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 Catcha.com 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. Catcha.com 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, Catcha.com, an unprofitable nine-month-old net search engine, would be worth about S$234 million û 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 Catcha.com 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 Catcha.com are valuing themselves highly. AsiaOne claims to have about two million page views a day. Catcha.com claims about 1.6 million a day. By comparison, Hong-Kong-based portal Sina.com 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.