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>Freee’s shares have lost about 38.2% over the last 12-months. The company is trading at FY+2 EV/Revenue of 15.23x at a slight premium to historical low of 11.27x.</li>
<li>Freee’s acquisition of Sight Visit has dragged down the market sentiment as the upside from the acquisition is lower. We expect the monetisation of Ninja Sign to be faster and successful.</li>
<li>We think Freee’s current multiples are a lot cheaper and offers a good opportunity to buy the stock.</li>
</ul>


Freee’s shares have lost about 38.2% over the last 12-months. The company is trading at FY+2 EV/Revenue of 15.23x at a slight premium to historical low of 11.27x.
Freee’s acquisition of Sight Visit has dragged down the market sentiment as the upside from the acquisition is lower. We expect the monetisation of Ninja Sign to be faster and successful.
We think Freee’s current multiples are a lot cheaper and offers a good opportunity to buy the stock.


Freee: Current Drop in Multiples Offer a Good Entry

Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>In <a href="https://www.smartkarma.com/insights/topix-inclusions-who-is-ready-4-0" target="_blank" data-smartkarma-citation="insights:61777" rel="noopener">TOPIX Inclusions: Who Is READY? 4.0</a>, I identified <a href="https://www.smartkarma.com/entities/freee-kk" target="_blank" data-smartkarma-citation="entities:28424:1" rel="noopener">freee (4478 JP)</a> as a potential TOPIX Inclusion candidate based on their ability to satisfy key Section Transfer Requirements.</li>
<li>Previously, I have discussed a pair trade involving <a href="https://www.smartkarma.com/entities/freee-kk" target="_blank" data-smartkarma-citation="entities:28424:1" rel="noopener">freee (4478 JP)</a> and its close competitor <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> in <a href="https://www.smartkarma.com/insights/topix-inclusion-money-forward-3994-could-outperform-freee-4478-until-end-of-month" target="_blank" data-smartkarma-citation="insights:54585" rel="noopener">TOPIX Inclusion: Money Forward (3994) Could Outperform Freee (4478)</a>.</li>
<li>Below is a look at the reasons for why the timing might be good for reversing this Trade and going <strong>LONG Freee - SHORT Money Forward.</strong>
</li>
</ul>


In TOPIX Inclusions: Who Is READY? 4.0, I identified freee (4478 JP) as a potential TOPIX Inclusion candidate based on their ability to satisfy key Section Transfer Requirements.
Previously, I have discussed a pair trade involving freee (4478 JP) and its close competitor Money Forward (3994 JP) in TOPIX Inclusion: Money Forward (3994) Could Outperform Freee (4478).
Below is a look at the reasons for why the timing might be good for reversing this Trade and going LONG Freee - SHORT Money Forward.



TOPIX Inclusion Pre-Event Pair Trade: LONG Freee - SHORT Money Forward

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, 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

Recruit Holdings / Equity Capital Markets

<ul>
<li>Toppan aims to raise up to US$966m via selling 0.9% stake in Recruit Holdings.</li>
<li>This is not the first selldown by Toppan and Recruit has seen a number of deals in the past, all of which have done well.</li>
<li>In this note, we will talk about the deal dynamics and run the deal through our ECM framework.</li>
</ul>


Toppan aims to raise up to US$966m via selling 0.9% stake in Recruit Holdings.
This is not the first selldown by Toppan and Recruit has seen a number of deals in the past, all of which have done well.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.


Recruit Holdings Placement - Not the First Selldown, past Deals Have Done Well

<ul>
<li>Net Protections Holdings (NPH), a buy now pay later service provider, aims to raise up to US$570m via selling a mix of primary and secondary shares in its Japan IPO.</li>
<li>As per Yano Research, it had 40% market share in the domestic BNPL market for B2C transactions.</li>
<li>In this note we will talk about the IPO valuation.</li>
</ul>


Net Protections Holdings (NPH), a buy now pay later service provider, aims to raise up to US$570m via selling a mix of primary and secondary shares in its Japan IPO.
As per Yano Research, it had 40% market share in the domestic BNPL market for B2C transactions.
In this note we will talk about the IPO valuation.


Net Protections Holdings IPO - Needs a Bit of Hope and Belief

<ul>
<li>The new market structure of the Tokyo Stock Exchange (TSE) consisting of Prime and Standard Sections is about to become functional in a few months.</li>
<li>Some companies have already announced their desired Market Sections under this new structure. However, some companies are yet to make such announcements.</li>
<li>In this insight, we take a look at those who are yet to make such announcements to identify attractive TOPIX Inclusion Pre-event candidates. </li>
</ul>


The new market structure of the Tokyo Stock Exchange (TSE) consisting of Prime and Standard Sections is about to become functional in a few months.
Some companies have already announced their desired Market Sections under this new structure. However, some companies are yet to make such announcements.
In this insight, we take a look at those who are yet to make such announcements to identify attractive TOPIX Inclusion Pre-event candidates. 


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: Current Drop in Multiples Offer a Good Entry

Freee’s acquisition of Sight Visit has dragged down the market sentiment. Freee’s current multiples are a lot cheaper and offers a good opportunity...

Shifara Samsudeen, FCMA, CGMA

TOPIX Inclusion Pre-Event Pair Trade: LONG Freee - SHORT Money Forward

Freee is a TOPIX Inclusion pre-event candidate and this might act as a catalyst to help them outperform their close peer Money Forward and the...

Janaghan Jeyakumar, CFA

Recruit Holdings Placement - Not the First Selldown, past Deals Have Done Well

Toppan aims to raise up to US$966m via selling 0.9% stake in Recruit Holdings. In this note, we will talk about deal dynamics and run the deal...

Sumeet Singh

Net Protections Holdings IPO - Needs a Bit of Hope and Belief

Net Protections Holdings (NPH), a buy now pay later service provider, aims to raise up to US$570m via selling a mix of primary and secondary shares...

Sumeet Singh

TOPIX Inclusions: Who Is READY? 4.0

In this insight, we take a look at potential pre-event candidates who could move to the First Section of the Tokyo Stock Exchange in the next few...

Janaghan Jeyakumar, CFA

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