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• NTT DoCoMo said its fourth quarter profit declined 38 percent year-on-year, as quake expenses and a decline in revenue cut into on the company's bottom line. Profit for the quarter ending in March declined to 46.5 billion yen (US$570.5 million), as revenue dipped 2.6 percent to 1.04 trillion yen (US$13 billion). DoCoMo had 7.1 billion yen (US$88 million) worth of quake-related expenses for the period. CEO Ryuji Yamada said the company will spend a total of 30 billion yen (US$371.9 million) on recovery, including 10 billion yen (US$124 million) for full restoration and 20 billion yen (US$248 million) to implement new disaster preparedness measures.
• NTT Data Corp. will acquire Italy’s Value Team SpA to expand in Europe and boost its presence in the Latin American market. Value Team, which generated revenue of 308 million euros (US$449 million) last year, will provide a bridgehead into Brazil to tap Latin American customers. NTT will spend 250 million euros (US$359.2 million) for the purchase. President Toru Yamashita will spend as much as 300 billion yen (US$3.7 billion) on acquisitions to quadruple sales outside Japan over three years. The Value Team agreement follows the acquisition of Keane International Inc. in December and is NTT Data’s seventh overseas deal in the past year. Value Team has at least 300 customers in the telecommunications, financial and manufacturing industries. The Milan-based company employs almost 3,000 people.
• KDDI boosted its annual profit nearly 20 percent, despite significant costs incurred from the Japanese earthquake. The company has a profit of 255.1 billion yen (US$3.11 billion) for the year ending in March. The company stated that the number of suspended base stations had fallen from 1,933 in the aftermath the quake to 124 as of April 22, and that just 2,237 of the 390,000 fixed line services that had been disrupted remain out of commission. KDDI’s restoration work so far has concentrated on recovering network coverage, and that this phase is due to end on April 30. Work will then begin on recovering quality, including installing 53 new base stations, in a stage scheduled to last until September 30. While the company's annual profit increased, operating revenues for the year declined 0.2 percent to 3.44 trillion won (US$3.2 billion). The company said its capex for the year declined 14.4 percent to 443.7 billion yen (US$5.51 billion) while Ebitda increased 1 percent, and Ebitda margin surged to 27.3 percent from 26.9 percent.
• Hackers who targeted Sony Corp. may have stolen personal data for customers from a second online service, bringing the potential number of compromised accounts to over 100 million. Sony Online Entertainment suspended access to its services after discovering personal information from 24.6 million accounts had been stolen. The information included names, addresses, birthdates and other personal details. The expansion of Sony's investigation dramatically raises the fallout from a high-profile breach of its computer records. The company acknowledged personal information had been stolen from another unit, PlayStation Network, prompting concerns about identity theft and an inquiry from members of the U.S. Congress.
• The PlayStation Network outage could cost Sony at least US$20 million in lost business by the time services are restored, figures from a leading analyst firm suggest. Informa Telecoms & Media estimates the outage cost Sony over US$10 million in the first six days the PlayStation and Qriocity networks were offline. With Sony estimating it could take another week to restart all services the total financial penalty could easily be double that amount. Sony will also be beefing up the security of its servers, but analysts warn that the firm risks losing consumer confidence entirely if it gets the improvements wrong.
• SK Telecom Co. has raised its 2011 capital investment to 2.3 trillion won (US$2 billion) to speed up the upgrade of its network services. The mobile operator said the surged spending of 300 billion won (US$272 million) will be spent on upgrading its data service quality by expanding the capacity of its third-generation networks and deploying the next-generation network technology, called long-term evolution. SK Telecom will release LTE services to meet boosting demand for wireless data services. In January, the mobile operator had earmarked 2 trillion won (US$1.9 billion) for its capital expenditure this year, as it expects the number of its smartphone users to at least double during the course of the year. In tandem with its focus on wireless data services, SK Telecom will introduce around 30 new smartphone models in 2011, or 60 percent of new mobile phone devices.
• SK Telecom intends to upgrade to LTE's successor, LTE-Advanced, starting in 2013. The company revealed its plan as announcing the first demonstration of its LTE network. SK Telecom also said it would apply Coordinated Multi-Point technology to the network when up and running in a bid to prevent base station interference, and pursue early development of LTE femtocells. A pre-existing network of 2G 800MHz repeaters will also be used to surge the new network's signals. SK Telecom in January chose Samsung, LG-Ericsson and NSN as its LTE vendor partners, and earlier that month revealed the results of field trials with China Mobile.
• KT Corp. will sell its entire 79.96 percent stake in Russian unit, New Telephone Co., for US$346 million to VimpelCom Ltd. KT purchased its stake in the Russian unit for US$22 million. In 2010, New Telephone posted a net profit of US$25 million on sales of US$110 million and secured 1.5 million subscribers. Korean telecom companies have been seeking ways to broaden their business portfolio into other new areas that have more growth potential to overcome the limited opportunities in South Korea's saturated telecom market. KT has been boosting its investment spending in the emerging markets, including Latin America and Africa, and is looking for other investment opportunities in the global markets.
• KT Corp. had first-quarter net profit jumped 85 percent, boosted by a surge in investment gains from its 37 affiliates and accelerating demand for data services from smartphone users. For the three months ended March 31, KT posted net profit of 555.2 billion won (US$511 million). The first quarter results are the first reported under new international accounting standards which became mandatory in South Korea. KT Skylife was the affiliate that contributed most to the leap in profit. KT Skylife was incorporated as an affiliate in April after KT's stake in the digital satellite broadcaster surged to around 53 percent from around 30 percent previously.
• Samsung Electronics Co. said its first quarter profit declined 30 percent to 2.78 trillion won (US$2.6 billion) as its TV-component business tumbled into the red and semiconductors and TVs brought smaller profits amid weakening demand. Samsung's investor relations chief Bob Yi forecast the challenging business conditions will persist in the quarters ahead, noting some risks surrounding the global economy, intensifying competition in the overall set businesses and the local currency volatility. Operating profit was 2.95 trillion won (US$2.7 billion) in the first quarter, as sales surged 6.8 percent to 36.99 trillion won (US$34 billion).
• Youku.com released financial results for the first quarter of 2011. The company had a net loss of 46.92 million yuan (US$7.2 million) in the first quarter of 2011, compared with a loss of 51.20 million yuan (US$7.9 million) in the corresponding period in 2010 and a loss of 37.72 million yuan (US$5.8 million) in the preceding quarter, bringing diluted loss per ADS to 0.45 yuan (US$.07). Net revenues for the period came to 127.99 million yuan (US$19.7 million), up 163 percent year-on-year but less than the 152.47 million yuan (US$23.4 million) recorded in the final quarter of 2010, having exceeded the high-end of company guidance by 22 percent. Of the total, brand advertising revenues amounted to 119.8 million yuan (US$18.4 million) up 165 percent year-on-year.
• Dangdang.com will increase the share of revenue offered to member sites of its online advertising alliance to a maximum of 7 percent from May 1 for non-book products. Dangdang will maintain its 3 percent of revenue offer to sites that promote its book products. The site also will offer e-coupons worth between 50 yuan (US$7.70) and 5,000 yuan (US$770), as well as other rewards, for university campus-based agents and consumer-to-consumer online retailers that place orders with Dangdang.
• Ganji.com has secured third-round financing worth US$70 million from Capital Today and Sequoia Capital. The round of funding was completed in late December and the capital will be directed towards branding, product development and cooperation with mobile manufacturers. The site's revenue came to US$10 million in 2010 and is seen to reach US$30 million this year.
• Ctrip.com International has established a group purchasing channel for hotel deals. The channel offers reservation and stay-extension booking deals from over 100 hotels daily. Although Ctrip indicated that the deals would not affect its commission income, rather opening a new channel for increasing revenue, China Business News cites unnamed industry sources as saying the cut-price offers are likely to eat into Ctrip's commissions.
• Baidu and Rakuten's joint China business-to-consumer (B2C) online shopping mall has secured agreements with 20 domestic bookstores to market their products online. Dangdang.com announced that it would not be affected by newcomers.
• Alibaba Group has completed the acquisition of domestic website traffic tracking service provider CNZZ for an undisclosed amount, Sina said. Alibaba paid US$15 million for the deal. Alibaba and its website infrastructure service provider Net.cn, acquired in 2009, recently released a new website development service, Ali Awai, targeted at Alibaba's manufacturing and trading clients, china.com cited separately on the same day.
• Baidu made a net income of 1.07 billion yuan (US$165 million) in the first quarter of 2011, a 122.8 percent gain versus the prior year, and representing diluted earnings per ADS of 3.06 yuan (US$0.47). Total revenues in the quarter came to 2.44 billion yuan (US$376 million), up 88.3 percent year-on-year, as the number of active online marketing customers in the quarter surged 24.0 percent year-on-year but decreased 0.7 percent quarter-on-quarter to 274,000. Revenue per online marketing customer for the quarter was 8,900 yuan (US$1370), up 50.8 percent year-on-year and flat on a sequential basis.
• Dianping.com has completed a round of financing worth over US$100 million with venture capital firms Trust Bridge Partners, Sequoia Capital, Qiming Ventures and Lightspeed Venture Partners, Sina cited. The funding will be mainly directed towards expansion into new city markets as well as developing new group shopping services and mobile internet services.
• Alibaba.com will form a partnership with China Post EMS Logistics' Zhejiang branch to build a warehousing center in Hangzhou, Zhejiang Province to provide logistics services to SME clients under Alibaba's Aliexpress service.
• Sohu recorded net income of US$39.3 million in the first quarter of 2011. Total revenues for the first quarter were US$174.4 million, up 1 percent quarter-on-quarter and 35 percent versus the prior year’s period, above the high end of company guidance of US$169.5 million. Of the total, online brand advertising revenues totaled US$57.2 million, and search revenues were US$8.0 million, up 21 percent quarter-on-quarter and 183 percent year-on-year.
• Changyou had net income of US$52.85 million in the first quarter of 2011, up 11 percent quarter-on-quarter and 33 percent year-on-year and representing a fully diluted earnings per Ads of US$0.99. Total revenues for the first quarter of 2011 surged 6 percent quarter-on-quarter and 35 percent year-on-year to US$97 million. The company had guided revenues of US$92 million to US$95 million. Changyou also recorded a total of 116.5 million accounts by the end of the quarter, up 5 percent quarter-on-quarter and 33 percent year-on-year, as active paying accounts boosted 7 percent sequentially and 21 percent year-on-year to 2.88 million, though peak concurrent users declined 3 percent sequentially to 1 million. Average revenue per active paying account (ARPU) decreased 4 percent quarter-on-quarter and surged 4 percent year-on-year to 210 yuan (US$32.30). For the second quarter of 2011, the company expects to record total revenues of between US$97 million and US$100 million.
• China will complete its planned integration of Internet, television and telephone networks by 2015, according to the Economic Information Daily, citing Ministry of Industry and Information Technology head engineer Zhu Hongren. China's State Council last year said it approved the first group of cities to take part in a trial program involving the construction of a communications network integrating internet, TV and telephone services. Currently, the three services generally use separate networks in China.
• China Unicom said unaudited results show its Q1 net profit declined 86 percent from last year as subsidies on 3G handsets again weighed on earnings. Net profit fell to 166 million yuan (US$25 million), despite a 21 percent revenue increase to 49.03 billion yuan (US$7.5 billion), as the carrier competed with rivals for 3G customers. Subsidies on 3G handsets surged sharply in Q1 to 1.9 billion yuan (US$292 million). The company said results had also been affected by depreciation and other operating expenditures. Depreciation and amortization charges had risen to 14.06 billion yuan (US$2.2 billion), as operating expenses increased to 30.65 billion yuan (US$4.7 billion). Overall ARPU increased to 45.5 yuan (US$7.00), but ARPU for 3G users had fallen to 117.2 yuan (US$18.00). China Unicom is expected to start offering iPhones without a contract soon. The firm last month said higher 3G subsidies had been tied to higher iPhone sales in Q4 2010.
• China Telecom had an 8 percent increase in profit for the quarter ended 31 March, driven by internet and data services. Profit was 4.6 billion yuan (US$708 million), as operating revenue increased 11.3 percent year-on-year to hit 58.67 billion yuan (US$9.03 billion). Ebitda before capacity lease fees was 23.76 billion yuan ($3.65 billion). China’s largest fixed line operator and smallest wireless operator said growth in its internet and data services segment more than offset declining numbers for fixed line voice services. China Telecom had 16.37 million 3G subscribers in Q1, up from 12.29 million during the same period last year. Total mobile customers stood at 100.25 million at the end of the quarter, compared to 90.52 million last year.
Media, Entertainment and Gaming
· Shanda Games licenses in-house developed MMORPG fantasy novel adaptation in Taiwan. The company announced that Legend of Immortal was licensed to Taiwanese game operator SoftWorld International subsidiary Game Flier International. The game was also licensed to Vietnamese game operator VNG Corporation in mid-March.
· Shanda Games has signed a contract with NAMCO Bandai's Korean unit Bandai Korea to operate Dragon Ball Online in mainland China. The game recorded 350,000 account registration applications during testing in Korea. The company also licensed 2D side-scrolling MMORPG Granage from Korean game company Logiware.
· CDC Corp recorded a net loss of US$23.03 million in the fourth quarter of 2010, compared with a net loss of US$6.10 million in the prior quarter and a loss of US$4.68 million in the fourth quarter of 2009. The fourth quarter loss included a US$17.52 million charge associated with restructuring. Total revenues came to US$83.08 million in the final quarter of 2010, up from US$78.36 million in the previous quarter and from US$82.97 million in the comparable period the year before. The company's software subsidiary CDC Software contributed US$56.75 million in the fourth quarter, up from US$53.01 million in the previous quarter, its IT consulting arm CDC Global Services made US$14.64 million, down from the US$15.87 million third quarter contribution, and CDC Corp's games division, CDC Games, generated US$7.25 million, compared with US$6.38 million in the previous quarter.
• ReneSola had net income of US$43.33 million in the first quarter of 2011, down from US$61.05 million in the fourth quarter of 2010 and representing diluted earnings per ADS of US$0.49. Net revenues in the quarter were US$328.2 million, in line with company guidance and representing a decrease of 15.1 percent from the previous quarter, as total shipments decreased 5.4 percent quarter-on-quarter. The company achieved gross margin of 30.7 percent, compared with 30.9 percent in the prior quarter, but recognized a US$19.8 million loss in the fair value of foreign exchange forward contracts due to euro appreciation, compared to a gain of US$10.1 million in the fourth quarter of 2010.
• LDK Solar expected to report revenue of US$745 million to US$755 million for the first quarter 2011. This represents a decrease from previous guidance of US$800 million to US$850 million, after reducing module shipments to 109-114MW, but increasing wafer shipments to 625-635MW and in-house polysilicon production to 2,450-2,470MT. LDK also raised its forecast gross margin for the quarter to 30-31 percent. The company maintains its 2011 guidance of US$3.5 billion to US$3.7 billion in revenues, at a gross margin of 24-29 percent, from wafer shipments of 2.7-2.9GW and module shipments of 800-900MW.
• Comtec Solar Systems had revenues of 317.91 million yuan (US$48.9 million) in the first quarter of 2011, representing an increase of 60.3 percent year-on-year, as shipment volumes increased due to accelerating demand and capacity. Gross profit margin reached 30.5 percent, which the company attributed to increased selling price of wafers. Net income increased 311.1 percent year-on-year to 83.51 million yuan (US$28.3 million).