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.

Equity Bottom-Up

<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 2QFY06/2023 results today. Revenue increased 35.3% YoY to JPY4,479m (vs consensus JPY4,469.5m) while operating losses for the quarter widened to JPY1,281m (vs consensus JPY1,574.5m).</li>
<li>Both ARPU and no. of paying customers continue to increase and the company’s strategy of onboarding large corporates seems to pay off.</li>
<li>Widening operating loss is no major concern as it is a matter of time before freee cuts down advertising and other costs given the expanding revenue base and excessive GPM.</li>
</ul>



freee (4478 JP) reported 2QFY06/2023 results today. Revenue increased 35.3% YoY to JPY4,479m (vs consensus JPY4,469.5m) while operating losses for the quarter widened to JPY1,281m (vs consensus JPY1,574.5m).
Both ARPU and no. of paying customers continue to increase and the company’s strategy of onboarding large corporates seems to pay off.
Widening operating loss is no major concern as it is a matter of time before freee cuts down advertising and other costs given the expanding revenue base and excessive GPM.


Freee: Widened Losses No Major Concern as Freee Advances Towards Medium/Long Term Growth Strategy

<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> reported 4QFY11/2022 results yesterday. Revenue increased 42.5% YoY to JPY6.2bn (vs consensus JPY6.0bn) driven by growth in both MF Business and MF Home.</li>
<li>Operating losses for the quarter widened to JPY2.2bn (34.8% of revenue) from JPY661m (15.2% of revenue) in the same quarter last year (vs consensus JPY2.0bn).</li>
<li>Though MF’s top line continues to grow, we have not yet seen a meaningful improvement in its profitability, and we think, MF’s shares are overvalued compared to its counterpart freee.</li>
</ul>



Money Forward (3994 JP) reported 4QFY11/2022 results yesterday. Revenue increased 42.5% YoY to JPY6.2bn (vs consensus JPY6.0bn) driven by growth in both MF Business and MF Home.
Operating losses for the quarter widened to JPY2.2bn (34.8% of revenue) from JPY661m (15.2% of revenue) in the same quarter last year (vs consensus JPY2.0bn).
Though MF’s top line continues to grow, we have not yet seen a meaningful improvement in its profitability, and we think, MF’s shares are overvalued compared to its counterpart freee.


Money Forward: Top Line Expands, Yet to See Meaningful Turnaround in Profitability

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Skymark Airlines / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/skymark-airlines-inc" target="_blank" data-smartkarma-citation="entities:20430:1" rel="noopener">Skymark Airlines (9204 JP)</a> raised US$242m in its Japan IPO. Skymark Airlines (SA) is a Japanese low-cost airline, being the third largest domestic airline according to the company.</li>
<li>SA began its operations in Japan as a domestic airline and gradually increased the number of routes offered to passengers. However, it has a mired history of bankruptcy.</li>
<li>In our previous notes, we looked at the company’s past performance and talked about valuations. In this note, we’ll talk about the trading dynamics.</li>
</ul>



Skymark Airlines (9204 JP) raised US$242m in its Japan IPO. Skymark Airlines (SA) is a Japanese low-cost airline, being the third largest domestic airline according to the company.
SA began its operations in Japan as a domestic airline and gradually increased the number of routes offered to passengers. However, it has a mired history of bankruptcy.
In our previous notes, we looked at the company’s past performance and talked about valuations. In this note, we’ll talk about the trading dynamics.


Skymark Airlines IPO Trading - Subscription Has Been Strong Despite Asking More than Peers

<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 1QFY06/2023 results yesterday. Revenue increased 34.5% YoY to JPY4.24bn (vs consensus JPY4.18) driven by 23.5% YoY growth in paying customers to 386,655 from 313,206 in 1QFY06/2022.</li>
<li>As expected, operating losses widened to 24.6% of revenue, however, reported losses of JPY1.0bn was well below consensus estimate of JPY1.6bn.</li>
<li>Freee’s share price has moved up by about 5% following earnings announcement which shows that the market is confident over freee’s ability to turn around its profitability.</li>
</ul>



freee (4478 JP) reported 1QFY06/2023 results yesterday. Revenue increased 34.5% YoY to JPY4.24bn (vs consensus JPY4.18) driven by 23.5% YoY growth in paying customers to 386,655 from 313,206 in 1QFY06/2022.
As expected, operating losses widened to 24.6% of revenue, however, reported losses of JPY1.0bn was well below consensus estimate of JPY1.6bn.
Freee’s share price has moved up by about 5% following earnings announcement which shows that the market is confident over freee’s ability to turn around its profitability.


Freee: Earnings Beat and Losses Widen as Freee Focuses on Mid-To-Long Term Plan

<ul>
<li>Money Forward reported 3QFY11/2022 results. Revenue increased 42.2% YoY to JPY5.45bn (vs consensus JPY5.40bn) while adjusted op.losses further widened to JPY2.5bn vs JPY449m in the same period a year ago.</li>
<li>Though top line growth has resumed following a slowdown in 2QFY11/2022, MF’s margins have further worsened with increased investment in advertising, staff and subsidies.</li>
<li>MF’s share price fell almost 8% following earnings announcement as investors are concerned over deteriorating profitability.</li>
</ul>


Money Forward reported 3QFY11/2022 results. Revenue increased 42.2% YoY to JPY5.45bn (vs consensus JPY5.40bn) while adjusted op.losses further widened to JPY2.5bn vs JPY449m in the same period a year ago.
Though top line growth has resumed following a slowdown in 2QFY11/2022, MF’s margins have further worsened with increased investment in advertising, staff and subsidies.
MF’s share price fell almost 8% following earnings announcement as investors are concerned over deteriorating profitability.


Money Forward: Top Line Beats Consensus but Losses Widen Further

Japan

freee K.K. develops software products. The Company produces cloud based accounting softwares, automatic online accounting systems, and other products. freee provides its services throughout Japan.

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Freee KK (4478 JP)

Freee: Widened Losses No Major Concern as Freee Advances Towards Medium/Long Term Growth Strategy

Widened operating losses was not at all a surprise as the company already mentioned that it will continue to invest on user growth. Growth in large...

Shifara Samsudeen, FCMA, CGMA

Money Forward: Top Line Expands, Yet to See Meaningful Turnaround in Profitability

MF's 4QFY11/22 earnings beat estimates. EBITDA (losses) improved sequentially but we are yet to see steady improvement in profitability. Expects to...

Shifara Samsudeen, FCMA, CGMA

Skymark Airlines IPO Trading - Subscription Has Been Strong Despite Asking More than Peers

Skymark Airlines (9204 JP) raised US$242m in its Japan IPO. Skymark Airlines (SA) is a Japanese low-cost airline, being the third largest domestic...

Clarence Chu

Freee: Earnings Beat and Losses Widen as Freee Focuses on Mid-To-Long Term Plan

freee's 1Q earnings beat estimates. As expected, operating losses widened due to focusing on mid-to-long term plan which should eventually help...

Shifara Samsudeen, FCMA, CGMA

Money Forward: Top Line Beats Consensus but Losses Widen Further

Though Money Forward's top line continues to expand, losses have further widened as the company invests heavily on advertising, subsidies and...

Shifara Samsudeen, FCMA, CGMA

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