Japan Specialist

Mark Chadwick

Equity Bottom-Up

<div><a href="https://www.smartkarma.com/entities/makuake-inc" target="_blank" data-smartkarma-citation="entities:29281:1" rel="noopener">Makuake Inc (4479 JP)</a>  is a unique online platform that helps companies to launch new products and services online. The seven-year-old company is a product of the Cyberagent incubation umbrella and debuted on Mothers in December 2019. The company's core business is the Makuake platform, which supports new product launches, brings them in front of buyers/supporters, before formal market release. The Makuake Incubator Studio (MIS) helps firms with strong R&amp;D to develop and commercialize products via their platform.  </div><div>This note looks at the recent Q4 results, while the following note discusses in more detail the Market, Moat and Management.: <a href="https://www.smartkarma.com/insights/small-cap-growth-makuake-4479-launching-innovative-ideas" target="_blank" data-smartkarma-citation="insights:43337" rel="noopener">Small Cap Growth: Makuake (4479) - Launching Innovative Ideas</a>  </div>

Makuake Inc (4479 JP)  is a unique online platform that helps companies to launch new products and services online. The seven-year-old company is a product of the Cyberagent incubation umbrella and debuted on Mothers in December 2019. The company's core business is the Makuake platform, which supports new product launches, brings them in front of buyers/supporters, before formal market release. The Makuake Incubator Studio (MIS) helps firms with strong R&amp;D to develop and commercialize products via their platform.  This note looks at the recent Q4 results, while the following note discusses in more detail the Market, Moat and Management.: Small Cap Growth: Makuake (4479) - Launching Innovative Ideas  

Small Cap Growth: Makuake (4479) - Innovative Ideas Drive Strong Q4 Sales

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

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.

Event-Driven

We have been covering <a href="https://www.smartkarma.com/entities/base-inc" target="_blank" data-smartkarma-citation="entities:28353:1" rel="noopener">BASE Inc (4477 JP)</a> since its IPO in October 2019. Initially, BASE was valued in line with similar E-commerce platform multiples and the fast-growing payment processing business was ignored. However, the investor demand for COVID-resistant stocks drove the company’s valuation to unwarranted levels during the last six months.
In our last insight <a href="https://www.smartkarma.com/insights/base-inc-downside-risks-mount-as-ev-sales-peak" target="_blank" rel="noopener">BASE Inc: Downside Risks Mount As EV/​Sales Peak</a>, we suggested creating a short position when the share price peaked on 8th October. Since then, the share price has declined 21.5% to ¥12,500 per share.
On 16th October 2020, BASE Inc announced that it had invested in MOSH, a company involved in service E-Commerce.

We have been covering BASE Inc (4477 JP) since its IPO in October 2019. Initially, BASE was valued in line with similar E-commerce platform multiples and the fast-growing payment processing business was ignored. However, the investor demand for COVID-resistant stocks drove the company’s valuation to unwarranted levels during the last six months.
In our last insight BASE Inc: Downside Risks Mount As EV/​Sales Peak, we suggested creating a short position when the share price peaked on 8th October. Since then, the share price has declined 21.5% to ¥12,500 per share.
On 16th October 2020, BASE Inc announced that it had invested in MOSH, a company involved in service E-Commerce.

BASE Inc Moves to Service E-Commerce Via MOSH Acquisition

Founded in December 2012 in Roppongi Tokyo, <a href="https://www.smartkarma.com/entities/base-inc" target="_blank" data-smartkarma-citation="entities:28353:1" rel="noopener">BASE Inc (4477 JP)</a> is an e-commerce platform, payment services provider and also a SME funding services provider. The company’s main business “BASE” is an e-commerce platform which allows businesses and individuals to create online shops.In our last couple of reports, we suggested that there are downside risks as investor demand for COVID-resistant stocks have driven BASE’s valuation to unwarranted levels.However, we were reluctant to consider a short position and wanted to wait until FY+2 EV/Sales peak before arranging a short position.Over the last week BASE’s share price has rallied another 30%. Today the share price reached a new high of ¥16,510 per share before ending the day at ¥15,930 per share, up 12% from yesterday’s close price.As a result, BASE’s consensus FY+2 EV/Sales have reached a new high of 25.1x and offers an opportunity to arrange a short position with favourable risks rewards.

Founded in December 2012 in Roppongi Tokyo, BASE Inc (4477 JP) is an e-commerce platform, payment services provider and also a SME funding services provider. The company’s main business “BASE” is an e-commerce platform which allows businesses and individuals to create online shops.In our last couple of reports, we suggested that there are downside risks as investor demand for COVID-resistant stocks have driven BASE’s valuation to unwarranted levels.However, we were reluctant to consider a short position and wanted to wait until FY+2 EV/Sales peak before arranging a short position.Over the last week BASE’s share price has rallied another 30%. Today the share price reached a new high of ¥16,510 per share before ending the day at ¥15,930 per share, up 12% from yesterday’s close price.As a result, BASE’s consensus FY+2 EV/Sales have reached a new high of 25.1x and offers an opportunity to arrange a short position with favourable risks rewards.

BASE Inc: Downside Risks Mount As EV/Sales Peak

Equity Capital Markets

Benefiting from investor demand for COVID-resistant stocks, <a href="https://www.smartkarma.com/entities/base-inc" target="_blank" data-smartkarma-citation="entities:28353:1" rel="noopener">BASE Inc (4477 JP)</a> had an excellent run during the last six months, as share price increased more than 1,330% from the March 2020 low levels.BASE was listed on 25th October 2019 at ¥1,300 per share - the higher end of the proposed price range and currently trades at ¥11,000 per share.On 24th September 2020, the company’s board of directors resolved to raise around $125m via issuing 1.2m new shares to European and Asian institutional investors. The underwriters to this secondary offering are Daiwa Securities and Mizuho Securities. The book building period ends on 9th October 2020.The company plans to use secondary listing proceeds on advertising, recruitment, M&amp;A and working capital purposes.We feel this is an opportunistic move by BASE Inc to take full advantage of the currently inflated valuation multiples and therefore would avoid subscribing to the offer. Moreover, we would wait for a price reaction to the positive news flows such as BASE online store growth and consider arranging a short position at 20.0x consensus FY+2 EV/Sales – around ¥12,800 per share.

Benefiting from investor demand for COVID-resistant stocks, BASE Inc (4477 JP) had an excellent run during the last six months, as share price increased more than 1,330% from the March 2020 low levels.BASE was listed on 25th October 2019 at ¥1,300 per share - the higher end of the proposed price range and currently trades at ¥11,000 per share.On 24th September 2020, the company’s board of directors resolved to raise around $125m via issuing 1.2m new shares to European and Asian institutional investors. The underwriters to this secondary offering are Daiwa Securities and Mizuho Securities. The book building period ends on 9th October 2020.The company plans to use secondary listing proceeds on advertising, recruitment, M&amp;A and working capital purposes.We feel this is an opportunistic move by BASE Inc to take full advantage of the currently inflated valuation multiples and therefore would avoid subscribing to the offer. Moreover, we would wait for a price reaction to the positive news flows such as BASE online store growth and consider arranging a short position at 20.0x consensus FY+2 EV/Sales – around ¥12,800 per share.

BASE Inc Raising $125m Via an Overseas Secondary Offer Targeting European and Asian Investors

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

<a href="https://www.smartkarma.com/entities/base-inc" target="_blank" data-smartkarma-citation="entities:28353:1" rel="noopener">BASE Inc (4477 JP)</a>- Base is starting to show sign of waning upside momentum as an overlapping wedge takes shape after a very good run. Time to pinpoint a level to reduce long exposure and focus on where to reload.Given the lack of price history, it is more difficult to mark a macro rally projection outside of the new high target at 12,700. This level is the objective after a pullback sequence.Buy volumes have been very strong from August and supports a buy the pullback strategy.9,200 immediate pivot support  and if this holds/turns higher we should re test the recent high. Primary buy zone comes in at 8,000 and 7,000.

BASE Inc (4477 JP)- Base is starting to show sign of waning upside momentum as an overlapping wedge takes shape after a very good run. Time to pinpoint a level to reduce long exposure and focus on where to reload.Given the lack of price history, it is more difficult to mark a macro rally projection outside of the new high target at 12,700. This level is the objective after a pullback sequence.Buy volumes have been very strong from August and supports a buy the pullback strategy.9,200 immediate pivot support  and if this holds/turns higher we should re test the recent high. Primary buy zone comes in at 8,000 and 7,000.

Base Inc Exhaustive Rise and Fresh Buy Levels

Japan

BASE, Inc. offers internet based services. The Company provides net shop creation, shopping application development, online payment development, and other services. BASE provides its services throughout Japan.

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BASE Inc (4477 JP)

Small Cap Growth: Makuake (4479) - Innovative Ideas Drive Strong Q4 Sales

Makuake has a unique business model that helps entrepreneurs and companies to launch and commercialise products and services on line. It is scaling...

Mark Chadwick

BASE Inc Moves to Service E-Commerce Via MOSH Acquisition

In our last insight, we suggested creating a short position when the share price peaked on 8th October. Since then, the share price has declined by...

Oshadhi Kumarasiri

BASE Inc: Downside Risks Mount As EV/Sales Peak

Founded in December 2012 in Roppongi Tokyo, $bas is an e-commerce platform, payment services provider and also a SME funding services provider. The...

Oshadhi Kumarasiri

BASE Inc Raising $125m Via an Overseas Secondary Offer Targeting European and Asian Investors

Benefited from investor demand for COVID-resistant stocks, BASE Inc (4477 JP) had an excellent run during last six months, as share price increased...

Oshadhi Kumarasiri

Base Inc Exhaustive Rise and Fresh Buy Levels

BASE Inc (4477 JP)- Base is starting to show sign of waning upside momentum as an overlapping wedge takes shape after a very good run. Time to...

Thomas Schroeder

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