Rakumachi, Inc.
What does Rakumachi do?
Rakumachi runs rakumachi.co.jp, a marketplace for income-producing real estate in Japan. Individual investors browse listings and educational content for free. Brokerage agencies pay recurring monthly fees to post properties, and Rakumachi also sells premium subscriptions, off-market matching, video advertising, and valuation services. The portal can add paying agencies to an audience built through search and video without buying a comparable amount of new traffic, which is why the business earns a high margin.
As of January 2026, the site had 487,000 individual users and 5,459 paying agencies. First-half FY07/26 revenue reached ¥1,757M and OP margin was 55.3%. Founder Sakaguchi still owns 68.2% of the company, while the board expanded from four to seven directors in 2025 to add more operating depth. The balance sheet also holds a ¥4.08bn portfolio of US-dollar bonds. That portfolio earns more than domestic cash, but it also keeps a large amount of shareholder capital outside a business earning a much higher return.
Trust in the operating numbers became the immediate issue on May 25, 2026. Rakumachi corrected page-view figures in six earlier filings, while leaving every revenue and profit figure unchanged. On the same day, it authorized a buyback of up to 600,000 shares and ¥500M. The correction does not alter how agencies are billed, because contracts are priced per listing rather than per page view. It does leave investors needing a clear explanation of the new counting method and the controls around it. The share case now rests on three connected questions: whether growth in users and agencies is still real, whether the corrected KPI can be trusted, and whether the bond portfolio will keep accumulating or fund a predictable capital-return policy.
01 · THE RALLY Rakumachi runs one product: the rakumachi.co.jp portal. As of January 2026, 487,000 individual investors use it for free, while 5,459 brokerage agencies pay monthly listing fees to post income-producing properties. Three smaller lines sit on top of that listing model: a patented proposal feature for off-market matching, a Premium subscription with extra tools (ARPU +17% YoY in 1H FY07/26), and tie-up video ads sold to property managers and financial institutions.
02 · THE CONSOLIDATION From the September 2025 peak, the stock fell by about a third over the next eight months, reaching ¥990 on March 13, 2026. But operating performance stayed strong. At the October 2025 annual shareholders' meeting, the board expanded from four directors to seven, adding two long-tenure department heads as inside members. The founder kept his 68.2% holding; the change was governance depth in day-to-day operations. 1H OPM was 55.3% on cumulative sales of ¥1,757M.
03 · WHERE WE STAND NOW On May 25, 2026, the company filed two announcements on the same day. First, a new buyback: up to 600,000 shares (3.09% of shares outstanding ex-treasury) for up to ¥500M, running through November 27, 2026. Second, a correction notice: the company restated page-view figures in six prior filings back to the FY07/25 annual results. The correction was only about page-view counts. No revenue or profit number was changed.
Which debates are driving the stock now?
Measurement, the bond portfolio, and market maturity drive the debate.
- No revenue or profit line was restated, and agency contracts are priced per listing, not per page impression.
- So page-views are a demand signal, but they are not the billing base for cash flow.
- The pattern suggests a process problem rather than one isolated bug. Rakumachi corrected the KPI on the same day as a new buyback and has not named an outside party to verify the revised counting method.
- The dollar-bond portfolio yields 5.5%, well above domestic cash. Founder ownership of 68.2% also makes buybacks more attractive than issuing new stock.
- Non-operating securities still make up about two-thirds of assets while the operating business earns 28.2% on capital. A 20% dividend target leaves too much of that return trapped in a lower-yielding portfolio.
- Rakumachi has 5,459 paying brokerage agencies, about 4% of Japan's roughly 130,000 licensed brokerages.
- That still leaves 96% of the potential market.
- Generalist portals such as SUUMO also list investment properties. Rakumachi therefore has a large addressable market, but not an uncontested one.
What could change over the next twelve months?
Three actions could restore trust and improve capital efficiency.
- Rakumachi has corrected the historical page-view numbers but has not explained how it will prevent another error. It should describe the new counting method and have an outside auditor confirm that it is applied consistently. Without those controls, investors may distrust figures that were never misstated.
- Rakumachi already returns large amounts through buybacks, but each authorization arrives as a surprise. A multi-year policy that returns 80–100% of net income and draws ¥1.0–1.5bn a year from the dollar-bond portfolio would make that behavior predictable.
- Founder Sakaguchi owns 68.2% of Rakumachi, leaving too little stock in public hands for a TSE Prime upgrade. Selling 3–4 million of his existing shares to institutions would widen the float without diluting anyone. Management could then publish a timetable for the market change.
What has to be true for the stock to work from here?
The range depends on trusted growth, capital returns, and the float.
The bear band of ¥700–¥850 implies ~5.5–6.5x FY07/27 forward EV/OP — around the listed Japanese small-cap digital-marketplace peer median of 5.7x (LIFULL 5.8x, GA Technologies 5.6x, Temairazu 5.0x) and toward the private-buyer 5–7x cohort that has cleared in the Japanese small-cap listing-platform space.
The bull band of ¥1,350–¥1,650 implies ~10–13x FY07/27 forward EV/OP — within the Japanese listed digital-marketplace upper band (Azoom 15.5x, GA Technologies 5.6x) and at the lower end of the global niche-portal cohort (Rightmove, REA, Hemnet trade at ~17–25x). The implied multiple at the upper bull band sits just under two turns above today's 11.3x.
This is not investment advice.
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