repro cell presentation
TRANSCRIPT
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ReproCell, Inc. (4978:JP)Paradigm Shifting Business for Extraordinary Return
December 2, 2015
Poon [email protected]
Healthcare Group of Global Markets GroupUniversity of Virginia
mailto:[email protected]
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Agenda
Business OverviewKey Thesis Points
Long term growth opportunitySupport from the Japan Government4 Unique Competitive EdgesTactical Asset Allocation
RisksMacro Global RiskSocial, Political, and Legislative RiskCurrency RiskLanguage BarrierDifficult Money Management
ValuationComparable AnalysisDiscounted Cash FlowTechnical AnalysisSummary of Valuation
Q&AQuestion?Contact Information
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
2 Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Business OverviewReproCell-Innovator in iPS and ESa field
aiPS cell-induced pluripoten stem cell. ES cell-embryonic stem cell.
Who is ReproCell?I Biotech company engage in development of sophisticated
stem cell technologies; iPS and ES cell.
I Two main business segments1. iPS Cell business - Manufacture Research reagents for
human iPS/ES cell research and Provide humaniPS-derived functional cells used in drug discoveryscreening1
2. Clinical testing service business - Provide testing servicesspecialized in bone-marrow transplant and organtransplant.2
1The worlds first commercialized iPS cell - Human iPSC-derivedcardiomyocytes and Human iPSC-derived neurons. Drew global attention as away to replace animal experiments.
2A niche market that large analysis companies are not engaging.
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
2 Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Business OverviewReproCell-Innovator in iPS and ESa field
aiPS cell-induced pluripoten stem cell. ES cell-embryonic stem cell.
Who is ReproCell?I Biotech company engage in development of sophisticated
stem cell technologies; iPS and ES cell.I Two main business segments
1. iPS Cell business - Manufacture Research reagents forhuman iPS/ES cell research and Provide humaniPS-derived functional cells used in drug discoveryscreening1
2. Clinical testing service business - Provide testing servicesspecialized in bone-marrow transplant and organtransplant.2
1The worlds first commercialized iPS cell - Human iPSC-derivedcardiomyocytes and Human iPSC-derived neurons. Drew global attention as away to replace animal experiments.
2A niche market that large analysis companies are not engaging.
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
3 Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Business Overview
I Global provider of differentiated cell types includingiPSC-derived hepatocytes, cardiomyocytes, andGlu/Ach/DA neurons.
I Own Extensive portfolio of embryonic stem cell andinduced pluripotent stem cell culture reagents.
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
3 Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Business Overview
I Global provider of differentiated cell types includingiPSC-derived hepatocytes, cardiomyocytes, andGlu/Ach/DA neurons.
I Own Extensive portfolio of embryonic stem cell andinduced pluripotent stem cell culture reagents.
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
4 Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Business Overview
I Through 4 subsidiaries expanding portfolio of productsand services supporting and addressing the needs ofresearchers and clinicians.
1. Stemgent - Provide mRNA Reprogramming which iscutting-edge technology to increase efficiency and safety iniPS cell production.
2. Bioserve - One of the Largest commercial human tissuebanks in the World.
3. Reinnervate - Provide advanced technology in 3D cellculture, rapidly growing business.
4. Biopta - Drug development Support Service provider tomajor pharma manufacturers by receiving and utilizinghuman fresh tissues and organs from the UK and the US.
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
4 Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Business Overview
I Through 4 subsidiaries expanding portfolio of productsand services supporting and addressing the needs ofresearchers and clinicians.
1. Stemgent - Provide mRNA Reprogramming which iscutting-edge technology to increase efficiency and safety iniPS cell production.
2. Bioserve - One of the Largest commercial human tissuebanks in the World.
3. Reinnervate - Provide advanced technology in 3D cellculture, rapidly growing business.
4. Biopta - Drug development Support Service provider tomajor pharma manufacturers by receiving and utilizinghuman fresh tissues and organs from the UK and the US.
-
36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
4 Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Business Overview
I Through 4 subsidiaries expanding portfolio of productsand services supporting and addressing the needs ofresearchers and clinicians.
1. Stemgent - Provide mRNA Reprogramming which iscutting-edge technology to increase efficiency and safety iniPS cell production.
2. Bioserve - One of the Largest commercial human tissuebanks in the World.
3. Reinnervate - Provide advanced technology in 3D cellculture, rapidly growing business.
4. Biopta - Drug development Support Service provider tomajor pharma manufacturers by receiving and utilizinghuman fresh tissues and organs from the UK and the US.
-
36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
4 Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Business Overview
I Through 4 subsidiaries expanding portfolio of productsand services supporting and addressing the needs ofresearchers and clinicians.
1. Stemgent - Provide mRNA Reprogramming which iscutting-edge technology to increase efficiency and safety iniPS cell production.
2. Bioserve - One of the Largest commercial human tissuebanks in the World.
3. Reinnervate - Provide advanced technology in 3D cellculture, rapidly growing business.
4. Biopta - Drug development Support Service provider tomajor pharma manufacturers by receiving and utilizinghuman fresh tissues and organs from the UK and the US.
-
36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
4 Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Business Overview
I Through 4 subsidiaries expanding portfolio of productsand services supporting and addressing the needs ofresearchers and clinicians.
1. Stemgent - Provide mRNA Reprogramming which iscutting-edge technology to increase efficiency and safety iniPS cell production.
2. Bioserve - One of the Largest commercial human tissuebanks in the World.
3. Reinnervate - Provide advanced technology in 3D cellculture, rapidly growing business.
4. Biopta - Drug development Support Service provider tomajor pharma manufacturers by receiving and utilizinghuman fresh tissues and organs from the UK and the US.
-
36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
5 Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Business OverviewiPS and ES cell-The Future of Healthcare Industry
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis Points6 Long term growth
opportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Key Thesis PointsLong term growth opportunity
I Japans Ministry of Economy, Trade, and Industryestimated the Regenerative Medicine market will grow to 2Trillion yen in 2020, 17 Trillion yen in 2030, and 50 Trillionyen in 2050.
I From 50 Trillion yen forecast market, about 42 Trillion yenis a relevant market for ReproCell.
I ReproCell has a Mid and Long term growth strategy tobecome a leader in the high business potential field ofregenerative medicine.
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis Points6 Long term growth
opportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Key Thesis PointsLong term growth opportunity
I Japans Ministry of Economy, Trade, and Industryestimated the Regenerative Medicine market will grow to 2Trillion yen in 2020, 17 Trillion yen in 2030, and 50 Trillionyen in 2050.
I From 50 Trillion yen forecast market, about 42 Trillion yenis a relevant market for ReproCell.
I ReproCell has a Mid and Long term growth strategy tobecome a leader in the high business potential field ofregenerative medicine.
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis Points6 Long term growth
opportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Key Thesis PointsLong term growth opportunity
I Japans Ministry of Economy, Trade, and Industryestimated the Regenerative Medicine market will grow to 2Trillion yen in 2020, 17 Trillion yen in 2030, and 50 Trillionyen in 2050.
I From 50 Trillion yen forecast market, about 42 Trillion yenis a relevant market for ReproCell.
I ReproCell has a Mid and Long term growth strategy tobecome a leader in the high business potential field ofregenerative medicine.
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis Points7 Long term growth
opportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Key Thesis PointsLong term growth opportunity
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis Points8 Long term growth
opportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Key Thesis PointsLong term growth opportunity
Figure: Credithttps://www.alliedmarketresearch.com/regenerative-medicines-market
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis Points9 Long term growth
opportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Key Thesis PointsLong term growth opportunity
I ReproCell has a Mid and Long term growth strategy tobecome a leader in the high business potential field ofregenerative medicine.
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis Points10 Long term growth
opportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Key Thesis PointsLong term growth opportunity
I Mid and Long term plan has been boost the Companysrevenue. On target to become a Global leader inregenerative medicine business3.
3Sales in Millions of JPY
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
11 Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Key Thesis PointsSupport from the Japan Government
I A Special Zone for iPS Cell Research and Development.
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
12 Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Key Thesis PointsSupport from the Japan Government
I Legislation supports businesses working on regenerativemedicine.
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
13 4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Key Thesis Points4 Unique Competitive Edges
The Power of Synergy-One-Stop solution for Widevarieties of iPS&ES cell products
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
14 4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Key Thesis Points4 Unique Competitive Edges
I Benefit from the Worlds largest human tissue sampleBank = More iPS&ES cell products
I Cutting-Edge technologies in mRNA reprogramming and3D cell culture increase efficiency and safety significantly.
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
15 4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Key Thesis Points4 Unique Competitive Edges
I Biopta Acquisition will further expand the business throughdrug development support services.
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
16 4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Key Thesis Points4 Unique Competitive Edges
Global Scale Marketing channel and Expandinginternet sales
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
17 4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Key Thesis Points4 Unique Competitive Edges
Global Research Network
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
18 4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Key Thesis Points4 Unique Competitive Edges
Acquiring promising seed technologies via a VentureFund - Cell Innovation Partners
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
19 Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Key Thesis PointsTactical Asset Allocation
BOJs QQEI Since the launch of QQE program in early 2013, the
Japanese market has been in a bullish trend.
I With divergent monetary policy between the Fed and theBOJ, JPY will be further weaken. Hence, it is supportivefor exporter like Japan.
-
36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
19 Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Key Thesis PointsTactical Asset Allocation
BOJs QQEI Since the launch of QQE program in early 2013, the
Japanese market has been in a bullish trend.I With divergent monetary policy between the Fed and the
BOJ, JPY will be further weaken. Hence, it is supportivefor exporter like Japan.
-
36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
20 Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Key Thesis PointsTactical Asset Allocation
Figure: TOPIX weekly chart from January 2013 to December 2015.Strong uptrend with two golden crosses.
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
21 Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Key Thesis PointsTactical Asset Allocation
Institutional Investors SupportI The Government Pension Investment Fund (GPIF) of
Japan raised domestic stock allocation from 12% to 25%. .I The Worlds largest public pension fund remain Bullish.I Keep funds flowing into the market.I Recent abnormal surge in volume and On Balance
Volume (OBV) could imply institutional investors sharesaccumulation.
I Institutional investors can drive stock price significantly.
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
22 Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Key Thesis PointsTactical Asset Allocation
Figure: Most recent Assets Allocation of GPIF.
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
23 Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
Key Thesis PointsTactical Asset Allocation
Figure: ReproCell 1 year Weekly Chart. Surge in volume and OBVsupport this new uptrend.
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
Risks24 Macro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
RisksMacro Global Risk
China Economy SlowdownI As the 2nd biggest Economy, Chinas economy does
matter, any slowdown will affect global growth.
I Unavoidably, the recovery of Japans economy can betampered by the Chinas slow down.
Failure of Bank of Japans Quantitative andQualitative program (BOJs QQE)
I If the QQE program fail, the consequence can be muchworse than "the Lost Decade of Japan".
I Investors will lose confidence in the Japanese equitieswhich lead to market sell off.
-
36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
Risks24 Macro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
RisksMacro Global Risk
China Economy SlowdownI As the 2nd biggest Economy, Chinas economy does
matter, any slowdown will affect global growth.I Unavoidably, the recovery of Japans economy can be
tampered by the Chinas slow down.
Failure of Bank of Japans Quantitative andQualitative program (BOJs QQE)
I If the QQE program fail, the consequence can be muchworse than "the Lost Decade of Japan".
I Investors will lose confidence in the Japanese equitieswhich lead to market sell off.
-
36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
Risks24 Macro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
RisksMacro Global Risk
China Economy SlowdownI As the 2nd biggest Economy, Chinas economy does
matter, any slowdown will affect global growth.I Unavoidably, the recovery of Japans economy can be
tampered by the Chinas slow down.
Failure of Bank of Japans Quantitative andQualitative program (BOJs QQE)
I If the QQE program fail, the consequence can be muchworse than "the Lost Decade of Japan".
I Investors will lose confidence in the Japanese equitieswhich lead to market sell off.
-
36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
Risks24 Macro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
RisksMacro Global Risk
China Economy SlowdownI As the 2nd biggest Economy, Chinas economy does
matter, any slowdown will affect global growth.I Unavoidably, the recovery of Japans economy can be
tampered by the Chinas slow down.
Failure of Bank of Japans Quantitative andQualitative program (BOJs QQE)
I If the QQE program fail, the consequence can be muchworse than "the Lost Decade of Japan".
I Investors will lose confidence in the Japanese equitieswhich lead to market sell off.
-
36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
25 Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
RisksSocial, Political, and Legislative Risk
Changing in Healthcare regulationI Any change in regulation can potentially affect ReproCells
business.I However, with the Japans government support on
regenerative medicine business via the newly registeredPMDA4, this risk is subsided.
4The Act on the Safety of Regenerative Medicine, and Pharmaceutical andMedical Device Act or PMDA enforced on November 25 2014. Moreinformation http://www.mhlw.go.jp/english/policy/health-medical/medical-care/dl/150407-01.pdf
http://www.mhlw.go.jp/english/policy/health-medical/medical-care/dl/150407-01.pdfhttp://www.mhlw.go.jp/english/policy/health-medical/medical-care/dl/150407-01.pdf
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
26 Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
RisksCurrency Risk
Weak Japanese Yen due to BOJs QQEI Japanese Yen will continue weakening as a result of BOJs
QQE.I Feds decision on interest rate will affect the direction of
USD/JPY.
Long YCS to mitigate the FX riskI ProShares UltraShort Yen (YCS) will allow investors to
hedge FX risk.I Possible ratio of 2:1 hedging to stay fully hedged5.
5But not perfectly 100% hedged
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
27 Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
RisksLanguage Barrier
Lost in translation (Japanese)I Most Japanese companies will release their materials in
both Japanese and English.I However, it does take awhile until they put English version
on their IR website.I Use Bloomberg terminal, Capital IQ, Thomson Reuters
Eikon, andhttp://www.kaijinet.com/jpExpress/default.aspx tokeep update on earning and news.
http://www.kaijinet.com/jpExpress/default.aspx
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
28 Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
RisksDifficult Money Management
Trading in a board lotI Unlike the US market, trading a stock in the Japanese
market is done in a unit of a board Lot.i.e. 1 Lot = 100 shares, 1000 shares.
I It can be difficult to completely control moneymanagement.
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
Valuation29 Comparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
ValuationComparable Analysis
For a comparable analysis, 8 Japanese companies were usedto calculate multiples6 as shown in the following table.
Company EV/Sales P/TBV7
Takara Bio (4974) 4.7x 2.8xTella (2191) 6.5x 7.0xMedinet (2370) 7.2x 2.2xMediBIC (2369) 14.1x 13.3xJapan Tissue Engi-neering (7774) 27.6x 5.8x
CellSeed (7776) 53.6x 2.7xHealiosK.K. (4593) 161.1x 22.1xReproCell (4978) 20.6x 4.5x
6Most companies have negative earning, hence, only two multiples wereused.
7Multiples from Capital IQ
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
Valuation30 Comparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
ValuationComparable Analysis
Here are different implied share prices.Share Price Share Pricefrom fromEV/Sales P/TBV8
High 2,799 2,142Low 170 211Mean 751 773Median 329 561
8Share Price in JPY
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
31 Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
ValuationDCF
To calculate target price using DCF, here are assumptions.I WACC calculation
1. Corporate TaxRate = 3.64%9
2. Risk Free Rate = 10yr JGB = 0.32%10
3. Risk Premium = 6.8%11
4. Equity = 0.312
5. Industry Equity = 2.76. Cost of Debt = 6.87%7. Cost of Equity-Company = 2.4%
9http://people.stern.nyu.edu/adamodar/New_Home_Page/datacurrent.html#capstru, due to Government Support in Biotech.Normally, tax rate = 33% after the most recent cut from Abenomics.
10Bloomberg11http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/
ctryprem.html12CapitalIQ
http://people.stern.nyu.edu/adamodar/New_Home_Page/datacurrent.html##capstruhttp://people.stern.nyu.edu/adamodar/New_Home_Page/datacurrent.html##capstruhttp://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/ctryprem.htmlhttp://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/ctryprem.html
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
32 Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
ValuationDCF
I Growth rate1. Revenue Growth rate = 35% conservative case13
2. Revenue Growth rate = 70% case 214
I DCF target price1. Case 1 - Conservative case = 535 JPY2. Case 2 - 1% Market Share case = 1,248 JPY
13Much less than companys forecast growth at 150%14Assume that ReproCell has 1% of 2020 Global Market Share (2 Trillions
JPY)
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
33 Technical Analysis
Summary of Valuation
Q&AQuestion?
Contact Information
ValuationTechnical Analysis
I ReproCell share price just broke out from a longdowntrend resistance.
I From the recent movement, the target price will be at1.618 Fibonacci Extensions which is 639 JPY.
Figure: 3 Months Daily chart of Reprocell (4978:JP)
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
34 Summary of Valuation
Q&AQuestion?
Contact Information
ValuationSummary
Summary of ValuationMethod Target Upside RRR15
Price (JPY) Downside(%)EV/Revenue(Comp.) 328 -24 -0.33
P/TBV (Comp.) 560 29 0.28DCF1 535 23 0.34DCF2 1,248 187 0.04Fib. Extensions 639 47 0.17
15RRR=Risk Reward Ratio=Risk/Reward; Assume Risk is 8% cutloss.Ideally, prefer RRR < 0.50
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&A35 Question?
Contact Information
Q&AQuestions Time
The only way you get a realeducation in the market isTo invest cash, Track yourtrade, and Study yourmistakes.
Jesse Livermore
If you have any question, please feel free to ask me.Credit to sharelatex website. 16
16This presentation is created by LATEX
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36
ReproCell, Inc.(4978:JP)
Poon Panichpibool
Business Overview
Key Thesis PointsLong term growthopportunity
Support from the JapanGovernment
4 Unique CompetitiveEdges
Tactical Asset Allocation
RisksMacro Global Risk
Social, Political, andLegislative Risk
Currency Risk
Language Barrier
Difficult MoneyManagement
ValuationComparable Analysis
Discounted Cash Flow
Technical Analysis
Summary of Valuation
Q&AQuestion?
36 Contact Information
Q&AContact Information
In case you have any comments, suggestions or have foundadditional information, please do not hesitate to contact me.You can find my contact details below.
Poon [email protected]
2021 Ivy Road, Apt. B4Charlottesville, VA 22903
mailto:[email protected]
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Thank you for your attention!
Business OverviewKey Thesis PointsLong term growth opportunitySupport from the Japan Government4 Unique Competitive EdgesTactical Asset Allocation
RisksMacro Global RiskSocial, Political, and Legislative RiskCurrency RiskLanguage BarrierDifficult Money Management
ValuationComparable AnalysisDiscounted Cash FlowTechnical AnalysisSummary of Valuation
Q&AQuestion?Contact Information