Mercari, Inc. (4385.T) fair value

ACCE thesis

Mercari runs Japan's largest consumer-to-consumer marketplace for secondhand goods, alongside its fintech arm Merpay, which handles payments and lending inside the app. The structural case rests on the Japanese secondhand market, where the app has built a large liquid buyer and seller base and a high gross margin (73.7%) that reflects a take-rate model rather than inventory risk. Revenue growth of 27.7% is strong for a business at this scale, and the trailing P/E of 16.9 looks modest against a forward P/E of 34.3, a gap that implies earnings are expected to fall or reset sharply and needs to be understood before any valuation view is formed. Operating margin of 15.6% and ROE of 29.9% suggest the core is profitable, but the forward multiple is the first thing to test, since it signals either an investment cycle in Merpay or a one-off hit to the earnings base. Worth a deeper look to establish which of those explanations holds, and how much of the 27.7% growth is sustainable in a mature domestic market.