Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

A chartered management accountant with more than 10 years of rich experience in investment research and financial analysis. Worked as an equity analyst for one of the world's largest asset managers with USD2.5trn in AUM covering numerous sectors including chemicals, retail, tech, autos, telco, real-estate and banks, globally. Experienced in fundamental equity research, industry research, commodity studies, forensic accounting, and due diligence reviews.

Equity Analyst

TME: Strong 1Q Driven by Record Online Music User Adds; Shares Fall Amidst Regulatory Scrutiny

Baidu 1Q21: Post-Pandemic Recovery in Online Marketing and New Initiatives Drive Earnings Beat

Tencent: Earnings Beat Consensus; Falling User Growth and Game Revenue Growth Concerning

CyberAgent: Strong 2Q Results Driven by Gaming; Upward Revisions to Full-Year Forecasts

Hoya: Strong Demand for EUV Blanks/HDD Drives Better Than Expected 4QFY21 Results

Freee 3Q Results: Strong Earnings Momentum Continues; Recent Drop in Multiples Offer a Good Entry

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

JD Logistics IPO: Financial Forecasts and Initial Thoughts on Rumoured US$40.0bn Valuation

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a> hold reported its 4Q and full-year FY03/21 financial results on Monday (17th of May 2021).Recruit marginally beat its full-year revenue guidance with a consolidated revenue of ¥2,269.3bn in FY03/2021 versus the guidance of ¥2,224.6bn. The company’s consolidated EBITDA was ¥241.6bn compared to guidance of ¥231.9bn.On a year-on-year basis, the company’s 4Q revenues grew by 4.0% whereas EBITDA margin declined 440bps to 5.0% compared to 9.4% a year ago. Although the HR tech segment is gradually recovering from the COVID-19 impact, the other two segments have not performed that favourably.At a FY2 EV/EBITDA multiple of 18.6x Recruit looks expensive to us compared to both its peers. <a href="https://www.smartkarma.com/entities/temp-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1428:1" rel="noopener">Persol Holdings (2181 JP)</a> , the second largest staffing company in Japan after Recruit, is trading at a FY2 EV/EBITDA of 7.3x while Yahoo Japan (4689 JP), which earns around 70% of its EBITDA from advertising related businesses, is trading at an FY2 EV/EBITDA of 10.7x (owned by Z Holdings).

Recruit Holdings (6098 JP) hold reported its 4Q and full-year FY03/21 financial results on Monday (17th of May 2021).Recruit marginally beat its full-year revenue guidance with a consolidated revenue of ¥2,269.3bn in FY03/2021 versus the guidance of ¥2,224.6bn. The company’s consolidated EBITDA was ¥241.6bn compared to guidance of ¥231.9bn.On a year-on-year basis, the company’s 4Q revenues grew by 4.0% whereas EBITDA margin declined 440bps to 5.0% compared to 9.4% a year ago. Although the HR tech segment is gradually recovering from the COVID-19 impact, the other two segments have not performed that favourably.At a FY2 EV/EBITDA multiple of 18.6x Recruit looks expensive to us compared to both its peers. Persol Holdings (2181 JP) , the second largest staffing company in Japan after Recruit, is trading at a FY2 EV/EBITDA of 7.3x while Yahoo Japan (4689 JP), which earns around 70% of its EBITDA from advertising related businesses, is trading at an FY2 EV/EBITDA of 10.7x (owned by Z Holdings).

Recruit Holdings: Recovery in HR Tech but Other Segments Still Struggling