Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Amidst the volatility in the Japanese yen, companies like Money Forward, with a strong domestic revenue base and minimal exposure to forex risk, present an attractive investment opportunity.</li>
<li>Despite broader market uncertainties, Money Forward continues to demonstrate impressive growth, with its corporate ARR surging by 38% YoY in the most recent quarter, signaling sustained momentum.</li>
<li>The recent agreement to divest 49% of its non-core B2C segment, Money Forward ME, underscores the significant undervaluation of its core operations. </li>
</ul>


Amidst the volatility in the Japanese yen, companies like Money Forward, with a strong domestic revenue base and minimal exposure to forex risk, present an attractive investment opportunity.
Despite broader market uncertainties, Money Forward continues to demonstrate impressive growth, with its corporate ARR surging by 38% YoY in the most recent quarter, signaling sustained momentum.
The recent agreement to divest 49% of its non-core B2C segment, Money Forward ME, underscores the significant undervaluation of its core operations. 


Money Forward (3994): A Must-Buy Amid Yen Volatility

<ul>
<li>Money Forward released Q2 results post market close on Friday. Revenue growth of +41% YoY beat our estimates by 7%.</li>
<li>We highlight continued solid financial metrics supported by growth in SaaS ARR and in particular mid-sized corporate growth.</li>
<li>No change to our bullish long-term view on the company. Stock has run up around 11% ahead of earnings but we see further 20%+ upside from here. </li>
</ul>


Money Forward released Q2 results post market close on Friday. Revenue growth of +41% YoY beat our estimates by 7%.
We highlight continued solid financial metrics supported by growth in SaaS ARR and in particular mid-sized corporate growth.
No change to our bullish long-term view on the company. Stock has run up around 11% ahead of earnings but we see further 20%+ upside from here. 


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> reported 3QFY06/2025 results today. Revenue for the quarter was marginally below consensus despite increasing 27% YoY, while GAAP OP beat consensus by a huge margin.</li>
<li>Due to the tax filing season, freee’s S&amp;M costs tends to be higher during 3Q which led to slightly lower Adj. OP during the quarter. Price revisions have improved ARPU.</li>
<li>Freee’s share price has been up more than 40% YTD, strengthening profitability and its solid business model vs <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> mean there is further upside.</li>
</ul>



Freee KK (4478 JP) reported 3QFY06/2025 results today. Revenue for the quarter was marginally below consensus despite increasing 27% YoY, while GAAP OP beat consensus by a huge margin.
Due to the tax filing season, freee’s S&amp;M costs tends to be higher during 3Q which led to slightly lower Adj. OP during the quarter. Price revisions have improved ARPU.
Freee’s share price has been up more than 40% YTD, strengthening profitability and its solid business model vs Money Forward (3994 JP) mean there is further upside.


High Conviction 2025 - Freee: Robust Business Model Supports Stable Margins; Further Upside Ahead

<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> reported 2QFY06/2025 results on Friday which beat consensus estimates. The company also reported a second consecutive quarter of operating profits in 2Q.</li>
<li>Despite cutting down significantly on selling and marketing, freee has managed to maintain growth. The company also has revised upwards its OP guidance and expects positive adj. free cashflows.</li>
<li>Though freee’s share price has moved up 35% YTD, strengthening profitability and its solid business model vs <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> should further drive share price up.</li>
</ul>



Freee KK (4478 JP) reported 2QFY06/2025 results on Friday which beat consensus estimates. The company also reported a second consecutive quarter of operating profits in 2Q.
Despite cutting down significantly on selling and marketing, freee has managed to maintain growth. The company also has revised upwards its OP guidance and expects positive adj. free cashflows.
Though freee’s share price has moved up 35% YTD, strengthening profitability and its solid business model vs Money Forward (3994 JP) should further drive share price up.


High Conviction 2025 – Freee: Earnings Beat with Upward Revision to Profit Guidance

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/rakuten-bank-ltd" target="_blank" data-smartkarma-citation="entities:35638:1" rel="noopener">Rakuten Bank (5838 JP)</a>, the online banking arm of <a href="https://www.smartkarma.com/entities/rakuten-group-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten (4755 JP)</a>, aims to raise up to around US$630m in its Japan listing in April 2023.</li>
<li>RB is the largest internet bank in Japan, by number of accounts. As of Dec 22, it had 13.3m deposit accounts with a total deposit base of JPY8.8tn.</li>
<li>In our earlier notes, we have looked at the company’s past performance and undertook a peer comparison. In this note, we talk about valuations in the IPO price range.</li>
</ul>



Rakuten Bank (5838 JP), the online banking arm of Rakuten (4755 JP), aims to raise up to around US$630m in its Japan listing in April 2023.
RB is the largest internet bank in Japan, by number of accounts. As of Dec 22, it had 13.3m deposit accounts with a total deposit base of JPY8.8tn.
In our earlier notes, we have looked at the company’s past performance and undertook a peer comparison. In this note, we talk about valuations in the IPO price range.


Rakuten Bank IPO - Lower Range Makes It Even More Attractive

Japan

Money Forward, Inc. develops mobile application software. The Company produces automatic household account book softwares, household account book application softwares, and other products. Money Forward also provides personal financial management, cloud based accounting solutions, and other services.

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Money Forward (3994 JP)

Money Forward (3994): A Must-Buy Amid Yen Volatility

Japanese fintech company Money Forward presents an attractive investment opportunity with strong domestic revenue, impressive growth, and...

Mark Chadwick

Money Forward (3994) | Metronomic Growth

Money Forward's Q2 results show strong revenue growth, particularly in SaaS ARR and mid-sized corporate growth, exceeding estimates by 7%. Bullish...

Mark Chadwick

High Conviction 2025 - Freee: Robust Business Model Supports Stable Margins; Further Upside Ahead

freee reported strong results with profits. As we expected, seasonally higher S&M spending for tax filing led to drop in profits. Share price is up...

Shifara Samsudeen, FCMA, CGMA

High Conviction 2025 – Freee: Earnings Beat with Upward Revision to Profit Guidance

freee's 2Q earnings were strong with upward revision to OP guidance. Share price has been up 35% YTD driven by its strengthening profitability...

Shifara Samsudeen, FCMA, CGMA

Rakuten Bank IPO - Lower Range Makes It Even More Attractive

Rakuten Bank (5838 JP), the online banking arm of Rakuten (4755 JP), aims to raise up to around US$630m in its Japan listing in April 2023.

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

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Money Forward (3994): A Must-Buy Amid Yen Volatility

​Japanese fintech company Money Forward presents an attractive investment opportunity with strong domestic revenue, impressive growth, and...

Mark Chadwick

Money Forward (3994) | Metronomic Growth

​Money Forward's Q2 results show strong revenue growth, particularly in SaaS ARR and mid-sized corporate growth, exceeding estimates by 7%. Bullish...

Mark Chadwick

High Conviction 2025 - Freee: Robust Business Model Supports Stable Margins; Further Upside Ahead

freee reported strong results with profits. As we expected, seasonally higher S&M spending for tax filing led to drop in profits. Share price is up...

Shifara Samsudeen, FCMA, CGMA

High Conviction 2025 – Freee: Earnings Beat with Upward Revision to Profit Guidance

freee's 2Q earnings were strong with upward revision to OP guidance. Share price has been up 35% YTD driven by its strengthening profitability...

Shifara Samsudeen, FCMA, CGMA

Rakuten Bank IPO - Lower Range Makes It Even More Attractive

Rakuten Bank (5838 JP), the online banking arm of Rakuten (4755 JP), aims to raise up to around US$630m in its Japan listing in April 2023.

Sumeet Singh

Japanese fintech company Money Forward presents an attractive investment opportunity with strong domestic revenue, impressive growth, and...

Money Forward's Q2 results show strong revenue growth, particularly in SaaS ARR and mid-sized corporate growth, exceeding estimates by 7%. Bullish...