Jiro Yasu of Varecs Partners, a Tokyo-based value investor with a market-beating record and AUM of ~US$700 million, presented his investment thesis on Oro Co (Japan: 3983) at Asian Investing Summit 2026.
Thesis summary:
Oro is a Tokyo-listed software company whose high-quality Cloud Solutions ERP franchise is obscured by a struggling Marketing Solutions segment, a cash-heavy balance sheet, and a resulting conglomerate discount.
Jiro sees an opportunity to own a founder-led Japanese compounder at a bargain price, with catalysts tied to a potential Marketing Solutions divestiture and further capital-allocation improvement. Founders Atsushi Kawata (CEO, 37.67% ownership) and Yasuhisa Hino (17.02% ownership) started the company in 1999 and, per Jiro, engage openly on shareholder-return and portfolio-optimization topics.
Cloud Solutions, which serves project-based businesses such as IT services, system development, advertising, and consulting, contributes 68% of revenue and 94% of operating profit at segment OPM above 40%. FY2025 segment revenue was 5.6B yen and operating profit 2.5B yen, with 10-year revenue and profit CAGRs of 14.9% and 20.8%. Growth is being driven by new customer additions of 80–90 per year against a base of 1,100 clients, rising licenses per client, NRR of 116%, churn of 0.3%, and the January 2023 shift to SaaS-only contracts, which Jiro expects to support further margin expansion. Management targets 4,000 clients against an estimated 44,000 domestic targets.
Marketing Solutions, concentrated on Nissan and Aeon, generated 2.6B yen of revenue but only 0.1B yen of operating profit in FY2025, with a 10-year profit CAGR of negative 5.6%. Jiro believes a sale for 2–3B yen is plausible, removing a visible drag and allowing the market to reprice the Cloud franchise on its own.
Capital allocation has inflected. Net cash has grown from 1B to 10B yen, or 70% of total assets. Buybacks have stepped up from 500M yen in 2024 to 1B yen in 2025 and another 1B yen announced for 2026, with payout exceeding 40% and a 2.5% dividend yield. Jiro believes Oro should distribute more than 100% of profit going forward given the modest capital needs of the business.
Oro recently traded at 6.7x EV/EBITDA and 15.7x P/E, or roughly 10x ex-cash, a discount to Japanese software peers trading at a median 13.5x EV/EBITDA and 23.4x P/E. VARECS’ three-year base case assumes a 7.6x EV/EBIT multiple on FY2028E EBIT of 4.6B yen and a 10% share-count reduction, yielding ~66% upside from a recent 1,900 yen. A spin-off plus multiple expansion to 10x implies 104% upside; combined with a 25% buyback, upside reaches 145%.
Disclaimer
Asian Investing Summit 2026 was held from April 14-21, 2026. The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.
Slides
Let’s take a closer look.
