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Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<p>A surge in domestic eCommerce took that segment to its highest profitability in four years but accelerating mobile losses were much higher and hopes for a recovery in that segment have been pushed out to FY22. In addition to operational losses, network investment plans have also been raised by up to ¥240bn, although this should be less surprising as the original plans were always too optimistic despite all the cloud virtualization talk.  Lastly, fintech results were mixed as top-line growth slowed from previous quarters and profitability slipped on higher marketing spend for its credit card and payments business.</p>

A surge in domestic eCommerce took that segment to its highest profitability in four years but accelerating mobile losses were much higher and hopes for a recovery in that segment have been pushed out to FY22. In addition to operational losses, network investment plans have also been raised by up to ¥240bn, although this should be less surprising as the original plans were always too optimistic despite all the cloud virtualization talk.  Lastly, fintech results were mixed as top-line growth slowed from previous quarters and profitability slipped on higher marketing spend for its credit card and payments business.

Rakuten Q4 20 Results: Mobile Losses Accelerate as Cash Requirements Become Clear