Dream Incubator (4310) 2 Catalysts to Drive Share Price Higher near Term.

Director, Pearl Hill Advisors

Nicholas Tanner

Director

Pearl Hill Advisors

Equity Bottom-Up

<p>A sum of parts valuation would suggest Dream Incubator is very conservatively worth Y30bn (perhaps closer to Y40bn) vs. the current market cap of just over Y20bn. It is thus trading on at least a 35% discount to the sum of the parts, and the Ipet business is growing and there are a number of interesting potential IPOs to happen over the next few years. In terms of a p.e.r, the shares are on about 18x this year’s numbers. The company does not make forecasts as it is difficult to forecast the venture capital business. What they will say, however, is that the pet insurance business and the consulting business this year should have combined revenue of Y18bn (+16%) vs. Y15.5bn last year. This seems reasonable and profits on both will improve. Thus the wild card is the venture business but there is nothing to suggest a worse year this year.</p>

A sum of parts valuation would suggest Dream Incubator is very conservatively worth Y30bn (perhaps closer to Y40bn) vs. the current market cap of just over Y20bn. It is thus trading on at least a 35% discount to the sum of the parts, and the Ipet business is growing and there are a number of interesting potential IPOs to happen over the next few years. In terms of a p.e.r, the shares are on about 18x this year’s numbers. The company does not make forecasts as it is difficult to forecast the venture capital business. What they will say, however, is that the pet insurance business and the consulting business this year should have combined revenue of Y18bn (+16%) vs. Y15.5bn last year. This seems reasonable and profits on both will improve. Thus the wild card is the venture business but there is nothing to suggest a worse year this year.

Dream Incubator (4310) Sold off Following Ipet Listing, Now Too Cheap.