Over the past few days, Line Corp, the Japanese-Korean mobile messaging platform, has announced two key alliances. Together with Mizuho Bank, it is setting up an online bank aimed at younger customers. This complements efforts earlier this year to get into insurance and investment services -- again, aiming at an audience that is already using Line's wildly popular chat and messaging services.
Second, Line is teaming up with Tencent, the Chinese internet giant, to offer electronic payment services to mainland tourists in Japan. Merchants who join the scheme will be able to accept payment either via Line's own LinePay or Tencent's WeChat Pay. This is an attempt to capture business in a rapidly growing market -- last year, Japan welcomed more than 7m Chinese tourists, a number that has tripled in three years. And it is also a defensive measure to counter a recent alliance between Tencent rival Alibaba and Softbank/Yahoo Japan that is aiming for the same business.
The moves made by Line have had a direct impact on its share price. If you visit the Line Corp company page in scoutAsia, you can clearly see the jump in news articles on Line this week, peaking at five mentions on November 27 in our News Mentions Graph -- and the direct correlation with the jump in Line's share price and volume of shares traded on the same day (visible in the first graph). After a colourless performance for most of this year, the shares have jumped a fifth in the past week as investors have re-rated the group's growth prospects.
That is a juicy short-term return and doubly impressive at a time when technology stocks are under pressure globally. But it does suggest that Line will have to come up with fresh news in order to take its stock higher from here. Meanwhile, if you click on the Connections button in the top right-hand side of the Line Corp company page, you will be taken to a map of its organisational hierarchy, which reveals that Line is controlled (and more than 70%-owned) by Naver Corp, a separately-listed Korean internet company.
As you can see from the information and graphs provided, Naver is larger and better diversified than Line and is making positive moves of its own, with a push into online banking in Taiwan and video streaming of K-Pop stars in south-east Asia. Yet its shares have not jumped nearly as much as Line's in the past week and may now offer better value.
Of course, Line and Naver are widely-analysed public companies and their relationship is well-known. But as this blog post hopefully shows, it is only when you can access the data, news and connections of companies that are relevant to you in one place that valuable insights can be easily drawn. We at scoutAsia hope to bring you more and more of these insights as our service matures -- and increasingly about private companies as well as the listed ones.