Hello,
I've spent the past four weeks scouring the Japanese markets for those cheap, high-margin, fast-growing, low-churn SaaS companies everyone on Fintwit seems to be buzzing about. The space is certainly interesting, and I’ve added about half a dozen names to my watchlist—but none has yet stood out enough to buy or to write up.
Luckily, one other Japanese name I’ve been following for almost a year has now dropped to within 15% of the lowest valuation it’s seen in over a decade. I also believe it’s the highest‑quality micro‑cap I'll write about this year—its first‑mover data advantage reminds me of when I first discovered $TCU.SI last year—and it shares the same asset‑light, counter‑cyclical traits. The kicker? It has increased both sales and net income for 23 consecutive years. Yes, consecutive—you read that right.
To be more specific, public filings show revenue compounding at a 13% CAGR and EPS at an 18% CAGR since 2006. Adding to the appeal, a management team with a track record of underpromising and overdelivering laid out a well-reasoned plan last year to double profits over the following four years.
And if they succeed, this business will be generating ¥10 billion in ordinary profits from FY ending March 2028 onwards—while it currently trades at a ¥70 billion market cap and a ¥54 billion EV.
Moreover, just last month, the company updated its shareholder return policy and announced the first buyback in its history—on top of offering the highest sustainable dividend yield it’s ever had.
As you can probably tell, I’m excited to dig into this one, especially since it’s a stock that hasn’t been written up on Substack yet, or even mentioned on Twitter. Probably because the business model is unique, and because it’s not some sexy SaaS play but a marketplace buried in the unsexy corners of the Japanese financial sector. Which, of course, is enough to turn off 90% of investors right away.
So without further ado, let me break down this interesting business—and walk you through why I’ve decided to make it a new addition to my portfolio.