TSE:3938

Stock Analysis Report

Executive Summary

LINE Corporation provides a platform for mobile messaging and communication services, content distribution, and life and financial services primarily in Japan, Taiwan, Thailand, and Indonesia.

Rewards

Earnings are forecast to grow 77.29% per year

Risk Analysis

No risks detected for 3938 from our risk checks.


Snowflake Analysis

High growth potential with adequate balance sheet.


Similar Companies

Share Price & News

How has LINE's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 3938 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.2%

3938

10.2%

JP Interactive Media and Services

13.0%

JP Market


1 Year Return

32.9%

3938

4.9%

JP Interactive Media and Services

-8.5%

JP Market

Return vs Industry: 3938 exceeded the JP Interactive Media and Services industry which returned 3.2% over the past year.

Return vs Market: 3938 exceeded the JP Market which returned -11.1% over the past year.


Shareholder returns

3938IndustryMarket
7 Day4.2%10.2%13.0%
30 Day-3.4%-16.0%-9.9%
90 Day-3.0%-22.5%-16.2%
1 Year32.9%32.9%5.3%4.9%-7.2%-8.5%
3 Year21.4%21.4%-17.4%-20.5%2.5%-3.5%
5 Yearn/a-24.2%-30.4%6.1%-4.2%

Price Volatility Vs. Market

How volatile is LINE's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is LINE undervalued compared to its fair value and its price relative to the market?

7.86x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: 3938 (¥5190) is trading above our estimate of fair value (¥2098.97)

Significantly Below Fair Value: 3938 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 3938 is unprofitable, so we can't compare its PE Ratio to the Interactive Media and Services industry average.

PE vs Market: 3938 is unprofitable, so we can't compare its PE Ratio to the JP market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 3938's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 3938 is overvalued based on its PB Ratio (7.9x) compared to the JP Interactive Media and Services industry average (2.3x).


Next Steps

Future Growth

How is LINE forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

77.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 3938 is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (-0.09%).

Earnings vs Market: 3938 is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: 3938's is expected to become profitable in the next 3 years.

Revenue vs Market: 3938's revenue (12.9% per year) is forecast to grow faster than the JP market (3.4% per year).

High Growth Revenue: 3938's revenue (12.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 3938's Return on Equity is forecast to be high in 3 years time (20.8%)


Next Steps

Past Performance

How has LINE performed over the past 5 years?

-56.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 3938 is currently unprofitable.

Growing Profit Margin: 3938 is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: 3938 is unprofitable, and losses have increased over the past 5 years at a rate of -56% per year.

Accelerating Growth: Unable to compare 3938's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: 3938 is unprofitable, making it difficult to compare its past year earnings growth to the Interactive Media and Services industry (10.6%).


Return on Equity

High ROE: 3938 has a negative Return on Equity (-29.77%), as it is currently unprofitable.


Next Steps

Financial Health

How is LINE's financial position?


Financial Position Analysis

Short Term Liabilities: 3938's short term assets (¥295.6B) exceed its short term liabilities (¥161.7B).

Long Term Liabilities: 3938's short term assets (¥295.6B) exceed its long term liabilities (¥205.0B).


Debt to Equity History and Analysis

Debt Level: 3938's debt to equity ratio (81.8%) is considered high.

Reducing Debt: 3938's debt to equity ratio has reduced from 194.4% to 81.8% over the past 5 years.


Balance Sheet

Inventory Level: 3938 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 3938's debt is covered by short term assets (assets are 2.1x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: 3938 has sufficient cash runway for more than 3 years based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if 3938 has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.


Next Steps

Dividend

What is LINE's current dividend yield, its reliability and sustainability?

0.003%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate 3938's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate 3938's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if 3938's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 3938's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 3938's dividend in 3 years as they are not forecast to pay a notable one for the JP market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.9yrs

Average management tenure


CEO

Takeshi Idezawa (46yo)

4.92s

Tenure

JP¥315,000,000

Compensation

Mr. Takeshi Idezawa has been the Co-Chief Executive Officer and President at LINE Corporation since April 2015. Mr. Idezawa served as Chief Operating Officer and President of livedoor Co., Ltd., where he s ...


CEO Compensation Analysis

Compensation vs Market: Takeshi's total compensation ($USD2.87M) is above average for companies of similar size in the JP market ($USD1.76M).

Compensation vs Earnings: Takeshi's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
Takeshi Idezawa
President4.92yrsJP¥315.00m0.013% ¥155.7m
Jungho Shin
Co-CEO, Chief WOW Officer & Director8.17yrsJP¥589.00m1.99% ¥24.7b
In-Joon Hwang
CFO & Director11.25yrsJP¥218.00mno data
Jun Masuda
Chief Strategy & Marketing Officer and Director5yrsJP¥257.00m0.0021% ¥26.0m
Kokan Ki
Head of Finance and Accountingno datano datano data
Euibin Park
CTO & Head of Web Services Development Group5.92yrsno datano data
Takeshi Nakayama
Chief Compliance Officeno datano datano data
Tomohiro Ikebe
Head of Services Development5.92yrsno datano data
Takeshi Shimamura
Head of Portal & Media Business5.92yrsno datano data
Shintaro Tabata
Chief-Corp Business Group5.92yrsno datano data

5.9yrs

Average Tenure

43yo

Average Age

Experienced Management: 3938's management team is seasoned and experienced (5.9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Takeshi Idezawa
President4.92yrsJP¥315.00m0.013% ¥155.7m
Jungho Shin
Co-CEO, Chief WOW Officer & Director8.17yrsJP¥589.00m1.99% ¥24.7b
In-Joon Hwang
CFO & Director11.25yrsJP¥218.00mno data
Jun Masuda
Chief Strategy & Marketing Officer and Director5yrsJP¥257.00m0.0021% ¥26.0m
Tadashi Kunihiro
Outside Director4.42yrsno data0.00028% ¥3.5m
Hitoshi Kurasawa
Corporate Auditor6.92yrsno datano data
Hae-Jin Lee
Chairman of the Board 8.17yrsno data1.92% ¥23.8b
Rehito Hatoyama
Outside Director4yrsno data0.00014% ¥1.7m
Koji Kotaka
Outside Director4.08yrsno data0.0010% ¥12.9m
Yoichi Namekata
Corporate Auditor1yrno datano data

5.5yrs

Average Tenure

51yo

Average Age

Experienced Board: 3938's board of directors are considered experienced (5.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

LINE Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: LINE Corporation
  • Ticker: 3938
  • Exchange: TSE
  • Founded: 2000
  • Industry: Interactive Media and Services
  • Sector: Media
  • Market Cap: JP¥1.244t
  • Shares outstanding: 239.76m
  • Website: https://linecorp.com

Number of Employees


Location

  • LINE Corporation
  • JR Shinjuku Miraina Tower
  • 23rd Floor
  • Tokyo
  • 160-0022
  • Japan

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LNNYSE (New York Stock Exchange)SPONSORED ADRUSUSDJul 2016
LI6DB (Deutsche Boerse AG)SPONSORED ADRDEEURJul 2016
3938TSE (The Tokyo Stock Exchange)YesCommon SharesJPJPYJul 2016
HL3DB (Deutsche Boerse AG)YesCommon SharesDEEURJul 2016
LNNF.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJul 2016

Biography

LINE Corporation provides a platform for mobile messaging and communication services, content distribution, and life and financial services primarily in Japan, Taiwan, Thailand, and Indonesia. It operates through two segments, Core Business and Strategic Business. The company offers LINE, a cross-platform messenger application that enables users to communicate through free instant messaging, stickers, and voice and video calls, as well as serves as a smart portal to its other applications and services. It also provides communication products, including LINE Stickers and themes; and contents, such as LINE Games, LINE PLAY, LINE Manga, LINE Music, and LINE Fortune. In addition, the company offers display advertising services through Timeline, LINE NEWS, and LINE TODAY; account advertising products and services comprising official accounts, LINE@, sponsored stickers, and LINE Point Ads; and other advertising products and services that include LINE Part-time Job, livedoor, and Matome Web portals. Further, it sells LINE characters merchandise under the LINE Friends name; and provides fintech services, such as LINE Pay service, as well as other services that include AI and e-commerce. The company was formerly known as NHN Japan Corporation and changed its name to LINE Corporation in April 2013. The company was founded in 2000 and is headquartered in Tokyo, Japan. LINE Corporation is a subsidiary of Naver Corporation. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/28 16:40
End of Day Share Price2020/03/27 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.