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Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<ul>
<li>The pending IPO of Rakuten Bank could be worth ¥380bn (2x book) and boosts appreciation of a fintech business we think is worth ¥1,400/share</li>
<li>That is well above the current share price reflecting the valuation drag of an expensive mobile segment, which is expected to hit peak losses in Q1 22</li>
<li>We expect mobile break-even will take longer than expected and downside here offsets fintech excitement - we remain at Neutral</li>
</ul>


The pending IPO of Rakuten Bank could be worth ¥380bn (2x book) and boosts appreciation of a fintech business we think is worth ¥1,400/share
That is well above the current share price reflecting the valuation drag of an expensive mobile segment, which is expected to hit peak losses in Q1 22
We expect mobile break-even will take longer than expected and downside here offsets fintech excitement - we remain at Neutral


Rakuten Group (Neutral) - Bank IPO a Step Towards Unlocking Fintech but Mobile Worries Remain