Go (581A): Initiate with Buy: Japan‘s e-hailing leader, monetization is only beginning

Research evidence excerpt

Go (581A): Initiate with Buy: Japan‘s e-hailing leader, monetization is only beginning

Executive Summary: Monetization is only

beginning

Summary of investment thesis: Initiating coverage with our PO of ¥4,200

We initiate coverage of GO with a Buy rating and our PO of ¥4,200. Our PO is based on

our FY5/27 adjusted EPS estimate of ¥105, calculated using a standard tax rate of 30%,

and a 40x P/E multiple, representing a c.10% premium to the c.36x FY26 average P/E of

seven domestic and global peer companies. GO is the dominant platform in Japan's e-

hailing market, with a 56% share based on affiliated taxi vehicles in the three major

prefectures of Tokyo, Osaka, and Kanagawa. We believe the company will continue to

deliver profit growth that substantially outpaces revenue growth over the medium term,

supported by regulatory barriers to entry and network effects.

Our investment thesis can be summarized in four key themes. The first is a Regulatory

Moat. Japan's unique regulatory framework, including vehicle supply regulations, fare

regulations, and the commercial driver's license system, structurally limits the direct

entry of overseas-style ridesharing services. We do not believe the company's

advantage, supported by a network of more than 1,500 affiliated operators, can be

replicated through capital or technology alone. Japan's ridesharing framework, introduced

in 2024, also requires drivers to be directly employed by taxi operators. In practice, 80%

of ridesharing vehicles are operated by GO-affiliated partners. We believe regulatory

change is functioning as an incremental revenue opportunity for GO rather than a source

of increased competition.

Exhibit 1: Number of rides surpasses 100mn for the first time in FY5/26