Podcast: An Under-the-Radar Japanese Spin-off

Recently, I had the chance to discuss Hamee Corporation (TSE: 3134) with Evan Bleker of Event Driven Insights.

Hamee Corporation will soon spin-off its high margin software business.

In a nutshell, the setup looks interesting because:

  1. The company is 2 weeks away from breaking up into two separate companies which both look attractive.
  2. It is currently classified as a Specialty Retail company but will spin off a high growth, high margin, SaaS company.
  3. I estimate the spin-off is worth more than the current market cap of the company.
  4. The stock is cheap on an absolute basis (10x NTM earnings, 5.3x NTM EBITDA).
  5. Under the radar (hasn’t been written up on Seeking Alpha, Twitter, or VIC).

To me it looks like a classic “demerger arbitrage” situation and that’s why I bought the stock.

Here’s what we covered:

0:46: Introducing Hamee Corporation

7:25: Hamee Corp’s SaaS Churn

14:17: Hamee is Founder Led with Strong Growth

20:15: Discussion of Hamee’s Balance Sheet.

26:17: Discussion of Key Risks

You can watch the interview here: