KDDI Rises in Tokyo as Smartphone Outlook Spurs Rating Increases
August 26, 2011, 7:13 AM EDTBy Kazuyo Sawa
Aug. 26 (Bloomberg) -- KDDI Corp., Japan’s second-largest mobile-phone operator, jumped the most in more than two months in Tokyo trading as expectations smartphone use will push up revenue per user prompted analysts to raise their ratings.
The shares advanced as much as 3.9 percent to 563,000 yen, the biggest intraday gain since June 10, and traded at 560,000 yen at the 11 a.m. break on the Tokyo stock exchange. The benchmark Topix index gained 0.1 percent.
KDDI data revenue surpassed voice for the first time in the three months ended in June as the carrier sold more smartphones that use Google Inc.’s Android operating system, luring users to play games and download music and software. Data revenue per user will probably grow 7 percent this fiscal year in Japan, compared with 4 percent in the previous 12 months, according to estimates by New Street Research LLC analysts including Kirk Boodry.
“KDDI’s data ARPU is expected to increase because of smartphones,” Hideaki Tanaka, an analyst at Mitsubishi UFJ Morgan Stanley Securities Co. wrote in a note to clients yesterday. Cost reductions in the fixed-line telecommunication segment will also benefit the company, he wrote.
Mitsubishi UFJ Morgan Stanley and Mizuho Securities Co. raised their ratings on KDDI to “outperform” from “neutral.” Tanaka boosted his target price for KDDI to 670,000 yen from 610,000 yen.
--Editors: Dave McCombs, Suresh Seshadri
To contact the reporters on this story: Kazuyo Sawa in Tokyo at ksawa3@bloomberg.net;
To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net.
