Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>Japanese equities fell after record highs as Middle East tensions pushed oil higher, triggering global risk-off sentiment and exposing Japan’s vulnerability as a major energy importer.</li>
<li>Oil shock hit energy-sensitive sectors: airlines, rubber and brokers fell, while mining and shipping gained; sell-off was broad with momentum reversal and defensives outperforming.</li>
<li>Stock moves diverged: SaaS firms rose on earnings stability, Rohm surged on takeover news, while Sumitomo Metal Mining and Sumitomo Rubber plunged on commodity and oil risks.</li>
</ul>


Japanese equities fell after record highs as Middle East tensions pushed oil higher, triggering global risk-off sentiment and exposing Japan’s vulnerability as a major energy importer.
Oil shock hit energy-sensitive sectors: airlines, rubber and brokers fell, while mining and shipping gained; sell-off was broad with momentum reversal and defensives outperforming.
Stock moves diverged: SaaS firms rose on earnings stability, Rohm surged on takeover news, while Sumitomo Metal Mining and Sumitomo Rubber plunged on commodity and oil risks.


Japan Strategy Weekly | Oil Shock Tests a Crowded Rally

Equity Bottom-Up

<ul>
<li>
 Take profit ahead of 3Q: at ¥6,020, Money Forward has effectively reached our ¥6,030 DCF value. </li>
<li>
Strong results largely anticipated: HIRAC boosts headline EBITDA, while a guidance raise is increasingly priced into ~5x FY26E sales. </li>
<li>
Risk/Reward has shifted: limited valuation cushion makes protecting gains ahead of a potentially noisy 3Q print prudent.</li>
</ul>



 Take profit ahead of 3Q: at ¥6,020, Money Forward has effectively reached our ¥6,030 DCF value. 

Strong results largely anticipated: HIRAC boosts headline EBITDA, while a guidance raise is increasingly priced into ~5x FY26E sales. 

Risk/Reward has shifted: limited valuation cushion makes protecting gains ahead of a potentially noisy 3Q print prudent.


Money Forward (3994 JP) | Take Profit Ahead of 3Q. The Price Has Caught Up.

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>On 28 August, <a href="https://www.smartkarma.com/entities/base-inc" target="_blank" data-smartkarma-citation="entities:28353:1" rel="noopener">BASE Inc (4477 JP)</a> announced an offer by <a href="https://www.smartkarma.com/entities/sbi-holdings-inc" target="_blank" data-smartkarma-citation="entities:10928:1" rel="noopener">SBI Holdings (8473 JP)</a> to acquire up to 23.8m shares (20.00% stake) at JPY340, a 7.6% premium to the undisturbed price. </li>
<li>There is no minimum acceptance condition. The shares are trading above the offer price, either due to expectations of a bump or to the SBI alliance benefiting the back-end valuation.</li>
<li>A price bump is likely as the offer is light on several metrics, the two substantial shareholders are unlikely to tender, and the Board has taken a neutral stance. </li>
</ul>


On 28 August, BASE Inc (4477 JP) announced an offer by SBI Holdings (8473 JP) to acquire up to 23.8m shares (20.00% stake) at JPY340, a 7.6% premium to the undisturbed price. 
There is no minimum acceptance condition. The shares are trading above the offer price, either due to expectations of a bump or to the SBI alliance benefiting the back-end valuation.
A price bump is likely as the offer is light on several metrics, the two substantial shareholders are unlikely to tender, and the Board has taken a neutral stance. 


BASE (4477 JP): SBI’s Partial Tender Offer Needs a Price Bump

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/genda-inc" target="_blank" data-smartkarma-citation="entities:39911:1" rel="noopener">GENDA (9166 JP),</a> along with a selling shareholder, is looking to raise around US$190m to partly fund its M&amp;A.</li>
<li>Genda develops and operates amusement facilities in Japan, primarily operating under its Genda GiGO Entertainment subsidiary.</li>
<li>In this note, we will talk about the placement and run the deal through our ECM framework.</li>
</ul>



GENDA (9166 JP), along with a selling shareholder, is looking to raise around US$190m to partly fund its M&amp;A.
Genda develops and operates amusement facilities in Japan, primarily operating under its Genda GiGO Entertainment subsidiary.
In this note, we will talk about the placement and run the deal through our ECM framework.


GENDA Placement - Good Track Record & Sort off Well Flagged but Relatively Large

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/freee-kk" target="_blank" data-smartkarma-citation="entities:28424:1" rel="noopener">Freee KK (4478 JP)</a> offers cloud-based online accounting and HR/Payroll software to small and medium businesses (SMBs) in Japan. The company operates a subscription-based revenue model.</li>
<li>Freee reported its first-ever profits recently and we expect continued improvement in freee’s profitability driven by its strong business model vs MF whose business model has started to breakdown.</li>
<li>Freee’s current valuation multiples are cheap and there is significant upside to the current share price, hence we recommend making an entry.</li>
</ul>



Freee KK (4478 JP) offers cloud-based online accounting and HR/Payroll software to small and medium businesses (SMBs) in Japan. The company operates a subscription-based revenue model.
Freee reported its first-ever profits recently and we expect continued improvement in freee’s profitability driven by its strong business model vs MF whose business model has started to breakdown.
Freee’s current valuation multiples are cheap and there is significant upside to the current share price, hence we recommend making an entry.


2025 High Conviction: Freee KK – Becoming Free From Losses; Significant Upside

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Freee (4478 JP)

Japan Strategy Weekly | Oil Shock Tests a Crowded Rally

Japanese equities fell due to record highs and Middle East tensions pushing oil prices higher, exposing vulnerability as a major energy importer.

Mark Chadwick

Money Forward (3994 JP) | Take Profit Ahead of 3Q. The Price Has Caught Up.

Q3 Preview: The headline numbers should be strong, but will include material one-offs. A routine beat-and-raise may therefore be insufficient to...

Mark Chadwick

BASE (4477 JP): SBI’s Partial Tender Offer Needs a Price Bump

A price bump is likely as the offer is light on several metrics, the two substantial shareholders are unlikely to tender, and the Board has taken a...

Arun George

GENDA Placement - Good Track Record & Sort off Well Flagged but Relatively Large

GENDA (9166 JP), along with a selling shareholder, is looking to raise around US$190m to partly fund its M&A. In this note, we talk about the deal...

Sumeet Singh

2025 High Conviction: Freee KK – Becoming Free From Losses; Significant Upside

Freee has proved that its business model is solid vs Money Forward by beginning to make profits without compromising on growth. freee's shares are...

Shifara Samsudeen, FCMA, CGMA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japan Strategy Weekly | Oil Shock Tests a Crowded Rally

​Japanese equities fell due to record highs and Middle East tensions pushing oil prices higher, exposing vulnerability as a major energy importer.

Mark Chadwick

Money Forward (3994 JP) | Take Profit Ahead of 3Q. The Price Has Caught Up.

Q3 Preview: The headline numbers should be strong, but will include material one-offs. A routine beat-and-raise may therefore be insufficient to...

Mark Chadwick

BASE (4477 JP): SBI’s Partial Tender Offer Needs a Price Bump

A price bump is likely as the offer is light on several metrics, the two substantial shareholders are unlikely to tender, and the Board has taken a...

Arun George

GENDA Placement - Good Track Record & Sort off Well Flagged but Relatively Large

GENDA (9166 JP), along with a selling shareholder, is looking to raise around US$190m to partly fund its M&A. In this note, we talk about the deal...

Sumeet Singh

2025 High Conviction: Freee KK – Becoming Free From Losses; Significant Upside

Freee has proved that its business model is solid vs Money Forward by beginning to make profits without compromising on growth. freee's shares are...

Shifara Samsudeen, FCMA, CGMA

Japanese equities fell due to record highs and Middle East tensions pushing oil prices higher, exposing vulnerability as a major energy importer.