A week in tech, May 14-20

A roundup of the latest tech news.

ò Softbank Corp is to form a joint venture with Alibaba.com that links Japanese small businesses to trading partners in China. Alibaba.com. said the new company will take over the operation of Alibaba.com's existing Japanese language site. Alibaba Group has built a global community of close to 30 million members from over 240 countries and regions. Japan has more than 4 million small and medium enterprises, which account for 25% of the country's export value and 63% of its import value.

ò Nippon Telegraph and Telephone Corp is expected to post operating profit of 1.15 trillion yen ($11 billion) to 1.20 trillion yen ($11 billion) in the current year to March 2009, down 100 billion yen ($955 million) from the previous year. The decline is due to special factors that boosted its profit by 190 billion yen ($2 billion) in the past year to March, including capital gains from the return of pension funds which it managed on behalf of the government. The company's operating profit for the year ended March 31 likely jumped 17% to about 1.3 trillion yen ($12 billion), topping its previous projection of 1.26 trillion ($12 billion).

ò Nippon Telegraph & Telephone CorpÆs shares rose the most in 9 1/2 years in Tokyo trading after the company said it will increase its dividend payment and share buybacks this year. NTT climbed 11% to close at 498,000 yen on the Tokyo Stock Exchange, its biggest gain since October 1998. UBS AG raised its rating on the company to ôbuyö from ôneutral,ö citing the ôsurpriseö dividend increase. Nomura Holdings Inc upgraded the stock to ôstrong buyö from ôbuy.ö The company raised its annual dividend payment to 11,000 yen ($105) a share, from 9,000 yen ($86) a year earlier. NTT plans to buy back up to 3.3% of its outstanding shares for as much as 200 billion yen ($1.9 billion), or double the previous year's plan.

ò Fujitsu Ltd reported its operating profit rose 12.6% in the past year to March, helped by brisk sales of personal computers. The company expects the momentum to continue this year despite a stronger yen. Operating profit grew to 204.99 billion yen ($2 billion) from 182.09 billion yen ($2 billion) in the year earlier. Revenue increased 4.5% to 5.33 trillion yen ($51 billion) . The company booked a one-time cost of about 22 billion yen ($210 million) to restructure its large scale integrated (LSI) circuit operation and write down the segment's impaired assets.

ò Japanese precision equipment maker Nikon Corp said its annual profit rose 32.5%, boosted by sales of its advanced cameras and chip-making equipment, but its outlook missed forecasts. Operating profit was 135.2 billion yen ($1.3 billion) in the year ended March 31, up from 102 billion yen ($974 million) a year earlier. That compares with a mean market estimate of 135.7 billion yen ($1.3 billion) based on 17 brokerages surveyed by Reuters Estimates. While hit by a stronger yen, Nikon is coasting on solid sales of its digital single-lens reflex (DSLR) cameras, while focusing on raising profits from its compact cameras rather than seeking market share.

ò Kenwood Corp and Victor of Japan forecast their operating profit will quadruple in three years after combining their operations this October. Operating profit will climb to 39 billion yen ($376 million) in the 12 months to March 2011. Total operating profit of the two companies was 9.6 billion yen in the year ended March 31. Kenwood and Victor plan to achieve annual sales of 830 billion yen ($8 billion) in the year to March 2011.

ò Sony Corp reported profit rose more than it projected after selling buildings, chip-making assets and shares of its financial unit. Net income in the 12 months ended March 31 almost tripled to a record 369.4 billion yen ($3.5 billion), beating its 340 billion yen forecast. Sony predicted profit will fall 22% to 290 billion yen ($3 billion) this fiscal year. Lower earnings this year may increase the pressure on Chairman Howard Stringer, 66, to deliver products that can outsell Nintendo Co's Wii and Apple Inc's iPod.

ò NEC Electronics Corp forecast a half-year net loss of 2 billion yen ($19 million) for next year, after improving net loss from 41.5 billion yen ($396 million) to 16 billion yen ($153 million) for the year to March 31, 2008. Revenue was down 0.7% to 687.7 billion yen ($6.6 billion). Operating loss improved from 28.6 billion yen ($272.9 million) to a profit of 5.1 billion yen ($48.7 million) and pre-tax loss improved from 35.4 billion yen ($337.8 million) to 3.3 billion yen ($31.5 million). A half-year revenue of 335 billion yen ($3.2 billion) is forecast, with a full-year breakeven net profit projected on revenue of 685 billion yen ($6.5 billion) to March 31, 2009.

Media, Entertainment and Gaming
ò Konami Corp said its net profit grew 13% in the year to March 2008, boosted by stronger sales of its video games. Net profit rose to 18.3 billion yen ($175 million) from 16.2 billion yen ($155 million) the year before, which develops software for computer games. Operating profit jumped 20.2% to 33.8 billion yen ($323 million). Revenue rose 6.1% to 297.4 billion yen ($2.8 billion). Profit at its work-out facility management business and in its gaming machine segment also improved.


ò SK Telecom will invest $7.8 million in a 30% stake in the Hong Kong unit of Shanghai-based online gaming company Magicgrids Networks. Established in 2006, Magicgrids Networks has been developing and publishing advanced online games. Recently, the company successfully built a distribution and marketing network for nationwide publishing service in China. SK Telecom plans to participate in the management of the target company and said the move is aimed at actively tapping China's fast growing online gaming market.

ò Shares of Samsung Electronics Co Ltd set a fresh record with investors being positive about the company's new management line-up following the resignation of its scandal-tainted chairman Lee Kun-Hee. Samsung Electronics stock was last up 1.8% at 751,000 won ($722.3), after climbing to an all-time high of 753,000 won ($724.2). The stock has soared about 51% since its October low of 500,000 won ($480.9). The company appointed Lee Yoon-woo to replace Yun Jong-yong as vice chairman and chief executive officer.

ò Samsung Electronics Co ranked first in March in terms of sales of liquid crystal display (LCD) panels worldwide. Samsung Electronics sold a total of $1.92 billion worth of LCD panels during the month, followed by its Taiwanese rival AU Optronics with $1.54 billion. Samsung explained that the company's strong performance in March was due to its aggressive investment aimed at preempting fast-growing large LCD panel markets.China

ò Kingdee International Software Group Co, Ltd announced on May 8, 2008 that it would kick off its proposed share subdivision and the new board lot size on May 9, 2008. Under the plan, each share will be split into four and per value of each share will be subdivided to HK$0.025 ($0.03) from HK$0.1 ($0.01) while the board lot size will be increased to 2,000 shares from 500 shares. In the meantime, for those option shares held by the Hong Kong-listed company's employees that had not exercised till May 8 will be subdivided too, based on the same proportion.

ò Chinese e-commerce group Alibaba.com has entered into a tie-up with Intel Corp for a PC targeted at small and medium-sized enterprises (SMEs). There are 42 million small and medium-enterprises in China. However, only a small number of them have launched E-commerce services, which will significantly limit their growth. Alibaba sees a significant potential in this market. Alibaba will embed its new E-commerce platform into the PCs, while Intel will provide support on Internet security and services based on its chip platform. Intel and Alibaba are currently selecting domestic PC manufacturers to make the PCs and bring in IT service providers to integrate their services in the product. Alibaba expects the first machines to be offered this year.

ò Alibaba.com plans to expand overseas market after making profit in the first quarter. Company's total revenue amounted to 680.1 million yuan ($97.2 million) in the first quarter of this year, up 53.2% year on year, and its net profit, 300.7 million yuan ($43 million), up 111.7% from last year. The company's share price rose 1.05% to close at HK$15.4 ($2) on May 6. Alibaba is expected to stretch its business on new markets to cope with global trade pressures brought by the economic downturn in the U.S., and taking advantages of its low costs and widely covered trading network.

ò Ctrip reported a better than expected 52% increase in first-quarter profit. The company reported $14 million in quarterly profit, beating the $12.6 million forecast by Reuters Estimates. Sales grew 47% to $49 million. However, shares of the company fell on concerns the earthquake will erode the company's earnings Chief financial officer Jane Sun said the impact of the earthquake could be significant, Sichuan travel accounted for less than 10% of the firm's business, holidaymakers might delay trips for safety concerns. The company stated that revenue would rise 30% in the current quarter, slightly less than its full-year forecast of 35%.

ò Datang Mobile, one of the core developers of China's TD-SCDMA mobile standard, plans to launch a domestic initial public offering within three years. The company also announced that it does not have a problem with expertise in technology and management in response to reports that there is trouble within the company as several senior officials have left.

ò China Unicom announced its launching of 'Stock in Palm' service on GSM network. Three editions including trading edition, quotation edition and text messaging edition are involved in the GSM 'Stock in Palm'. The trading edition supports online share trading, immediate quotation and rankings, stock information and trading commission, covering 80% of end user market. Quotation edition mainly provides stock-related information, including new share issue, A-share market index quotation, and plates analysis.

ò China Mobile has invested 14.2 billion yuan ($2 billion) in the TD-SCDMA project, and will start a second round of TD mobile phone procurement in the near future. There are only 6 types of products of 6 brands available in present TD mobile phone market, and insufficient terminal quantity and variety are the pivotal factors affecting the result of TD trial commercialisation. And China Mobile's procurement is aiming to solve the problem. 14,000 base stations have been built in eight Chinese cities, involving Beijing and Shanghai, for TD network test, with the total investment heretofore reaching 14.2 billion yuan ($2 billion).

ò Huawei Technologies Co, Ltd is reportedly brewing to sell billions of US dollars shares of its mobile terminal division to a foreign investor, which can help it foray into the North American market. The deal was still in its early period, and would become the largest foreign investment got by Chinese companies when completed. Huawei plans to invite strategic investors and private equity funds later this month, which will send a tender offer for large quantities of shares of its mobile terminal division. Insiders point out that the news is believable, because Huawei's rivals are unanimously brewing to spin off similar businesses.

Media, Entertainment and Gaming
ò China's online game market is valued at 3.985 billion yuan ($570 million) in the first quarter of this year, representing a sequential increase of 14% over the previous quarter. Shanda Interactive Entertainment Ltd leads the sector with a market share of 18.7% and operational revenue of 745 million yuan ($107 million) for the quarter, followed by Netease.com, 13.3%, The9, 11.5% and Giant Interactive Group Inc, 11.3%.

ò NetDragon announces that the increase in the company's total revenue was mainly due to the continuing popularity of its core games Conquer Online, Eudemons Online, Zero Online and Tou Ming Zhuang Online. To improve the quality of these games, the company allowed players to download free upgrades for each of them on a weekly basis. Currently, the Group is actively developing three 2.5D MMORPGs, namely Heroes of Might and Magic Online, Way of the Five, and Tian Yuan. The company has also entered into a licensing agreement with UserJoy Technology Co, Ltd for the operation of a traditional Chinese version of Eudemons Online in Taiwan. The game is expected to be launched in Taiwan this summer.

ò Sina Corp reported a 73% increase in profit, fuelled by strong brand advertising growth and stable wireless revenue. Net profit for the first quarter reached $19.6 million, as revenue grew 39% to $71.3 million from a year earlier. Sina forecasts second-quarter revenues would be even better at $88 million to $90 million, or an about 47 to 50% increase from a year earlier, higher than the consensus estimate of $82.1 million. Brand advertising, which accounted for 67% of the Beijing firm's total revenue, soared 51% from a year earlier, much more than the usual 40% annual rate. Wireless services, which have dragged down Sina's margin since China Mobile introduced its user protection policy in 2006, also showed significant improvement. It reached $21.7 million in the first quarter, representing an increase of 19% from a year earlier and 16% from the previous quarter. The company expects 50% revenue growth this year. But most analysts believe the growth rate will slow down after the Olympics. Mr. Wei said the online advertising market would grow 20 to 30% next year, down from the 30 to 40% range of the past few years.

ò NetDragon announces its first quarterly results for the three months ended March 31, 2008. Total revenue amounted to 175.6 million yuan ($25.1 million) representing an increase of 63.7% over the same period last year. Gross profit and profit for the period were 159.0 million yuan ($22.7 million) and 69.9 million yuan ($10 million) respectively, representing increases of approximately 57.7% and 19.6% over the corresponding period in 2007. The directors do not recommend payment of interim dividends for the period.

ò Chinese liquid crystal display maker SVA Electron Co unveiled a 2.65 billion yuan ($380 million) deal to take over LCD assets from its parent and an affiliate, funded mostly by a private placement of shares. SVA Electron planned to take over a fifth-generation TFT-LCD manufacturing unit from its parent company and SVA Information Industry. The unit is expected to book a 216 million yuan net profit this year, turning around after a net loss of 318 million yuan in 2007. Shares in both SVA Electron and SVA Information Industry tumbled by their 10% daily limit as they resumed trade after a four-month suspension, catching up with a one-third drop during that period in the broader market index.

ò Semiconductor Manufacturing International Corporation (SMIC) is putting the final touch on introducing a foreign strategic investor. It is likely to be finalised in the first half of 2008, an insider close to the company disclosed. SMIC hopes to introduce the strategic investor at a reasonable price for the interest of its previous shareholders.Taiwan

ò Telecom-equipment supplier Nortel Networks Corp will buy NT$8 billion ($261 million) worth of equipment in Taiwan this year, 15-20% more relative to last year. Globally, the Toronto, Canada-headquartered company has increased outsourcing at annual rate of 10-15%, to $7 billion last year. Its Taiwan-based contract suppliers include Zyxel Communications Corp, Delta Electronics Inc, GemTek Technology Co, Ltd., Accton Technology Corp, Quanta Microsystems and Hon Hai Precision Industry Co, Ltd. The company had long depended on Beceem and Sequans for WiMAX chips, suggesting MediaTekÆs entry into NortelÆs supply chain represents the Taiwanese chip designers had successfully snatched up a spot in global WiMAX market.

ò Chunghwa Telecom Co Ltd said parent-level net profit was NT$4.1 billion ($164 million) in April compared with NT$4.08 billion ($133 million) in March as sales increased to NT$15.57 billion ($508 million) from NT$14.79 billion ($482 billion). In the four months to April, net profit was NT$14.83 billion ($484 million), or NT$1.55 ($0.05) per share, on sales of NT$62.29 billion ($2 billion). The April results include an unrealised valuation loss on a 10-year foreign currency derivative contract signed last September between the company and an international investment bank. At the end of April, Chunghwa Telecom's accumulated mark-to-market unrealised valuation loss on the derivative contract was NT$3.08 billion ($100 million).

ò Hon Hai Precision Industry Co Ltd said its parent-level sales rose to NT$102.87 billion ($3.4 billion) in April from NT$84.53 billion ($3 billion) posted in the same month last year. For the four months to April, parent sales stood at NT$404.69 billion ($13.2 billion) against NT$331.42 billion ($11 billion) a year earlier.

ò The Ministry of Economic Affairs (MOEA) announced that it has approved proposals by IC packaging and testing companies PowerTech Technology Inc and Advanced Semiconductor Engineering Inc (ASE) to expand their investment in China. The two companies plan to invest $100 million and $90 million, respectively, in facilities in China, the latest in a wave of investment projects by the sector across the Taiwan Strait. The MOEA approved on April 8 China investment plans by four other local integrated circuit (IC) packaging and testing companies - Lingsen Precision Industries, King Yuan Electronics, Sigurd Corp and Siliconware Precision Industries - after giving ASE, the world's biggest chip packager, approval to invest $30 million in its factory in Shanghai in mid-February.

Hong Kong

ò Tencent Holdings announced the unaudited results for the first quarter of 2008 ended March 31, 2008. Total revenues were 1.4 billion yuan ($204.1 million), an increase of 27.7% quarter-on-quarter and 85.4% over the first quarter of 2007. Revenues from Internet value-added services (IVAS) were 998.7 million yuan ($142.3 million), an increase of 33.5% quarter-on-quarter or 99.0% year-on-year. Revenues from mobile and telecommunications value-added services (MVAS) were 288.3 million yuan ($41.1 million), an increase of 36.3% quarter-on-quarter or 46.7% year-on-year. Revenues from online advertising were 144.6 million yuan ($20.6 million), a decrease of 9.5% quarter-on-quarter or an increase of 95.2% year-on-year. Profit for the period was 542.0 million yuan ($77.2 million), an increase of 4.8% quarter-on-quarter or an increase of 86.8% year-on-year.

ò Lenovo said it has received a written notice from IBM for the conversion of 375.28 million non-voting shares, or 4.06% of the issued shares of the company as enlarged by the conversion. Immediately after the conversion on May 15, it said IBM holds 551.91 million shares in the company, or 5.97% of its issued shares.Singapore/Malaysia/Philippines/Indonesia/India/Australia

ò Philippine Long Distance Telephone Co (PLDT), announced the listing of its outsourcing unit, SPi Global Solutions, is unlikely to take place this year as originally planned, due to the difficult market conditions. SPi's listing on the Philippine stock exchange is also being hampered by certain operational issues. SPi Global Solutions is a holding company that owns some of the assets of outsourcing companies ePLDT, Ventus and SPi Technologies. All these are owned by ePLDT, the PLDT group's information and communications technology arm. SPi Technologies and Ventus will be integrated, which will result in improved margins.

ò Globe Telecom Corp said first-quarter core earnings fell 4% as rising inflation and the strong peso dented revenue. Core net profit, or earnings from mobile phone and broadband services, fell to 3.51 billion pesos ($82 million) from 3.67 billion pesos ($86 million) in the same period last year. But net profit, which includes non-core items, rose 32% to 3.42 billion pesos ($80 million), mainly due to lower financing costs. Financing costs were bloated in the year-earlier period by one-time charges related to Globe's early redemption of $300 million in notes originally due in 2010. It said that rising inflation due to surging commodity prices could further weaken earnings this year. Globe, which is partly owned by Philippine conglomerate Ayala Corp and Singapore Telecommunications, expects revenue from its wireless business, its main earnings driver, to grow at a slower pace this year than in 2007. Operating margins remain under pressure as average revenue per user (ARPU) for its wireless business has been declining. But Globe Telecom expects their market penetration rate to reach 65 to 66% by end of this year and to 70% by end of 2009. After net additions to their subscribers in the first three months of 2008 nearly close to one million or 960,000 which is only short of 40,000. In April alone, the company had registered net additions of another 400,000 in their subscriber base.

ò Philippine Long Distance Telephone Company (PLDT) posted a net profit of 10.4 billion pesos ($243 million) for the first quarter of 2008, an increase of 21% from the 8.6 billion pesos ($201 million) last year. This years results benefited from significant mark-to-market foreign exchange and derivative gains plus a one-time gain of approximately 0.7 billion pesos ($16 million) arising from the designation as non-hedges of certain derivatives related to the company's 2009, 2012 and 2017 bonds which had previously been designated as hedges. The core net income, net of these exceptional items, rose to 9.3 billion pesos ($217 million) in the first three months of 2008, 11% over the core net income of 8.4 billion pesos ($196 million) in the same period of last year. Fixed line service revenues increased to 12.4 billion pesos ($290 million) for the first three months of 2008, a four% increase from last year's 11.9 billion pesos ($278 million). The increase was augmented due to increase in corporate data and DSL service revenues, higher LEC and national long distance (NLD) revenues, and decrease in international long distance (ILD) revenues due to the negative impact arising from a stronger peso. Fixed line service revenues would have increased by 0.5 billion pesos ($12 million) or another four% year-on-year if the peso remained stable

ò Pilipino Telephone Corp (Piltel) reported 24% increase in quarterly earnings as its subscriber base continued to expand. Net profit in the first quarter rose to 2.46 billion pesos ($57 million) from 1.98 billion pesos ($46 million) in the same period last year. Core net profit, which strips out exceptional items, also rose 24% to 2.39 billion pesos ($56 million). Piltel's upbeat results provide a glimpse of how Philippine Long Distance Telephone Co (PLDT) performed during the quarter. In April, the company's subscriber base surpassed the 11.5 million mark. Revenue grew 17% to 4.2 billion pesos ($98 million).

ò CAT Telecom says it is willing to buy the 42% holding of TOT Plc in Thai Mobile for 2.4 billion baht ($74 million) in order to jump-start third-generation (3G) service. The two state telecom enterprises have been haggling for three years over a price for their six-year-old Thai Mobile joint venture, which has six billion baht in debts and 50,000 customers in a market of 54 million. TOT had offered 2.4 billion baht ($74 million) for CAT's 58% stake but the latter wanted a better price. Now TOT is wavering as its financial position is deteriorating. CAT wanted to buy the remaining shares in the venture so that it could start providing 3G service.

ò True Corporation's Q108 net profit is forecasted at 2,436 million baht ($75 million), up 410% year-on-year. The company's normalised profit would be at 286 million baht ($8.8 million) for Q108, improving from the 764 million baht ($23.6 million) normalised loss recorded for Q107. Positive operating profit in Q108 is expected, as Q1 is a traditionally low season for expenses together with absence of 315 million baht ($9.7 million) goodwill amortisation expenses, following the new accounting rule starting from Q108.

ò Singapore Telecommunications Ltd, Southeast Asia's largest telephone company, said fourth-quarter profit climbed 11%, beating analysts' estimates, on gains in its Indian unit. Net income rose to S$1.09 billion ($794 million), or S$6.83 ($5) a share, in the three months ended March 31. Chief Executive Officer Chua Sock Koong marks her first year at the helm with the profit gain and a plan to expand growth by investing in emerging markets such as Africa and the Middle East.

Media, Gaming and Entertainment
ò Philweb Corp reported that its revenues for the year 2007 doubled from 132.9 million pesos ($3.1 million) to P266.9 million ($6.2 million). In a statement to the Philippine Stock Exchange, the company said its revenue growth was driven by positive gains in the core gaming operations, specifically in the expansion of its network with the PAGCOR e-Games Cafes and the good turnout in the sports betting and mobile gaming operations. The companyÆs operating income rose five times to more than P121.2 million ($2.8 million) in 2007 from the P23.1 million ($0.5 million) in 2006. PhilWeb is a subsidiary of telecommunications giant PLDT.
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