What does Temairazu do?
Temairazu sells one product that matters. Its TEMAIRAZU service is a booking site controller — software a hotel or ryokan uses to manage its room inventory and prices across many online travel agencies (OTAs) such as Rakuten Travel, Jalan and Booking.com, plus its own website, from a single screen.
Customers pay a monthly subscription. About three-quarters of revenue is a fixed monthly fee — a base charge plus options — and the rest is a variable fee that rises with the number of reservations a property takes. The company keeps churn low and signs new properties each year, so the fixed base compounds while the variable slice tracks Japan's inbound-tourism boom.
The business matters because it is mission-critical and almost free to run. A hotel that routes every distribution channel through TEMAIRAZU does not switch lightly. With roughly 41 employees and no factories, the company turned ¥2.19bn of FY2025 revenue into ¥1.61bn of operating profit — a 73% operating margin — and converts nearly all of it to cash.
Those economics have compounded quietly. Revenue and operating profit have risen every year; operating profit reached ¥1.61bn in FY2025, up 8.9%; and the balance sheet holds ¥6.4bn of net cash against no debt. Return on equity is only 16%, but that is the idle cash talking — the operating business itself earns triple-digit returns on the capital it actually uses.
So why does the stock sit at a two-year low — its operating business valued at just 4.6 times yearly operating profit (4.6x EV/EBIT) — with net cash equal to 46% of its market value? That is the question this profile works through: first how the price arrived here, then the three debates that set the multiple, the levers that could close the gap, and finally what the parts are worth.
What has driven the stock over the past two years?
Over 24 months the shares fell 28% while TOPIX rose 44%. The move is not an earnings story — operating profit set records throughout — but a multiple that fell from the low-teens to about 4.6x EV/EBIT. The chart splits the period into four regimes; the pins beneath it trace them.
01 · PEAK REGIME Through the summer of 2024 the shares traded around ¥3,500–3,955, reaching ¥3,955 on August 1, 2024. FY2024 had just delivered revenue up 11.9% and operating profit up 10.9%, and inbound demand was setting records. At the peak the market valued the operating business in the low-teens on EV/EBIT — already modest for a 73%-margin franchise, but supported by the record-tourism story and the hope that the cash pile would be returned.
02 · MULTIPLE COMPRESSION From August 2024 the shares fell for twenty-two months to a two-year low of ¥2,101 on June 3, 2026. Earnings did not fall — operating profit kept climbing to fresh highs — so the move was almost entirely the multiple. Small-cap and growth stocks were sold across Tokyo; investors questioned how much of the variable, reservation-linked revenue was cyclical; and a free float near 24% left few buyers to absorb the selling.
03 · CAPITAL-RETURN PIVOT As the price fell, management leaned harder on buybacks. A ¥800mn program authorized in September 2025 bought its full 260,000-share cap for ¥793mn by May 2026, and the dividend rose from ¥34 to ¥38. The shares still found little support, but the cash was now visibly being returned rather than only accumulating.
04 · CURRENT On June 5, 2026 the company launched a fresh buyback of up to 130,000 shares — about 2.2% of shares outstanding excluding treasury — capped at ¥300mn. The stock closed at ¥2,146: near its two-year low, ~4.6x forward EV/EBIT, with net cash worth 46% of the market value. The next four quarters turn on one question — what makes the market pay a higher multiple, and whether the founder returns enough cash to force it.
Live Investor Debates
Three debates set the multiple. Each is visible in the filings, in the price action, and in the gap between this franchise and how the market values it.
EV/EBIT values only the operating business; it strips out the ¥6.4bn of net cash. So 4.6x is the market's price for the booking-site-controller engine alone — the debate is whether that price reflects the franchise or a discount for control and liquidity.
Fixed revenue grows as Temairazu signs net-new properties and lifts the fee per property; the variable slice rises with reservation volume. Both ultimately depend on a finite number of Japanese accommodation facilities and on the inbound-tourism cycle.
Net cash of ¥6.4bn is about 46% of the market value and earns almost nothing, pulling reported return on equity down to 16% and ROCE to 26%. The operating business needs almost none of it, so what happens to that cash largely decides the multiple.
Capital-Efficiency Levers
Three levers could lift the multiple without a single yen of extra earnings. Each is inside management's control.
Scenario Pathways
At ¥2,146 (June 5, 2026), against FY2026 company operating-profit guidance of ¥1.64bn, an enterprise value of ~¥7.5bn implies about 4.6x forward EV/EBIT. The three scenarios below are JII estimates, not company guidance.
- FY2026 operating profit lands at or below the +1.9% guide.
- No upsized buyback or payout framework; net cash still rising.
- Free float stays near 24%; institutional demand thin.
- Inbound-linked variable revenue softens on a stronger yen.
Even here the downside is cushioned: net cash is worth ~46% of the current market value, so the equity holds a hard floor a strategic buyer would not ignore.
- Fixed revenue keeps growing ~8% on net-new properties and revenue per property.
- Buybacks continue; the ex-treasury share count falls.
- First disclosure of property count or revenue per property.
- EV/EBIT widens toward the high-single digits.
- A formula-based payout or special dividend against the cash.
- Property and revenue-per-property disclosure proves durable growth.
- FY2026 operating profit beats the guide.
- Net cash falls as buybacks accelerate.
The bull band stays just under the ¥3,955 August-2024 high. Intrinsic value can sit higher: the sum-of-parts below points to ¥3,300–4,600 once the cash is credited near full.
This is not investment advice.
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