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Smartkarma

Equity Bottom-Up

Kelvin Teo is the co-founder and CEO of Funding Societies which is an online peer-to-peer lending marketplace for SMEs to acquire loans and fuel their growth through investor funding. The company has raised close to $60 million from top tier investors such as Sequoia, Softbank Ventures, Golden Gate, Alpha JWC Ventures, Qualgro VC, The Graduate Syndicate, and Line Corporation to name a few. <a target="_blank" rel="noopener nofollow" href="https://alejandrocremades.com/kelvin-teo/">Continue listening on DealMakers »</a>

Morningstar

Morningstar, Inc.

We expect the stagnation of Line’s advertisement business to disappoint the market in the short run. Cost per mille, or CPM (advertisement revenue paid over 1,000 impressions) dropped to JPY 380 from JPY 434 in the previous quarter and JPY 491 in the prior-year period, as an increase in overseas ads and the transition to new ad platforms worsened the product mix. As a result, display ad revenue growth in the September quarter was 13%, representing a slowdown from 62% in the June quarter…

While Line’s operating income for the March quarter was below our forecast, the revenue growth of the company was in line with our numbers, which we think demonstrates the strength of Line’s network effect, the source of our narrow economic moat rating. Line disclosed that its monthly active users figure in Japan was 75 million in the March quarter, 2 million above the previous quarter, and 7 million up on the year-on-year basis, which suggests that Line’s user base covers more than 90% of…

We raise our fair value estimate for Line to JPY 5,400 per share and $50 per U.S. ADR, from JPY 4,800 and $42 per U. S. ADR, respectively. While the share price dropped approximately 10% after the earnings meeting, in which management indicated it would not focus on improving operating margin and would continue to invest over the next few years, we are encouraged by the strong revenue growth momentum in the December quarter. We therefore believe that Line’s narrow economic moat, which is based…

Japan

A Holdings Corporation develops and operates the LINE application for smartphones. The Company offers games distribution, music distribution, advertisements, and other services. A Holdings serves clients across worldwide.

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