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

Urbem Capital

Quality-first, Business-perspective, Long-term

Quality-first, Business-perspective Strategy

Urbem (HK) Limited

Thematic (Sector/Industry)

<ul>
<li>Kakaku.com returned about 28x with dividends from its first trading day in 2003 to this year’s takeover offers, roughly 15.5% a year, against 8.4% for TOPIX with dividends.</li>
<li>Early on it grew into a debut priced at 267x earnings, shut its own flagship site after a 2005 breach and launched Tabelog with two staff.</li>
<li>Later, Tabelog turned reviews into JPY 20bn of reservation fees, return on equity averaged 36% for a decade, and two bidding groups competed for it.</li>
</ul>


Kakaku.com returned about 28x with dividends from its first trading day in 2003 to this year’s takeover offers, roughly 15.5% a year, against 8.4% for TOPIX with dividends.
Early on it grew into a debut priced at 267x earnings, shut its own flagship site after a 2005 breach and launched Tabelog with two staff.
Later, Tabelog turned reviews into JPY 20bn of reservation fees, return on equity averaged 36% for a decade, and two bidding groups competed for it.


Kakaku.com’s 23 Listed Years: What It Got Right, From a Frothy IPO to a Bidding War

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Back on the 12th May, <a href="https://www.smartkarma.com/entities/kakaku-com-inc" target="_blank" data-smartkarma-citation="entities:7408:1" rel="noopener">Kakaku.com (2371 JP)</a> recommended EQT's Offer at ¥3,000/share. On the 14th May, <a href="https://www.smartkarma.com/entities/ly-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">LY (4689 JP)</a> submitted an initial bid at ¥3,232/share, contingent on due diligence.</li>
<li>The Nikkei flagged yesterday <a href="https://www.smartkarma.com/entities/digital-garage-inc" target="_blank" data-smartkarma-citation="entities:13747:1" rel="noopener">Digital Garage (4819 JP)</a>, 20.68% shareholder of Kakaku, will not accept LY's bid for what appears spurious reasons. </li>
<li>Kakaku's share price is holding; whereas DG's are down 29% since the middle of last month. The discount to NAV has widened to 65%. The implied stub has cratered. </li>
</ul>


Back on the 12th May, Kakaku.com (2371 JP) recommended EQT's Offer at ¥3,000/share. On the 14th May, LY (4689 JP) submitted an initial bid at ¥3,232/share, contingent on due diligence.
The Nikkei flagged yesterday Digital Garage (4819 JP), 20.68% shareholder of Kakaku, will not accept LY's bid for what appears spurious reasons. 
Kakaku's share price is holding; whereas DG's are down 29% since the middle of last month. The discount to NAV has widened to 65%. The implied stub has cratered. 


Digital Garage Is The Wrong Price As It (Reportedly) Dings LY's Tilt

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>EQT/DG raised its <a href="https://www.smartkarma.com/entities/kakaku-com-inc" target="_blank" data-smartkarma-citation="entities:7408:1" rel="noopener">Kakaku.com Inc (2371 JP)</a> offer by JPY1 to JPY3,682, extending the closing date to 28 October. The bump buys time as EQT/DG still lacks minimum acceptances.</li>
<li>Bain/LY's silence likely signals one decisive bump, ideally above JPY3,756 and towards the JPY3,923 DCF high end. But each idle extension gives Oasis and KDDI time to side with EQT/DG.</li>
<li>At JPY3,800, upside is limited (+2.2% to +3.2%) against a -3.1% base downside and a severe (low-probability) tail risk. Taking some money off the table is sensible.</li>
</ul>


EQT/DG raised its Kakaku.com Inc (2371 JP) offer by JPY1 to JPY3,682, extending the closing date to 28 October. The bump buys time as EQT/DG still lacks minimum acceptances.
Bain/LY's silence likely signals one decisive bump, ideally above JPY3,756 and towards the JPY3,923 DCF high end. But each idle extension gives Oasis and KDDI time to side with EQT/DG.
At JPY3,800, upside is limited (+2.2% to +3.2%) against a -3.1% base downside and a severe (low-probability) tail risk. Taking some money off the table is sensible.


Kakaku.com (2371 JP): Third JPY1 Bump, Same Stalemate, Limited Upside Left

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Equity Bottom-Up

<ul>
<li>LY (LINE-Yahoo) is now all launching AI agents that do far more than recommend products.</li>
<li>LY is catching up with Rakuten and Amazon on AI services which manage the full purchase journey from discovery to re-order. </li>
<li>As well as changing how many consumers will shop online, LY and competitors claims much higher engagement and profit.</li>
</ul>


LY (LINE-Yahoo) is now all launching AI agents that do far more than recommend products.
LY is catching up with Rakuten and Amazon on AI services which manage the full purchase journey from discovery to re-order. 
As well as changing how many consumers will shop online, LY and competitors claims much higher engagement and profit.


Japanese Turnaround Situations, Short-Ideas, Azabu Research

Michael Allen

Japanese Turnaround Situations, Short-Ideas

Azabu Research

Azabu Research is a publishing and consulting firm focused on distressed equities in the Japanese market. We specialize in turnaround strategies, corporate combinations, divestitures, and restructuring.

Publisher of the Tokyo Turnaround Letter, which conducts the most thorough research possible of publicly available information, including forensic tests for fraudulent overstatement of assets and understatement of liabilities, as well as rigorous market and industry analysis to assess the underlying strengths of the company’s products or services, the appropriateness of the company’s turnaround strategy, and the skill of its current management team. The average length of a report exceeds 25 pages of text and tables, excluding any disclosures or executive summaries.

We have more than 30 years of experience in applying this process to distressed equities in Japan. Additionally, subscribers have free access to detailed, yet easily navigated earnings models for the target company as well as the top five comparable companies, and unlimited access to the analyst for follow-up questions.

Azabu Research also conducts be-spoke research on a project basis, and provides consulting services to companies looking to restructure, divest, make acquisitions, go public, or improve investor sentiment toward their stock.

Independent Research and Consulting Firm

<ul>
<li>Management expects adjusted EBITDA to grow 17.8% in the year to 3/27, driven by a 37% surge in its payments segment and a 22% rebound in commerce.</li>
<li>Management’s guidance was roughly in line with my expectations, but probably higher than consensus.</li>
<li>The market has priced LY for a scenario much worse than the consensus of sell-side analysts, so “in-line” should help to restore investor confidence at the very least.  </li>
</ul>


Management expects adjusted EBITDA to grow 17.8% in the year to 3/27, driven by a 37% surge in its payments segment and a 22% rebound in commerce.
Management’s guidance was roughly in line with my expectations, but probably higher than consensus.
The market has priced LY for a scenario much worse than the consensus of sell-side analysts, so “in-line” should help to restore investor confidence at the very least.  


LY Corp (4689): Surge in Payments Underway

Japan

LY Corporation operates as an internet search engine "Yahoo! JAPAN". The Company provides electronic commerce and settlement finance services for small medium enterprises and individuals. LY also operates media business including search linked advertising and display advertising services.

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LY (4689 JP)

Kakaku.com’s 23 Listed Years: What It Got Right, From a Frothy IPO to a Bidding War

From a debut priced at 267x earnings to a 2026 bidding war, Kakaku.com returned about 28x with dividends. What it got right, early and late, and...

Urbem Capital

Digital Garage Is The Wrong Price As It (Reportedly) Dings LY's Tilt

Whether EQT steps up to match LY and/or EQT/LY jostle for control, Digital Garage (4819 JP) appears bombed out here. EQT's buyback tender Offer is...

David Blennerhassett

Kakaku.com (2371 JP): Third JPY1 Bump, Same Stalemate, Limited Upside Left

EQT/DG's JPY1 bump to JPY3,682 buys time, not a win. Bain/LY's silence likely signals one decisive bump. At JPY3,800, the risk/reward is not...

Arun George

LY Catches up on AI Shopping

LY is evolving online shopping with AI agents that go beyond product recommendations, aiming to manage the entire purchase journey and increase...

Michael Causton

LY Corp (4689): Surge in Payments Underway

Management expects strong growth in adjusted EBITDA driven by payments and commerce segments, in line with expectations and likely higher than...

Michael Allen

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Kakaku.com’s 23 Listed Years: What It Got Right, From a Frothy IPO to a Bidding War

From a debut priced at 267x earnings to a 2026 bidding war, Kakaku.com returned about 28x with dividends. What it got right, early and late, and...

Urbem Capital

Digital Garage Is The Wrong Price As It (Reportedly) Dings LY's Tilt

Whether EQT steps up to match LY and/or EQT/LY jostle for control, Digital Garage (4819 JP) appears bombed out here. EQT's buyback tender Offer is...

David Blennerhassett

Kakaku.com (2371 JP): Third JPY1 Bump, Same Stalemate, Limited Upside Left

EQT/DG's JPY1 bump to JPY3,682 buys time, not a win. Bain/LY's silence likely signals one decisive bump. At JPY3,800, the risk/reward is not...

Arun George

LY Catches up on AI Shopping

​LY is evolving online shopping with AI agents that go beyond product recommendations, aiming to manage the entire purchase journey and increase...

Michael Causton

LY Corp (4689): Surge in Payments Underway

​Management expects strong growth in adjusted EBITDA driven by payments and commerce segments, in line with expectations and likely higher than...

Michael Allen

LY is evolving online shopping with AI agents that go beyond product recommendations, aiming to manage the entire purchase journey and increase...

Management expects strong growth in adjusted EBITDA driven by payments and commerce segments, in line with expectations and likely higher than...