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LY Corp 4689

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Stock XTKS Rating as of
JPY 396.90 −2.60 (0.65%)
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Company Report

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LY Shares Are Undervalued Amid Security Concerns

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 284% premium.
Price
JPY 399.50
Fair Value
JPY 771.00
Uncertainty
High
1-Star Price
JPY 648.00
5-Star Price
JPY 334.00
Economic Moat
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Capital Allocation
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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 399.50
Day Range
JPY 391.60–398.60
52-Week Range
JPY 337.50–503.50
Bid/Ask
JPY 396.80 / JPY 397.00
Market Cap
JPY 2.98 Tril
Volume/Avg
3.1 Mil / 17.4 Mil

Key Statistics

Price/Earnings (Normalized)
22.85
Price/Sales
1.66
Dividend Yield (Trailing)
1.39%
Dividend Yield (Forward)
2.78%
Total Yield
1.39%

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
40,643
Website
https://www.lycorp.co.jp

Competitors

Valuation

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Metric
4689
4755
4385
Price/Earnings (Normalized)
 22.85—24.48
Price/Book Value
 0.992.265.89
Price/Sales
 1.660.872.26
Price/Cash Flow
 10.0512.1350.84
Price/Earnings
4689
4755
4385

Financial Strength

Metric
4689
4755
4385
Quick Ratio
 2.3428.441.34
Current Ratio
 2.3728.441.38
Interest Coverage
 —−1.6699.60
Quick Ratio
4689
4755
4385

Profitability

Metric
4689
4755
4385
Return on Assets (Normalized)
 1.62%−1.28%4.12%
Return on Equity (Normalized)
 4.74%−32.10%31.27%
Return on Invested Capital (Normalized)
 2.69%−4.97%7.75%
Return on Assets
4689
4755
4385
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