Japanese Tech Stock Weekly Summary

by: IRG Ltd

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

Media, Entertainment and Gaming

• The Bank of Tokyo-Mitsubishi UFJ (NYSE:MTU) announced that it has entered into an alliance with Walt Disney Co. (Japan) to provide a new service for personal computers and mobile phones. Industry observers note that this marks the first time that Walt Disney has joined forces with a major Japanese bank to work in the online banking business. Under the agreement, an account is all that is needed to participate in the new Disney Osaifu (purse) Service. Points awarded for using financial services can be used to buy Disney goods and play games featuring Disney characters.

• NHK announced the growth in both revenue and profit in 2006, the first time in three years, with the media group ascribing the results to a recovery in subscription payments. NHK said its revenues added 8.8 billion yen (US$22 million), with over 95 percent of the growth attributed to subscription fees, to reach 643.2 billion yen (US$5.2 billion). The company said its expenditures were down to 619.8 billion yen (US$5 billion).


• According to the Internet research firm Infoplant, the phenomenon of downloading manga to a computer or cell phone is gaining traction in the Japanese market. The survey was conducted via cell phone and covered some 5,400 respondents. The research firm said out of the people surveyed, 91.8 percent knew of the existence of manga downloads, and 40.2 percent had actually downloaded a manga title before. The study said that out of the people who downloaded manga and specified their gender on the survey, women outnumbered men 43.6 percent to 34.4 percent. The overwhelming majority of these women were age 19 or younger (61.7 percent). The survey also indicated that manga downloads are especially popular with commuters and younger users. The survey found out that the trend has interested others, with over 60 percent of those surveyed indicating that they plan to try downloading manga in the future.


• According to the research by ROA Group, the number of mobile users in Japan will grow to 107.3 million by the end of 2010 with a compound annual growth rate [CAGR] of 3.9 percent during 2003-2010. The ROA Group report stated that the introduction of Mobile Number Portability [MNP] was the most important issue in the Japanese mobile market in the second half of 2006, even as the report said that it had a limited influence on the overall mobile market because mobile operators maintained a relatively low subscriber churn rate by offering attractive handsets, services and tariff plans. The report took note of another significant change in the Japanese mobile market with the emergence of SoftBank Mobile, created by the merger between SoftBank (OTCPK:SFTBF) and Vodafone (NASDAQ:VOD) Japan. The ROA Group contended that 3.5G [HSDPA] networks are spreading and data services are expected to increase with an accelerating speed, providing another driving engine for market growth in Japan.


• 3M Co. (NYSE:MMM) disclosed that it has settled a patent dispute involving lithium ion battery cathode materials with Japan's Matsushita Electric Industrial Co. Ltd. (MC-OLD) In a statement, 3M said that under the agreement, Matsushita and its subsidiary Panasonic Corp. of North America were now licensed sources of batteries. The U.S.-based 3M did not disclose the terms of the settlement. The settlement is also expected to remove Matsushita and its Panasonic unit from the lawsuit as well as from a complaint filed with the U.S. International Trade Commission. According to a 3M spokesperson, both the lawsuit and the complaint are proceeding against such companies as Sony Corp. (NYSE:SNE), Lenovo Group Ltd. (OTCPK:LNVGY), a U.S. unit of Hitachi Ltd. (HIT), CDW Corp. (CDWC), and Sanyo Electric Co. Ltd. (OTC:SANYY). Lithium ion batteries are a source of power for laptop computers, mobile phones and portable electronic devices.

• Industry sources said Pentax Corp. has agreed to a takeover estimated to have reached about 105 billion yen (US$860.2 million) by rival Hoya Corp. (OTCPK:HOCPY). Under the agreement, Hoya is offering 770 yen (US$6.3) a share for the Pentax shares, and plans to start the tender offer to shareholders in early June, and turn Pentax into a wholly owned unit. The two companies said details of the deal will be announced later.

• NPC Inc., a developer of equipment to manufacture solar batteries, has received approval to list on the Tokyo Stock Exchange's Mothers Market. The company will offer 300,000 shares to the public in its initial public offering. Of those, 250,000 are newly issued shares and 50,000 are shares currently held in private. Okasan Securities is the lead underwriter of the offer. The company will offer all the shares through the book-building method. For the current fiscal year through February 2008,the company forecasts a group net profit of 443 million yen (US$3.6 million), a pretax profit of 765 million yen (US$6.2 million), and sales of 6.4 billion yen (US$52.4 million).


• UBIC Inc., which provides services to investigate computer fraud, has received approval to list on the Tokyo Stock Exchange's Mothers market. The company said it will offer 118,000 shares to the public in its IPO. Of those, 59,000 are newly issued shares and another 59,000 are shares currently held in private. Mitsubishi UFJ Securities is the lead underwriter of the offer. The company will offer all the shares through the book-building method. The company expects to generate 527.7 million yen (US$4.3 million) from the IPO. Of the IPO proceeds, it plans to use 358.1 million (US$3 million) for capital expenditure, 89.3 million yen (US$731,600) for advertising and sales promotions, 75 million yen (US$614,400) for hiring employees and the remaining for working capital. For the current fiscal year through March 2008, the company forecasts a parent pretax profit of 232 million yen (US$2 million), net profit of 139 million yen (US$1.1 million) and revenue of 824 million yen (US$6.7 million).

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