Daily Brief Japan: Ibiden Co Ltd, Rakuten, Fuji Soft Inc, TSE Tokyo Price Index TOPIX, NEOJAPAN Inc, i-mobile Co Ltd, Good Com Asset, GA Technologies and more

• Late last month, Shinko Electric Industries (6967 JP) announced that the JIC consortium Tender Offer due to be launched by end-August would be delayed. Next update? January 2025.
• Everyone was expecting a delay, but that caused the stock to fall. Then tech/AI fell out of bed, Ibiden crashed, then China export restrictions noise/pushback caused further delay.
• I saw a 9% gross spread yesterday and thought “Geez”, that’s a buy.” A day later, it’s 6%. Still wide, still interesting. And that has set a boundary.

• Rakuten is a Japanese conglomerate with a diverse portfolio of businesses, including e-commerce, finance, travel, and mobile telephony.
• Founded during the late nineties global Internet boom, Rakuten has become a ubiquitous brand in Japan.
• The loyalty point system has become a key feature of Rakuten’s business model, connecting its various services together.

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• When Bain came out saying they would bid more, with preparation to launch in November, KKR launched early to see if they could get the jump, discussed here.
• The stock popped when the Bain’s bid was obviously serious, and supported by the Founding Family, but it went to Bain’s “5% higher” plus another 5%. I was bearish.
• But I signalled willingness to change my mind if the stock price dropped. It has dropped. 

• Comparing the number of Japanese companies in top 50 global market capitalization and Japan’s GDP as percentage of world’s GDP in 1989, it’s clear that economy and companies didn’t grow.
• Without more Japanese companies that have an edge in profitability, a key focus for long-term global investors, it will not be possible to put long-term investment money into Japanese equities.
• It is assumed that BoJ’s policy of inducing the yen to depreciate through ultra-monetary easing may have in part spoiled company managers and caused them to neglect their corporate efforts.

• Revenue increased by 4.4% YoY to JPY3.4bn, operating profit rose by 40.8% YoY to JPY848mn.
• Revenue from desknet’s NEO Cloud grew 7.5% YoY, while AppSuite Cloud revenue surged 30.6% YoY.
• Total license revenue declined 27.8% YoY, with desknet’s NEO licenses decreasing 22.7% YoY.

• i-mobile reported FY07/24 revenue of JPY18.7bn (+14.1% YoY) and operating profit of JPY3.5bn (+0.7% YoY).
• Consumer Service business FY07/24 revenue was JPY16.0bn (+20.1% YoY) and segment profit JPY3.4bn (+15.8% YoY).
• FY07/25 projections: revenue JPY23.0bn (+22.8% YoY), operating profit JPY4.5bn (+26.8% YoY), net income JPY3.0bn (+21.9% YoY).

• Sales increased to JPY34.0bn (+136.2% YoY), with an operating profit of JPY2.9bn (+84.4% YoY) and net income of JPY1.6bn (+79.3% YoY).
• Wholesale Sales segment saw sales rise by 355.7% YoY and operating profit by 66.6% YoY, with a 7.3% profit margin.
• Real Estate Management segment achieved sales of JPY2.0bn (+62.9% YoY) and operating profit of JPY925mn (+437.0% YoY), with a 45.9% profit margin.

• FY10/23 figures reflect finalized provisional accounting treatment; business profit is JPY2.7bn (+67.9% YoY), revenue JPY131.6bn (+33.0% YoY).
• RENOSY Marketplace improved profit margin through topline growth and fee measures; ITANDI segment profit rose 70% YoY.
• ITANDI business saw ARR reach JPY3.4bn (+36% YoY), with a churn rate of 0.40% and unit economics at 39.0x.