Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>The Nikkei Stock Average declined 738 yen (1.9%) in the second week of January as heavy-weight stocks sell-off</li>
<li>Nintendo (7974 JP) ended the trading week marginally higher by 0.7% after a partial unveiling of its new Swich 2 Console. Less earnings cyclicality, but less upside?</li>
<li>The BoJ looks set to lift interest rates again next week, unless market turbulence following Trump's  inauguration, delays the inevitable</li>
</ul>


The Nikkei Stock Average declined 738 yen (1.9%) in the second week of January as heavy-weight stocks sell-off
Nintendo (7974 JP) ended the trading week marginally higher by 0.7% after a partial unveiling of its new Swich 2 Console. Less earnings cyclicality, but less upside?
The BoJ looks set to lift interest rates again next week, unless market turbulence following Trump's  inauguration, delays the inevitable


Japan Strategy Weekly | Nintendo’s Switch and Trump’s Return

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 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

<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 1QFY06/2025 results which saw the company generating its first-ever Adj. operating profit, earlier than we expected.</li>
<li>The company has begun capitalising its software assets (decline in R&amp;D costs as % of revenue) and this coupled with fall in S&amp;M costs have contributed to profits.</li>
<li>The corporate paying customers surpassed more than 200k for the first time and we expect freee’s earnings to continue to improve going forward.</li>
</ul>



Freee KK (4478 JP) reported 1QFY06/2025 results which saw the company generating its first-ever Adj. operating profit, earlier than we expected.
The company has begun capitalising its software assets (decline in R&amp;D costs as % of revenue) and this coupled with fall in S&amp;M costs have contributed to profits.
The corporate paying customers surpassed more than 200k for the first time and we expect freee’s earnings to continue to improve going forward.


Freee 1Q: Turns Profitable Sooner Than We Expected

<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 4QFY06/2024 and full-year results today. Earnings were in line with guidance, but operating losses have declined significantly beating consensus by a huge margin.</li>
<li>The company has issued guidance which calls for a break-even or an adj. OPM of 3% for FY06/2025E suggesting freee’s investments in marketing and client acquisition have finally paid off.</li>
<li>Freee’s share price has moved up slightly during the last few weeks, but still trading at a discount to its own multiples and at a steep discount to Money Forward.</li>
</ul>



Freee KK (4478 JP) reported 4QFY06/2024 and full-year results today. Earnings were in line with guidance, but operating losses have declined significantly beating consensus by a huge margin.
The company has issued guidance which calls for a break-even or an adj. OPM of 3% for FY06/2025E suggesting freee’s investments in marketing and client acquisition have finally paid off.
Freee’s share price has moved up slightly during the last few weeks, but still trading at a discount to its own multiples and at a steep discount to Money Forward.


Freee 4Q: Significant Decline in Losses; Soon to Turn Profitable

<ul>
<li>Money Forward’s share price has declined by around 16% since reporting Q1 results.</li>
<li>The company will report Q2 results in early July. We expect continued solid momentum</li>
<li>We believe the stock price has around 30% upside potential to our target price of ¥6,600</li>
</ul>


Money Forward’s share price has declined by around 16% since reporting Q1 results.
The company will report Q2 results in early July. We expect continued solid momentum
We believe the stock price has around 30% upside potential to our target price of ¥6,600


Money Forward (3994) | Looking Forward to Q2

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.

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

Money Forward (3994 JP)

Japan Strategy Weekly | Nintendo’s Switch and Trump’s Return

Nikkei Stock Average drops due to heavy-weight stock sell-off, Nintendo sees slight gain with new console unveiling, BoJ likely to raise interest...

Mark Chadwick

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

Freee 1Q: Turns Profitable Sooner Than We Expected

The key highlight of freee's 1Q results was the first-ever Adj. operating profits for the company, earlier than we expected. The Corporate Paying...

Shifara Samsudeen, FCMA, CGMA

Freee 4Q: Significant Decline in Losses; Soon to Turn Profitable

Freee's 4Q losses declined significantly, which beat consensus by a wide margin. Guidance for FY06/2025E calls for operating profits as...

Shifara Samsudeen, FCMA, CGMA

Money Forward (3994) | Looking Forward to Q2

Money Forward's stock price has dropped 16% post-Q1 results, but Q2 results expected to show solid momentum with potential 30% upside to target...

Mark Chadwick

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japan Strategy Weekly | Nintendo’s Switch and Trump’s Return

​Nikkei Stock Average drops due to heavy-weight stock sell-off, Nintendo sees slight gain with new console unveiling, BoJ likely to raise interest...

Mark Chadwick

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

Freee 1Q: Turns Profitable Sooner Than We Expected

The key highlight of freee's 1Q results was the first-ever Adj. operating profits for the company, earlier than we expected. The Corporate Paying...

Shifara Samsudeen, FCMA, CGMA

Freee 4Q: Significant Decline in Losses; Soon to Turn Profitable

​Freee's 4Q losses declined significantly, which beat consensus by a wide margin. Guidance for FY06/2025E calls for operating profits as...

Shifara Samsudeen, FCMA, CGMA

Money Forward (3994) | Looking Forward to Q2

​Money Forward's stock price has dropped 16% post-Q1 results, but Q2 results expected to show solid momentum with potential 30% upside to target...

Mark Chadwick

Nikkei Stock Average drops due to heavy-weight stock sell-off, Nintendo sees slight gain with new console unveiling, BoJ likely to raise interest...

Freee's 4Q losses declined significantly, which beat consensus by a wide margin. Guidance for FY06/2025E calls for operating profits as...

Money Forward's stock price has dropped 16% post-Q1 results, but Q2 results expected to show solid momentum with potential 30% upside to target...