2H26 Investment Strategy: AI Embedded in Services to Drive Earnings Growth; Recruit, LY and Mercari Stand Out

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2H26 Investment Strategy: AI Embedded in Services to Drive Earnings Growth; Recruit, LY and Mercari Stand Out

IdeaMgrowth to remain at a high level in the June quarter, supporting robust near-term

fundamentals.

Medium-term growth driver – monetization of financial services: The financial services

business continues to deliver strong revenue growth and is poised to enter a margin

expansion phase, positioning it as a key driver of consolidated profit growth. In addition to

the core marketplace business, improving profitability in financial services is making the

medium-term earnings growth story increasingly compelling.

Valuation and shareholder return upside: Despite strong near-term earnings momentum

and favorable medium-term profit growth prospects, the stock continues to trade at an

undemanding valuation, leaving significant upside potential. We expect distributable

earnings to accumulate by the end of F6/26, increasing flexibility for shareholder returns.

Management has indicated a preference for share repurchases, and we think any

meaningful shareholder return program would be viewed positively by the market.

MonotaRO

A leading B2B MRO e-commerce platform with limited online competition: MonotaRO

specializes in B2B e-commerce for MRO (maintenance, repair, and operating) supplies and

has established a dominant position in a market where most competitors remain offline

distributors. With more than 28.8 million SKUs and approximately 11.5 million registered

accounts, its extensive purchasing data, logistics network, and system integrations create

significant barriers to entry. There are few direct competitors of comparable scale in the

online channel.

Growth drivers – solid SME growth and significant untapped enterprise opportunity: