Asian Tech Stock Weekly Review (November 30– December 6, 2009)

by: IRG Ltd



Sony Corp. (NYSE:SNE) Chairman Howard Stringer wants to remain the company’s chief for at least three years through March 2013 to meet a turnaround plan delayed by the global recession and the yen’s surge to a 14-year high against the dollar. Sony last month pushed back key profitability targets as the maker of Bravia televisions battles to recover from its first back-to-back annual losses since its 1958 listing. Stringer will continue streamlining Sony to compete against South Korean electronics makers such as Samsung Electronics Co. (OTC:SSNLF) Sony projected in October the yen would average 90 to the dollar in the six-month period beginning Oct. 1. The company’s losses reached about 1 billion yen (US$11 million) in annual operating profit for every yen gain against the dollar.

Toshiba Business Solutions Inc. (TBS) (OTCPK:TOSBF) announced that industry veteran Jim Hawkins has joined Toshiba as vice president of Operations US. Most recently, Hawkins was senior vice president of Field Operations for Danka, where he oversaw approximately 250 employees and led an executive team of nine direct reports.


Panasonic Corp. (PC) will invest US$1 billion by 2012 in a plan to make its principal business equipping homes and buildings with solar power and energy-saving technologies. The move focuses on solar-panel and energy-storage technology that Panasonic will gain from its purchase of Sanyo Electric Co. (OTC:SANYY), coupled with systems that Panasonic has invented. Panasonic is shifting focus as growth slows in its main consumer-electronics and appliances businesses, where it competes against Samsung Electronics Co. The change coincides with a worldwide move toward more energy-efficient technologies, a goal that’s leading more than 190 countries to meet in Copenhagen to discuss cutting greenhouse-gas emissions. The new technology will let consumers monitor their own electricity use and display the data on television sets. The system will be able to connect and monitor all of the appliances in a house, and the solar panels may produce enough clean power to offset any carbon dioxide created from other power the appliances use.

Tokyo Electron Ltd. (OTCPK:TOELF) expects orders this quarter to exceed the company’s forecast, helped by demand from memory chipmakers. Projected by Credit Suisse Group AG, bookings for chip and flat-panel gear in the three months ending Dec. 31 will be close to the 105 billion yen (US$1.2 billion), 12 percent higher than the 93.8 billion yen (US$1.03 billion) predicted by the company in October. Global sales of chip gear will probably rise 53 percent in 2010 after slumping 46 percent this year, Semiconductor Equipment and Materials International forecast on Dec. 1.

Orders for Japanese-made semiconductor-manufacturing equipment placed by domestic and overseas chipmakers in October logged the first rise since February 2007, as chipmakers began updating their facilities in view of recovering demand. The value of the orders climbed 66 percent in the reporting month from a year earlier. Sales of the equipment also increased about 8 percent, marking the first rise in 23 months. After slacking due to oversupply in the chip market and the global financial crisis, demand for semiconductors has recovered due to the spread of digital electronics appliances to emerging economies and increased shipments for new personal computers, which was partly stimulated by the release of Microsoft Corp.'s (NASDAQ:MSFT) new Windows 7 operating system.

Following its planned purchase of rechargeable-battery maker Sanyo Electric Co., Panasonic Corp. is in talks with about 10 automakers to supply lithium-ion batteries as demand for energy-efficient vehicles grows. The discussions include companies from the U.S., India, Europe and Japan. The world’s largest plasma-television maker offered 403 billion yen (US$4.6 billion) to buy control of Sanyo. The company estimates the global lithium-ion battery market will increase fivefold by 2018 from this year. Automakers are shifting to develop electric cars and hybrid plug-in models that use lithium-ion cells, which are lighter and more powerful than nickel-metal hydride batteries currently used in most hybrids.


NTT Docomo (NYSE:DCM) has bought back 154,065 of its own shares on the Tokyo Stock Exchange for 19.99 billion yen (US$220 million). The share re-purchase program was approved early November and allowed the company to buy back up to 160,000 shares for an aggregate price of up to 20 billion yen (US$221 million) between 10 and 30 November.


Media, Gaming and Entertainment

Neowiz has obtained exclusive operating rights for The9's (NASDAQ:NCTY) in-house developed Three Kingdoms-themed side-scrolling fighting casual game World of Fight ("Ming Jiang San Guo") in Korea. This is the first time that The9 has licensed an in-house developed game to the Korean market. The9 licensed World of Fight to Taiwanese online game company Gamania Digital Entertainment (6180.TW) for operation in Hong Kong, Macao and Taiwan.


Sales of Samsung Electronics’ full touchscreen mobile phones surpassed 50 million units so far this year. Samsung Electronics said it shipped its 50 millionth full touchscreen mobile phone at the end of November. It has sold 40 million units out of the total from January through November. Samsung has sold its largest share of full touch devices in Europe with 19 million units, followed by the U.S. with 6.3 million, China with 3.4 million and 3.0 million in its home market.



China's software industry revenues grew 20.2 percent year-on-year in the first ten months of 2009. Sales of software products were up 20.6 percent year-on-year, while technology services revenue grew 26 percent year-on-year.

CDC Software Corp. (CDCS) has signed an agreement to acquire Gomembers, Inc, which provides software as a service (SaaS) and on-site solutions for non-profit and non-governmental organizations.


China recorded 14.5 billion yuan (US$2.1 million) in online advertising revenues in the first three quarters of the year. Advertising revenues for the three months between July and September boosted 17.9 percent year-on-year and 26.2 percent quarter-on-quarter.

According to the Digitimes reports citing a survey by China Internet Network Information Center (CNNIC), the number of Chinese internet users connecting through a mobile handset or data card went up to 181 million at the end of August this year, a 53.4 percent increase the end of last year. Mobile internet users accessed the internet 2.2 times for a total of 97 minutes per day. Users of 3G handsets accessed the internet more often at five times and longer at 105 minutes per day. The most popular activity was browsing for news of 90.8 percent, followed by online chat of 47.9 percent, and search of 46.9 percent. is eyeing an initial public offering (IPO) on a mainland stock exchange to raise 1.2 billion yuan (US$175.8 million). Company Chairman and General Manager Shen Jinhua will hold about 80 percent equity interest in the company. has a market share of 2.9 percent.


According to the Digitimes who cited a study by Analysys International, China Mobile (NYSE:CHL) was the largest provider of mobile e-mail services, accounting for 72.26 percent of mobile e-mail users. China Mobile also accounted for 77.91 percent of the revenues from mobile e-mail services. There were 96.82 million mobile e-mail users in Q3, with total revenues of 386.4 million yuan (US$56.5 million). Following China Mobile with a market share of 16.09 percent is China Unicom, and in third place is Google (NASDAQ:GOOG) China as mobile e-mail service provider with a market share of 2.50 percent.

Linktone (NASDAQ:LTON) had third-quarter net revenues boost to US$13.3 million from US$16 million in the year-earlier quarter. Data-related services revenue was US$7.8 million. Audio-related services revenues accounted for 36 percent or US$4.9 million of total revenues. Other services accounted for 7 percent of gross revenues, or US$1.1 million. Net income from continuing operations fell to US$0.6 million from a net profit of US$1.5 million. Gross margin fell to 39 percent from 53 percent previously. Cash and cash equivalents amounted to US$78.86 million at the end of Q3. For the fiscal fourth quarter, the company expects gross revenues to be approximately US$14-15 million.

According to Interfax, Lenovo Mobile Communication Technology Co. Ltd. (OTCPK:LNVGY) ranked fifth among handset manufacturers in terms of domestic GSM handset shipments in China in October. Lenovo Mobile was the only Chinese company among the top five in October, shipping 423,000 GSM handsets to domestic distributors. Nokia (NYSE:NOK), Sony Ericsson, Samsung and Motorola (MOT). held the top four positions in October, shipping 4.13 million, 1.95 million, 982,000 and 776,000 units, respectively. LG Electronics (OTC:LGERF), which ranked fifth in September, fell out of the top five. Chinese manufacturers held the top three positions in terms of domestic CDMA handset shipments. ZTE (OTCPK:ZTCOF) retained its leading position, shipping 312,000 units in October, while Huawei Technologies and Haier Group (OTCPK:HRELF), ranked second and third with shipments of 267,000 and 196,000 units, respectively during the same time.

Lenovo Group will pay US$200 million to reacquire its mobile phone business that it spun off one and half years ago, from a group of investors led by Hony Capital. Lenovo spun off its mobile phone unit Lenovo Mobile Communication Technology Ltd in 2008 for US$100 million. The acquisition will enable it to strengthen its position in the rapidly growing mobile internet market in China.


According to the Ministry of Industry and Information Technology (MIIT), China ended October with 729.537 million mobile telephony subscribers, 16.30 percent increase year-on-year. User density in October stood at 54.3 percent and mobile users sent 67.26 billion SMS messages in the month. Furthermore, the country had 321.38 million fixed-line subscribers, with a user density of 24.4 percent. The number of broadband subscribers climbed 22.71 percent year-on-year to 100.89 million, while the number of dial-up subscribers stood at 8.94 million.

Qualcomm Inc.'s (NASDAQ:QCOM) China operations generated US$2.3 billion in revenue, accounting for 23 percent of Qualcomm's total revenue for the fiscal full year ended September 27, 2009. The company had full year revenues of US$10.42 billion. Qualcomm invested in Suzhou-based mobile social networking site

Media, Entertainment and Gaming

· Actoz Soft may invest in small Asian game firms or enter foreign markets jointly with its parent. Actoz Soft, which developed the popular multiplayer online game "Legend of Mir II," aims for about 50 percent sales growth next year. The firm focuses on overseas markets as online games enjoy sharp growth in China and increasing popularity in Western countries. The online game industry's revenue is expected to grow 21 percent to more than US$13 billion in 2010, while revenue from video games is seen falling 5 percent. Actoz Soft generates about 90 percent of sales overseas. It benefits from its relationship with Shanda (NASDAQ:GAME), which services several Actoz games over its strong Chinese network. Foreign companies face increasingly tougher regulation in China, which has the largest number of Internet users in the world. Shanda Games, China's No. 2 online game company, was carved out of media firm Shanda Interactive Entertainment (NASDAQ:SNDA) in September to expand overseas.

· Tencent Holdings Limited (TCEHF.PK) said that sales revenue of China's online gaming industry is expected to reach 27.5 billion yuan (US$4.03 billion) in 2009. The third quarter financial reports of major Chinese online game companies including Sohu (NASDAQ:SOHU), Tencent, NetEase (NASDAQ:NTES) and Shanda, showed most of them recorded a 60 percent or even higher increase in gross profit. The sales revenue of China's online gaming industry reached 18.38 billion yuan (US$2.7 billion) in 2008, up 76.6 percent from 2007. An executive from the gaming department of NetEase attributed the continuous growth of the online gaming industry to the development of Internet technologies and preferential policies from the government. Chinese online game companies' expansion overseas also contributed to the growth.

· Kingsoft Corp. and Shanda Interactive Entertainment Ltd. are expected to make an official announcement that they will work together to jointly operate online games. Kingsoft is currently strengthening its game operation capacity and will launch 10 new self-developed games in 2010. Such joint operation partnership is expected to become a trend as China's online game market matures. The outcome of Kingsoft's partnership with Shanda is still unclear, as CGA platform users are different from Kingsoft's target user base for its JX game series, which includes the JW. Kingsoft generated total revenue of 162.8 million yuan (US$23.83 million) from online game operation in the third quarter of 2009, boosted 9 percent year-on-year.

· Take-Two (NASDAQ:TTWO) anticipates that its results for the fourth quarter and fiscal year 2009 will be below its prior guidance mainly due to the performance of its Major League Baseball® titles in the fourth quarter, which reduced earnings by approximately US$0.09 per share, along with an impairment of capitalized software based on sales estimates for its MLB titles in fiscal 2010, representing approximately US$0.05 per share. The company also incurred inventory write downs in its distribution business primarily related to prior generation software, representing approximately $0.07 per share, and realized lower than expected initial performance of several of its key holiday releases. Additionally, on a GAAP basis, Take-Two expects to record non-cash impairment charges of up to approximately US$15 million on its distribution segment (equivalent to US$0.19 per share in the fourth quarter and US$0.20 per share for the full fiscal year 2009), in connection with the company's annual assessment of goodwill. These amounts are excluded from the estimated fourth quarter and fiscal year non-GAAP EPS provided in the chart below.


An auction agency in southern China's Fujian province would arrange sale of integrated assets held by the Amoi Electronics at a reference 146.78 million yuan (US$21.4 million) price. The assets include the Amoi brand, patent, 75 percent shares of Amoi Electronics' subsidiary Amoi Mobile, management system, manufacturing and testing equipment, as well as inventories that relate to the handset business. The sale Amoi Electronics' assets were evaluated at about 800 million yuan (US$117.1 million).

SinoHub, Inc.’s total revenues for the 2009 third quarter increased more than 28 percent to US$36.2 million from US$28.2 million for the 2008 third quarter. Revenues from electronic component sales, including procurement-fulfillment and spot component sales, increased more than 27 percent to US$34.3 million for the 2009 third quarter from US$26.9 million for the same period last year. Revenues from the company's supply chain management services business climbed more than 50 percent to US$1.9 million for the 2009 third quarter from US$1.3 million last year.

Alternative Energy

Trina Solar Ltd. (NYSE:TSL) will supply an estimated number of 8 megawatts of photovoltaic (PV) modules to the Chinese domestic market. The Chinese government approved its project of about 2 MW under the Golden Sun program. This project expects to install approximately 20 MW of solar power capacity in every province of the country. The 8 MW sales deal was to supply PV modules at predetermined prices. The company had sales deal with PROINSO for 108 megawatts worth of solar panels to boost its market share in Europe.

Disclosure: Director

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