2477 Temairazu

Temairazu sells software that lets hotels update room prices and availability on many booking sites at once. Record foreign tourists and a hotel staff shortage keep hotels signing up.

▲ About 75% of revenue is fixed monthly subscription, and the rest rises with every booking. Few customers cancel.  ▼ Japan has a limited number of hotels to sign. Nine-month profit grew slower than sales, and the company forecasts profit up only 1.9% this year.

Hotels run their daily room-selling through this software, and the company earns a 73% operating margin with about 41 employees. New tie-ups with pricing tools deepen the dependence.

▲ If a hotel removes the software, its listings on every booking site break. That switching pain, not patents, is the wall.  ▼ SiteMinder competes worldwide. The company does not disclose how many hotels it serves, what they pay, or how many leave — outsiders cannot verify the lock-in.

Founder Watanabe owns about 62% and is handing cash back: a ¥793mn buyback finished in May 2026, a new ¥300mn one started in June, and the dividend rose two years running.

▲ Only about 24% of shares trade freely. Buybacks keep shrinking that pool, so at some point a special dividend becomes the only way to return cash.  ▼ The buybacks are small next to ¥6.4bn of net cash plus about ¥1bn earned each year. The pile still grows.

The business sells for 4.5 years of operating profit. Its capital earns 23.8%. Net cash is 46.6% of the market cap; 21.3% of profit goes out as dividends. Today's dividend yield is 1.7%. If the company paid out all of its profit, the yield at today's price would be 8.1% — past the 6% level where Japanese small caps tend to find buyers. Raising the payout 10 points a year would reach 6% in about 5.3 years. At the current payout, the cash pile alone equals today's market cap in about 8.4 years. How this valuation floor works →