MTG has been described as one of Japan’s few ‘unicorns’ – technology companies that are valued at over $1 billion but have shied away from listing. MTG debuted on the Tokyo Stock Exchange this week and immediately saw a jump of more than 30% in its asking price as investors rushed into the stock.
But who is MTG?
MTG has been around since 1996. It has carved out a successful niche for itself in Japan and in overseas markets by bridging the gap between cosmetics and gadgets. It works with medical institutions, universities and celebrities to build and market devices that can help promote a healthier lifestyle and a more beautiful you.
It developed Sixpad with Portuguese football ace Cristiano Ronaldo – this is an abdominal muscle training aid which has sold more than one million units. It has also developed a skincare brand called MDNA SKIN, which it has promoted with the aid of Madonna. Or then there’s its facial beauty roller device, ReFa.
Looking at the numbers for MTG, the company reported proceeds of $409 million in September 2017, with profits of $5.5 million. The current net profit is around the $38 million, giving it an EPS of around 20. It is now trading well north of the public offer price.
MTG IPO follows in footsteps of Mercari
The MTG IPO is the second major technology IPO on the Tokyo Stock Exchange this summer, following the listing of Mercari, which went live in June and saw its share price soar 67%. But Mercari shares are now down from their IPO at JPY 5300 – they closed today in Tokyo at 4555. That’s not to say that MTG IPO is going to go the same way, but some brokers in Japan are questioning the market’s appetite for big name technology IPOs which are priced too high and trade initially purely on enthusiasm that has little foundation on the rugged sales data.
It is fair to say that the profits achieved from early stage investors in some big brand tech stocks has left the market with plenty of appetite for unicorns that take the plunge and list. MTG has been in its space since 1996, giving it more longevity than Amazon or Google.
While the MTG IPO will likely remain one of the biggest IPOs in Japan this year, that EPS looks quite high and it may be we see the price come off a bit over the next few months as the hot money flows out. But once that has happened, this could end up being a solid technology play with a good domestic market for its product.