Find 100 bagger (100x stock)! December 7, 2020 issue
This week's video is here
Note: The video is 26 minutes long.
1. 100% Bagger (2x stock) Candidate
2767 Fields
Listed on Tokyo Stock Exchange First Section
Stock code Company name Year listed
2767 Fields 2003
Current market cap (billion yen) Target market cap (billion yen) 2x market cap (billion yen)
133 460 266
Business type
Major distributor of pachinko/pachislot machines
Owns licensing rights for Evangelion for gaming machines
Parent company of Tsuburaya Productions, known for Ultraman
Note: The listing year refers to the date of listing on the Tokyo Stock Exchange First Section, Second Section, Mothers, or JASDAQ
Note: The 100x market capitalization is calculated from the minimum market cap.
2. Key Points
1. The company engages in distribution by selling gaming machines; holds the licensing rights for Evangelion for pachinko/pachislot and sells machines using those characters. From September 2020 to the present, there was a period of significant headwinds causing earnings to deteriorate, but recently signs of a turnaround have appeared.
2. Not only the company but the entire pachinko/pachislot industry faced strong headwinds due to Japan's IR casino policy, changes to the payout performance standards for pachinko/pachislot machines, and a decline in players. However, the change in payout standards created a replacement demand for new-generation machines, leading to a substantial increase in machine sales.
3. The demand for replacement with new-generation machines is confirmed to continue until the end of 2021, with a period of more than a year of special demand. Also, Fields’ catalog includes the nationwide rollout of the popular Pachislo Monster Hunter World in November, suggesting a favorable position for the large-scale new-machine replacement through next year-end.
4. The company has under its umbrella Tsuburaya Productions, known for Ultraman, since 2010. Tsuburaya is preparing for the production of Shin Ultraman scheduled for release in early summer 2021; Shin Godzilla was a major hit, produced by Hideaki Anno and Shinji Higuchi. The company believes it could target a box office of around 10 billion yen, implying substantial potential profit contribution.
5. The company is cash-rich, holding 22.1 billion yen in cash, and even after subtracting all liabilities from current assets, still has about 16.0 billion yen left; the current market cap of around 13.0 billion yen appears undervalued. Earnings turned positive last fiscal year, and continued revenue and profit growth is likely this year and next; if it can restore profits to a level comparable to 2015, a rise to around 1,326 yen per share (market cap around 46.0 billion yen) is fully plausible.
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