Japan Specialist

Mark Chadwick

Equity Bottom-Up

<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


Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sbi-sumishin-net-bank" target="_blank" data-smartkarma-citation="entities:34572:1" rel="noopener">SBI Sumishin Net Bank (7163 JP)</a> raised around US$370m in its Japan IPO in Mar 2023. Its IPO linked lockup is set to expire on 24th Sep 2023.</li>
<li>SBI Sumishin Net Bank is a Japanese digital bank set up as a 50-50 joint venture between Sumitomo Mitsui Trust Bank, Japan’s largest trust bank, and SBI Group.</li>
<li>In this note, we will talk about the lock-up dynamics and updates since our last note.</li>
</ul>



SBI Sumishin Net Bank (7163 JP) raised around US$370m in its Japan IPO in Mar 2023. Its IPO linked lockup is set to expire on 24th Sep 2023.
SBI Sumishin Net Bank is a Japanese digital bank set up as a 50-50 joint venture between Sumitomo Mitsui Trust Bank, Japan’s largest trust bank, and SBI Group.
In this note, we will talk about the lock-up dynamics and updates since our last note.


SBI Sumishin Net Bank IPO Lock-Up - A US$1bn Lockup Release, Will Sell a Little at Some Point

<ul>
<li>Freee reported 4QFY06/23 results today. Revenue increased 39.6% YoY to ¥5.4bn (vs consensus ¥5.32bn) while operating losses increased to ¥3.0bn from ¥724m in 4QFY06/2022 (vs consensus ¥2.5bn).</li>
<li>
<a href="https://www.smartkarma.com/entities/freee-kk" target="_blank" data-smartkarma-citation="entities:28424:1" rel="noopener">Freee KK (4478 JP)</a> ’s full-year revenues and operating losses were in line with the company’s guidance, and increased losses were due to investments related to growth and customer acquisition.</li>
<li>The company’s medium-term plan expects revenues of more than ¥50.0bn by FY06/2027E and operating profits by FY06/2025E which seems attainable to us.</li>
</ul>


Freee reported 4QFY06/23 results today. Revenue increased 39.6% YoY to ¥5.4bn (vs consensus ¥5.32bn) while operating losses increased to ¥3.0bn from ¥724m in 4QFY06/2022 (vs consensus ¥2.5bn).

Freee KK (4478 JP) ’s full-year revenues and operating losses were in line with the company’s guidance, and increased losses were due to investments related to growth and customer acquisition.
The company’s medium-term plan expects revenues of more than ¥50.0bn by FY06/2027E and operating profits by FY06/2025E which seems attainable to us.


Freee: Earnings in Line With Guidance; Medium-Term Plan Seems Attainable

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)

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

SBI Sumishin Net Bank IPO Lock-Up - A US$1bn Lockup Release, Will Sell a Little at Some Point

SBI Sumishin Net Bank (7163 JP) raised around US$370m in its Japan IPO in Mar 2023. Its IPO linked lockup is set to expire on 24th Sep 2023.

Sumeet Singh

Freee: Earnings in Line With Guidance; Medium-Term Plan Seems Attainable

As guided, freee's operating losses have widened during the quarter. Corporate paying users have grown significantly and Mid-term plan aims for...

Shifara Samsudeen, ACMA, CGMA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

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

SBI Sumishin Net Bank IPO Lock-Up - A US$1bn Lockup Release, Will Sell a Little at Some Point

SBI Sumishin Net Bank (7163 JP) raised around US$370m in its Japan IPO in Mar 2023. Its IPO linked lockup is set to expire on 24th Sep 2023.

Sumeet Singh

Freee: Earnings in Line With Guidance; Medium-Term Plan Seems Attainable

As guided, freee's operating losses have widened during the quarter. Corporate paying users have grown significantly and Mid-term plan aims for...

Shifara Samsudeen, ACMA, CGMA

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