Japan start-up Jig-Saw's shares tumble on earnings growth concern
17/05/2016 11:07
TOKYO, May 17 (Reuters) - Shares of Japanese internet
management firm Jig-Saw 3914.T have tumbled more than 35
percent over the past two trading sessions on Tokyo's Mothers
Market due to concerns about earnings growth, underscoring the
risks of the start-up market.
Although Japanese share markets have been stagnant so far
this year, the Tokyo Stock Exchange's Mothers Market for
start-up firms was an exception, attracting investors that saw
more opportunities than in the lethargic main board.
The Mothers Index .MTHR is up 28.5 percent so far this
year, compared to 12.5 percent fall in the Nikkei average
.N225 , though many market players have said a lot of buying
has been speculative.
Shares of Jig-Saw, whose businesses include automatic
management of internet systems, were high-flying even among
volatile Mothers shares, having risen more than 260 percent at
one point from the end of last year.
Jig-Saw, which listed in April last year, posted a full-year
2015 operating profit of 147 million yen ($1.34 million), up 393
percent over the previous year. But late last week, it announced
a first-quarter profit of 58 million yen, seen by some investors
as weak to maintain the growth momentum.
Even after their slump in the past two days, the shares are
still traded at 850 times its profits last year. At its peak hit
last month, Jig-Saw was traded with multiple of over 1,600
times.
"Jig-Saw shares had been bought on themes, such as
artificial intelligence and automatic driving, rather than
earnings and fundamentals. They had been rising because people
liked their fast price moves. But they had become expensive so
the earnings triggered profit-taking," said Mitsushige Akino,
chief fund manager at Ichiyoshi Asset Management.
Jig-Saw did not respond to a request by Reuters for a
comment on the share price fall.
($1 = 109.5700 yen)
(Reporting by Hideyuki Sano and Nobuhiro Kubo; Editing by
Muralikumar Anantharaman)
((hideyuki.sano@thomsonreuters.com; +81 3 6441 1827; Reuters
Messaging: hideyuki.sano.thomsonreuters.com@reuters.net))
Keywords: JIG SAW STOCKS/