Report

PSA ERP Software: A Month of Respite for SaaS Stocks – A Sector Update

Many of Japan’s SaaS stocks have enjoyed a rally over the past month. They are still trading on attractive EV/S ratios, so in this report we make a brief analysis of each company and how it is performing relative to peers.
Underlyings
123FAHRSCHULE SE

23ANDME HLDG CO

Daiichi Sankyo Company Limited

Daiichi Sankyo is engaged in the research and development, manufacture, sales, and marketing of pharmaceutical products. Co. operates its operation in Japan, the Americas, Europe, China and Asia. Co. provides ethical pharmaceutical and proprietary drugs. Co.'s principal products include antihypertensive agent "Olmetec" ("Olmesartan" in overseas), ulcer treatment drug "NEXIUM," Alzheimer's disease treatment "Memary," anti-influenza treatment "Inavir," antiplatelet agent "Prasugrel," anticoagulant "Edoxaban," anti-inflammatory analgesic "Loxonin" Tape, synthetic antibacterial agent "Cravit," treatment for bone complications "RANMARK," and anticoagulant "LIXIANA."

Microsoft Corporation

Microsoft is a technology company. The company develops and supports software, services, devices, and solutions. The company provides an array of services, including cloud-based solutions as well as solution support and consulting services. The company also delivers relevant online advertising. The company's products include operating systems; cross-device productivity applications; server applications; business solution applications; desktop and server management tools; software development tools; and video games. The company also designs, manufactures, and sells devices, including personal computers, tablets, gaming and entertainment consoles, other devices, and related accessories.

Park24 Co. Ltd.

Park 24 is mainly engaged in the parking lot operation and management. As of Oct 31 2017, Co. operates 20,461 parking lots. Co. operates in three business segments. Parking Lot - Domestic and Parking Lot - Foreign segments are engaged in the subleasing of land from landowners, the management and operation of 24-hour and unmanned hourly and monthly parking facilities throughout in Japan as well as in Taiwan, South Korea, Australia, New Zealand, the United Kingdom, Singapore and Malaysia. Mobility segment is engaged in the provision of car rental services under the name of "Times Car Rental" and car sharing services under the name of "Time Car Plus."

PKSHA Technology Inc.

PKSHA Technology Inc is a Japan-based company mainly engaged in algorithmic license business. The Company operates through two business segments. The Cloud Intelligence segment is engaged in the sale of algorithm modules, and algorithm software BEDORE and CELLOR in the area of intelligent processing in the digital space. The Mobility & MaaS segment is engaged in the sale of algorithm modules related to image/video analysis and sales of algorithm software Hrus in the area of intelligent operation of real space for smart city. The algorithm modules include text understanding modules, dialogue modules, image/video analysis modules, recommendation modules, prediction modules, anomaly detection modules, and reinforcement learning modules.

Ricoh Company Ltd.

Ricoh is engaged in the development, manufacture, sale and service of office equipment and printing equipment. Office Printing segment offers multifunctional printers, copiers, laser printers, digital duplicators, wide format printers, facsimile, scanners and related parts and supplies. Office Service segment offers PCs, servers, network equipment, projectors and unified communication systems for video/web conferencing. Commercial Printing segment offers cut sheet printers, continuous feed printers, related parts and supplies. Industrial Printing segment offers inkjet heads, imaging systems and industrial printers. Thermal Media segment offers thermal paper and thermal transfer ribbons.

Sony Corporation

Sony is engaged in the development, design, production, manufacture, offer and sale of various kinds of electronic equipment, instruments and devices for consumer, professional and industrial markets such as network services, game hardware and software, televisions, audio and video recorders and players, still and video cameras, mobile phones, and semiconductors. Co. is engaged in the development, production, manufacture, and distribution of recorded music and the management and licensing of the words and music of songs as well as the production and distribution of animation titles. Co. is also engaged in the production, acquisition and distribution of motion pictures and television.

Toyota Motor Corp.

Toyota Motor is an automobile manufacturer. Co. is primarily engaged in the design, manufacture, and sale of sedans, minivans, compact cars, sport-utility vehicles, trucks and related parts and accessories throughout the world. Co. provides financing, vehicle and equipment leasing and certain other financial services primarily to its dealers and their customers to support the sales of vehicles and other products manufactured by Co. Co.'s principal business segments are automotive operations, financial services operations and other operations. Co. sells its vehicles in approximately 190 countries and regions, and markets for its automobiles in Japan, North America, Europe and Asia.

Yamato Holdings Co. Ltd.

Yamato Holdings is a holding company. Co., through its subsidiaries and associated companies, operates in seven business segments: delivery, BIZ-logistics, home convenience, e-business, financial, autoworks, and others. "TA-Q-BIN" (a special home delivery system for small parcels) services is the Co.'s core business. Co. is engaged in the provision of small-parcel delivery services including "TA-Q-BIN," "Cool TA-Q-BIN," "TA-Q-BIN Time Service," "Worldwide Delivery Service," "Golf, Sky & Airport Round Trip TA-Q-BIN," "Super-Speed TA-Q-BIN," and "Kuroneko DM-Bin" (posting service); as well as intercompany logistics services, and moving and household effects delivery services.

Provider
Pelham Smithers Associates Ltd
Pelham Smithers Associates Ltd

Founded in 2009, Pelham Smithers Associates (PSA) provides market intelligence on Asian technology, focusing in particular on Japan. The industries covered by our team of specialists are: consumer electronics, telecomms, pharmaceuticals, internet, electronic parts and materials, automotive technology, retail and capital goods. 

PSA produces both company and sector reports. The focus of PSA’s research is to identify winners and losers as new technologies impact the top and bottom lines of corporations. Critical to our research is the clear explanation of how these new technologies work and how they impact companies and industries. 

The founding partners have worked closely together for twenty years and the team has more than doubled in size since 2012. 

Analysts
Lindsay Whipp

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