Sansan (TYO: 4443) - Fundamental Investment Case

A large and evolving market, an expanding blue chip client list, a cloud-based efficiency delivering product and a dominant market position add up to a significant long term growth opportunity.

Sansan provides the Sansan business card management service, primarily for large companies, and the Eight business card management service and social network for small companies and individuals.

The Sansan service has an 81.9% market share. The company estimates new entrants, lacking its accumulated database of reliable card entries checked by back end personnel, would face 15x its current data entry costs.

Sansan is successfully growing customer numbers, average contract value and the number of departments it covers at existing customers. It estimates room to cover 10x its existing company roster and provide the Sansan service to 100x the number of existing users.

A shift from advertising to monetisation, primarily in the loss-making Eight business, is being rewarded with rapid progress towards profitability. The operating loss decreased Y2.2bn YoY in FY 5/19, making the forecast +Y1.6bn YoY improvement into the black in FY 5/20 appear entirely reasonable.