Quality-first, Business-perspective Strategy, Urbem (HK) Limited

Steven Chen

Quality-first, Business-perspective Strategy

Equity Bottom-Up

<ul>
<li>Founder-led Technology One has the capability to earn superior returns on capital while expanding predictably and profitably alongside a massive runaway, in our opinion.</li>
<li>Although the share seems a bit elevated at the moment, we feel that the name should be worth following among long-term, quality-focused investors who can wait patiently.</li>
</ul>


Founder-led Technology One has the capability to earn superior returns on capital while expanding predictably and profitably alongside a massive runaway, in our opinion.
Although the share seems a bit elevated at the moment, we feel that the name should be worth following among long-term, quality-focused investors who can wait patiently.


Technology One: Our Top SaaS Pick From APAC

Japan Specialist

Mark Chadwick

A wrong hire, skills mismatch, and inadequate training equals low efficiency and lost productivity. Companies pay a significant price for not correctly managing talent. It does not stop there. Low transparency, missed opportunities, and weak management lead to frustration and dissatisfaction for employees. The result is a lack of motivation and employee exits. Both companies and employees suffer when talent is not adequately managed. Companies can scarcely afford to lose or misallocate the right people as the costs are enormous - lost productivity, lost business, and a dysfunctional environment that hurts from the top to bottom line. Talent management plays a critical role in the modern company, and in many cases, it can mean the difference between a successful culture and going out of business. Enter <a href="https://www.smartkarma.com/entities/kaonavi-inc" target="_blank" data-smartkarma-citation="entities:29703:1" rel="noopener">Kaonavi Inc (4435 JP)</a> 
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/166/617/original/image_9811369031603321138858.png?1603321148" class="editor-image img-responsive" data-smartkarma-image-id="166617"></figure>

A wrong hire, skills mismatch, and inadequate training equals low efficiency and lost productivity. Companies pay a significant price for not correctly managing talent. It does not stop there. Low transparency, missed opportunities, and weak management lead to frustration and dissatisfaction for employees. The result is a lack of motivation and employee exits. Both companies and employees suffer when talent is not adequately managed. Companies can scarcely afford to lose or misallocate the right people as the costs are enormous - lost productivity, lost business, and a dysfunctional environment that hurts from the top to bottom line. Talent management plays a critical role in the modern company, and in many cases, it can mean the difference between a successful culture and going out of business. Enter Kaonavi Inc (4435 JP) 


Small Cap Growth: Kaonavi (4435) – Turning Talent into Teams

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In May, Facebook CEO Mark Zuckerberg said that more than 95% of the company’s workforce was working remotely and that it planned to ensure employees could continue to do so on a long-term basis. Google workers will stay remote until summer 2021. Many others made similar announcements.  
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This would have been unthinkable even a decade ago, but cloud-based platforms are enabling employees to work from anywhere, on any device. Companies must now deploy systems rapidly, in a cost-effective and scalable manner to adapt to this new worldview.  
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<a href="https://www.smartkarma.com/entities/teamspirit-inc" target="_blank" data-smartkarma-citation="entities:29704:1" rel="noopener">TeamSpirit Inc (4397 JP)</a> ’s workforce management platform helps Japanese companies to support telework, not only an essential way of working following the outbreak of COVID-19, but also a necessity as companies shift to a hybrid workforce.  
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 Recent FY8/20 numbers (13 October) 
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Q4 revenue +25% YoY to ¥654m (slowed from 38% YoY in Q3) 
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Gross margin 60% 
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Annual Recurring Revenue +32% to ¥2.2b 
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Number of active licenses rose 41% to 269,000  Number of client companies 1,409 (+14% YoY; +2% QoQ) 
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Covid had a negative impact on the business. The inflow of leads slowed due to the cancellation of promotional events. On boarding was delayed as customer struggled with the unfamiliarity of telework, with small businesses in particular slowing in terms of licenses added. The company guided for 29% revenue growth in FY8/21 
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The stock has corrected by around 20% in the week following full year earnings and is worth looking at for long-term growth investors.
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In May, Facebook CEO Mark Zuckerberg said that more than 95% of the company’s workforce was working remotely and that it planned to ensure employees could continue to do so on a long-term basis. Google workers will stay remote until summer 2021. Many others made similar announcements.  


This would have been unthinkable even a decade ago, but cloud-based platforms are enabling employees to work from anywhere, on any device. Companies must now deploy systems rapidly, in a cost-effective and scalable manner to adapt to this new worldview.  


TeamSpirit Inc (4397 JP) ’s workforce management platform helps Japanese companies to support telework, not only an essential way of working following the outbreak of COVID-19, but also a necessity as companies shift to a hybrid workforce.  

 Recent FY8/20 numbers (13 October) 


Q4 revenue +25% YoY to ¥654m (slowed from 38% YoY in Q3) 


Gross margin 60% 


Annual Recurring Revenue +32% to ¥2.2b 


Number of active licenses rose 41% to 269,000  Number of client companies 1,409 (+14% YoY; +2% QoQ) 



Covid had a negative impact on the business. The inflow of leads slowed due to the cancellation of promotional events. On boarding was delayed as customer struggled with the unfamiliarity of telework, with small businesses in particular slowing in terms of licenses added. The company guided for 29% revenue growth in FY8/21 


The stock has corrected by around 20% in the week following full year earnings and is worth looking at for long-term growth investors.


Small Cap Growth: TeamSpirit (4397) - Nirvana for Workers

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

The MSCI ACWI index (USD) is breaking out to all-time highs while the MSCI EM index (local) is breaking above its prior highs from January. This is bullish and will continue to be as long as there is an absence of breakdowns. On the other hand, Europe’s EURO STOXX 50 and Japan’s TOPIX have struggled to break above resistance and their RS remains near the lows -- be selective. In addition to covering important technical levels across all markets, we highlight additional ideas in the following Sectors: Services, Communications, Industrials, and Transportation.

The MSCI ACWI index (USD) is breaking out to all-time highs while the MSCI EM index (local) is breaking above its prior highs from January. This is bullish and will continue to be as long as there is an absence of breakdowns. On the other hand, Europe’s EURO STOXX 50 and Japan’s TOPIX have struggled to break above resistance and their RS remains near the lows -- be selective. In addition to covering important technical levels across all markets, we highlight additional ideas in the following Sectors: Services, Communications, Industrials, and Transportation.

Global Equity Strategy: Bullish Outlook Intact

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Quantitative Analysis

As Software companies look to become the key beneficiaries of a post-COVID world, we analyse allocations among active Global managers.  We find that holdings in Software companies have risen dramatically over the last 5-years, and have accelerated further through 2020. Over the last few months, Software has become the largest industry allocation among active global managers, surpassing Pharmaceuticals and Banks along the way.  Microsoft is the key holding and continues to attract new investment from the active funds in our analysis, though managers have also been raising stakes in the second tier, led by Salesforce, Intuit and Adobe.Taken from Copley's Global Research, comprising 405 Global equity funds, with combined AUM of $760bn.

As Software companies look to become the key beneficiaries of a post-COVID world, we analyse allocations among active Global managers.  We find that holdings in Software companies have risen dramatically over the last 5-years, and have accelerated further through 2020. Over the last few months, Software has become the largest industry allocation among active global managers, surpassing Pharmaceuticals and Banks along the way.  Microsoft is the key holding and continues to attract new investment from the active funds in our analysis, though managers have also been raising stakes in the second tier, led by Salesforce, Intuit and Adobe.Taken from Copley's Global Research, comprising 405 Global equity funds, with combined AUM of $760bn.

Global Active Equity:  Managers Ramp up Software Holdings

United States

SAP SE is a multinational software company.  The Company develops business software, including e-business and enterprise management software, consults on organizational usage of its applications software, and provides training services.  SAP markets its products and services worldwide.

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Technology One: Our Top SaaS Pick From APAC

Although the share seems a bit elevated at the moment, we feel that Technology One should be worth following among long-term, quality-focused...

Steven Chen

Small Cap Growth: Kaonavi (4435) – Turning Talent into Teams

Talent management plays a critical role in the modern company, and in many cases, it can mean the difference between a successful culture and going...

Mark Chadwick

Small Cap Growth: TeamSpirit (4397) - Nirvana for Workers

TeamSpirit is a cloud-based Workforce Management SaaS that enables workers to work from anywhere and allows companies to get the best out of their...

Mark Chadwick

Global Equity Strategy: Bullish Outlook Intact

The MSCI ACWI index (USD) is breaking out to all-time highs while the MSCI EM index (local) is breaking above its prior highs from January. This is...

Vermilion Research

Global Active Equity: Managers Ramp up Software Holdings

As Software companies look to become the key beneficiaries of a post-COVID world, we analyse allocations among active Global managers. We find...

Steven Holden

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