Valuation for the Softbank subsidiaries is pretty scary (and difficult to calculate in any rational way). Anyway, we had a close yesterday at $505 in the US and a close at $517 in Tokyo and a current price of around $521 in Frankfurt mid day in Europe a few minutes ago (7:30 AM EST).
These stories were published by Nikkei Net in Japan. They cover Softbank (9984) and Softbank Technology (4726) and Yahoo Japan (4689). Some of the information has already been mentioned, but the text of the articles may be useful to some people who haven't seen other versions of these stories:
Wednesday, November 10, 1999
Softbank To Register Shares Of 3 Subsidiaries On OTC Market
TOKYO (Nikkei)--Softbank Corp. (9984) plans to register shares of three finance-related subsidiaries on the over-the-counter market in 2000, company officials said Tuesday.
The wholesaler of PC software is also considering offering the shares on Nasdaq Japan, a new stock market the company is helping to establish.
Morningstar Japan KK, an information service firm specializing in investment trusts, is expected to go public in the April-June quarter of 2000. Daiwa Securities Group Inc. (8601) will be the lead manager.
Online brokerage firm E*Trade Securities Co. is expected to go public in July-September 2000, with Nomura Securities Co. (8604) acting as lead manager.
E*Trade will probably increase its capital through a public subscription when it registers on the OTC market and use the extra funds to gain the upper hand in its competition with other online securities firms.
Softbank Investment Corp., which mainly handles investments in start-up firms, is expected to go public in October-December 2000, also with Nomura Securities as lead manager.
The parent company also announced plans to start banking, insurance sales and leasing operations on the Internet.
(The Nihon Keizai Shimbun Wednesday morning edition)
Tuesday, November 9, 1999
Softbank Technology Expects 220% Jump In Midterm Profit
TOKYO (Nikkei)--Softbank Technology Corp. (4726), which sells computer software over the Internet, expects to book a 549 million yen pretax profit in the fiscal first half ended Sept. 30, exceeding an earlier projection by 91 million yen and marking a 220% year-on-year increase.
The profit surge reflected a growing market for e-commerce transactions and rising sales in related divisions.
Interim revenue appears to have risen 40% on the year to 7.59 billion yen, some 925 million yen higher than previous estimates. In addition to growth in e-commerce related revenue, the systems integration business made a significant contribution.
(The Nikkei Financial Daily Tuesday edition)
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Tuesday, November 2, 1999
OTC Company Analysis: Yahoo Japan
TOKYO (Nikkei)--Earnings of major Internet search engine Yahoo Japan Corp. (4689) are growing steadily thanks to a steep increase in advertising revenues. In the April-September first half of fiscal 1999, the company boosted its pretax profit 8.8 times year on year to 726 million yen.
With the strong business performance, Yahoo Japan is at last matching the high hopes the stock market places on it as a leading Internet-related issue. Nevertheless, the firm's stock price of more than 50 million yen against par value of 50,000 yen cannot be explained by conventional investment analysis.
Yahoo Japan's growth is based on the expanding market for ads placed with Internet service providers. According to major ad agency Dentsu Inc., the market is expected to grow to 19.8 billion yen in 1999, up nearly 80% over the previous year.
Yahoo Japan, which relies on advertising revenue for more than 80% of total sales, lifted total sales 2.9 times year on year to 2.1 billion yen in the first half of fiscal 1999. For the full year, the company expects a pretax profit of 1.6 billion yen, up 4.1 times over the previous year, on a 2.7-fold increase in sales to 5.1 billion yen.
The healthy results are a reflection of page views, the number of times Net-surfers hit on its service site. The hits topped 1 billion in September alone, nearly three times more than the year earlier. In addition, the number of registered users of the service totaled 1.4 million at the end of September, a fivefold increase.
To further promote its service, Yahoo Japan opened shopping and auction sites among others in September and began running television commercials on Oct. 20. The company will also release a magazine, Yahoo Press, for Net novices in late November, adding a new page to its business strategy.
Given the vibrant earnings growth, analysts are starting to change their cautious views on the company. Akiyoshi Hayakawa, senior analyst of IBJ Securities Co., says the price of Yahoo Japan stock will hit 60 million yen, while Makoto Ueno, senior analyst at Daiwa Research Ltd., notes that the company's stock price is hardly high in light of the rapid growth of the Internet market.
However, Yahoo Japan's market capitalization already exceeds 1.5 trillion yen and is 300 billion yen more than that of Nippon Television Network Corp. (9404), which also earns income from ads on its free broadcasting service and chalks up after-tax profit 26 times that of Yahoo Japan.
With Yahoo Japan's price earnings ratio topping 1,000, and despite the strong business performance, the high stock price hardly permits theoretical explanation.
(The Nihon Keizai Shimbun Tuesday morning edition)
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