Japan Specialist

Mark Chadwick

Over 20 years experience in equities and asset management in Asia and Japan. Qualified CFA with experience analyzing companies as a buy-side analyst. In-depth knowledge of company fundamental analysis, corporate governance and valuations.

Japan Small Cap Growth: TeamSpirit - Better Days Ahead

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

Small Cap Growth: Rakus (3923) - Sayonara Manual Expenses!

Equity Bottom-Up

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Q1 trading update 
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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>  released Q1 results on 12 Jan, which were generally in line with previously released guidance for the full year. Covid restrictions continue to be a negative headwind on contracting new clients, which is impacting top line growth rates.  This seems especially true of small and mid-sized companies, where growth has stalled badly, and we believe competition may be heating up in that segment. In response, Team Spirit is shifting its sales focus towards larger enterprises and this mix improvement is a bright spot in the Q1 report, with the number of enterprise licences jumping 44% YoY. The share price remains around 30% below its 52-week high.   
<table class="table table-striped">
<colgroup> <col width="261"> <col span="5" width="99"> </colgroup>
<tbody>
<tr>
<td style="width: 196pt;">Million Yen</td>
<td style="width: 74pt;">1Q20</td>
<td style="width: 74pt;">2Q20</td>
<td style="width: 74pt;">3Q20</td>
<td style="width: 74pt;">4Q20</td>
<td style="width: 74pt;">1Q21</td>
</tr>
<tr>
<td>Sales</td>
<td>552</td>
<td>606</td>
<td>631</td>
<td>654</td>
<td>671</td>
</tr>
<tr>
<td>Sales growth </td>
<td>40%</td>
<td>35%</td>
<td>39%</td>
<td>26%</td>
<td>22%</td>
</tr>
<tr>
<td>Operating Profit</td>
<td>44</td>
<td>84</td>
<td>106</td>
<td>50</td>
<td>71</td>
</tr>
<tr>
<td>Operating margin</td>
<td>8%</td>
<td>14%</td>
<td>17%</td>
<td>8%</td>
<td>11%</td>
</tr>
<tr>
<td>Net Income</td>
<td>14</td>
<td>42</td>
<td>55</td>
<td>142</td>
<td>36</td>
</tr>
</tbody>
</table>
 
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Q1 trading update 


TeamSpirit Inc (4397 JP)  released Q1 results on 12 Jan, which were generally in line with previously released guidance for the full year. Covid restrictions continue to be a negative headwind on contracting new clients, which is impacting top line growth rates.  This seems especially true of small and mid-sized companies, where growth has stalled badly, and we believe competition may be heating up in that segment. In response, Team Spirit is shifting its sales focus towards larger enterprises and this mix improvement is a bright spot in the Q1 report, with the number of enterprise licences jumping 44% YoY. The share price remains around 30% below its 52-week high.    

   


Million Yen
1Q20
2Q20
3Q20
4Q20
1Q21


Sales
552
606
631
654
671


Sales growth 
40%
35%
39%
26%
22%


Operating Profit
44
84
106
50
71


Operating margin
8%
14%
17%
8%
11%


Net Income
14
42
55
142
36



 


Japan Small Cap Growth: TeamSpirit (4397) - Expect Brighter Second Half