One on, one off in Singapore

Singapore web portals AsiaOne and aren''t exactly setting the investment world on fire with their proposed IPOs, both of which are valued higher than analysts consider justified.


In Singapore, two internet listing candidates offer a divergent example of what has become of the new economy IPO fervour. SPH AsiaOne, the internet arm of  newspaper monopoly Singapore Press Holdings, is moving forward with its IPO on the Singapore Stock Exchange, pricing the shares at S$0.60, while smaller rival is postponing its listing until the market improves.

AsiaOne plans to sell 148 million shares to raise S$88.8 million ($51.3 million). It had set a price range of S$0.60-S$0.80. Even at the low end, some analysts say the price is higher than the company's growth potential warrants. hoped to list its shares at between S$0.80 and S$0.90, an even more unjustifiable price, they say.

AsiaOne's price of $0.60 values the company at S$693 ($400) and represents 30 times its projected revenue for next year. That's higher than all but the biggest dotcoms, most of which trade at less than 10 times revenue, analysts say.

"The price seems rich," says Jahanaz Naseer, an analyst at ABN Amro. "Unless it can expand across the region its growth will be limited, and in terms of acquisitions SPH hasn't been too successful."

At S$0.80-S$0.90,, an unprofitable nine-month-old net search engine, would be worth about S$234 million รป not high enough according to the company's chief executive Patrick Grove. Yet the shares are priced at about 24 times the company's expected sales of S$7.5 million to S$10 million for the year ending March 31. And has neither the experience, deep-pocketed parent or track-record of AsiaOne, which was formed in 1995.

"At the end of the day there are so many of these kind of companies around and there has not been a consolidation yet to suggest any one is better than the other," says Winnie Lee, chief investment officer at BNP Paribas. "Unless you are a venture capitalist they are pretty risky investments."

Even among internet content providers, AsiaOne and are valuing themselves highly. AsiaOne claims to have about two million page views a day. claims about 1.6 million a day. By comparison, Hong-Kong-based portal has 25 million page views a day. Sina listed its shares last month on Nasdaq and was valued at $770 million. So while it has many times the page views of AsiaOne, it's valuation is less than double that of AsiaOne.

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