Find 100 Baggers! September 7, 2020 issue

1. 100 Bagha candidates

7030 Sprix Co., Ltd. Tokyo Stock Exchange Prime Market

2. Points

1. While the overall education industry has been experiencing a significant decline in revenue and surpluses due to the COVID-19 impact, the company has secured a profit in the April–June period, and its business structure is good.

2. As of the third quarter, the full-year plan is ahead of schedule, and a potential upward revision for the year is highly likely.

3. The fourth quarter corresponds to the period when summer courses are held, making it highly likely that sales will exceed those of the third quarter. Consequently, there is a high likelihood that earnings forecasts will be upwardly revised.

4. Compared with dining, aviation, and travel industries, individualized tutoring schools are unlikely to experience prolonged COVID-19 impact, making a V-shaped recovery in the next term highly probable.

5. Our company’s break-even point is lower than that of other peers, giving it an edge within the cram school sector.

6. The key to substantial growth lies in expanding business domains; the programming business conducted in collaboration with CyberAgent could become a pillar of this strategy.

7. Since listing, the stock has consistently declined, and there is a perception that the management lacks motivation to enhance shareholder value. On the other hand, with the downsizing of margin trading, we believe the stock price has hit a bottom, and a price rally is likely to begin this autumn.

For details, please see the PDF file.