GungHo Online Entertainment (TSE:3765) - Share price, News & Analysis

3765 fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	0/6
Past Performance	5/6
Financial Health	6/6
Dividends	2/6

3765 Stock Overview

GungHo Online Entertainment, Inc. plans, develops, operates, and distributes online computer games, smartphone applications, and console games.

Rewards

Trading at 46.8% below our estimate of its fair value

Earnings grew by 39.8% over the past year

Risk Analysis

Earnings are forecast to decline by an average of 2% per year for the next 3 years

GungHo Online Entertainment Competitors

Tencent Holdings

SEHK:700

HK$3.3t

Sony Group

TSE:6758

JP¥13.8t

NetEase

NasdaqGS:NTES

US$57.4b

Tapinator

OTCPK:TAPM

US$8.5m

Price History & Performance

Summary of all time highs, changes and price drops for GungHo Online Entertainment
Historical stock prices
Current Share Price	JP¥2,247.00
52 Week High	JP¥3,120.00
52 Week Low	JP¥1,973.00
Beta	0.36
1 Month Change	-13.58%
3 Month Change	-16.75%
1 Year Change	11.07%
3 Year Change	-31.49%
5 Year Change	-17.99%
Change since IPO	298.40%

Shareholder Returns

	3765	JP Entertainment	JP Market
7D	-12.8%	-0.01%	-2.7%
1Y	11.1%	-2.4%	-2.5%

Return vs Industry: 3765 exceeded the JP Entertainment industry which returned -2.4% over the past year.

Return vs Market: 3765 exceeded the JP Market which returned -2.5% over the past year.

Price Volatility

Is 3765's price volatile compared to industry and market?
3765 volatility
3765 Average Weekly Movement	5.9%
Entertainment Industry Average Movement	5.8%
Market Average Movement	4.5%
10% most volatile stocks in JP Market	8.9%
10% least volatile stocks in JP Market	2.5%

Stable Share Price: 3765 is not significantly more volatile than the rest of JP stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: 3765's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1998	1,391	Kazuki Morishita	https://www.gungho.co.jp

GungHo Online Entertainment, Inc. plans, develops, operates, and distributes online computer games, smartphone applications, and console games. The company was formerly known as ONSale Co., Ltd. and changed its name to GungHo Online Entertainment, Inc. in August 2002.

GungHo Online Entertainment Fundamentals Summary

How do GungHo Online Entertainment's earnings and revenue compare to its market cap?
3765 fundamental statistics
Market Cap	JP¥142.72b
Earnings (TTM)	JP¥22.88b
Revenue (TTM)	JP¥104.63b

6.2x

P/E Ratio

1.4x

P/S Ratio

Is 3765 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
3765 income statement (TTM)
Revenue	JP¥104.63b
Cost of Revenue	JP¥43.57b
Gross Profit	JP¥61.06b
Other Expenses	JP¥38.18b
Earnings	JP¥22.88b

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	360.27
Gross Margin	58.36%
Net Profit Margin	21.87%
Debt/Equity Ratio	0.4%

How did 3765 perform over the long term?

See historical performance and comparison

Dividends

1.3%

Current Dividend Yield

9%

Payout Ratio

Valuation

Is GungHo Online Entertainment undervalued compared to its fair value and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

46.8%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: 3765 (¥2247) is trading below our estimate of fair value (¥4223.83)

Significantly Below Fair Value: 3765 is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: 3765 is good value based on its PE Ratio (6.2x) compared to the JP Entertainment industry average (16.5x).

PE vs Market: 3765 is good value based on its PE Ratio (6.2x) compared to the JP market (12.1x).

Price to Earnings Growth Ratio

PEG Ratio: 3765's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

Price to Book Ratio

PB vs Industry: 3765 is good value based on its PB Ratio (1.3x) compared to the JP Entertainment industry average (1.8x).

Future Growth

How is GungHo Online Entertainment forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-2.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 3765's earnings are forecast to decline over the next 3 years (-2% per year).

Earnings vs Market: 3765's earnings are forecast to decline over the next 3 years (-2% per year).

High Growth Earnings: 3765's earnings are forecast to decline over the next 3 years.

Revenue vs Market: 3765's revenue is expected to decline over the next 3 years (-6.7% per year).

High Growth Revenue: 3765's revenue is forecast to decline over the next 3 years (-6.7% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 3765's Return on Equity is forecast to be low in 3 years time (11%).

Past Performance

How has GungHo Online Entertainment performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-5.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 3765 has high quality earnings.

Growing Profit Margin: 3765's current net profit margins (21.9%) are higher than last year (16.6%).

Past Earnings Growth Analysis

Earnings Trend: 3765's earnings have declined by 5% per year over the past 5 years.

Accelerating Growth: 3765's earnings growth over the past year (39.8%) exceeds its 5-year average (-5% per year).

Earnings vs Industry: 3765 earnings growth over the past year (39.8%) exceeded the Entertainment industry 19.4%.

Return on Equity

High ROE: 3765's Return on Equity (21.4%) is considered high.

Financial Health

How is GungHo Online Entertainment's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 3765's short term assets (¥127.5B) exceed its short term liabilities (¥14.9B).

Long Term Liabilities: 3765's short term assets (¥127.5B) exceed its long term liabilities (¥1.4B).

Debt to Equity History and Analysis

Debt Level: 3765 has more cash than its total debt.

Reducing Debt: 3765's debt to equity ratio has reduced from 2.7% to 0.4% over the past 5 years.

Debt Coverage: 3765's debt is well covered by operating cash flow (4656.1%).

Interest Coverage: 3765 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

Dividend

What is GungHo Online Entertainment current dividend yield, its reliability and sustainability?

Dividend Score

1/6

Dividend Score 1/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.34%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 3765's dividend (1.34%) isn’t notable compared to the bottom 25% of dividend payers in the JP market (1.61%).

High Dividend: 3765's dividend (1.34%) is low compared to the top 25% of dividend payers in the JP market (3.61%).

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, 3765 has been paying a dividend for less than 10 years.

Growing Dividend: 3765's dividend payments have increased, but the company has only paid a dividend for 8 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (8.8%), 3765's dividend payments are thoroughly covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (8.3%), 3765's dividend payments are thoroughly covered by cash flows.

Next Steps

Explore strong dividend paying companies in the Media industry.

Management

How experienced are the management team and are they aligned to shareholders interests?

14.8yrs

Average management tenure

CEO

Kazuki Morishita (48 yo)

18.33yrs

Tenure

JP¥208,000,000

Compensation

Mr. Kazuki Morishita has been President and Chief Executive Officer of GungHo Online Entertainment, Inc. since January 2004. He has been Executive Director of Gravity Co., Ltd since March 28, 2008. Mr. Mor...

CEO Compensation Analysis

Compensation vs Market: Kazuki's total compensation ($USD1.61M) is about average for companies of similar size in the JP market ($USD1.39M).

Compensation vs Earnings: Kazuki's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: 3765's management team is seasoned and experienced (14.8 years average tenure).

Board Members

Experienced Board: 3765's board of directors are seasoned and experienced ( 11.2 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/16 00:00
End of Day Share Price	2022/05/16 00:00
Earnings	2021/12/31
Annual Earnings	2021/12/31