In today’s briefing:
- CyberAgent (4751) | World Cup Winners
- CyberAgent 1QFY09/2023: Earnings Miss, Struggling Gaming and Huge FIFA Cost Add to the Woes
- Maybe There Are Many Companies in Japan that Have the Resources but Neglect Efforts to Increase ROA
- Paramount Global: Expansion Of Paramount+ & Other Developments
CyberAgent (4751) | World Cup Winners
- CyberAgent Q1 loss on one-off expenses from World Cup streaming. We see Q1 as a bottom this fiscal year
- Share price already discounted weak FY9/23 guidance last October and focus is now on recovery
- The World Cup was a success for the Japanese National side and for Abema
CyberAgent 1QFY09/2023: Earnings Miss, Struggling Gaming and Huge FIFA Cost Add to the Woes
- CyberAgent Inc (4751 JP) reported 1QFY09/2023 results. Revenue declined 2.1% YoY to JPY167.6bn (vs consensus JPY176.1bn) while OP turned negative JPY1.25bn (vs consensus OP of JPY4.1bn.
- CA’s largest investment to-date was for FIFA 2022 but top line growth has largely been in line with previous quarter. WAU have dropped to pre-FIFA levels.
- Though AbemaTV’s monetisation strategy seems to work, the growth prospects for other two segments are concerning and likely to drag down the consolidated performance.
Maybe There Are Many Companies in Japan that Have the Resources but Neglect Efforts to Increase ROA
- If we read “improved asset efficiency” as “ROA,” it would fit better. ROA, along with ROE, correlates with valuation, and higher ROA can be expected to trigger higher stock prices.
- Companies with high ROA tend to have advanced corporate governance initiatives. In Metrical Universe of 1,779 companies, ROA (historical 3-year average) for many of corporate governance metrics are significantly correlated.
- Whether Japanese stocks are undervalued is another question, but if companies have resources but are neglecting company-wide efforts to increase margins and turnover, activist investors are likely to be interested.
Paramount Global: Expansion Of Paramount+ & Other Developments
- Paramount had a disappointing set of results in the last quarter as it failed to meet the revenue expectations as well as earnings expectations of Wall Street.
- The company maintained its strength in TV, expanded in cinema, and benefitted from the worldwide surge in streaming during the third quarter.
- Among major updates, Walmart chose Paramount+ when looking to add a streaming service to its Walmart+ package.
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