H.I.S. Shares Plunge as Tourist Numbers, Profits Fall
bloomberg.com
H.I.S. Co. shares had their biggest decline in almost five years after Japan's largest discount travel agency reported a drop in operating profit and JPMorgan lowered its target price on the stock.
The shares plunged 14.5 percent, or 365 yen, to 2,160 yen at the 3 p.m. close on the Tokyo Stock Exchange, their lowest value since August 2005 and their biggest one-day decline since Dec. 11, 2002. The stock has fallen 26 percent this year compared with a 6.8 percent decrease in the benchmark Topix index.
Tokyo-based H.I.S. said operating profit for the nine months ended July 31 fell 8.1 percent to 2.45 billion yen ($21 million). The company attributed the drop to a decline in Japanese travelers flying overseas due to the weak yen and higher ticket prices caused by airline fuel surcharges. The travel agency's performance last year was boosted by the World Cup finals in Germany, H.I.S. said in a statement yesterday.
JPMorgan Securities Asia analyst Go T. Saito lowered his target price on H.I.S. to 2,630 yen from 3,000 yen, citing the impact of lower consumer spending, the strong euro and higher fuel charges on the company's performance. Saito left his ``neutral'' rating unchanged in the report dated Sept. 18.
