7523.JP - Art Vivant

[ValueHippie]

This is my first topic on the board, so I hope you like it.

Art Vivant is a really small company with a market cap of just a little over ¥5.9 billion (~$50 million). It is about 2.4x EV/EBIT and trades at just 51% of NCAV. The company wasn't profitable for quite a while, but managed to turn things around and started making money in 2013 again. The company is in very good financial position as well and I don't think current prices are reasonable.

 

The main idea of Art Vivant is to make high priced oil paintings available to more people. So they print those paintings in high quality and sell them (I hope I got that right. Any Japanese guys on this board?). They also sell other art products like tapestries. Like many other Japanese companies they are operating other unrelated businesses as well, like a fitness club, resort business and they also offer financial services. I guess they provide some sort of short term lending to their customers, however, this might be a risk and accounts receivable might be written down.

Recently the company also published an app called Wonder4World, which is some sort of puzzle game, in which users can make in app purchases to gain some advantage. I really do like this business model, but I can’t tell how this venture will turn out, since the app space is pretty crowded and competitive. However, the app is very well designed, which resonates well with the customers. The stock jumped pretty high because of the news, but is on its way down to prices before the announcement. So I think of the app as kind of an option, which could turn out to be extremely profitable or not.

 

I think buying Art Vivant as part of a Japanese basket will turn out pretty well.

[paperwerks]

I bought this as a net net and recently sold it on the spike in price when day traders rushed in to own it when they released Wonder4ful World app which was a completely new business for them.

 

I am waiting the the day traders to capitulate fully before reentering. Hopefully around 400 yen or less. But I think it is still a net net or close to it and doubt that the 4 star resort hotel is fully on the balance sheet.

 

Hope to get back in and sell out quicky again on the release of the next app.

 

This one is weird because it was a net net and a great value stock that got hijacked by day traders on margin buying it for another reason. Lots of good assets and catalysts with this one.