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LY Corp 4689

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Stock XTKS Rating as of
JPY 376.00 +2.10 (0.56%)
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Company Report

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Improving Margins and Line Yahoo Synergies Will Drive Top-Line Growth

Kazunori Ito, Pujance Chan

LY Corp is Japan’s largest internet conglomerate, with the Yahoo Japan portal site, Line messenger, PayPay mobile payment, and Zozo fashion e-commerce site under its umbrella, each with the largest number of active users in Japan. LY Corp’s business portfolio was built through the aggressive mergers and acquisitions strategy implemented by former co-CEO Kentaro Kawabe. Yahoo Japan, which has a relatively older user base; Line, which has a younger user base; and Zozo, which has many young female users, have little overlap in user base, and thus we expect significant synergies in the future.

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Price vs Fair Value

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4689 is trading at a 28% discount.
Price
JPY 373.90
Fair Value
JPY 483.00
Uncertainty
High
1-Star Price
JPY 565.00
5-Star Price
JPY 638.00
Economic Moat
Kxkckg
Capital Allocation
Kplnqkgs

Bulls Say, Bears Say

Bulls

Collaboration with Line and Zozo will strengthen LY Corp's network effect.

Bears

Line's and Zozo's growth may weaken in the future due to market saturation.

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Trading Information

Previous Close Price
JPY 373.90
Day Range
JPY 373.80–380.20
52-Week Range
JPY 337.50–503.50
Bid/Ask
JPY 376.00 / JPY 376.10
Market Cap
JPY 2.82 Tril
Volume/Avg
11.6 Mil / 19.0 Mil

Key Statistics

Price/Earnings (Normalized)
31.03
Price/Sales
1.61
Dividend Yield (Trailing)
2.92%
Dividend Yield (Forward)
2.92%
Total Yield
2.92%

Company Profile

LY Corp's portal site, Yahoo Japan, was one of the first internet services in Japan, and it has maintained its market-leading position in terms of monthly active user numbers and page views. In addition, the company offers a variety of internet services, including e-commerce, online travel, and online video. In October 2013, the firm began a new e-commerce strategy of waiving store tenant fees and sales royalty fees on its Yahoo Shopping service to compete with Rakuten and Amazon Japan. The company acquired Zozo in 2019 and integrated Line in 2021.
Sector
Consumer Cyclical
Industry
Internet Retail
Stock Style Box
Large Core
Total Number of Employees
41,165
Website
https://www.lycorp.co.jp

Competitors

Valuation

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Metric
4689
035420
3092
Price/Earnings (Normalized)
 31.0323.0525.26
Price/Book Value
 0.941.2811.93
Price/Sales
 1.613.035.17
Price/Cash Flow
 13.0917.8121.13
Price/Earnings
4689
035420
3092

Financial Strength

Metric
4689
035420
3092
Quick Ratio
 2.401.081.50
Current Ratio
 2.421.111.65
Interest Coverage
 —11.86740.72
Quick Ratio
4689
035420
3092

Profitability

Metric
4689
035420
3092
Return on Assets (Normalized)
 1.21%3.86%37.93%
Return on Equity (Normalized)
 3.55%5.97%75.38%
Return on Invested Capital (Normalized)
 2.01%4.76%59.55%
Return on Assets
4689
035420
3092
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