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Drecom update 3/16 and other tech IPO craziness March 16, 2006

Posted by fukumimi in IPO, IT, Japan.

Drecom is still trading at over 4million yen (JPY4.05M at today’s close), making the company worth JPY80Billion, give or take a few yen.

And in other news…..

Another recent (floated yesterday) IPO hikaku.com has also spyrocketed, IPO was at JPY450k (raising approx $20M for the company) and the current price is JPY1.86M having reached the maximum allowable gain/day on its first 2 days of trading. The current price would value this company at approx JPY58B, on operating profits of JPY110M last FY (estimated JPY150M net profit for current FY). PER is north of 400.

Price comparison sites are nothing new, the market leader is kakaku.com, note the similar sounding names (hikaku means comparison, whereas kakaku means price, in Japanese)….

Kakaku.com listed on TSE Mothers in 2003, and is currently listed on the TSE proper. It is valued at JPY63.6B, on operating profits of JPY920M.

Perhaps hikaku.com’s main visual differentiator is that the top page is the discount airline ticket page, but the offered catagories (from travel to electronics to insurance, 42 in all) are remarkably similar. Even their favicons look remarkably similar….. Hmmm…..

A potentially key functional differentiator is that Kakaku.com offers BBS functionality for each product/service offered and a user rating scheme, both of which may be helpful to prospective buyers.

Business model wise, Kakaku.com is an affiliate model, whereas Hikaku.com is on a CPL advertising model. Hikaku.com has a high operating margin (43%) which may be attracting investors.

In terms of pageviews and reach, Kakaku.com is a lot stronger than Hikaku.com, but the relative revenues reflect more efficient monetisation of Hikaku.com’s business model. (and/or overhead related to additional functionality available at Kakaku.com)

Alexa data here (via alexaholic)

The Hikaku.com website is very slow. Looking at Alexa, since the IPO, traffic has doubled, but if that is the cause of the slow response, it would appear to reflect poor planning.

It will be interesting to see where the stock price settles down.



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