Temairazu, Inc.
What does Temairazu do?
Temairazu provides TEMAIRAZU, software used by hotels and ryokan to manage room inventory and prices across multiple booking channels from one screen. Those channels include online travel agencies such as Rakuten Travel, Jalan, and Booking.com, as well as the property's own website.
Customers pay mainly through monthly fees. About three-quarters of revenue comes from fixed monthly charges, including the base fee and optional services. The rest comes from variable fees linked to reservation volume. This means the business has a recurring subscription base, with an additional revenue layer that rises when customer booking volume increases.
The product matters because it sits inside the hotel's daily sales process. Once a property uses TEMAIRAZU to manage many booking channels, switching systems would create operational risk. That keeps churn low and lets new customer additions build on the existing revenue base.
The economics are unusual. In FY06/25, Temairazu generated ¥2.19bn of revenue and ¥1.61bn of OP, a 73% OP margin. The company has roughly 41 employees, no manufacturing assets, and very little capital required to run the business, so most OP turns into cash. Reported ROE is only 16%, mainly because the large cash balance lowers it; returns on the operating capital actually required by the business appear to be much higher.
The stock does not reflect that quality. At ¥2,146 on June 5, 2026, the shares traded at about 4.6x forward EV/OP, while net cash was equal to roughly 46% of the market value. The valuation question is why the market is applying such a low multiple to a business with recurring revenue, high margins, and a large net cash balance.
What has driven the stock over the past two years?
Earnings rose while the valuation multiple fell sharply.
01 · When investors still paid for the tourism-growth story Through the summer of 2024 the shares traded around ¥3,500–3,950, reaching ¥3,950 on August 1, 2024. FY06/24 had just delivered revenue up 11.9% YoY and OP up 10.9% YoY, and inbound demand was at record levels. At the peak the operating business was valued in the low-teens on EV/OP — already modest for a business with 73% margins, but investors were still willing to pay for the record-tourism growth story and expected management to return more of the cash balance to shareholders.
02 · When the multiple fell despite record profit From August 2024 the shares fell for twenty-two months to a two-year low of ¥2,120 on June 3, 2026. OP continued to reach new highs, so the share-price decline came mainly from the valuation multiple. Small-cap and growth stocks were sold across Tokyo; investors questioned how much of the variable, reservation-linked revenue was cyclical; and the limited free float near 24% meant there were not enough natural buyers when holders sold.
03 · When management began returning more cash As the share price fell, management increased buyback activity. 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 share price remained weak, but management had started to return cash instead of only letting it build on the balance sheet.
04 · Where the stock stands now The stock closed at ¥2,146 on Friday, June 5, 2026, near its two-year low, and traded at about 4.6x forward EV/OP, with net cash worth 46% of the market value. After the close that day the company announced a new buyback of up to 130,000 shares — about 2.2% of shares outstanding excluding treasury — capped at ¥300mn, with purchases running from June 8 to October 30.
What investors disagree about
Growth runway, cash use, and the low multiple define the debate.
EV/OP looks at the operating business after removing net cash; it strips out the ¥6.4bn of net cash. So 4.6x is the market's price for the TEMAIRAZU operating business alone — what matters is whether that price reflects the quality of the business or a discount for founder control and limited liquidity.
- The valuation has fallen while OP reached a record. About 75% of revenue recurs, churn remains low, and buybacks retire more shares when the price is depressed.
- The low multiple may persist. The free float is only ~24%, the founder controls ~62% through 68k Inc. and his own holding, and no growth source beyond the domestic hotel base has been disclosed.
Fixed revenue grows as Temairazu signs net-new properties and raises the fee per property; variable revenue rises with reservation volume. Both depend on how many accommodation facilities in Japan can still be added, and on the inbound-tourism cycle.
- Record inbound tourism and hotel labor shortages both increase the value of booking automation. Fixed revenue growth around 8% would show that Temairazu can keep raising revenue per property even as the domestic hotel count matures.
- The domestic customer base may be getting harder to expand, and management has not disclosed an overseas or adjacent growth engine. If FY06/26 OP merely meets the 1.9% growth guide, the slowdown will look structural rather than temporary.
Net cash of ¥6.4bn is about 46% of the market value and appears to earn little return, pulling reported ROE down to 16% and ROCE to 26%. Investors are likely to value the company differently depending on whether that cash is returned, invested, or left idle.
- Management has started to return cash while the share price is low.
- Two buybacks in a year — ¥793mn completed and ¥300mn just launched — plus a dividend guided up to ¥40 show intent, and every share bought near a two-year low raises per-share value.
- The buybacks are still too small to reduce the cash balance meaningfully.
- At ¥0.3–0.8bn a year against ¥6.4bn of cash and about ¥1bn of annual generation, the cash balance can continue to rise, and the company has returned cash without committing to a payout framework or a target balance.
Capital-Efficiency Levers
Management can remove much of the discount without faster earnings growth.
- Net cash equals about 46% of market value and earns little. A credible plan to reduce it would give shareholders more of the value already on the balance sheet. FY06/26 results are the next opportunity for management to state a capital-return policy.
- The company says churn is low and the fixed base grows, but does not disclose the property count, the revenue per property, or a churn number.
- A single quarterly slide showing properties and revenue per property would let investors verify the recurring revenue base and reduce the discount caused by limited disclosure.
- The lowest-cost growth path is to earn more from existing customers.
- Because the cost base is near-fixed, much of the additional revenue could flow through to OP; combined with variable fees that rise with reservation volume, this is how revenue can keep growing even where the domestic property count is limited.
Scenario Pathways
The cases start from ¥2,314 and FY06/26 OP guidance.
Even in this case, net cash limits the downside to some extent: it is worth ~46% of the current market value, a large cash balance that would matter in any strategic valuation.
The bull band stays just under the ¥3,950 August-2024 high. The implied fundamental value could be higher: the sum-of-parts below points to ¥3,300–4,600 if investors give most of the cash balance full value.
This is not investment advice.
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