Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Every year in April there are two TOPIX rebalance changes - the FFW review for July-September FY-end companies, and the annual liquidity factor adjustments.</li>
<li>This year, the former is replaced by the TOPIX FFW Methodology Change for the new Market Structure. This is a big change, but it will not necessarily overwhelm the latter.</li>
<li>
<a href="https://www.smartkarma.com/profiles/janaghan-jeyakumar-cfa" target="_blank" data-smartkarma-citation="accounts:3173" rel="noopener">Janaghan Jeyakumar, CFA</a>'s piece of 5 weeks ago discussing the Liquidity Factor basket has seen generally good performance. There are two days to go. </li>
</ul>


Every year in April there are two TOPIX rebalance changes - the FFW review for July-September FY-end companies, and the annual liquidity factor adjustments.
This year, the former is replaced by the TOPIX FFW Methodology Change for the new Market Structure. This is a big change, but it will not necessarily overwhelm the latter.

Janaghan Jeyakumar, CFA's piece of 5 weeks ago discussing the Liquidity Factor basket has seen generally good performance. There are two days to go. 


The TOPIX Liquidity Factor Adjustment - Still a Trade To Do

Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Money Forward’s stock price has declined by 2% YTD versus a 23% gain for the overall market. Technically, the stock is approaching oversold levels</li>
<li>We see 38% upside for Money Forward’s stock price. At 5.5x EV/revenue, the stock is trading at a 50% discount to global peer, Intuit</li>
<li>We believe that investors are under pricing the size of the Japanese market for cloud accounting and operating leverage from penetration into mid-cap corporate market</li>
</ul>


Money Forward’s stock price has declined by 2% YTD versus a 23% gain for the overall market. Technically, the stock is approaching oversold levels
We see 38% upside for Money Forward’s stock price. At 5.5x EV/revenue, the stock is trading at a 50% discount to global peer, Intuit
We believe that investors are under pricing the size of the Japanese market for cloud accounting and operating leverage from penetration into mid-cap corporate market


Money Forward (3394) | A Growth Stock for 2024

<ul>
<li>Money Forward's Corporate SaaS business is thriving, with +44% year-over-year growth in ARR, a 139,000-strong customer base, and a healthy CAC-to-LTV ratio of 3.7x.</li>
<li>Despite strong fundamentals, the stock's 20% decline is attributed to market fixation on quarterly earnings and concerns about rising interest rates.</li>
<li>The company's untapped potential lies in the mid-market segment, where cross-selling opportunities across 18 paid products could significantly boost ARPA, tapping into a TAM estimated at $15 billion.</li>
</ul>


Money Forward's Corporate SaaS business is thriving, with +44% year-over-year growth in ARR, a 139,000-strong customer base, and a healthy CAC-to-LTV ratio of 3.7x.
Despite strong fundamentals, the stock's 20% decline is attributed to market fixation on quarterly earnings and concerns about rising interest rates.
The company's untapped potential lies in the mid-market segment, where cross-selling opportunities across 18 paid products could significantly boost ARPA, tapping into a TAM estimated at $15 billion.


Money Forward (3994) | A Deep Dive into the Corporate Business

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/money-forward-inc" target="_blank" data-smartkarma-citation="entities:25919:1" rel="noopener">Money Forward (3994 JP)</a> reported 3QFY11/2023 results on Friday. 3Q revenue fell below consensus despite increasing 37.4% YoY while reported operating losses were slightly below consensus estimated operating losses.</li>
<li>MF also has provided more details on its ¥12bn convertible bond issuance in August to secure funds to further grow its SaaS and fintech businesses.</li>
<li>This is concerning given the huge debt in the company’s balance sheet and it seems that the company may not be able to make profits in the near-term.</li>
</ul>



Money Forward (3994 JP) reported 3QFY11/2023 results on Friday. 3Q revenue fell below consensus despite increasing 37.4% YoY while reported operating losses were slightly below consensus estimated operating losses.
MF also has provided more details on its ¥12bn convertible bond issuance in August to secure funds to further grow its SaaS and fintech businesses.
This is concerning given the huge debt in the company’s balance sheet and it seems that the company may not be able to make profits in the near-term.


Money Forward: Weakening Top Line Growth and Huge Convertible Bond Issuance to Support Growth

<ul>
<li>Money Forward's share price dipped 20% post-Q2 results, but strong operational performance and upward sales revisions make it appealing.</li>
<li>We expect 42% YoY sales growth in Q3 and believe long-term growth prospects remain exceptional against the market size.</li>
<li>Management to deliver profitability next FY, meeting investor demands to “show me the money” - we remain bullish</li>
</ul>


Money Forward's share price dipped 20% post-Q2 results, but strong operational performance and upward sales revisions make it appealing.
We expect 42% YoY sales growth in Q3 and believe long-term growth prospects remain exceptional against the market size.
Management to deliver profitability next FY, meeting investor demands to “show me the money” - we remain bullish


Japan

Money Forward, Inc. develops mobile application software. The Company produces automatic household account book softwares, household account book application softwares, and other products. Money Forward also provides personal financial management, cloud based accounting solutions, and other services.

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Money Forward (3994 JP)

The TOPIX Liquidity Factor Adjustment - Still a Trade To Do

The TOPIX Liquidity Factor Trade is an esoteric rebalance accompanying the major FFW rebalance to be announced Thursday. The major names have seen...

Travis Lundy

Money Forward (3394) | A Growth Stock for 2024

Money Forward's stock price has declined YTD & is approaching oversold levels. We see 38% upside. At 5.5x EV/Rev, the stock is trading at a 50%...

Mark Chadwick

Money Forward (3994) | A Deep Dive into the Corporate Business

Corporate SaaS business is thriving, but stock decline is due to market fixation on earnings and concerns about interest rates. Untapped potential...

Mark Chadwick

Money Forward: Weakening Top Line Growth and Huge Convertible Bond Issuance to Support Growth

Money Forward's top line growth has weakened and the company has issued ¥12bn convertible bond in August to secure funds to grow its SaaS and other...

Shifara Samsudeen, ACMA, CGMA

Money Forward (3994) | Show Me the Money

Money Forward's share price dropped 20% after Q2 results, but strong performance and sales revisions make it attractive. Q3 sales growth is...

Mark Chadwick

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

The TOPIX Liquidity Factor Adjustment - Still a Trade To Do

The TOPIX Liquidity Factor Trade is an esoteric rebalance accompanying the major FFW rebalance to be announced Thursday. The major names have seen...

Travis Lundy

Money Forward (3394) | A Growth Stock for 2024

​Money Forward's stock price has declined YTD & is approaching oversold levels. We see 38% upside. At 5.5x EV/Rev, the stock is trading at a 50%...

Mark Chadwick

Money Forward (3994) | A Deep Dive into the Corporate Business

Corporate SaaS business is thriving, but stock decline is due to market fixation on earnings and concerns about interest rates. Untapped potential...

Mark Chadwick

Money Forward: Weakening Top Line Growth and Huge Convertible Bond Issuance to Support Growth

Money Forward's top line growth has weakened and the company has issued ¥12bn convertible bond in August to secure funds to grow its SaaS and other...

Shifara Samsudeen, ACMA, CGMA

Money Forward (3994) | Show Me the Money

​Money Forward's share price dropped 20% after Q2 results, but strong performance and sales revisions make it attractive. Q3 sales growth is...

Mark Chadwick

Money Forward's stock price has declined YTD & is approaching oversold levels. We see 38% upside. At 5.5x EV/Rev, the stock is trading at a 50%...

Money Forward's share price dropped 20% after Q2 results, but strong performance and sales revisions make it attractive. Q3 sales growth is...