Research Coverage of Japanese Listed Companies, Shared Research Inc

Shared Research

Research Coverage of Japanese Listed Companies

Shared Research Inc

Pioneering research coverage of Japanese listed companies. Now customizable and interactive for global institutional investors. Corporate access reimagined.

Equity Bottom-Up

<ul><li>In cumulative Q3 FY08/24, the company reported sales of JPY81.1bn (+28.1% YoY) and net income of JPY3.3bn (-17.2% YoY).</li><li>Q3 GPM was 31.7%, with the Software Testing segment reporting JPY52.4bn in sales and JPY17.5bn in gross profit.</li><li>Software Development segment sales were JPY25.7bn (+33.6% YoY), while operating profit declined due to lower utilization at subsidiaries.</li></ul>

In cumulative Q3 FY08/24, the company reported sales of JPY81.1bn (+28.1% YoY) and net income of JPY3.3bn (-17.2% YoY).Q3 GPM was 31.7%, with the Software Testing segment reporting JPY52.4bn in sales and JPY17.5bn in gross profit.Software Development segment sales were JPY25.7bn (+33.6% YoY), while operating profit declined due to lower utilization at subsidiaries.

Shift Inc (3697 JP): Q3 FY08/24 flash update

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/shift-inc" target="_blank" data-smartkarma-citation="entities:7266:1" rel="noopener">Shift Inc (3697 JP)</a> ’s share price has been down more than 50% YTD with the release of 1QFY08/2024 results in January 2024 which saw a drop in margins.</li>
<li>The company’s aggressive investment in HR and system reinforcement led to a decline in margins, however, margins saw a QoQ improvement in 2QFY08/2024.</li>
<li>Despite there being an improvement in 2Q and the company expecting the margins to bounce back in 4Q, Shift’s share price has continued to fall.</li>
</ul>



Shift Inc (3697 JP) ’s share price has been down more than 50% YTD with the release of 1QFY08/2024 results in January 2024 which saw a drop in margins.
The company’s aggressive investment in HR and system reinforcement led to a decline in margins, however, margins saw a QoQ improvement in 2QFY08/2024.
Despite there being an improvement in 2Q and the company expecting the margins to bounce back in 4Q, Shift’s share price has continued to fall.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/shift-inc" target="_blank" data-smartkarma-citation="entities:7266:1" rel="noopener">Shift Inc (3697 JP)</a> reported 4Q and full-year FY08/2023 results today. 4Q revenue increased 38.2% YoY while OP more than doubled during the quarter. Both revenue and OP beat consensus estimates.</li>
<li>Full-Year revenues and OP increased 35.7% and 67.4% respectively beating consensus estimates by 1.2% and 67.4% respectively. Both revenue and OP were above the company's own guidance.</li>
<li>Shift’s share price has dropped by about 17% since August as market became concerned over the growth prospects, however, share price has started to move up.</li>
</ul>



Shift Inc (3697 JP) reported 4Q and full-year FY08/2023 results today. 4Q revenue increased 38.2% YoY while OP more than doubled during the quarter. Both revenue and OP beat consensus estimates.
Full-Year revenues and OP increased 35.7% and 67.4% respectively beating consensus estimates by 1.2% and 67.4% respectively. Both revenue and OP were above the company's own guidance.
Shift’s share price has dropped by about 17% since August as market became concerned over the growth prospects, however, share price has started to move up.


High Conviction Shift: Another Upbeat Quarter; Wipes Off Concerns Over an Earnings Slowdown

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shift-inc" target="_blank" data-smartkarma-citation="entities:7266:1" rel="noopener">Shift Inc (3697 JP)</a> reported 1QFY08/2024 results last week. Revenue and OP increased 29.5% and 0.4% YoY to ¥25.1bn and ¥1.8bn respectively.</li>
<li>Both revenue and OP were below consensus estimates which triggered a more than 25% drop in Shift’s share price over the last 5 days.</li>
<li>We think the weaknesses in the company’s 1Q earnings were temporary and we expect the company’s earnings to show recovery going forward</li>
</ul>



Shift Inc (3697 JP) reported 1QFY08/2024 results last week. Revenue and OP increased 29.5% and 0.4% YoY to ¥25.1bn and ¥1.8bn respectively.
Both revenue and OP were below consensus estimates which triggered a more than 25% drop in Shift’s share price over the last 5 days.
We think the weaknesses in the company’s 1Q earnings were temporary and we expect the company’s earnings to show recovery going forward


Shift: Market Overreacts to Temporary Dip in Earnings

<ul>
<li>Our conviction long <a href="https://www.smartkarma.com/entities/shift-inc" target="_blank" data-smartkarma-citation="entities:7266:1" rel="noopener">Shift Inc (3697 JP)</a> 's share price went up by more than 50% in 2023 driven by strong growth in top line alongside further improvement in margins.</li>
<li>The company’s margins fell in 2022 due to unprofitable projects, however, as these projects came to an end and the company being careful with projects, margins began to recover.</li>
<li>Shift’s share price has declined over the last few days which we think is temporary and offers an  opportunity to make an entry.  </li>
</ul>


Our conviction long Shift Inc (3697 JP) 's share price went up by more than 50% in 2023 driven by strong growth in top line alongside further improvement in margins.
The company’s margins fell in 2022 due to unprofitable projects, however, as these projects came to an end and the company being careful with projects, margins began to recover.
Shift’s share price has declined over the last few days which we think is temporary and offers an  opportunity to make an entry.  


Japan

DTS CORPORATION provides system, operation, and network engineering services for financial and communication-related companies.  The Company also provides product services and support services including system development, maintenance, and management.

TKC Corporation is an consulting firm that provides accounting and tax information with local and overseas clients.  The Company provides database services for judicial precedents in tax and civil law.  TKC develops and sells personal computer and office automation equipment, and also provides nationwide management data-process consulting services.

Net One Systems Co., Ltd. designs, installs, maintains and supports computer network systems.  The company also installs computer security related products and integrated audio visual data communication environment system by applying IP (Internet Protocol) technology.  Net One Systems builds virtualized data center environment as well.

Future Architect, Inc. provides information system and consulting services.  The Company offers a variety of services including system design and development of application software.

Digital Garage, Inc. is a web solution provider and a business incubator.  The Company provides Internet communications and strategy planning, electronic commerce solution tools, web creation and enhancement, and Internet advertising consulting services.

Transcosmos Inc is an independent data processing company that provides software development services. The Company develops and manages electronic commerce systems, and also provides marketing support services.

ZUKEN INC. plans, develops, and sells computer-aided design (CAD), computeraided manufacturing (CAM), and computer-aided engineering (CAE) system services. The Company operates an overseas production subsidiary in England and sales subsidiaries in the US, England, the Netherlands, Germany, Austria, Switzerland, France, Italy, Korea, and Singapore.

ARGO GRAPHICS Inc. develops CAD (Computer Aided Design) software.  The Company also provides consulting and maintenance services.  Argo Graphics also provides CATIA (Computer Graphics Aided Three Dimensional Interactive Application) related software and training program.  The Company provides its services for automobile, electric component, and communication industries.

Change Co., Ltd. provides IT and network security services and solutions. The company also delivers data analytics services and training related solutions.

TECHMATRIX CORPORATION provides system integration and solution services.  The Company's services include networking, security, and software quality assurance solutions.  TECHMATRIX provides consulting services and develops enterprise software for electronic commerce and financial companies.  The Company develops packaged software for hospital system and customer relationship management(CRM).

Chinasoft International Limited develops and provides solutions in China to government authorities and its IT (Information Technology) service providers. The Company also provides IT consulting and training services, IT outsourcing services and standalone software products.

CSG Systems International, Inc. provides customer care and billing solutions for cable television providers, direct broadcast satellite providers, on-line services markets, and telephony providers. The Company offers a suite of processing and related services, as well as software and professional services which automate customer care and billing functions.

PCI-Suntek Technology Co., Ltd. provides customer service solutions for telecommunication service providers, banks, and securities firms.  The Company develops voice service systems, calling center systems, telecommunication operation and maintenance systems, and other value-added service solutions.

Jasmine Telecom Systems PCL provides a wide range of telecommunications services and equipment. The Company leases submarine fiber optic cable network and provides satellite telecommunications,  Internet and satellite-based mobile communications services. Jasmine also supplies, designs, and installs telecommunication and computer networks, including other peripheral equipment.

Iress Limited provides real-time information services to businesses that specialize in the equity, equity options and future information markets in Australia and New Zealand. The Group supplies a range of pricing data, charting, news and equity and equity derivatives and also offers real-time trading tools, including a domestic order routing product and financial

MoneyGram International, Inc. provides payment services to consumers and businesses through a network of agents and its financial institution customers. The Company enables consumers to make payments and to transfer money around the world.

eClerx Services Limited provides data analytics and solutions to global enterprise clients in the financial services, retail and manufacturing industries. The Company offers data analytics, operations management, data audits, metrics management and reporting services.

Digital China Information Service Company Ltd is principally engaged in systems integration, technical services, application software development and finance special equipment related businesses.

Digital China Information Service (000555 CH)

Sabre Corporation provides technology solutions to the global travel and tourism industry. The Company offers tours and travel services, as well as, online reservations for airlines, hotels, cruises, car rental companies, and vacation packages.

Taiji Computer Corporation Limited develops, designs, manufactures, sells and repair computer, integrated circuit, software and communication equipment. The Company's services include industry-specific solution, IT consulting, value-added services, and IT infrastructure services.

SHIFT Inc. offers information technology outsourcing services. The Company provides outsourcing software testing services to corporations and individual clients. SHIFT also provides software solutions and consulting services, as well as educational classes and programs.

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Shift Inc (3697 JP)

Shift Inc (3697 JP): Q3 FY08/24 flash update

In cumulative Q3 FY08/24, the company reported sales of JPY81.1bn (+28.1% YoY) and net income of JPY3.3bn (-17.2% YoY). Q3 GPM was 31.7%, with the...

Shared Research

Shift: On a Road to Recovery

Shift's share price has been down more than 50% YTD due to a drop in the company's margins in 1QFY08/2024. There has been a notable improvement in...

Shifara Samsudeen, ACMA, CGMA

High Conviction Shift: Another Upbeat Quarter; Wipes Off Concerns Over an Earnings Slowdown

Shift reported strong 4Q results which beat estimates. Share price has dropped since August due to concerns over earnings growth, however, recent...

Shifara Samsudeen, ACMA, CGMA

Shift: Market Overreacts to Temporary Dip in Earnings

Shift's 1QFY08/2024 revenues and operating profit fell below consensus which triggered a more than 25% drop in the company's share price over the...

Shifara Samsudeen, ACMA, CGMA

Shift: High Conviction Review 2023

Our conviction LONG Shift's share price surged over 50% in 2023. As we expected, completion of unprofitable projects and expansion into upstream...

Shifara Samsudeen, ACMA, CGMA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Shift Inc (3697 JP): Q3 FY08/24 flash update

In cumulative Q3 FY08/24, the company reported sales of JPY81.1bn (+28.1% YoY) and net income of JPY3.3bn (-17.2% YoY). Q3 GPM was 31.7%, with the...

Shared Research

Shift: On a Road to Recovery

​Shift's share price has been down more than 50% YTD due to a drop in the company's margins in 1QFY08/2024. There has been a notable improvement in...

Shifara Samsudeen, ACMA, CGMA

High Conviction Shift: Another Upbeat Quarter; Wipes Off Concerns Over an Earnings Slowdown

​Shift reported strong 4Q results which beat estimates. Share price has dropped since August due to concerns over earnings growth, however, recent...

Shifara Samsudeen, ACMA, CGMA

Shift: Market Overreacts to Temporary Dip in Earnings

​Shift's 1QFY08/2024 revenues and operating profit fell below consensus which triggered a more than 25% drop in the company's share price over the...

Shifara Samsudeen, ACMA, CGMA

Shift: High Conviction Review 2023

Our conviction LONG ​Shift's share price surged over 50% in 2023. As we expected, completion of unprofitable projects and expansion into upstream...

Shifara Samsudeen, ACMA, CGMA

Shift's share price has been down more than 50% YTD due to a drop in the company's margins in 1QFY08/2024. There has been a notable improvement in...

Shift reported strong 4Q results which beat estimates. Share price has dropped since August due to concerns over earnings growth, however, recent...

Shift's 1QFY08/2024 revenues and operating profit fell below consensus which triggered a more than 25% drop in the company's share price over the...

Our conviction LONG Shift's share price surged over 50% in 2023. As we expected, completion of unprofitable projects and expansion into upstream...