Yahoo Japan Business Still Going Strong After First Quarter

Morgan Stanley’s Tetsuro Tsusak maintained an Equal-weight rating for Yahoo Japan, with a price target of ¥500, citing Askul’s monthly sales and healthy B2B business as positives.

Yahoo Japan is a joint venture between Yahoo! Inc. YHOO and Japan’s Softbank. Monthly sales at subsidiary ASKUL were higher than the previous November high. “By our estimates, growth still topped 80% YoY even when stripping out the Leap Year impact,” analyst Tetsuro Tsusak wrote.

LOHACO March sales were a record ¥3.1bn, representing 89 percent y/y growth. LOHACO total sales through March came in at ¥26.7bn, representing 69 percent y/y growth.

Full-Year Target

Yahoo Japan would need to generate ¥5.3bn in sales over the remaining two months of the current fiscal year to meet its full-year target of ¥32.0bn, which was revised up in March from the prior target of ¥30.0bn, Tsusak mentioned. He added, “We think the firm has ample scope to reach full year plans judging from this year's monthly sales.”

B2B

Average customer pricing in B2B business rose 3.4 percent y/y, while customer volume was up 3.4 percent. “It appears that customer pricing is being bolstered as the company widens its customer shopping zone,” Tsusak commented. B2B sales through March was at ¥209.2bn, representing 9 percent y/y growth.