Find 100 Baggers (100x Stocks)! Issue December 14, 2020
【This Week's Video is Here】
The video is 27 minutes long.
1. 100% Bagger (Double Stock) Candidate
3646 Ekitan
Listed on the Tokyo Stock Exchange Mothers Section
Stock Code Company Listing Year
3646 Ekitan 2011
Current Market Cap (billion yen) Target Market Cap (billion yen) 2x Market Cap (billion yen)
34 83 68
Business Model
Operates the route search site "Ekitan"
Subsidiary Latora International also engages in inbound business
Entered into a five-party business alliance aimed at promoting Maas business in Hokkaido
※ Listing year lists the listing dates for the Tokyo Stock Exchange first/second section, Mothers, and JASDAQ
※ The 100x market cap is calculated from the minimum market cap.
2. Highlights
1. As one of the four major route search sites, the company faced an internal dispute in May 2020. After a former director's harassment was revealed, it led to shareholder proposals. As a result, the management team was fully replaced, and a new structure was launched from the end of June. Previously, corporate value had been deteriorating, but with the new management, signs of change have appeared.
2. This fiscal year, performance was affected by the state of emergency declared in April, resulting in a loss in Q1, but recovered to profitability in Q2. It is highly likely that the second half will exceed the first half. For next fiscal year, the Q1 loss that weighed on this year’s performance is unlikely, so there is a strong possibility that this year's forecast will be exceeded.
3. The company's business model is【recurring】, with paid services for route search on a monthly subscription basis. Churn rate is low, around 2%, similar to SaaS companies. Even during the internal dispute, the company did not incur losses due to its strong business structure, and it is using this base to explore growth areas.
4. The most notable aspect of the company’s business is that it is a【Mass (Mobility as a Service) related stock】. Maas represents a new concept for mobility, and the company has chosen Hokkaido as its target. Hokkaido is a region with advanced challenges, and there is a high likelihood that the Maas concept will align well.
5. The company’s balance sheet is in excellent condition, essentially cash-rich. With cash of 2.4 billion yen and liabilities of only 380 million yen, there are almost no financial problems. Although the scale is small, it has ample room for investment in new businesses. If new ventures succeed and corporate value rises, it is quite plausible that it could be valued at up to 10x EBITDA, so within the next three fiscal periods (by March 2023) there is potential for the market capitalization to rise to 8.3 billion yen (stock price 1,217 yen).
Please refer to the PDF file for more details.
