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

<ul>
<li>Beenos revealed a ¥300m buyback plan in 2QFY23 and recently declared a ¥500m buyback in 3QFY23. This incremental buybacks is likely to continue due to disposal of incubator investments.</li>
<li>The cash balance of 34% of total assets and over 49% of market cap, supports the ongoing buyback trend even if incubator divestments take longer than expected.</li>
<li>Hence, we expect <a href="https://www.smartkarma.com/entities/beenos-inc" target="_blank" data-smartkarma-citation="entities:18023:1" rel="noopener">Beenos Inc (3328 JP)</a>’s Holdco discount to move closer to the 20% mark, potentially resulting in a 75% upside in the short term.</li>
</ul>


Beenos revealed a ¥300m buyback plan in 2QFY23 and recently declared a ¥500m buyback in 3QFY23. This incremental buybacks is likely to continue due to disposal of incubator investments.
The cash balance of 34% of total assets and over 49% of market cap, supports the ongoing buyback trend even if incubator divestments take longer than expected.
Hence, we expect Beenos Inc (3328 JP)’s Holdco discount to move closer to the 20% mark, potentially resulting in a 75% upside in the short term.


Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/beenos-inc" target="_blank" data-smartkarma-citation="entities:18023:1" rel="noopener">Beenos Inc (3328 JP)</a>, despite missing earnings and offering smaller-than-expected buybacks, is potentially a deeply undervalued investment.</li>
<li>Beenos holds 38% of its market-cap in cash 14% in GoTo shares 72% in VC investments and 9% in investment securities, which amounts to over 133% of its current market-cap.</li>
<li>Distributing these excess assets to investors could potentially generate more than 100% upside.</li>
</ul>



Beenos Inc (3328 JP), despite missing earnings and offering smaller-than-expected buybacks, is potentially a deeply undervalued investment.
Beenos holds 38% of its market-cap in cash 14% in GoTo shares 72% in VC investments and 9% in investment securities, which amounts to over 133% of its current market-cap.
Distributing these excess assets to investors could potentially generate more than 100% upside.


Beenos: Holds 133% of Its Market Cap in Cash, GoTo Shares, VC Investments & Investment Securities

<ul>
<li>
<a href="https://www.smartkarma.com/entities/beenos-inc" target="_blank" data-smartkarma-citation="entities:18023:1" rel="noopener">Beenos Inc (3328 JP)</a> is currently one of the cheapest stocks in the Japanese e-commerce sector with a consensus FY+2 EV/OP of 4.5x with an OP CAGR of around 130%.</li>
<li>In addition, the relatively cheap-looking valuation multiple excludes the current valuation of Beenos’ incubation program investments.</li>
<li>We think Beenos can sell its stake in GoTo in the short-term to conduct a big share buyback as the management thinks that Beenos is unfairly valued by the market.</li>
</ul>



Beenos Inc (3328 JP) is currently one of the cheapest stocks in the Japanese e-commerce sector with a consensus FY+2 EV/OP of 4.5x with an OP CAGR of around 130%.
In addition, the relatively cheap-looking valuation multiple excludes the current valuation of Beenos’ incubation program investments.
We think Beenos can sell its stake in GoTo in the short-term to conduct a big share buyback as the management thinks that Beenos is unfairly valued by the market.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/beenos-inc" target="_blank" data-smartkarma-citation="entities:18023:1" rel="noopener">Beenos Inc (3328 JP)</a> results beat with revenue at ¥7.2bn (+4.6% vs consensus) and OP of ¥431m (+21.4% vs consensus).</li>
<li>FY22 guidance was raised across Beenos’ core e-commerce businesses due to the favourable impact of the yen depreciation on overseas demand and changes to shipping methods and rates.</li>
<li>What caught our eye the most was Beenos’ decision to gradually realise gains from its VC investments.</li>
</ul>



Beenos Inc (3328 JP) results beat with revenue at ¥7.2bn (+4.6% vs consensus) and OP of ¥431m (+21.4% vs consensus).
FY22 guidance was raised across Beenos’ core e-commerce businesses due to the favourable impact of the yen depreciation on overseas demand and changes to shipping methods and rates.
What caught our eye the most was Beenos’ decision to gradually realise gains from its VC investments.


Beenos Decides to Lock-In Profits from Incubator Investments

<ul>
<li>Monotaro’s 1Q22 topline was broadly in line with expectations but OP overshot consensus and company guidance by ¥355m and ¥396m respectively as SG&amp;A fell short of the plan by ¥435m.</li>
<li>Although the market treated <a href="https://www.smartkarma.com/entities/monotaro-co-ltd" target="_blank" data-smartkarma-citation="entities:15441:1" rel="noopener">MonotaRO Co Ltd (3064 JP)</a> as a pandemic stock, it has stronger fundamentals than most pandemic winners.</li>
<li>Shares are not cheap enough to be outright bullish but it is still a decent long hedge to short many other low-quality names.</li>
</ul>


Monotaro’s 1Q22 topline was broadly in line with expectations but OP overshot consensus and company guidance by ¥355m and ¥396m respectively as SG&amp;A fell short of the plan by ¥435m.
Although the market treated MonotaRO Co Ltd (3064 JP) as a pandemic stock, it has stronger fundamentals than most pandemic winners.
Shares are not cheap enough to be outright bullish but it is still a decent long hedge to short many other low-quality names.


Japan

Beenos Inc sells various type of merchandise using group-buying method through Internet. The Company's merchandises include fashion goods, brand goods, convenience goods, baby goods, and toiletry goods.

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Beenos Inc (3328 JP)

Beenos: Ramps Up Buybacks

Beenos revealed a ¥300m buyback plan in 2QFY23 and recently declared a ¥500m buyback in 3QFY23. This incremental buybacks is likely to continue due...

Oshadhi Kumarasiri

Beenos: Holds 133% of Its Market Cap in Cash, GoTo Shares, VC Investments & Investment Securities

Beenos, despite missing earnings and offering smaller-than-expected buybacks, is potentially a deeply undervalued investment. It Holds over 133% of...

Oshadhi Kumarasiri

Beenos: Big Buybacks Forthcoming

We think it is quite possible for Beenos to sell its stake in GoTo in the short term to conduct a big share buyback as the management is of the...

Oshadhi Kumarasiri

Beenos Decides to Lock-In Profits from Incubator Investments

We think the realisation of profits from these investments could lead to a higher overall payout (dividend and buybacks), which could bring...

Oshadhi Kumarasiri

MonotaRo: Not a Pandemic Stock

With the share price down 51% from the peak at one point, markets discounted MonotaRo alongside the rest of the pandemic stocks, even though the...

Oshadhi Kumarasiri

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