Focus on Smaller Cap Value Names, Altay Capital

Altay Capital

Focus on Smaller Cap Value Names

Long time value investor. Long/Short portfolio that’s always net long (between 30-80%). I have extensive experience in the video game industry as I founded a leading media company in the space, which I have since exited after an acquisition. Gaming companies only make up ~15% of my portfolio, but its a sector where I believe I have an edge. A newsletter about value investing! Mostly focus on smaller cap value names that aren't widely covered.

Equity Bottom-Up

<ul><li><p>Applied Co is a small cap regional Japanese PC retailer and IT provider with surprisingly good execution that’s moving into higher margin local AI deployments (HPC) and IT services.</p></li><li><p>Company-wide return on equity was <strong>17.6%</strong> in FY26 despite carrying more than half its market cap in net cash.</p></li><li><p>FY23 and FY24 were historically bad years with 12.3% RoE while FY2016-FY2022 bounced around 17-20%. This is incredible for such an over capitalized business.</p></li></ul>

Applied Co is a small cap regional Japanese PC retailer and IT provider with surprisingly good execution that’s moving into higher margin local AI deployments (HPC) and IT services.Company-wide return on equity was 17.6% in FY26 despite carrying more than half its market cap in net cash.FY23 and FY24 were historically bad years with 12.3% RoE while FY2016-FY2022 bounced around 17-20%. This is incredible for such an over capitalized business.

Applied Co. (TYO 3020): A Cash-Rich Japanese PC/HPC Company at ~1.5x EV/EBIT...

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

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.

Thematic (Sector/Industry)

<div><p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p></div><p>Our best and worst pair from Tuesday's announcements is consumer electronics retailer <a href="https://www.smartkarma.com/entities/bic-camera-inc" target="_blank" data-smartkarma-citation="entities:11328:1" rel="noopener">Bic Camera (3048 JP)</a> and Japan's largest mall operator <a href="https://www.smartkarma.com/entities/aeon-mall-co-ltd" target="_blank" data-smartkarma-citation="entities:5262:1" rel="noopener">AEON Mall (8905 JP)</a>.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/163/781/original/2020-10-07_06-18-08.png?1602019101" class="editor-image img-responsive" data-smartkarma-image-id="163781"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/163/782/original/2020-10-07_06-18-56.png?1602019156" class="editor-image img-responsive" data-smartkarma-image-id="163782"></figure><div class="content-caption"><span>Source for all charts &amp; tables: Japan Analytics</span></div><div><hr></div><div><p style="text-align: center;"><strong>DAILY STATS</strong></p></div><hr><div><p style="text-align: center;"><strong>16 Quarterly Results</strong></p></div><div><ul style="list-style-type: disc;">
<li><p><strong>Results Score:</strong> 63% Positive / 0% Neutral / 37% Negative</p></li>
<li><p><strong>Average Results Score Change</strong>: +3.4 points</p></li>
<li><p><strong>Average % Change in Revenue:</strong> +3.4% Quarter YoY / -0.5% Rolling TTM YoY </p></li>
<li><p><strong>Average Operating Profit Margin Change</strong>: +0.3ppt</p></li>
<li><p><strong>Percentage Making Quarterly Losses: </strong>25%</p></li>
</ul></div><hr><div><p style="text-align: center;"><strong>11 Annual • 3 Interim Forecasts/Revisions</strong></p></div><div><ul style="list-style-type: disc;">
<li><p><strong>Annual Forecast/Revision Score:</strong> 45% Positive /18% Neutral / 37% Negative</p></li>
<li><p><strong>Interim Forecast/Revision Score Change:</strong> 33% Positive / 0% Neutral / 67% Negative</p></li>
<li><p><strong>Average Forecast/Revision Score Change:</strong> -0.3 point</p></li>
</ul></div>

• BEST &amp; WORST •Our best and worst pair from Tuesday's announcements is consumer electronics retailer Bic Camera (3048 JP) and Japan's largest mall operator AEON Mall (8905 JP).Source for all charts &amp; tables: Japan AnalyticsDAILY STATS16 Quarterly Results
Results Score: 63% Positive / 0% Neutral / 37% Negative
Average Results Score Change: +3.4 points
Average % Change in Revenue: +3.4% Quarter YoY / -0.5% Rolling TTM YoY 
Average Operating Profit Margin Change: +0.3ppt
Percentage Making Quarterly Losses: 25%
11 Annual • 3 Interim Forecasts/Revisions
Annual Forecast/Revision Score: 45% Positive /18% Neutral / 37% Negative
Interim Forecast/Revision Score Change: 33% Positive / 0% Neutral / 67% Negative
Average Forecast/Revision Score Change: -0.3 point


🇯🇵 JAPAN • Results & Revisions - 10/​​​​​​​06 -  SAN-A, AEON Mall, Consumer Electronics Retailers

Japan

Applied Co., Ltd. sells personal computers, its parts, and peripheral devices. The Company also manufactures its own brand personal computers, and provides technical support services.

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Applied Co Ltd (3020 JP)

Applied Co. (TYO 3020): A Cash-Rich Japanese PC/HPC Company at ~1.5x EV/EBIT...

Applied Co is a small cap regional Japanese PC retailer and IT provider with surprisingly good execution that’s moving into higher margin local AI...

Altay Capital

🇯🇵 JAPAN • Results & Revisions - 10/06 - SAN-A, AEON Mall, Consumer Electronics Retailers

• BEST WORST • Our best and worst pair from Tuesday's announcements is

Campbell Gunn

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Applied Co. (TYO 3020): A Cash-Rich Japanese PC/HPC Company at ~1.5x EV/EBIT...

Applied Co is a small cap regional Japanese PC retailer and IT provider with surprisingly good execution that’s moving into higher margin local AI...

Altay Capital

🇯🇵 JAPAN • Results & Revisions - 10/​​​​​​​06 - SAN-A, AEON Mall, Consumer Electronics Retailers

• BEST WORST • Our best and worst pair from Tuesday's announcements is

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions - 10/06 - SAN-A, AEON Mall, Consumer Electronics Retailers