Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Money Forward has one of the largest SaaS/Fintech platforms in Japan and is a key beneficiary of corporate digital transformation </li>
<li>The stock has fallen 48% year to date as valuations crashed with global SaaS multiples</li>
<li>We think MF will emerge from downturn in good shape. At 10x EV/Rev, we see 22% upside (maybe even 55%....)</li>
</ul>


Money Forward has one of the largest SaaS/Fintech platforms in Japan and is a key beneficiary of corporate digital transformation 
The stock has fallen 48% year to date as valuations crashed with global SaaS multiples
We think MF will emerge from downturn in good shape. At 10x EV/Rev, we see 22% upside (maybe even 55%....)


Money Forward (3994) | SaaS Crash Survivor

Research from Mita Securities, Mita Securities

Mita Securities

Research from Mita Securities

Mita Securities provides a full scale diversified investment banking and financial services. A comprehensive investment banking department, specializes in rights offerings advisory, take-over bids agents, M&A etc. Including a proprietary trading desk, and wealth management department that offers brokerage, custody, real estate, and full proxy services.

<ul><li>Our new target price 4,000 yen; Raising our rating to Buy</li><li>We believe that market participants have become increasingly concerned about the sustainability of high growth for loss-making SaaS companies</li><li>We raise our 2Q (Mar-May) FY11/22 sales forecast from 5.102bn yen to 5.145bn yen (+28.8% YoY, company guidance median 4.912 bn yen)</li></ul>

Our new target price 4,000 yen; Raising our rating to BuyWe believe that market participants have become increasingly concerned about the sustainability of high growth for loss-making SaaS companiesWe raise our 2Q (Mar-May) FY11/22 sales forecast from 5.102bn yen to 5.145bn yen (+28.8% YoY, company guidance median 4.912 bn yen)

Money Forward (3994 JP): Raising Our Rating to Buy. Cash Is King

<ul><li>The company has made multiple investments in Mekari since its first investment in 2018</li><li>This investment is a large one, equivalent to approximately 6.2bn yen. We understand that the largest investment the company has made in the past was approximately 3.4bn yen in Smartcamp (a consolidated subsidiary).</li><li>The company's balance sheet at the end of 1Q FY11/22 showed 5.4bn yen in investment securities and 4.8bn yen in goodwill</li></ul>

The company has made multiple investments in Mekari since its first investment in 2018This investment is a large one, equivalent to approximately 6.2bn yen. We understand that the largest investment the company has made in the past was approximately 3.4bn yen in Smartcamp (a consolidated subsidiary).The company's balance sheet at the end of 1Q FY11/22 showed 5.4bn yen in investment securities and 4.8bn yen in goodwill

Money Forward (3994): Large Additional Investment in Indonesian SaaS Company

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/Freee-kk" target="_blank" data-smartkarma-citation="entities:28424:1" rel="noopener">freee (4478 JP)</a>  reported 3QFY06/2022 results on Friday. Revenue grew 35.7% YoY to JPY3.65bn (vs consensus JPY3.63bn) driven by strong growth in paying users.</li>
<li>Operating losses declined to 18.5% of revenues during the quarter from 24.0% in the same period a year ago.</li>
<li>The company’s shares moved up by about 9% at the end of Friday’s close following its earnings announcement.</li>
</ul>



freee (4478 JP)  reported 3QFY06/2022 results on Friday. Revenue grew 35.7% YoY to JPY3.65bn (vs consensus JPY3.63bn) driven by strong growth in paying users.
Operating losses declined to 18.5% of revenues during the quarter from 24.0% in the same period a year ago.
The company’s shares moved up by about 9% at the end of Friday’s close following its earnings announcement.


Freee: Strong User Growth and Improvement in Profitability; Shares Are a Lot Cheaper

Telco/Internet specialist

Kirk Boodry

Redex Research

<ul>
<li>
<a href="https://www.smartkarma.com/entities/money-forward-inc" target="_blank" data-smartkarma-citation="entities:25919:1" rel="noopener">Money Forward (3994 JP)</a> posted solid Q1 financial results as revenue growth rebounded and EBITDA losses were within management's forecast</li>
<li>But revenue guidance for Q2 was weaker than expected and represents the lowest YoY growth to date which has raised questions on the effectiveness of marketing spend</li>
<li>Full year guidance remains intact and the company expects that underlying growth in recurring revenue to remain robust which is positive for the long term thesis</li>
</ul>



Money Forward (3994 JP) posted solid Q1 financial results as revenue growth rebounded and EBITDA losses were within management's forecast
But revenue guidance for Q2 was weaker than expected and represents the lowest YoY growth to date which has raised questions on the effectiveness of marketing spend
Full year guidance remains intact and the company expects that underlying growth in recurring revenue to remain robust which is positive for the long term thesis


Money Forward Q1 22 Results: Mixed Quarter but Underlying KPIs Solid

Japan

Money Forward, Inc. develops mobile application software. The Company produces automatic household account book softwares, household account book application softwares, and other products. Money Forward also provides personal financial management, cloud based accounting solutions, and other services.

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Money Forward (3994 JP)

Money Forward (3994) | SaaS Crash Survivor

Money Forward has one of the largest SaaS/Fintech platforms in Japan and is a key beneficiary of corporate digital transformation. It is a SaaS...

Mark Chadwick