Thanks for the write up, learned a lot. I was looking into competitors of Round1 as I did a stock pitch on them recently. Saw your pitch being shared by stock analysis compilation and glad I clicked. How do you think Genda compares to Round1? Also, in terms of valuation, what would you say is a good entry point to start buying? What is a fair valuation for Genda?
Thanks for the feedback and question. Had a look at your Round1 pitch and it was very insightful.
I think Genda and Round1 are certainly competitors in Japan but also in the US. They both seem to see a big opp in the US abroad. Difference there is that Round1 is opening more full-on facilities whereas Genda is focused more on 'mini-sites' that are unmanned for now. What I like with Genda is the calibre of management.
In terms of valuation I've added some thoughts in Part 2 (also link to your Round1 report if you don't mind!) but the short of it is that I think its not super expensive at the moment but not super cheap either I'm estimating FCF yield of about 4-5% conservatively. If you compare to other roll-ups in Japan its still very cheap though.
Round1 is also experimenting with small crane game stores. It is yet to be seen if they will have staff on-site or not. Given that in the US, they have Round1 points cards, I believe they will have staff, which means potentially higher revenues due to better customer service at a major sacrifice of margins. The specialized crane game stores in Japan provide customer assistance when they lose too much, this has yet to be seen in the US. I would like to see management experiment with the prize assistance at a few US stores to see what the results are.
Yes, feel free to link to my report. Thanks for asking and appreciate the exposure!
In Japan, let's say you lose 5 times in a row. You can ask the store staff for assistance to put the prize in a better spot so it is easier to win. If you still can't win, you can ask the staff again, and they will put it in an even easier to win spot. Hope that makes sense.
Thanks for the write up, learned a lot. I was looking into competitors of Round1 as I did a stock pitch on them recently. Saw your pitch being shared by stock analysis compilation and glad I clicked. How do you think Genda compares to Round1? Also, in terms of valuation, what would you say is a good entry point to start buying? What is a fair valuation for Genda?
Thanks for the feedback and question. Had a look at your Round1 pitch and it was very insightful.
I think Genda and Round1 are certainly competitors in Japan but also in the US. They both seem to see a big opp in the US abroad. Difference there is that Round1 is opening more full-on facilities whereas Genda is focused more on 'mini-sites' that are unmanned for now. What I like with Genda is the calibre of management.
In terms of valuation I've added some thoughts in Part 2 (also link to your Round1 report if you don't mind!) but the short of it is that I think its not super expensive at the moment but not super cheap either I'm estimating FCF yield of about 4-5% conservatively. If you compare to other roll-ups in Japan its still very cheap though.
Round1 is also experimenting with small crane game stores. It is yet to be seen if they will have staff on-site or not. Given that in the US, they have Round1 points cards, I believe they will have staff, which means potentially higher revenues due to better customer service at a major sacrifice of margins. The specialized crane game stores in Japan provide customer assistance when they lose too much, this has yet to be seen in the US. I would like to see management experiment with the prize assistance at a few US stores to see what the results are.
Yes, feel free to link to my report. Thanks for asking and appreciate the exposure!
what does it mean "provide customer assistance when they lose too much,"?
Check out my free stock pitch on Round1: https://continuouscompounding.substack.com/cp/141072478
I also have a post detailing the business economics of Round1, but that is for paid subs only.
In Japan, let's say you lose 5 times in a row. You can ask the store staff for assistance to put the prize in a better spot so it is easier to win. If you still can't win, you can ask the staff again, and they will put it in an even easier to win spot. Hope that makes sense.
Keep up the good work!
Thank you so much for the kind words!
Brilliant start mate
Thank you!
Congrats on your first substack post, Made in Japan. Looking forward to more!
Thank you Jam-san!