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

<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

Quality-first, Business-perspective, Long-term, Urbem (HK) Limited

Urbem Capital

Quality-first, Business-perspective, Long-term

<ul>
<li>Founder-led Technology One has the capability to earn superior returns on capital while expanding predictably and profitably alongside a massive runaway, in our opinion.</li>
<li>Although the share seems a bit elevated at the moment, we feel that the name should be worth following among long-term, quality-focused investors who can wait patiently.</li>
</ul>


Founder-led Technology One has the capability to earn superior returns on capital while expanding predictably and profitably alongside a massive runaway, in our opinion.
Although the share seems a bit elevated at the moment, we feel that the name should be worth following among long-term, quality-focused investors who can wait patiently.


Technology One: Our Top SaaS Pick From APAC

<p>Freee 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, and the adoption of cloud-based accounting and HR software among SMBs is still at a nascent stage compared to other Western markets.</p><p>The company’s shares have gained 177% YTD outperforming both Nikkei 225 Index and Topix.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/174/972/original/image_65217007521606637862376.png?1606637863" class="editor-image img-responsive" data-smartkarma-image-id="174972"></figure><div class="content-caption"><em>Source: Cap IQ</em></div><p>Our “2021 High Conviction” calls for an upside potential of at least 50%. Given the company is a few quarters away from reporting OP, we believe it is likely that the company’s share price will rally more than 50% over the next 12-months.</p>

Freee 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, and the adoption of cloud-based accounting and HR software among SMBs is still at a nascent stage compared to other Western markets.The company’s shares have gained 177% YTD outperforming both Nikkei 225 Index and Topix.Source: Cap IQOur “2021 High Conviction” calls for an upside potential of at least 50%. Given the company is a few quarters away from reporting OP, we believe it is likely that the company’s share price will rally more than 50% over the next 12-months.

2021 High Conviction - Rapid User Growth Will Set You Freee From Losses

<ul>
<li>Last week, Japanese ERP and digital consulting firm oRo reported its Q3 results demonstrating weakness across both business segments;</li>
<li>The market sold off upon the "bad" news;</li>
<li>At the same time, long-term investors may want to figure out whether there is a secular deterioration of business fundamentals or just a temporary glitch.</li>
</ul>


Last week, Japanese ERP and digital consulting firm oRo reported its Q3 results demonstrating weakness across both business segments;
The market sold off upon the "bad" news;
At the same time, long-term investors may want to figure out whether there is a secular deterioration of business fundamentals or just a temporary glitch.


Japan

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

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oRo Co Ltd (3983 JP)

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, FCMA, 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, FCMA, CGMA

Technology One: Our Top SaaS Pick From APAC

Although the share seems a bit elevated at the moment, we feel that Technology One should be worth following among long-term, quality-focused...

Urbem Capital

2021 High Conviction - Rapid User Growth Will Set You Freee From Losses

Our “2021 High Conviction” calls for an upside potential of at least 50%. Given the company is a few quarters away from reporting OP, we believe it...

Shifara Samsudeen, FCMA, CGMA

ORO: Our Takeaways From Q3 Results

When the market sells off upon "bad" news, long-term investors may want to figure out whether there is a secular deterioration or just a temporary...

Urbem Capital

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