Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Mercari Q1 FY25: Stock Down 16%; Revenues up +2% y/y, but core OP down -13% y/y</li>
<li>This quarter was a rough one for Mercari’s core Marketplace business. GMV growth slowed to mid-single digits</li>
<li>Fintech segment continues to power ahead. Revenue here jumped +37%, fueled by more customers and higher credit balances.</li>
</ul>


Mercari Q1 FY25: Stock Down 16%; Revenues up +2% y/y, but core OP down -13% y/y
This quarter was a rough one for Mercari’s core Marketplace business. GMV growth slowed to mid-single digits
Fintech segment continues to power ahead. Revenue here jumped +37%, fueled by more customers and higher credit balances.


Mercari (4385) | Q1 FY25 Results: Stock Down 16%

<ul>
<li>Q4 results were a mixed bag with GMV growth slowing to just 6%. However, costs came in better than expected, boosting margins</li>
<li>Management surprise the market with bullish FY6/25 guidance. Expects GMV growth to accelerate to +10% and sees OP at a healthy 22-25 billion yen</li>
<li>Activist investor Oasis has taken a stake in the company. There is an obvious restructuring angle in addition to significant upside from fintech expansion </li>
</ul>


Q4 results were a mixed bag with GMV growth slowing to just 6%. However, costs came in better than expected, boosting margins
Management surprise the market with bullish FY6/25 guidance. Expects GMV growth to accelerate to +10% and sees OP at a healthy 22-25 billion yen
Activist investor Oasis has taken a stake in the company. There is an obvious restructuring angle in addition to significant upside from fintech expansion 


External reports (aggregated public sources), Value Investors Club

Value Investors Club

External reports (aggregated public sources)

<ul><li>Mercari is a Japanese e-commerce company known for operating the leading online used goods marketplace in Japan with over 23 million monthly active users and significant annual GMV.</li><li>The company's strong network effects moat and growth prospects in Japan's second-hand goods market suggest substantial potential value, despite investor frustration with loss-making initiatives like Mercari US and its Fintech segment.</li><li>Analysts believe that Mercari Japan alone is worth nearly double the company's current market cap, highlighting potential for significant upside.</li></ul><p><em>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.</em></p>

Mercari is a Japanese e-commerce company known for operating the leading online used goods marketplace in Japan with over 23 million monthly active users and significant annual GMV.The company's strong network effects moat and growth prospects in Japan's second-hand goods market suggest substantial potential value, despite investor frustration with loss-making initiatives like Mercari US and its Fintech segment.Analysts believe that Mercari Japan alone is worth nearly double the company's current market cap, highlighting potential for significant upside.This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Mercari, Inc. (4385) - Tuesday, Jul 9, 2024

<ul>
<li>Mercari's US operations, responsible for major losses, saw a workforce reduction by 45%, potentially preceding a market exit to improve overall margins.</li>
<li>Fintech growth is strong, with Mercari issuing over 3 million credit cards, achieving a 67% YoY credit balance increase, despite current operational losses</li>
<li>Mercari Hallo, an on-demand work platform, has rapidly gained users and business partners, positioning it to capitalize on Japan's growing gig economy.</li>
</ul>


Mercari's US operations, responsible for major losses, saw a workforce reduction by 45%, potentially preceding a market exit to improve overall margins.
Fintech growth is strong, with Mercari issuing over 3 million credit cards, achieving a 67% YoY credit balance increase, despite current operational losses
Mercari Hallo, an on-demand work platform, has rapidly gained users and business partners, positioning it to capitalize on Japan's growing gig economy.


Mercari (4385) | Fintech and Gig Economy as Key Catalysts

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a> investors are in a conundrum. The stock is doing well. With one quarter to go, the company just raised its full-year EPS target by 8.3%.</li>
<li>It also raised its H2 dividend by 20+% so the full-year div will be more than 20% higher than previously forecast and up 35+% since last year. All good. </li>
<li>Except for the selling. Potentially lots of selling. And more outperformance begets more selling. Then even more selling in 2024. And 2025? What about 2025? More outperformance begets more selling.</li>
</ul>



Fast Retailing (9983 JP) investors are in a conundrum. The stock is doing well. With one quarter to go, the company just raised its full-year EPS target by 8.3%.
It also raised its H2 dividend by 20+% so the full-year div will be more than 20% higher than previously forecast and up 35+% since last year. All good. 
Except for the selling. Potentially lots of selling. And more outperformance begets more selling. Then even more selling in 2024. And 2025? What about 2025? More outperformance begets more selling.


Fast Retailing UPs Forecasts, Which Creates A Sell/Short Opportunity

Japan

Mercari, Inc. operates as an electronic commercial company. The Company offers electronic commercial software, operation management, marketing planning, and other marketplace services. Mercari serves customers worldwide.

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Mercari (4385 JP)

Mercari (4385) | Q1 FY25 Results: Stock Down 16%

Mercari's Q1 FY25 sees stock drop 16% as Marketplace business struggles with slowing growth, while Fintech segment thrives with 37% revenue increase.

Mark Chadwick

Mercari (4385) | Activist to Add Urgency

Q4 results show slowing GMV growth but better costs, management bullish on FY6/25 guidance, activist investor sees restructuring and fintech upside.

Mark Chadwick

Mercari, Inc. (4385) - Tuesday, Jul 9, 2024

Mercari is a leading Japanese e-commerce company with a strong online used goods marketplace in Japan, but faces investor frustration due to loss...

Value Investors Club

Mercari (4385) | Fintech and Gig Economy as Key Catalysts

Mercari's US operations cut workforce by 45% to improve margins, while fintech growth remains strong and Mercari Hallo gains traction in Japan's...

Mark Chadwick

Fast Retailing UPs Forecasts, Which Creates A Sell/Short Opportunity

Fast Retailing announced decent earnings for Q3 and upgraded forecasts for August 2023. It also raised its full-year dividend vs previous guidance....

Travis Lundy

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Mercari (4385) | Q1 FY25 Results: Stock Down 16%

​Mercari's Q1 FY25 sees stock drop 16% as Marketplace business struggles with slowing growth, while Fintech segment thrives with 37% revenue increase.

Mark Chadwick

Mercari (4385) | Activist to Add Urgency

​Q4 results show slowing GMV growth but better costs, management bullish on FY6/25 guidance, activist investor sees restructuring and fintech upside.

Mark Chadwick

Mercari, Inc. (4385) - Tuesday, Jul 9, 2024

Mercari is a leading Japanese e-commerce company with a strong online used goods marketplace in Japan, but faces investor frustration due to loss...

Value Investors Club

Mercari (4385) | Fintech and Gig Economy as Key Catalysts

​Mercari's US operations cut workforce by 45% to improve margins, while fintech growth remains strong and Mercari Hallo gains traction in Japan's...

Mark Chadwick

Fast Retailing UPs Forecasts, Which Creates A Sell/Short Opportunity

Fast Retailing announced decent earnings for Q3 and upgraded forecasts for August 2023. It also raised its full-year dividend vs previous guidance....

Travis Lundy

Mercari's Q1 FY25 sees stock drop 16% as Marketplace business struggles with slowing growth, while Fintech segment thrives with 37% revenue increase.

Q4 results show slowing GMV growth but better costs, management bullish on FY6/25 guidance, activist investor sees restructuring and fintech upside.

Mercari's US operations cut workforce by 45% to improve margins, while fintech growth remains strong and Mercari Hallo gains traction in Japan's...