ASIRO Inc. operates a range of media sites that offer legal services. The company operates through two segments, Legal Media & Other; and Legal Human Resources. The Legal Media & Other segment operates legal media centered on the attorney search series and Other Media, such as Carism, a career change media. The Legal Human Resources segment conducts fee charging employment placement businesses. ASIRO Inc. was founded in 2009 and is headquartered in Tokyo, Japan.

Japan

ASIRO Inc.

Consumer Cyclical

The company pays dividends on rare occasions. 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 unclear. In the past 12 months, the dividend yield has been moderate and on par with its peers. 

7378.T reported revenue of JPY 5 413mn in the last 12 months, up 56% from FY23. The dynamics of cash flow, as measure by free cash flow (FCF), were rather similar. Market expects EPS to reach JPY 4.80 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 11ppts over past six months and grown 7ppts 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 modest EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 18.4% in the last 12 months, up from 0.4% in FY23. 

Historically, 7378.T has reported average net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 10.0%, a growth from -5.5% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to 19.6%, above the peers. The consensus estimate for FY24 for RoCE is -2.9%, however, this time below its peers. 

Another important profitability metric, return on assets (RoA), amounted to 14.2% in the last 12 months, an increase from -5.4% in FY23. The market analysts predict that RoA will be -3.3% in FY24, though below its peers in this period. 

ASIRO Inc. reported a return on equity (RoE) of 24.7% in the last 12 months, up from -8.9% in FY23. The market consensus projects an RoE of -5.9% in FY24, however, this time below its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 2.0 in the past several years. This ratio implies a good 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.

7378.T has below average trading liquidity. The average private investor can sell his common position in the stock in a single trading day. Liquidity is unstable and is average on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a very small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is minimal. We note resilient historical revenue growth, solid return on capital, 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, poor working capital management.

In highly turbulent market conditions, 7378.T is moderately volatile. In other words, the stock will fall 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 moderate. 

In normal market circumstances, 7378.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 large to notable. 

From both historical and forecast perspectives, the stock is overpriced compared to similar stocks. In particular, the stock is reasonably priced on P/E, of fair value on EV/EBITDA, trading at neutral levels on P/FCF. 

ASIRO Inc.

¥ 1856

4

ASIRO Inc.

¥ 1856

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

¥ 1856

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