Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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.

Thematic (Sector/Industry)

<h3>What’s Original?</h3>
<p>In this original, we have discussed some of the key aspects highlighted in Kishida’s policy statements along with the current status of these policies and companies that are likely to benefit.</p>

What’s Original?
In this original, we have discussed some of the key aspects highlighted in Kishida’s policy statements along with the current status of these policies and companies that are likely to benefit.

Kishida as Prime Minister: The Path Ahead

Equity Analyst, Event-driven, Quiddity Advisors

Janaghan Jeyakumar, CFA

Equity Analyst, Event-driven

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<p>After market-close yesterday, Japan-based business system package software maker <a href="https://www.smartkarma.com/entities/obic-business-consultants" target="_blank" data-smartkarma-citation="entities:17383:1" rel="noopener">Obic Business Consultants (4733 JP)</a> ("OBIC BC") announced a <a href="https://www.obc.co.jp/hubfs/obc/ir_english/Notification%20Regarding%20Secondary%20Offering%20of%20Shares.pdf" target="_blank" rel="noopener">Secondary Offering of Shares</a> for a total quantity of 9,714,000 shares which, at the current trading price, translates to a total offering size of ~¥52bn (US$470mn). </p><p>In this announcement, the company mentioned that they had received a notification from the Tokyo Stock Exchange on 9th July 2021 stating that their "<em>Tradable Shares</em>" ratio did not satisfy the criteria for maintaining a listing on the “Prime Market". </p><p>The Company is currently listed on the First Section of the Tokyo Stock Exchange and they intend to transition to the “Prime Market”. In order to do so, the company must be able to improve their "Tradable Shares" ratio above 35%. </p><p>This deal is an attempt to rectify the situation.</p>

After market-close yesterday, Japan-based business system package software maker Obic Business Consultants (4733 JP) ("OBIC BC") announced a Secondary Offering of Shares for a total quantity of 9,714,000 shares which, at the current trading price, translates to a total offering size of ~¥52bn (US$470mn). In this announcement, the company mentioned that they had received a notification from the Tokyo Stock Exchange on 9th July 2021 stating that their "Tradable Shares" ratio did not satisfy the criteria for maintaining a listing on the “Prime Market". The Company is currently listed on the First Section of the Tokyo Stock Exchange and they intend to transition to the “Prime Market”. In order to do so, the company must be able to improve their "Tradable Shares" ratio above 35%. This deal is an attempt to rectify the situation.

Obic Business Consultants (4733 JP): Trying to Avoid TOPIX Deletion

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

Steven Chen

Quality-first, Business-perspective Strategy

<ul>
<li>Nihon M&amp;A Center - healthy growth, booming ventures, solid economic moat; </li>
<li>Kakaku.com Inc. - growth momentum has yet to gather;</li>
<li>oRo Co. - resilient growth, continuous shareholder value creation on track.</li>
</ul>


Nihon M&amp;A Center - healthy growth, booming ventures, solid economic moat; 
Kakaku.com Inc. - growth momentum has yet to gather;
oRo Co. - resilient growth, continuous shareholder value creation on track.


Our Takeaways From The Recent Results - Nihon M&A Center, Kakaku.com Inc., ORO Co.

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Equity Bottom-Up

<div>
<a href="https://www.smartkarma.com/entities/oro-co-ltd" target="_blank" data-smartkarma-citation="entities:26941:1" rel="noopener">oRo Co Ltd (3983 JP)</a> reported its 4Q2020 and full-year 2020 results on Monday (15th February), which saw 28% YoY increase in revenues, while operating profit more than doubled to JPY704m from JPY325m in 4Q2019. Due to the Covid-19 outbreak, oRo’s revenue growth slowed down to mid-single digits during the first two quarters of 2020, while revenues declined YoY during 3Q2020. The 4Q2020 results show that the company’s earnings have recovered and in fact have had a strong rebound which marked record 4Q earnings for the company.</div><div></div><div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/188/801/original/image_95029282521613415391696.png?1613415392" class="editor-image img-responsive" data-smartkarma-image-id="188801"></figure></div><div class="content-caption">Source: Company Disclosures</div><div>The full-year 2020 revenue grew 4.3% YoY while operating profit increased 28% YoY during the year. Full-year revenue and OP both beat consensus estimates by 3.1% and 10.9% YoY respectively. </div><div></div><div>We discuss the details below.</div>


oRo Co Ltd (3983 JP) reported its 4Q2020 and full-year 2020 results on Monday (15th February), which saw 28% YoY increase in revenues, while operating profit more than doubled to JPY704m from JPY325m in 4Q2019. Due to the Covid-19 outbreak, oRo’s revenue growth slowed down to mid-single digits during the first two quarters of 2020, while revenues declined YoY during 3Q2020. The 4Q2020 results show that the company’s earnings have recovered and in fact have had a strong rebound which marked record 4Q earnings for the company.Source: Company DisclosuresThe full-year 2020 revenue grew 4.3% YoY while operating profit increased 28% YoY during the year. Full-year revenue and OP both beat consensus estimates by 3.1% and 10.9% YoY respectively. We discuss the details below.

ORo 4Q2020 Results: Strong Finish to the Year and There Is a Buyback

<p><a href="https://www.smartkarma.com/entities/change-inc" target="_blank" data-smartkarma-citation="entities:27414:1" rel="noopener">Change Inc (3962 JP)</a>  offers IT human resource development training services in Japan. The company’s share price has more than quadrupled over the past 12-months to JPY3,420 per share from JPY805 per share a year ago. In this insight, we examine the company’s business model and its financials to understand what has caused the significant rally in the company’s share price.</p><p>With the spread of COVID-19 in Japan, many companies have started shifting to working from home, whereby the digitisation of businesses has gathered speed.</p><p>Change Inc has benefitted from this trend leading to a 65.7% YoY increase in the company’s FY09/2020 revenues and a 235.2% increase in operating income.</p>

Change Inc (3962 JP)  offers IT human resource development training services in Japan. The company’s share price has more than quadrupled over the past 12-months to JPY3,420 per share from JPY805 per share a year ago. In this insight, we examine the company’s business model and its financials to understand what has caused the significant rally in the company’s share price.With the spread of COVID-19 in Japan, many companies have started shifting to working from home, whereby the digitisation of businesses has gathered speed.Change Inc has benefitted from this trend leading to a 65.7% YoY increase in the company’s FY09/2020 revenues and a 235.2% increase in operating income.

Change Inc: Digitisation of Public Enterprises in Japan to Drive Earnings

Japan

oRo Co., Ltd. develops and provides enterprise planning software. The Company also offers web based marketing services.

oRo Co Ltd (3983 JP)

Kishida as Prime Minister: The Path Ahead

In this original, we have discussed some of the key aspects highlighted in Kishida’s policy statements along with the current status of these...

Mio Kato

Obic Business Consultants (4733 JP): Trying to Avoid TOPIX Deletion

Japan-based software maker OBIC Business Consultants have launched a large secondary sale of shares to raise the float percentage to meet Prime...

Janaghan Jeyakumar, CFA

Our Takeaways From The Recent Results - Nihon M&A Center, Kakaku.com Inc., ORO Co.

Three high-quality Japanese companies on our "Investable Universe" list reported their respective recent-quarter results over the past couple of...

Steven Chen

ORo 4Q2020 Results: Strong Finish to the Year and There Is a Buyback

oRo reported its 4Q2020 and full-year 2020 results on Monday (15th February), which saw 28% YoY increase in revenues, while operating profit more...

Shifara Samsudeen, ACMA, CGMA

Change Inc: Digitisation of Public Enterprises in Japan to Drive Earnings

Change Inc's share price has more than quadrupled over the past 12-months to JPY3,420 per share from JPY805 per share a year ago and we examine...

Shifara Samsudeen, ACMA, CGMA