3983 — oRo Co., Ltd.

Deep-value analysis — oRo Co., Ltd. (TSE Prime: 3983)

Date: 28.08.2026 · Reference price: JPY … (close 28.08.2026) · Market cap: JPY 32.0 bn · Reporting and pricing currency: JPY (identical) · Accounting standard: IFRS since fiscal 2021 · Fiscal year: January-December

Primary sources: FY2025 決算短信 (IFRS, consolidated, filed 13.02.2026, TDnet 140120260212556631), H1 2026 決算短信 (filed 14.08.2026, TDnet 140120260812518396), the H1 2026 results presentation (58 pages, 14.08.2026, TDnet 140120260812518498), ownership and leadership data from the 有価証券報告書 aggregated by IRBANK (E33039), price and balance-sheet series from yfinance. Figures from financial statements take absolute priority over any secondary source.

Identification note — correction to the session’s preliminary material. The research briefing auto-generated on the morning of 28.08.2026 analyzed China BlueChemical Ltd. (HKEX: 3983), a completely different company. The tracker (“Sumar” sheet, row 228) lists for symbol 3983: “Oro Co., Ltd.”, Exchange = TSE, ISIN JP3201900002, price in JPY. The JP… ISIN confirms the Japanese issuer. Consequently the entire pre-existing research briefing was discarded, and this analysis is built exclusively on the Japanese company’s filings. The alias "3983": ("3983.T", "Oro Co., Ltd.") was added to deep_data_pack.py so the error doesn’t recur. This morning’s data pack was completely empty for the same reason; it was regenerated.

Executive summary

The thesis. oRo is two businesses glued into one shell, and the market prices both as if they were the bad one. The core — the Cloud Solution segment, i.e. the “ZAC” cloud ERP for Japanese knowledge-services firms (IT, advertising, consulting) — is a subscription with a 44% segment margin, a monthly churn rate of 0.3%, over 1,100 cumulative client companies, and a recurring base that grew from JPY 1.81 bn (2022) to 3.88 bn (2025), a 28.9% CAGR. Layered on top of this core, in 2024-2025, were two things that spoiled the headline numbers: (1) perpetual-license runoff — the company stopped selling “buyout” contracts from January 2023 and is recognizing what it already collected over ~30 months, meaning near…-margin revenue that’s extinguishing from JPY 764 mn (2024) to 435 mn (2025), ~130 mn (2026E), and zero from 2027; and (2) the Marketing Solution segment’s collapse, where profit fell from JPY 557.8 mn to 148.2 mn (…) because two large clients (the Aeon group and the Nissan group) cut their advertising budgets.

Result: in 2025 consolidated revenue grew only 5.2%, operating profit fell 2.6%, and net profit fell 8.5% — the first decline since 2016. The stock has fallen from its 2020 high of JPY 4,725 to …, i.e. …, and trades at the bottom of its nine-year band (P/E 13.7-82.8x since 2017; today …x on the trailing 12 months).

What the market sees is a Japanese ERP growing 5%. What the revenue breakdown in the filing shows is something else: excluding perpetual-license amortization, Cloud Solution revenue grew 25.5% in 2025 and 21.5% in H1 2026, and segment profit adjusted by the same amount grew 23.3% in H1 2026 versus a reported …. The headwind disappears entirely in 2027.

The balance sheet. Zero interest-bearing debt. The only financial liabilities are IFRS-16 lease obligations (JPY 751.7 mn at 30.06.2026), for offices. Cash plus term deposits: JPY 10,192 mn, i.e. JPY 620/share out of the JPY … price — 29.5% of market cap sits in the bank. The “ex-cash” price is JPY 1,485, i.e. 10.8x the projected 2026 net profit. The enterprise value of JPY 22.6 bn means 7.7x projected 2026 operating profit and 10.9x the trailing-12-month free cash flow to shareholders.

Estimated value. Five triangulated models give a wide range, from … to … margin of safety, with a median of …. A Monte Carlo simulation (20,000 scenarios, the same DCF formula as the tracker, with my assumptions) gives a median intrinsic value of JPY 3,181, with P10 at … and P90 at …, and a …% probability the stock is undervalued. The no-growth earnings power value (Greenwald, maintainable EBIT JPY 2,800 mn, r = 9%) is JPY 2,078 — practically the current price. In other words: at JPY … you pay the value of the business if it never grows again, and you get both the core SaaS business’s 20%+ growth and the disappearance of the 2027 headwind for free.

The verdict. BUY, medium-size position. It isn’t a risk-free business — client concentration in Marketing, Adobe’s acquisition of Semrush, decelerating new-customer acquisition in H1 2026 (33 of 104 planned), and, above all, 57% control held by two founders who can’t be challenged by minorities — but at …x profit, with 30% of market cap in cash, with JPY 3.05 bn of buybacks over three years and effective cancellation of the repurchased shares, the ratio between what you pay and what you get is clearly favorable. What I don’t support is a large position: the Monte Carlo range (P10 …, P90 …) is too wide for that, and the width comes from real uncertainty in the flow base, not noise.