Report by Asymmetric Advisors
Shares in MCJ have only recently started to rise having been moribund for 4 years, but with only 1 local broker covering the stock and a lack of detailed English presentation materials, this is a largely overlooked company entering a new growth phase. Its PER is only 11x what is an overly conservative FY3/25CoE calling for sales +5% and OP +6% to ¥18.3bn with a 9.2% OPM. In fact, Q1 sales were +11%, OP +25% with a 11.9% OPM (there is some seasonality, but it is still looking good for an overshoot). MCJ also significantly beat its original profit target in FY24. The group has net cash of ¥37bn (>25% of M/Cap), while mid-term growth in gaming PCs and AI PCs, of which MCJ's Mouse was the 1st in Japan to introduce AI CPU PCs, will be strong tailwinds.