tailieunhanh - Nothing But Net 2009 Internet Investment Guide 16

Nothing But Net 2009 Internet Investment Guide 16. Leading . Morgan Internet industry analyst Imran Khan provides a comprehensive look at key Internet industry characteristics, drivers, and trends in his seminal industry outlook, Nothing But Net. Geared toward Internet investing novices and experienced professionals, this book provides a detailed look at data points and trends that should be considered when investing in the Internet space. With almost 8 years of technology banking and investing experience, Khan provides a detailed analysis of multiple Internet sectors including online advertising, e-commerce, online travel, and social networking. This book is a must have for. | Morgan Imran Khan 1-212 622-6693 Global Equity Research 05 January 2009 Our View on Share Prices Despite Lower Trading Range a Near-term Rebound Appears Less Likely Korea s Internet sector has underperformed the KOSPI by for the past year NHN and Daum fell 56 and 65 respectively. In particular the shares fell sharply during August-September due to the emergence of regulatory risks. After such a sharp correction NHN has been holding up better outperforming the KOSPI by 12 since early October while Daum has underperformed by 3 . We believe the weakness in Korea s Internet sector largely stems from concerns about regulatory uncertainties and an economic slowdown. We expect these negatives to continue to dampen sentiment for the sector and its fundamentals for the next two to four quarters. Although current valuations are at historical lows we believe the market is largely reluctant to offer premium on growth stocks and is more sensitive to near-term earnings. The trading range has significantly lowered to 14-16x FY08E EPS for NHN and 13-18x FY08E EPS for Daum while the 12-month historical average trailing P E range is 20-50x for NHN and 40-80x for Daum. Figure 92 Korean Internet Sector Relative to KOSPI Performance 10 0 -10 -20 -30 -40 J Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 -------Internet sector to KOSPI ------------NHN to KOSPI---------------Daum to KOSPI Source Datastream We believe both NHN and Daum lack near-term catalysts due to the weak economy and regulatory risks. We think NHN will hold up better than Daum since investors will likely prefer the market leader given that advertisers on tighter budgets tend to lean towards the market leader to reap more benefits from their dollar spending. We believe that although the downside for NHN should be limited at the current level the stock is unlikely to rebound in the near term unless the market is convinced of an economic recovery. We believe Daum s share price will be largely