IR & Research Intelligence, Sessa Investment Research

Sessa Investment Research

IR & Research Intelligence

Sponsored research focusing on Japanese small cap.

Equity Bottom-Up

<ul><li>In 2023, the first year of CARTA Holdings’ new medium-term management plan, the company made a solid push to reform its business and organizational structure with the aim of executing a sharp recovery in business performance.</li><li>It moved forward with narrowing its focus, integrating four direct sales subsidiaries in the digital marketing business, and withdrawing from the low-profit game and hometown tax payment business in the internet-related services business.</li><li>In addition, the company announced and implemented additional measures to reduce fixed costs to the tune of ¥1 bn, including by calling for voluntary retirement during FY23/12, as its earnings may fall further than initially expected before bottoming out, mainly for reservation-based ads. </li></ul>

In 2023, the first year of CARTA Holdings’ new medium-term management plan, the company made a solid push to reform its business and organizational structure with the aim of executing a sharp recovery in business performance.It moved forward with narrowing its focus, integrating four direct sales subsidiaries in the digital marketing business, and withdrawing from the low-profit game and hometown tax payment business in the internet-related services business.In addition, the company announced and implemented additional measures to reduce fixed costs to the tune of ¥1 bn, including by calling for voluntary retirement during FY23/12, as its earnings may fall further than initially expected before bottoming out, mainly for reservation-based ads. 

<div><div><div><div><ul style="list-style-type: disc;"><li><p>Specific measures for structural reforms are being implemented one after another.</p></li><li><p>CARTA Holdings had announced the withdrawal from unprofitable businesses (game and hometown tax payment businesses), a ¥1 bn reduction in SG&amp;A expenses centered on fixed costs, the integration of four direct sales subsidiaries, and other streamlining measures leading up to the 2Q FY23/12 earnings announcement, and on September 5, 2023, the company's board of directors newly approved a resolution to call for voluntary retirement.</p></li><li><p>While the macroeconomic downturn was particularly noticeable in the April-June 2023 earnings results, with advertising companies downwardly revising their forecasts one after another, no other company has implemented such drastic measures like CARTA Holdings has, and this move is worth highlighting for its future sharp recovery.</p></li></ul></div></div></div></div>

Specific measures for structural reforms are being implemented one after another.CARTA Holdings had announced the withdrawal from unprofitable businesses (game and hometown tax payment businesses), a ¥1 bn reduction in SG&amp;A expenses centered on fixed costs, the integration of four direct sales subsidiaries, and other streamlining measures leading up to the 2Q FY23/12 earnings announcement, and on September 5, 2023, the company's board of directors newly approved a resolution to call for voluntary retirement.While the macroeconomic downturn was particularly noticeable in the April-June 2023 earnings results, with advertising companies downwardly revising their forecasts one after another, no other company has implemented such drastic measures like CARTA Holdings has, and this move is worth highlighting for its future sharp recovery.

Carta Holdings (3688 Jp) -Pushing Forward with Earnings Structure Improvements

<ul><li>In 1Q FY23/12, CARTA Holdings posted a 23.3% YoY increase in transaction volume for programmatic TV commercial service TELECY, and a 2.8-fold increase in gross sales in the retail domain, showing steady performance in the mass retail domain, which the company has positioned as a priority area in its medium-term management plan.</li><li>On the other hand, the weak macro environment continued to weigh on double-digit sales declines in reservation-based ads, resulting in a 7.7% YoY drop in sales and a 59.3% drop in operating profit overall. </li><li>YoY comparisons will ease off from the next quarter, but with 2Q usually being a slow period for advertising and the lack of activity from advertisers in the new fiscal year from April onward, earnings are expected to recovery smoothly rather than sharply.</li></ul>

In 1Q FY23/12, CARTA Holdings posted a 23.3% YoY increase in transaction volume for programmatic TV commercial service TELECY, and a 2.8-fold increase in gross sales in the retail domain, showing steady performance in the mass retail domain, which the company has positioned as a priority area in its medium-term management plan.On the other hand, the weak macro environment continued to weigh on double-digit sales declines in reservation-based ads, resulting in a 7.7% YoY drop in sales and a 59.3% drop in operating profit overall. YoY comparisons will ease off from the next quarter, but with 2Q usually being a slow period for advertising and the lack of activity from advertisers in the new fiscal year from April onward, earnings are expected to recovery smoothly rather than sharply.

Japan

Carta Holdings, Inc. provides on-line information retrieval services on a contract or fee basis.

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

Carta Holdings, Inc. (3688 JP)

3Q FOLLOW-UP - Carta Holdings (3688 JP)

In 2023, the first year of CARTA Holdings’ new medium-term management plan, the company made a solid push to reform its business and organizational...

Sessa Investment Research

Carta Holdings (3688 Jp) -Pushing Forward with Earnings Structure Improvements

CARTA Holdings had announced the withdrawal from unprofitable businesses (game and hometown tax payment businesses), a ¥1 bn reduction in SG&A...

Sessa Investment Research

Carta Holdings (3688 JP) - 1Q FOLLOW-UP

Careful review of turnaround indicators and timing is crucial - Share price has underperformed against the advertising sector

Sessa Investment Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)