IR Meeting Following T&D Financial Takeover

Research evidence excerpt

IR Meeting Following T&D Financial Takeover

Japan | Payments, Processors & IT Services

PayPay EquityJuneResearch9, 2026

FLASH NOTEIR Meeting Following T&D Financial Takeover

We held a meeting with the IR team following the announcement of the RATING BUY

70.2% takeover of T&D Financial (meeting was already planned). The key PRICE $15.17^

point is that the company wanted majority control of an insurance company PRICE TARGET | % TO PT $28.00 | +85%

instead of partial control, so that it can focus on strategy and product 52W HIGH-LOW $24.89 - $14.97

innovation in future, which we believe is sensible. Therefore, the success FLOAT (%) | ADV MM (USD) 98.3% | 13.89

will come from cross-selling and post merger integration (PMI) synergy MARKET CAP $10.3B

potential of the new company. TICKER PAYP

^Prior trading day's closing price unless otherwise

noted.

Rationale for the Transaction: In order to become a multi-service fintech company, PayPay

needed to acquire an insurance company. Majority control of the company is important, as

management can control strategy and product development of the new company, rather than

partnership. In addition, acquiring the Japanese insurance license is also important from this

acquisition. The Price to Embedded Value (PEV) is approximately 1x, which the company

believes is not too expensive. Potential synergies will come from cross-selling insurance to the

74mn PayPay registered users and improving investment returns from partnership with other

equity holders in One Investment Ltd. PayPay raised roughly ¥100bn from the IPO and will use

cash and retained earnings to cover the ¥134bn transaction.

Going Forward: The expected completion of the deal is Oct 2027. In order to archive

integration, TDF financials have to be converted into IFRS.