4475 HENNGE

HENNGE sells security software that controls how employees log in to cloud services. Recurring revenue still grows, but slowed to 15%, while Microsoft bundles similar security into its E5 license.

▲ Customer count rose 17%, seats rose 12%, and monthly cancellations fell to 0.26% — the base is still growing beneath the slower headline.  ▼ Microsoft's bundle covers the email-protection and identity features HENNGE sells separately. A market for standalone tools shrinks as bundles spread.

Customers run their daily logins through HENNGE, so almost none leave — 0.26% a month. But new customers skew small, and some big ones moved down to cheaper single-feature plans.

▲ Customers keep upgrading to the Pro tier, giving a price ladder across 3,731 companies. Gross margin is 87% and returns on capital are elite.  ▼ Ad spending is growing faster than revenue while growth slows — the classic sign a company is buying its position rather than defending it.

Three co-founders together hold about 48%. In late 2025 the company spent ¥910 million buying back 2.2% of its shares at about 38 times trailing earnings.

▲ The buyback cancelled out roughly three years of share dilution from employee stock grants. A second one at year-end results would make it policy.  ▼ The business earns about 48% on capital kept inside it; buying back expensive shares after growth had already slowed looks like weak discipline.

The business sells for 13.6 years of operating profit. Its capital earns 42.6%. Net cash is 17.8% of the market cap; 11.7% of profit goes out as dividends. Today's dividend yield is 0.5%. Even paying out all of its profit, the yield at today's price would be 4.7% — below the 6% floor, so the case rests on growth and the other squares. At the current payout, the cash pile alone equals today's market cap in about 19.9 years. How this valuation floor works →