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Technology Stocks : China.com Corp-(CHINA) -- Ignore unavailable to you. Want to Upgrade?

To: Eugene De Luz who wrote (218)	7/15/1999 10:43:00 PM
From: Mohan Marette	Respond to of 504

"In this business, the better you can define your future, the higher your valuations." Thursday, July 15, 1999 BUSINESS Lehman defends soaring China.com debut ERIC NG -------------------------------------------------------------------------------- Lehman Brothers, the lead underwriter of China.com's Nasdaq listing, has defended the Internet portal operator's high valuation on its first day of trading. China.com's share price ended the day on Tuesday at US$67.10, up sharply from its initial price of $20. The company ended the day with a market capitalisation of about $1.4 billion. An Internet-sector executive said China.com's price was "too high, given its profitability record and foreseeable projection. "It's a matter of demand and supply". He said there were "too many investors chasing after too few quality Internet companies. "The majority of investors tend to be a bit short-term". At $1,750, China.com's market-capitalisation value per pageview per day was more than 10 times the $150 of United States-based Internet company Yahoo!, the executive said. Last year, China.com lost $8.54 million against $4.14 million in 1997. Revenue surged to $3.54 million from $509,000. Ravi Sarathy, head of communications and Internet at Lehman Brothers Asia, said Internet companies should not be viewed under traditional valuation methods. For example, Lehman Brothers valued Internet companies based on future revenue projections rather than short-term profitability, he said. "[In the Internet industry], you see explosive growth typically in revenue; you see a necessity to invest heavily in creating a brand, to be an aggressive first mover." Lee Kheng Joo, vice-president of Greater China at America Online, added: "In this business, the better you can define your future, the higher your valuations." Lehman Brothers said it expected China.com's strong Nasdaq showing to spur other Asian Internet companies to seek exchange listings. William Bowmer, Lehman Brother Asia's senior vice-president, said he expected at least 12 regional Internet companies to go public by the end of the year. "We see Nasdaq as a stepping stone for Asian Internet companies to raise their profile," he said. "[Listings] also provide companies with acquisition currencies in the form of stocks, so they cannot only expand regionally by paying cash but also by paying with their stocks." Mr Sarathy said due to a scarcity of listed Internet companies in Asia and their "superior growth potential", these companies would command an Asian premium for at least two years. He estimated Asian Internet companies would command share prices three to five times higher than their counterparts in the US. Still, not all Internet companies in the region are interested in knocking on stock exchange doors any time soon. Laurie Kan, general manager at SINA.com, one of the largest portal operators in the mainland, said the company was not in a rush to raise funds publicly or privately. technologypost.com