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To: H James Morris who wrote (91874)	1/22/2000 4:26:00 PM
From: Glenn D. Rudolph	Respond to of 164684

Yahoo Japan -- first shares to hit Y100 mln By Yuko Inoue TOKYO, Jan 19 (Reuters) - Internet firms in Japan are feeling like a hundred million yen these days and none more so than Yahoo Japan, whose stocks on Wednesday became the nation's first to spring through that level. Shares in Japan's most popular Internet portal briefly rose by the daily limit to hit 101.4 million yen ($959,600), following a five-day rally partly inspired by a planned two-for-one share split unveiled last week. Buying, however, faltered in the afternoon with the share last traded at 99.1 million yen, down 0.3 percent. It spent the rest of the day ask-only at 97.4 million yen, down by the daily limit of two million yen from the previous day's close. The move -- the firm's third share split in the past year -- was aimed at feeding investors much-needed liquidity in Japan's core Internet stock, which has staged a stunning 30-fold jump over the past year. RALLY DEFIES USUAL VALUATION METHODS Yahoo Japan's current share price puts its price-to-earnings (PE) ratio around a jaw-dropping 3,355 times its estimated per-share earnings for this business year, according to Kota Nakako, an analyst at Warburg Dillon Read. That compares with an average PE ratio of 80 for the Tokyo Stock Exhange's 1,900 companies this business year. ``Probably, Yahoo Japan's (price-to-earnings) valuation is the highest in Japan, and, of course, much higher than that of its U.S. parent Yahoo! Inc,' said Nakako, adding that different market conditions made such a comparison unrealistic. Despite the huge gap between its market valuation and actual performance, most analysts agree that Yahoo Japan has more upward potential because there is still a lot of money chasing relatively few shares in Japan's nascent Internet industry. Yahoo Japan offers only 4,200 of its shares in the secondary market -- or 15 percent of its 27,854 issued stocks outstanding. ``A lack of liquidity was behind the latest festivity. If the number of floating shares increases via more share splits, then the premium could be eroded,' said a Japanese brokerage trader. NEW YARDSTICK? While traditional valuation methods are not relevant for Internet stocks, one yardstick that can be used in the early stages of growth is price to sales ratio, said Thomas Rhodes, internet analyst at Nikko Salomon Smith Barney. Last year, Yahoo Japan, owned 51.2 percent by high-flying Internet investor Softbank Corp and 34.2 percent by Yahoo! Inc of the United States, saw a 44-fold jump in its market capital, which totalled 2.55 trillion yen at the end of the year. It was the biggest rise of any Japanese firm and moved it up to 31st place in terms of market capitalisation in Japan only two years after it first went public in November 1997. STILL HIGH GROWTH POTENTIAL Unlike many Web firms, Yahoo Japan is at least profitable. Last week, it reported its non-consolidated current profit scored a more than five-fold jump to a record 584 million yen for the October-December quarter from a year ago, aided by strong advertising revenues. Current profit is pre-tax and includes non-operating items, such as gains or losses on stock investments. ``The latest share rally symbolises that its value as a Web advertising medium is growing day by day,' said one analyst at a second-tier brokerage, who estimated visible and invisible asset value of the company could swell to 9.5 trillion yen by 2010. The Japanese issue most likely to follow Yahoo Japan over the 100 million yen hurdle is Internet Research Institute (4741.T), listed on the Tokyo Stock Exchange's new Mothers market for high-tech start-ups. Internet Research was bid-only at 77.21 million yen on Wednesday, against Tuesday's bid-only price of 75.21 million yen. ($-106 yen) 05:29 01-19-00