Marketing Feedback - Asia

Research evidence excerpt

Marketing Feedback - Asia

luding the Asian investors we

met this week. During our EU tour three weeks ago (the week of June 22), when the stock

was trading around ¥11,000, several investors asked whether it was still attractive at current

levels. Our discussions focused on the key drivers behind the share price appreciation: (1)

management's ability to quantify AI-related benefits and demonstrate pricing improvements,

(2) consistently strong earnings execution, and (3) steady shareholder returns through share

buybacks. Together, these factors have propelled the stock to all-time highs. Recruit has

become a prime example of how a company can successfully reposition itself from an "AI-

negative" to an "AI-positive" story through clear communication and solid execution.

Mercari (4385 JP, Buy): Before Recruit's recent rally, Mercari was widely viewed as the

preferred stock in the sector. Most discussions centered on the outlook for Q4 results and

FY6/27 guidance. For Q4, investors appear to expect Japan Marketplace GMV growth of

around 20%, while U.S. trends are likely to remain broadly consistent with Q3. Looking ahead,

our impression is that Asian investors are looking for a starting point of roughly 10% Japan

GMV growth for next fiscal year. On profitability, we expect management to provide an

operating profit target range that encompasses current consensus expectations. While FY6/26

has been a comeback year for Mercari, Mercari and Recruit now appear to be the two clear

investor favorites in the sector.

CyberAgent (4751 JP, Buy) – The key issue for the company at this stage is the lack of visibility

on FY9/27 earnings, particularly the game pipeline. Most investor discussions focused on

the key earnings drivers for Q4 and FY9/27.