Commerce One Holdings Inc. provides solutions for e-commerce business operators to start and operate their businesses. The company provides e-commerce site construction and operation services; sales management and inventory management system for the e-commerce business; and management support tools, such as EC site authentication service and order trend display based on data analysis. The company was incorporated in 2006 and is based in Chiyoda, Japan.

Japan

Commerce One Holdings Inc.

Technology

The company pays dividends irregularly. There have only been a few years with dividend payments in the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are somewhat mixed. In the past 12 months, the dividend yield has been good and slightly above its peers. On average, the company pays dividends annually. 

4496.T reported revenue of JPY 3 680mn in the last 12 months, up 6% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 52% from FY23 to JPY 30.90. Market expects EPS to reach JPY 75.90 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 9ppts over past six months and grown 2ppts slower in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The company has reported average EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 20.8% in the last 12 months, a decline from 24.0% in FY23. 

Historically, 4496.T has reported good net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 6.0%, down from 13.4% in FY23. 

Commerce One Holdings Inc. reported a return on equity (RoE) of 8.3% in the last 12 months, down from 17.7% in FY23. The market consensus projects an RoE of 19.7% in FY24, this time above its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to 7.9%, below the peers. The consensus estimate for FY24 for RoCE is 28.0%, however, this time ahead of the peers. 

Another important profitability metric, return on assets (RoA), amounted to 6.2% in the last 12 months, a decrease from 13.2% in FY23. The market analysts predict that RoA will be 14.9% in FY24, more robust than its peers in this period. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 3.3 in the past several years. This ratio implies a excellent shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

4496.T has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is unstable and becomes extremely unfavourable on the days with the lowest activity. However, under highly turbulent market conditions, the trading volume tends to improve significantly. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note robust profitability, strong debt servicing capacity, adequate interest coverage, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors and we point to weak positions in its industry, slow historical revenue growth.

In highly turbulent market conditions, 4496.T is volatile. In other words, the stock will fall much more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be large. 

In normal market circumstances, 4496.T is volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move much wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from significant to substantial. 

Considering past and projected metrics, the stock is neither 'expensive' nor 'cheap' compared to its peers. In particular, the stock is reasonably priced on P/E, 'cheap' on EV/EBITDA, trading at neutral levels on P/FCF. 

Commerce One Holdings Inc.

¥ 800

4

Commerce One Holdings Inc.

¥ 800

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

¥ 800

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