R&D Laboratories Inc. has developed an optical communications technology that enables data to be transmitted over regular Ethernet networks at speeds of 100 gigabits per second and for distances as far as 1,000km without the need for signal correction. The Ethernet protocol is the standard for office and home LANs. Data can now be sent at 10 Gbps by using a bundle of 10 lines and a set of 10 transceivers. But looking toward the future, the telecommunications industry is developing the means of transmitting data at 100Gbps, hoping to have the systems in operation in the early 2010s.

Hardware

• The world’s second largest maker of consumer electronics Sony Corp’s (SNE) operating profit likely jumped more than fivefold to 380 billion yen (US$3.6 billion) on strong sales of digital cameras in the year just ended, but it missed the company’s forecast by 30 billion yen, the Nikkei business daily reported. That would also be below a consensus estimate of 393.6 billion yen in a poll of 17 analysts by Reuters Estimates. The yen firmed sharply against the dollar in the previous quarter, hurting the profitability of electronics makers, which had already been hit by rising raw materials prices and an economic slowdown in the key U.S. market. Sony spokeswoman Mami Imada said on Friday that the Nikkei report was based on the newspaper's own speculation and declined to comment further. The company will report earnings on May 14. Sony's video game division saw its operating loss shrink by about 100 billion yen in the year ended March 2008, helping boost overall profitability, the Nikkei said. The game unit posted an operating loss of 232 billion yen in the year ended March 2007 due to hefty start-up costs for its PlayStation 3 game console. But a sluggish stock market performance is expected to force Sony' financial unit to post appraisal losses on its securities holdings, leading to a lower group operating profit than its January forecast of 410 billion yen, the Nikkei said.