The company’s sales grew low double digit y/y since the COVID lows, yet the below peer comp table shows the company is trading at the lowest PE.

Based on my SOTP analysis, the company is trading at roughly a 17% discount to its NAV. Management is aware of this disconnect between intrinsic value and market pricing and is implementing initiatives aimed at narrowing the valuation gap.

The company profile:

A management consulting firm founded in 2000,  Link&Motivation (LMI) (cap: Y56 bn) measures employee expectations and satisfaction, diagnosing the level of engagement between companies and their employees via Motivation Engineering. Based on the results, it provides consulting on training programs and HR systems to enhance employee motivation. In 2016, it shifted these services to the cloud by launching Motivation Cloud, which is the first engagement cloud in Japan, improving profitability. Following the mandatory human‑capital disclosure requirements in 2023, more listed companies have begun publishing the results of these assessments, boosting the company’s sales.

The company also operates career schools offering certification programs and computer training. It runs tutoring schools for elementary, junior high, and high school students, and dispatches Assistant Language Teachers (ALTs). Through its acquired listed subsidiary, OpenWork, it also provides career‑change support.

Leveraging its motivation‑engineering framework to spot companies with significant upside potential, the firm has consistently identified compelling investment opportunities.

• OpenWork: Operates Japan’s largest employee review (“Kuchikomi”) platform. LMI invested in OpenWork pre‑IPO, and the company became a consolidated subsidiary as of January 2020.

• FCE: Provides the no‑code RPA tool RoboPat DX and the HR development platform SmartBoarding across its DX and training businesses. LMI’s stake in FCE increased to 21.31%, and as of September 5, 2024, FCE is accounted for as an equity‑method affiliate. LMI sells FCE’s products for commissions.

My note to the clients discusses my analysis of why LMI offers all three growth drivers within a single stock.

If you’re interested in learning more about LMI and its growth potential, I’d like to invite you to experience my service—completely free of charge. I am confident that once you discover the value, convenience, and quality I offer, you’ll be glad you gave me a try. Some of my clients who have a dedicated Japan research team find my take unique and actionable.

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