OBIC Co.,Ltd. (4684.T) fair value

ACCE thesis

OBIC sells enterprise resource planning software in Japan, centred on its OBIC7 platform for accounting, payroll, and distribution, with a large installed base among mid-sized and large Japanese corporates. The business runs at a 67.7% operating margin and 78.4% gross margin, figures that point to subscription-like economics and high switching costs once a customer's core ledgers sit on the system. Revenue grew 13.2% over the latest period, and the forward P/E of 37.1 against a trailing 32.2 implies the market expects earnings to grow more slowly than sales over the coming year, so the multiple is already carrying a lot of the quality premium. A 16.6% ROE on a business this profitable is worth a closer look at how much capital it actually needs to keep compounding. At a 2.55 trillion yen market cap with no index membership, the name sits in a segment many large-cap screens miss, which may be why it merits a deeper review of its renewal base and pricing power.