IR & Research Intelligence, Sessa Investment Research

Sessa Investment Research

IR & Research Intelligence

Sponsored research focusing on Japanese small cap.

Equity Bottom-Up

<ul><li>As outlined in its initial forecasts from May 2024, Gurunavi (hereafter, the Company) projected an operating loss of JPY 330 mn and a net loss of JPY 350 mn for the first half of FY2025/3.</li><li>The Company anticipated a recovery in the second half to achieve full-year operating profit of JPY 150 mn and net profit of JPY 110 mn.</li><li>However, following an upward revision announced with Q1 results, the Company reported an operating profit of JPY 278 mn and a net profit of JPY 247 mn for the first half, successfully achieving profitability during the period.</li></ul>

As outlined in its initial forecasts from May 2024, Gurunavi (hereafter, the Company) projected an operating loss of JPY 330 mn and a net loss of JPY 350 mn for the first half of FY2025/3.The Company anticipated a recovery in the second half to achieve full-year operating profit of JPY 150 mn and net profit of JPY 110 mn.However, following an upward revision announced with Q1 results, the Company reported an operating profit of JPY 278 mn and a net profit of JPY 247 mn for the first half, successfully achieving profitability during the period.

Gurunavi (2440 JP) - From Defense to Offense

<ul><li>Company overview Gurunavi (hereafter, the Company) was established in 1996 as a restaurant information portal, enabling restaurants to share detailed, up-to-date business information.</li><li>This served as an effective promotional tool for restaurants, while also providing consumers with valuable information.</li><li>However, as competition intensified and new players like Google and social media platforms emerged, the Company formed a capital and business alliance with Rakuten in 2019, aiming to strengthen its online reservation services among other areas. </li></ul>

Company overview Gurunavi (hereafter, the Company) was established in 1996 as a restaurant information portal, enabling restaurants to share detailed, up-to-date business information.This served as an effective promotional tool for restaurants, while also providing consumers with valuable information.However, as competition intensified and new players like Google and social media platforms emerged, the Company formed a capital and business alliance with Rakuten in 2019, aiming to strengthen its online reservation services among other areas. 

Gurunavi (2440 JP) - Initiation - September 6, 2024

Quality-first, Business-perspective Strategy, Urbem (HK) Limited

Steven Chen

Quality-first, Business-perspective Strategy

<ul>
<li>Kakaku.com Inc. can be a rare species among listed companies in Japan;</li>
<li>We had multiple email exchanges and meetings with the management team for a deep-dive view covering corporate cultural, management style, capital allocation, business model, and competitive strength.</li>
<li>We would wait for a 20%-30% pullback in the share price before looking to add to our position but would certainly remain reluctant to sell any share that we own.</li>
</ul>


Kakaku.com Inc. can be a rare species among listed companies in Japan;
We had multiple email exchanges and meetings with the management team for a deep-dive view covering corporate cultural, management style, capital allocation, business model, and competitive strength.
We would wait for a 20%-30% pullback in the share price before looking to add to our position but would certainly remain reluctant to sell any share that we own.


Telco/Internet specialist

Kirk Boodry

Redex Research

Thematic (Sector/Industry)

<ul>
<li>The Japan telecom and Internet companies in our coverage universe held ¥1,253bn in public equities as of Q2(Sep) largely built through capital alliances tied to business collaboration</li>
<li>NTT has the largest portfolio at c. ¥958bn (7% of market cap) followed by KDDI. Toyota (¥354bn) and JTower (three strategic telcos) are the largest and most widely held </li>
<li>The P&amp;L impact of valuation changes in Q2 should be muted. We have included tables for all the companies in our coverage</li>
</ul>


The Japan telecom and Internet companies in our coverage universe held ¥1,253bn in public equities as of Q2(Sep) largely built through capital alliances tied to business collaboration
NTT has the largest portfolio at c. ¥958bn (7% of market cap) followed by KDDI. Toyota (¥354bn) and JTower (three strategic telcos) are the largest and most widely held 
The P&amp;L impact of valuation changes in Q2 should be muted. We have included tables for all the companies in our coverage


Japan Telecoms/Internet - A Quick Look at Public Equity Portfolios

Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

Japan-based food delivery company <a href="https://www.smartkarma.com/entities/demae-can-co-ltd" target="_blank" data-smartkarma-citation="entities:10524:1" rel="noopener">Demae-Can Co., Ltd. (2484 JP)</a> launched a follow-on equity offering after market-close today to raise capital for business expansion. In this offering the company will be issuing 55,436,400 new shares and selling 3,240,000 treasury shares out of which a total of 19,293,900 shares will be allocated to the public and 39,382,500 shares will be allocated for <a href="https://www.smartkarma.com/entities/z-holdings-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">Z Holdings (4689 JP)</a> and South-Korea based <a href="https://www.smartkarma.com/entities/naver-corp" target="_blank" data-smartkarma-citation="entities:16029:1" rel="noopener">Naver Corp (035420 KS)</a>. Based on today's closing price, the total size of this equity offering could be around ~¥105bn (US$950mn) and the portion allocated to public shareholders could be around ~¥35bn (US$315mn). However, the official announcement estimates the minimum size of the equity offering to be around ~¥80bn (US$726mn) and the above-mentioned allocation can change slightly depending on share price movement and public investor interest. There is a really interesting event angle here which should pique the interest of investors. More below.

Japan-based food delivery company Demae-Can Co., Ltd. (2484 JP) launched a follow-on equity offering after market-close today to raise capital for business expansion. In this offering the company will be issuing 55,436,400 new shares and selling 3,240,000 treasury shares out of which a total of 19,293,900 shares will be allocated to the public and 39,382,500 shares will be allocated for Z Holdings (4689 JP) and South-Korea based Naver Corp (035420 KS). Based on today's closing price, the total size of this equity offering could be around ~¥105bn (US$950mn) and the portion allocated to public shareholders could be around ~¥35bn (US$315mn). However, the official announcement estimates the minimum size of the equity offering to be around ~¥80bn (US$726mn) and the above-mentioned allocation can change slightly depending on share price movement and public investor interest. There is a really interesting event angle here which should pique the interest of investors. More below.

Demae-Can's Latest Offering Preserves The Potential for TOPIX Inclusion

Japan

Gurunavi, Inc. operates search engine for restaurants. The Company also offers sales promotion support service to its participating restaurants. Gurunavi provides information on restaurants throughout Japan in multiple languages.

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Gurunavi Inc (2440 JP)

Gurunavi (2440 JP) - From Defense to Offense

As outlined in its initial forecasts from May 2024, Gurunavi (hereafter, the Company) projected an operating loss of JPY 330 mn and a net loss of...

Sessa Investment Research

Gurunavi (2440 JP) - Initiation - September 6, 2024

Company overview Gurunavi (hereafter, the Company) was established in 1996 as a restaurant information portal, enabling restaurants to share...

Sessa Investment Research

Kakaku.com Inc.: A Deep-Dive View

Kakaku.com Inc. has impressed us as a rare species compared to many other Japanese companies and is probably the most investable publicly-traded...

Steven Chen

Japan Telecoms/Internet - A Quick Look at Public Equity Portfolios

Public equity portfolios in our coverage represent 3% of total market cap, driven by capital alliances tied to business collaboration. We thought...

Kirk Boodry

Demae-Can's Latest Offering Preserves The Potential for TOPIX Inclusion

Japan-based food delivery company Demae-Can announced a large equity offering to boost their marketing expenditure and defend their market share in...

Janaghan Jeyakumar, CFA

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