I spent part of the weekend in Johor Bahru, a Malaysian city just north of the border from Singapore. The new RTS Link between Johor Bahru and Singapore is currently being built and will be finished by late 2026. Once it’s completed, the travel time from Malaysia to Singapore will be cut down to just 15 minutes. For those of you who want to learn more about this theme, I wrote about it the RTS Link last summer here.
Post of the week
During the weekend, paid subscribers of Asian Century Stocks received a post on Japanese e-commerce technology company BASE Inc (4477 JP — US$234 million). In the past, it’s been referred to as the “Shopify of Japan” as it enables small merchants to open up stores online. The company enjoyed incredible growth during COVID-19 as retailers scrambled to get an online presence. After the pandemic, growth decelerated, BASE’s went into the red and most investors gave up on the stock. But there are signs of a turnaround. It has moved to a new pricing structure that should allow it to compete for larger merchants. Its gross profit is now growing rapidly thanks to its payment solution. And unlike Shopify, the stock trades at at low valuation multiple of just 0.8x EV/Sales. You can read my full post on the company here ($).
Tweet of the week
I put together two valuation charts of Japanese SaaS companies, measuring their EV/Sales vs their Rule of 40 scores (EBITDA margin + sales growth). Talent management software company Kaonavi (4435 JP — US$139 million) scores well. As do printing services company Raksul (4384 JP — US$433 million) and beauty salon enterprise resource planning company CYND (4256 JP — US$41 million). You can find my tweet here.
Podcast episode of the week
In December 2024, our friends at Offpiste Investing shared this interview with strategist Chris Wood, who writes the newsletter Greed & Fear for Jefferies. I found it fascinating. Wood believes that Xi Jinping is finally moving towards a greater stimulus to stabilize the property market. His view is therefore that Chinese equities are starting to bottom out. He’s skeptical about the modern private equity industry. He thinks it’s under pressure from the high interest rate environment but that it’s been saved temporarily by inflow into private credit.
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