PSA IT Service Sector Earnings Review – Key Takeaways: Which Companies...

As we come to the end of earnings season for Japan’s IT Services, analyst Lindsay Whipp reflects on the main takeaways from those results and which companies are in a good position to outperform for the full year.

PSA IT Services: Five Takeaways from the IT Service Sector’s Results

Earnings season is over for most of the companies in the IT services sector. Analyst Lindsay Whipp highlights the main takeaways.

PSA Software and Services: Enechange (4169 JT) Gets a New Investor

PSA Software and Services: Enechange (4169 JT) Gets a New Investor Enechange is set to get a new large investor in the Japan Investment Corp in a third-party allotment of new shares. While it will dilute existing shareholders we think that the investment is good news.

5 Things to Know in Investing This Week - The Surprise Higher for Long...

ERP Software: Money Forward (3994 JT) FY23 Preview

In this report we preview Money Forward’s FY23 Q4 and its prospects for FY24 when the company has pledged to turn Ebitda positive, a shift the company would do well to stress is now sustainable in the coming fiscal years too.

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.

PSA ERP Software: Shift Inc (3697 JT) – Measuring Up for Success

Shift Inc may be expecting OP growth to slow in FY23 (Aug yr-end) but there are good reasons for this. The bottom line is that the company is executing its strategy well. Its FY24 EV/OP of 29.5x will drop sharply over the next two years to just 16.1x based on PSA estimates, while its FY24 EV/S is just 3.6x. For a company increasing annual sales in excess of +35% YoY, these valuations have the potential to pique investor interest.

PSA ERP Software: Reassessing Visional (4194 JT)

We take a fresh look at our expectations for Visional, in light of the company’s decision to place its mid-term annual sales growth outlook at between 15%~20%. Even with more tempered expectations, Visional’s valuations aren’t looking particularly stretched with a FY25 EV/OP of just under 15x based on our estimates. That said, we think the company is more vulnerable to competition with this slower growth outlook. So, the FY24 performance will be crucial in ascertaining its ability to grow the bu...

PSA Global Semiconductors: Opportunities & Risks from the AI Chip Boom

This report looks at the potential for the AI chip market and at who the winners and losers might be.

PSA ERP Software / IT Services: System Integrators Update

Teaser We update our views on five of Japan’s system integrators and find that it is the smaller of the species that are currently more attractive.

Vermilion Int'l Compass: Global Equity Strategy

Key Supports Holding Strong In last week's Int'l Compass (Aug. 18) we discussed that, if the 10-year Treasury yield and U.S. dollar (DXY) can stay below their respective resistance levels (4.3%-4.35% and $103.50-$103.70), we remain buyers on the pullback to $93 on MSCI ACWI (ACWI-US). The ACWI-US low on Aug. 18 was $93.02; as long as $93 (1+ year support) holds and the 10-year Treasury yield and DXY are below the aforementioned levels, $93 on ACWI-US is likely to low for this pullback. On the o...

PSA Enterprise Software / IT Services: Visional (4194 JT) Update

Visional met consensus estimates for its FY23 Q3, putting it nicely on track to meet its own full-year forecasts. The firm even has the potential to beat, especially on sales, explains analyst Lindsay Whipp. With the mid-career recruitment platform’s performance confounding recent market pessimism, Visional’s FY23 EV/S of just 5x isn’t to be sniffed at.

PSA ERP Software: Japan Mid-Sized Enterprise Software – The Great Sell...

18 months after many Japanese mid-sized enterprise software stocks were sold off, many remain more than 50% lower than their peaks. And yet, these companies continue to grow strong sales. In this report, we take a look at 11 of these companies and at the extent to which their operating performances are reflected in their current valuations.

PSA ERP Software: Money Forward's (3994 JT) Excellent FY23 Q1 Results

Analyst Lindsay Whipp reviews Money Forward’s Q1 results and discusses the outlook for Q2.

PSA ERP Software: Shift Inc (3697 JT) – It’s All About the People

Shift’s FY23 Q2 earnings beat has sent the stock up +19% WTD, taking EV/OP to 44.2x. However, we expect OP to continue to grow in excess of +40% YoY until at least FY25, which rapidly brings down valuations. As such we think the stock still remains attractive, even after this week’s rally.

PSA ERP Software: Visional (4194 JT) – Initiation Report: Envisioning ...

Visional Inc’s shares have had a reality check of late. But if reality for the online recruitment platform for professionals is annual sales growth of >30% YoY and OP growth of >50%, then at current valuations, the stock could reignite long-term investor interest.

PSA IT System Integrators: Whither Japanese IT Spending?

Concerns have been growing over IT spending overseas should the threat of recession materialise. But what is the situation in Japan and which system integrators are performing best? In this report we focus on NTT Data, NRI, TIS Inc and IIJ.

PSA Market Strategy: Japan Perspective for 2023

At the beginning of every year we publish our PSA Perspective, a report intended as a long shelf-life look at the year ahead. This year Pelham Smithers discusses Japan's economy, the outlook for the stock market, and some stand-out themes and developments for the year. These include the digital yen and the demise of live action entertainment in Japan. We also update our noted PSA Focus List of stocks. Table of Contents Overview 3 Background: 4 Japan’s Economic Outlook 5 Ja...

PSA ERP Software / IT Services: Some DX plays considered: Mid-tier IT ...

According to Bloomberg, Japan’s six listed mid-tier IT vendors – that’s NRI (4307 JT), CTC (4739 JT), TIS (3626 JT), SCSK (9719 JT), Biprogy [was Nihon Unisys] (8056 JT) and NS Solutions (2327 JT) – reported 2Q FY22 orders of ¥716bil (+12.4% YoY). The YoY increase, down slightly from the +13.1% YoY growth figure seen in the 1Q FY22 period, Pelham Smithers looks at the relative performance of mid-tier IT vendor orders.

PSA ERP Software / IT Services: Freee (4478 JT) – Shares Finally Reapp...

Freee KK (4478 JT) has been in the PSA Focus List since CY22 Q2. After a strong FY23 Q1, analyst Lindsay Whipp discusses whether the shares might finally start to join the DX rally following a 70% decline from its high?