Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<ul>
<li>Z Holdings will integrate its eCommerce platforms in a move that boosts the PayPay brand and may generate some (very) modest synergies</li>
<li>We are publishing updated forecasts and setting a new target price at ¥550 but we remain cautious on the shares in the near term as consensus remains high</li>
<li>Shares of ZHD still appear expensive at 14-16x our estimate of FY22e EBITDA and are more expensive than Alphabet at these levels (12x EBITDA)</li>
</ul>


Z Holdings will integrate its eCommerce platforms in a move that boosts the PayPay brand and may generate some (very) modest synergies
We are publishing updated forecasts and setting a new target price at ¥550 but we remain cautious on the shares in the near term as consensus remains high
Shares of ZHD still appear expensive at 14-16x our estimate of FY22e EBITDA and are more expensive than Alphabet at these levels (12x EBITDA)


Z Holdings (Neutral) - PayPay Rebranding of ECommerce; We Remain Cautious in a Rebuilding Year

Japan Specialist

Mark Chadwick

<ul>
<li>Z HD's stock has been heavily sold with other tech stocks amid a rising interest rate environment</li>
<li>However, we believe that the 3 core business segments are all performing strongly and will continue to gain share</li>
<li>Using global comps, we believe that Z HD has more than 100% upside and is the top pick in the online space in Japan</li>
</ul>


Z HD's stock has been heavily sold with other tech stocks amid a rising interest rate environment
However, we believe that the 3 core business segments are all performing strongly and will continue to gain share
Using global comps, we believe that Z HD has more than 100% upside and is the top pick in the online space in Japan


Z Holdings (4689) | SOTP Reveals Huge Upside

<ul>
<li>Askul posted Q4 results that were largely in-line and issued FY23 targets that are robust for revenue growth (+6%) but accompanied by upfront investment</li>
<li>Management also announced it would prepare subsidiary AlphaPurchase for a public listing although the timing has not been determined</li>
<li>The miss on profitability guidance is not ideal but the acceleration of top-line growth is attractive</li>
</ul>


Askul posted Q4 results that were largely in-line and issued FY23 targets that are robust for revenue growth (+6%) but accompanied by upfront investment
Management also announced it would prepare subsidiary AlphaPurchase for a public listing although the timing has not been determined
The miss on profitability guidance is not ideal but the acceleration of top-line growth is attractive


Askul Corp - Q4 22 Results Reaction: Mixed as Growth Looks Appealing but Profits Light

<ul>
<li>Fintech is the key mid-term earnings driver for Z Holdings</li>
<li>We are focused on the underlying growth drivers and KPIs </li>
<li>PayPay is at the heart of driving the fintech ecosystem and its growth</li>
</ul>


Fintech is the key mid-term earnings driver for Z Holdings
We are focused on the underlying growth drivers and KPIs 
PayPay is at the heart of driving the fintech ecosystem and its growth


Z Holdings (4689) | PayPay Key to Fintech Growth

<ul>
<li>Z HD's media business accounts for 80% of consolidated earnings.</li>
<li>We believe that the combination of Yahoo Japan and LINE is driving new synergies and growth opportunities.</li>
<li>We believe that the media business alone could justify an EV of ¥4.5t, way above ZHD's current EV of ¥3.5t</li>
</ul>


Z HD's media business accounts for 80% of consolidated earnings.
We believe that the combination of Yahoo Japan and LINE is driving new synergies and growth opportunities.
We believe that the media business alone could justify an EV of ¥4.5t, way above ZHD's current EV of ¥3.5t


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)

Z Holdings (Neutral) - PayPay Rebranding of ECommerce; We Remain Cautious in a Rebuilding Year

Z Holdings will integrate its two eCommerce platforms but this appears to be more about ambitious growth targets for fintech. We are publishing new...

Kirk Boodry

Z Holdings (4689) | SOTP Reveals Huge Upside

Given its growth prospects, expanding ecosystem, and business synergies, we are bullish on Z HD at single-digit FY3/23 EV/EBITDA multiples

Mark Chadwick

Askul Corp - Q4 22 Results Reaction: Mixed as Growth Looks Appealing but Profits Light

Askul is forecasting 6% top-line growth for the coming year, in line with mid-term plans, but like parent Z Holdings, investment to drive its FY25...

Kirk Boodry

Z Holdings (4689) | PayPay Key to Fintech Growth

Given its growth prospects, expanding ecosystem, and business synergies, we are bullish on Z HD at single-digit FY3/23 EV/EBITDA multiples. We...

Mark Chadwick

Z Holdings (4689) | An Online Goldmine

Z will see above-market earnings growth in all three core businesses: Commerce, Media, and Strategic. Given growth, expanding ecosystem, &...

Mark Chadwick

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