1、 The Stars of Asian SaaSThe Companies You Need to Know About in Asias Software-as-a-Service SectorResearchReinventedSmartkarma is a globalinvestment research networkthat brings togetherindependent Insight Providers,institutional investors,andcorporate investor relationsprofessionals and management.A

2、t Smartkarma,We Do Things DifferentlyWe leverage the online economy,applying this innovative mindset to capital markets.For a single subscription,Smartkarma users can consume all the research they need,just like Netflix enables viewers to watch unlimited hours of content on its platform.At the same

3、time,we address a growing need for a modern approach to corporate access.In 2019,we launched Corporate Solutions,which allows company executives and investor relations personnel to connect seamlessly to investors and analysts,all within a single network.In this effort,we work closely with global exc

4、hanges such as Singapore Exchange,which became our investor,to provide such services to listed companies worldwide.Our model ensures that the research on our platform is objective and unbiased,independent and free from conflicts of interest.The platform determines appropriate pricing according to th

5、e quality and value of each research piece.This helps independent Insight Providers monetise their research and incentivises them to produce truly quality,differentiated work that stands out from the rest of the market.A commitment to quality is also why we carefully vet and select our Insight Provi

6、ders.Less than 10 percent of the independent analysts who apply are approved as Insight Providers on Smartkarma.We currently have over 100 such curated Insight Providers publishing on the platform,ranging from one-person operations to teams of multiple members around the world.In the following pages

7、,you will be able to see for yourself the result of our efforts.In the meantime,we will be busy bringing you more exciting developments over the course of the year!2Cover photo by Lukas from PexelsThematic(Sector/Industry)Asian SaaS Stars:Opportunities,MarketOutperformance,&KeyChallengesBy Douglas K

8、im|02 Aug 2020EXECUTIVE SUMMARYThe Asian Software-as-a-Service(SaaS)is a highly fragmented sectorfilled with numerous innovative companies.Thousands of companiescompete in the Asian SaaS sector.In this insight,we have included 105companies,including 56 public companies and 49 private companies inAsi

9、a.The 56 public companies have a total market cap of$367.2 billion won.The top 10 companies in this list have a total market cap of$298.1 billionwon.Among the top-ranked companies,those from India and Australiastand out.India and Australian companies accounted for 8 out of 10 top-ranked companies in

10、 this list.We have provided the rankings of thesecompanies on their market cap basis.We have included 6 major countries/regions in Asia including Japan,China,Australia,India,Korea,andSoutheast Asia(Singapore,Malaysia,and Thailand).Keep in mind that although these 56 public companies all providesome

11、sorts of SaaS related products and services,not all of them have a100%SaaS business model.Rather,for most of these software-relatedcompanies,SaaS is becoming a greater portion of their incomingrevenues.Among all the public companies,Atlassian Corp(TEAM US)(Australia)is probably the biggest pure-play

12、 SaaS company right now with amarket cap of US$42.7 billion.The 49 private companies that we haveincluded in this insight tend to be smaller companies but they tend to bemore pure-play SaaS providers.SaaS is becoming more important in companies,our homes,and in our livesdue to the accelerating evolu

13、tion of technology in terms of greater adoptionof cloud-based services,smartphones,AI,Big Data,IoT,and increasingprogramming sophistication that reduces the need for human,manuallabor.Adam Smith would be very proud of SaaS today,as massive amountsof global venture capital and start-up funding have t

14、ried to acceleratepromising SaaS companies as the global competition has forced the very bestcompanies to sprout in this highly competitive market.Asian SaaS Stars:Opportunities,Market Outperformance,&Key Challenges3In Asia,some of the best companies in the SaaS segment include Atlassian(Australia),

15、After Pay(Australia),Xero(Australia),One Connect(China),Kingdee(China),Kingsoft(China),Douzone Bizon(Korea),Freee KK(Japan),and Rakus(Japan).The main purpose of this report is as follows:Identify the major players(both public&private)in the highlyfragmented SaaS sector in AsiaSpecify the key trends

16、driving the Asian SaaS industryProvide an initial overview of the key companies in the AsianSaaS industryHighlight the main risks of this industryDETAILCorrigenda:There is an error in this insight.Please note thecorrection.Correction:In the 2nd paragraph of the Executive Summary:Instead of“The 56pub

17、lic companies have a total market cap of$367.2 billion won.”should read“The 56 public companies have a total market cap of$367.2 billion.”What is Software?A simple definition of software is a system usedby computers,smartphones,or other digital devices which helps tosolve problems,reducing the need

18、for manual,human work.What is SaaS?A simple definition of SaaS is software that islicensed on a subscription basis so the incoming revenues are morerecurring and it is mostly run on a cloud-based system.The SaaS related stocks in Asia so far have had a banner year in terms oftheir share price perfor

19、mances.The SaaS related stocks in Asia are up onaverage 43%YTD,far outperforming most Asian countries equity indices.Many of the top SaaS related stocks in Asia are up more than 100%since thelows in March 2020.The big unknown&the big investment risk-Covid-19 has actuallyplayed a big positive factor

20、in pushing up the share prices of the many AsianSaaS related stocks this year.This is mainly due to the increasingtelecommuting,social distancing,greater use of e-commerce,smartphoneapps,and accelerated efforts to reduce human labor and improveAsian SaaS Stars:Opportunities,Market Outperformance,&Ke

21、y ChallengesDouglas Kim4productivity in remote non-office environments.However,it is difficult toexactly pinpoint how much of the share price appreciation of the SaaSrelated stocks in Asia this year has been due to the global spread ofCovid-19.The SaaS related stocks in Asia are up on average more t

22、han 40%this yearand perhaps we reasonably guess that at least one-third to one-half of thisappreciation may have been due to COVID-19.A huge amount of globalasset managers have reduced their holdings in major sectors such as banksand retail due to COVID-19 and instead have poured more money intosect

23、ors such as software(SaaS),biotech/healthcare,and F&B.We do not know exactly when a highly effective,cost-effective vaccine forCOVID-19 will be finally ready on a global basis.However,given theenormous amounts of capital and brain-power that are being spent to curethis disease,we could reasonably es

24、timate that this vaccine could be readyby 2022/2023.Nonetheless,there are many people that believe a cure couldtake a much longer time but there are also optimists who believe a curecould be found in the next 12 months.If and when an effective vaccine for COVID-19 is found,there could be acertain pe

25、riod(we do not claim to know how long)when the key sectors suchas software(SaaS),biotech/healthcare,and F&B that have outperformed(inpart)due to COVID-19 could underperform.In addition,there are seriousconcerns about excessive valuations in the SaaS sector right now,which alsoneeds to be considered.

26、What is a solid approach to researching and investing in the AsianSaaS sector?Our mandate is to find the 200 best companies in the world and investin them,and find the 200 worst companies in the world and go shorton them.If the 200 best dont do better than the 200 worst,youshould probably be in anot

27、her business.(Julian Robertson,Founderof Tiger Management)The quote above from Julian Robertson is probably a good starting point intrying to find the best SaaS companies in Asia.The market cap ranking ofthe top SaaS related companies by each country is probably a good place tostart,as the market ca

28、p reflects the potential free cash flow and earningspotential of these companies.As such,for each of the six major countries/regions in Asia in this report,we would target the top 5 companies for eachcountry/region,which would be about 30 companies in total.We would thenlook closely at metrics such

29、as the companies sales growth,profit margins,and valuations(such as P/S),as well as their core business models,customers served,strengths,and weaknesses.“Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim5One of the unique aspects of the SaaS sector is that it touches up

30、on so manyother industries and sectors.Whether it be financials,energy,utilities,consumer B2C e-commerce,telecom,and government,there are so manyexisting and new types of software that try to improve the current workflowor business processes.In addition,in researching this sector I have found that p

31、erhaps the threemost important countries globally could be the United States,India,andAustralia.The U.S.is a clear powerhouse in driving the major changes anddevelopments of the SaaS sector.India and Australia are also very importantin terms of keeping pace with these developments and in oftentimes

32、actuallyleading the new innovations of the global SaaS sector.One of the keyreasons for this may be people and the common use of the English languagein thee countries.India has some of the best and numerous personnel whoare so adept at coding skills and due to the extensive homegrown andmultinationa

33、l software companies with offices in India,it has becomeinevitable that the global SaaS industry is driven by the best companies inIndia.Major SaaS Companies in Asia(Ranked in Terms of Market Cap)The table below ranks all the 56 public SaaS related companies inAsia that we have included in this insi

34、ght,ranked in terms of marketcap.The average and median P/S multiples(2019)of these 56companies are 14.3x and 6.5x,respectively.The total market cap ofthese 56 companies is US$367.2 billion.The average and median operating margins of these 56 companieswere 5.7%and 12%,respectively in 2019.The averag

35、e and median%YoY change in sales was 27.5%and 18.4%,respectively in 2019.Remember that not all of this sales growth is organic but some of itcame from acquisitions.Overall,the sales growth of the SaaS sectorin Asia remains very healthy.Major SaaS Companies in Asia(Ranked in Terms ofMarket Cap)Compan

36、iesCodeCountryMkt cap:US$billionP/S(X);2019OP Margins(2019);(%)%YoY Change inSales(2019)Tata ConsultancyServicesTCSIndia108.55.224.6%7.2%InfosysINFYIndia52.34.121.5%8.3%AtlassianTEAMAustralia42.735.3-5.2%37.3%HCL Technologies532281India24.82.519.6%15.1%Wipro LtdWITIndia22.62.817.3%15.1%AfterPayAPTAu

37、stralia13.371.7-12.0%85.6%XeroXROAustralia9.112.74.6%29.9%Tech MahindraTECHMIndia8.41.712.0%6.1%OneConnectOCFTChina8.325.1-73.1%64.7%Kingdee268China8.016.712.7%18.4%Kingsoft3888China7.66.4-2.4%39.1%Travelsky696China5.54.730.3%8.7%Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDo

38、uglas Kim6Wisetech GlobalWTCAustralia4.819.623.0%57.2%AgoraAPIChina4.671.8-9.3%47.4%Fortune TrendSHAChina3.6112.4NA15.9%WeiMob2013China3.416.32.6%66.1%Altium LimitedALUAustralia3.017.633.1%22.6%Linkage SoftwareCo.688588China2.934.3NA27.7%Mphasis526299India2.82.415.9%12.8%Douzone Bizon012510Korea2.61

39、1.925.4%15.8%BaozunBZUNChina2.62.56.3%35.0%Freee KK4478Japan2.456.0-62.7%87.0%MindTree532819India2.22.110.5%10.6%Yeahka9923China2.16.415.6%127.4%Rakus3923Japan2.018.310.1%32.8%Technology OneLimitedTNEAustralia1.99.426.2%13.1%Sansan4443Japan1.713.45.7%30.9%Money Forward3994Japan1.522.5-34.2%55.8%NIIT

40、532541India1.42.613.2%13.8%Base4477Japan1.331.4-33.9%63.6%JinXianDai300830China1.217.7NA13.6%Bravura SolutionsBVSAustralia0.84.216.5%16.3%Fang DDDUOChina0.71.4-14.9%57.7%FineosASXAustralia0.79.70.0%16.7%Uzabase3966Japan0.76.1-9.9%34.1%Silverlake Axis(Singapore)5CPSingapore0.53.340.1%25.7%Ahnlab05380

41、0Korea0.53.611.0%4.5%Cafe24042000Korea0.42.34.5%31.3%Rsupport131370Korea0.416.520.4%15.4%iClick InteractiveAsia GroupICLKChina0.413.7-6.1%24.6%HansenTechnologiesLimitedHSNAustralia0.42.414.3%0.2%Webcash053580Korea0.36.515.2%-21.5%NeoJapan3921Japan0.39.018.7%40.6%Hancom030520Korea0.31.210.4%50.0%Kore

42、aCenter290510Korea0.31.54.3%32.6%WhispirWSPAustralia0.211.4-50.2%11.9%Netbay(Thailand)NetbayThailand0.215.141.4%13.8%Humanica(Thailand)HUMANThailand0.29.226.0%16.2%Citadel Group LtdCGLAustralia0.22.514.6%-6.9%Ezwel090850Korea0.11.711.4%12.6%Exem205100Korea0.13.918.3%6.5%Wise I-Tech065370Korea0.15.11

43、4.7%19.4%Opensys(Malaysia)OPENSYSMalaysia0.12.115.9%-8.2%IFCA(Malaysia)IFCAMSCMalaysia0.12.629.8%13.8%Synagie(Singapore)V2YSingapore0.03.1-49.0%20.5%Revez(Singapore)RCUSingapore0.07.19.5%NMAsian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim7Total367.2Top 10 Companies298.1

44、Top 20 Companies338.9Average14.35.7%27.5%Median6.512.0%18.4%Source:Companies data,Yahoo Finance,Google FinanceThe chart below provides the ranking of the SaaS related stocks in Asia(interms of market cap).It includes 31 companies whose market cap is at leastUS$1 billion.Most of these 31 companies ar

45、e in India,Australia,China,andJapan.Source:Companies data,Yahoo Finance,Google FinanceThe chart below shows the average 2019 P/S multiples and%YoYchange in sales(2019)by major Asian countries(publicly listed Saasrelated companies).Both Japan and China are on the top right-handcorner,displaying high

46、P/S valuation multiples and high salesgrowth.On the other hand,India,Korea,and Southeast Asia tendto be on the bottom left-hand corner,displaying lower P/S multiplesand lower YoY%change in sales.Australia is in the middle,withaverage P/S multiple of 17.9x and YoY sales growth in 2019 of 25.8%.Asian

47、SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim8Source:Companies data,Yahoo Finance,Google Finance;Our dataThe two pie charts below show the SaaS related stocks in Asia(56companies in our list)in terms of the percentage of total market cap(by countries).The first pie chart

48、shows India,Australia,and Chinaas the top three countries with 60.7%,21%,and 13.9%of totalmarket cap,respectively.In the second pie chart(excluding the top3 software stocks in India),Australia would have the largest share(42.4%),followed by China(28%),and India(20.6%).The top 3 software companies in

49、 India include Tata ConsultancyServices,Infosys,and HCL Technologies and although SaaS isbecoming a growing portion of their revenues,their business modelsare not currently 100%based on SaaS.As such,there may be somemixed perceptions among some investors who prefer to eitherinclude or exclude these

50、major Indian software companies as part ofSaaS companies.Many investors view these companies as more offully-integrated IT service providers as they are not pure-play SaaScompanies.Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim9Source:Companies data,Yahoo Finance,Goo

51、gle FinanceSource:Companies data,Yahoo Finance,Google FinanceAsian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim10The chart below shows a ranking of the top 20 SaaS relatedcompanies in Asia(in terms of their OP margins in 2019).Weincluded only those companies with a marke

52、t cap of at least US$0.5billion.The top five companies with the highest operating marginsinclude Silverlake Axis(Singapore),Altium(Australia),Travelsky(China),Technology One(Australia),and Douzone Bizon(Korea).The average operating margins of these five companies were 31%in2019,which was much higher

53、 than the average rate of 5.7%for the56 companies in total in 2019.Source:Companies data,Yahoo Finance,Google FinanceThe chart below shows a ranking of the top 20 SaaS relatedcompanies in Asia(in terms of their YoY sales growth in 2019).Weincluded only those companies with a market cap of at least U

54、S$0.5billion.The top five companies with the highest sales growth in 2019include Yeahka(China),Freee KK(Japan),After Pay(Australia),WeiMob(China),and OneConnect(China).As you can see,the ones with the highest sales growth are mostlyfrom China.The average YoY sales growth of these top fivecompanies w

55、as 86.2%in 2019,which was much higher than theaverage YoY sales growth rate of 27.5%for the 56 public companies.Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim11Source:Companies data,Yahoo Finance,Google FinanceShare Price Performances of the SaaS Related Companies in

56、Asia(YTD)We have included 51 companies in this list as five companies did nothave share prices at the end of 2019.Among the top 20 performingstocks in this list,they are up on average 108%YTD.Among thebottom 20 performing stocks in this list,they are down on average11%YTD.Therefore,the risk/reward r

57、atio has been very favorable onthe upside for the SaaS related stocks in Asia in 2020.Percentage Change in Share Price Performances of th e SaaS Related Companies in Asia(YTD)Companies%Change in SharePrice YTD(2020)*Companies%Change in SharePrice YTD(2020)*Rsupport249.2%Revez(Singapore)15.8%Base225.

58、9%Xero14.1%WeiMob224.5%Ezwel12.3%Whispir199.4%Wipro Ltd11.6%Kingdee148.5%NIIT11.1%AfterPay131.8%TataConsultancyServices6.9%OneConnect122.8%Humanica(Thailand)5.8%NeoJapan112.4%Cafe242.0%Opensys(Malaysia)100.0%TechnologyOne Limited0.8%iClick Interactive Asia Group91.0%Netbay(Thailand)-5.5%Kingsoft87.4

59、%Altium Limited-6.1%Fineos66.4%Sansan-6.3%Wise I-Tech65.5%Uzabase-6.6%Synagie(Singapore)58.3%KoreaCenter-7.7%Freee KK53.3%Ahnlab-7.8%Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim12Hancom52.5%Tech Mahindra-9.6%Atlassian52.4%WisetechGlobal-13.3%Exem41.9%BravuraSolutio

60、ns-17.3%Webcash41.0%IFCA(Malaysia)-22.4%Money Forward32.6%HansenTechnologiesLimited-23.2%Infosys31.4%Travelsky-25.2%MindTree31.1%Silverlake Axis(Singapore)-26.8%Douzone Bizon29.0%Citadel GroupLtd-28.5%Mphasis26.1%Fang DD-44.1%HCL Technologies25.2%Rakus20.2%Average42.5%Baozun19.3%Median20.2%Source:Co

61、mpanies data,Yahoo Finance,Google FinanceNote:*%Change in Share Price as of 7/29/2020Includes 51 companies(5 companiesexcluded due to lack of price at end of 2019)Source:Companies data,Yahoo Finance,Google FinanceRule of 40This is a widely followed metric in the global SaaS industry.Basically,it has

62、 two inputs(%change in sales and profit margin).If you add upthe two numbers and it is more than 40(40%),then the SaaScompany could be viewed as more attractive.This makes intuitiveAsian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim13sense since you want the SaaS company

63、to have both high salesgrowth and high-profit margins.If the SaaS company is notprofitable,it should have high sales growth and vice versa.In the table below,we divided the group(50 Asian SaaS companies,excluding the ones that are listed this year)into two groups.Group Aincludes the top 25 companies

64、 in terms of Rule of 40 and Group Brefers to the bottom 25 companies in terms of Rule of 40.So far thisyear,Group B has outperformed Group A.In 2020 YTD,Group A is upon average 34.6%whereas Group B is up 51.5%YTD.This goes toshow that while Rule of 40 is a good,simple rule,stock prices oftenmove lik

65、e a wild beast that is difficult to control and cage into a nice,neat box.Also,we were limited in our data of using 2019 salesgrowth and profit margins,instead of 2020 sales growth and profitmargins.SaaS Companies in Asia(Rule of 40&Share Price Performance YTD)Companies(Group A)Rule of 40(%Change in

66、 Sales+OperatingMargins)%Change in Share PriceYTDWisetech Global80.2%-13.3%AfterPay73.6%131.8%WeiMob68.8%224.5%Silverlake Axis(Singapore)65.7%-26.8%Hancom60.4%52.5%NeoJapan59.3%112.4%Altium Limited55.7%-6.1%Netbay(Thailand)55.3%-5.5%IFCA(Malaysia)43.6%-22.4%Rakus42.9%20.2%Fang DD42.8%-44.1%Humanica(

67、Thailand)42.2%5.8%Baozun41.3%19.3%Douzone Bizon41.2%29.0%Technology One Limited39.3%0.8%Travelsky39.0%-25.2%KoreaCenter36.9%-7.7%Kingsoft36.8%87.4%Sansan36.6%-6.3%Cafe2435.8%2.0%Rsupport35.7%249.2%HCL Technologies34.7%25.2%Xero34.4%14.1%Wise I-Tech34.1%65.5%Bravura Solutions32.9%-17.3%Average(Top 1

68、to 25)46.8%34.6%(Group B)Wipro Ltd32.4%11.6%Atlassian32.1%52.4%Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim14Tata Consultancy Services31.7%6.9%Kingdee31.1%148.5%Infosys29.8%31.4%Base29.7%225.9%Mphasis28.7%26.1%NIIT27.0%11.1%Exem24.7%41.9%Freee KK24.3%53.3%Uzabase24

69、.2%-6.6%Ezwel24.0%12.3%Money Forward21.6%32.6%MindTree21.1%31.1%iClick Interactive AsiaGroup18.6%91.0%Tech Mahindra18.1%-9.6%Fineos16.7%66.4%Ahnlab15.5%-7.8%Hansen TechnologiesLimited14.5%-23.2%Opensys(Malaysia)7.8%100.0%Citadel Group Ltd7.6%-28.5%Webcash-6.3%41.0%OneConnect-8.4%122.8%Synagie(Singap

70、ore)-28.5%58.3%Whispir-38.3%199.4%Average(#26 to#50)16.0%51.5%Source:Companies data,Yahoo Finance,Google FinanceConcerns About Security-One of the persistent concerns about theadoption of the SaaS systems in Asia is the fact that many CEOs are oftenvery protective and secretive about their entire bu

71、siness operations,especially in terms of data management.As a result,instead of relying oncloud-based computing and data management systems,many companies inAsia still operate their businesses the old fashion way,including having theirown servers and storing all their essential database of business

72、informationon them,instead of relying on outsourced,external cloud-based systems.Personally,prior to providing independent research at Smartkarma,I spentover a year working at a start-up in Korea specialing in making aerogelmaterial.At this company,I spent several weeks doing a cost-benefitanalysis

73、of whether the company should switch to a cloud-based databasesystem(back then in 2014 the company was relying on its own internalservers).The conclusion back then was that the CEO did not want to changeto a cloud-based system,especially due to a lack of clear cost-benefit as wellas concerns about s

74、ecrets of the company being stored in an external,cloud-based system.Things may have changed since then but the issue about security stillremains one of the key reasons why many companies in Asia still do not usecloud-based SaaS systems.There are other problematic issues that somecustomers point out

75、 about SaaS including troublesome software integration,Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim15difficulty with regulatory compliance,and cumbersome datamobility.Nonetheless,in terms of cost-performance,because of thetremendous amount of improvements in the Sa

76、aS system in the past fiveyears,the adoption curve of SaaS has been accelerating in numerous Asiancountries.Country-Specific SectionsJapanIn the table below,we highlighted some of the major SaaS related companiesin Japan.We have included 7 public companies and 12 private companies inJapan.The top th

77、ree SaaS related stocks in Japan include freee(4478 JP),Rakus Co Ltd(3923 JP),and Sansan Inc(4443 JP).The SaaS market in Japan probably has the highest growth as an industry inAsia.The marketplace has been extremely active over the last few years asthe industry continues to grow.In 2017 the software

78、 market as a whole inJapan was valued at USD 11 bn with the SaaS industry contributing to 31%ofthat total.According to the Fuji Keizai Group,the software industry islooking to reach US$19 billion by 2021 with SaaS topping US$6 billion of thetotal.Accordingly,the SaaS market is expected to grow 2x du

79、ring this periodwhile the overall software industry is expected to grow at a slightly slowerrate of 1.7x over the same period.The rapid growth in the industry is focused on Japans declining population.According to Mitsubishi UFJ Research and Consulting,Japan is looking atlosing a further 2.3 million

80、 people between the ages of 15 and 64 by 2030.This will mean that there will be close to 590,000 tech-related job positionsthat will be unfilled by then,as reported by the Ministry of Economy,Trade,and Industry.Major SaaS Companies inJapanCompaniesCode CountryPublic/privateMkt cap:US$billionMkt cap:

81、Local Currency(JPY billion)Freee KK4478JapanPublic2.4252.7Rakus3923JapanPublic2.0212.3Sansan4443JapanPublic1.7179.7Money Forward3994JapanPublic1.5161.1Base4477JapanPublic1.3120.7Uzabase3966JapanPublic0.775.8NeoJapan3921JapanPublic0.333.7Total9.8AbejaN/AJapanPrivateN/AN/AAtonarpN/AJapanPrivateN/AN/AA

82、sian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim16From ScratchN/AJapanPrivateN/AN/AReproN/AJapanPrivateN/AN/ASmartHRN/AJapanPrivateN/AN/AToretaN/AJapanPrivateN/AN/AYappliN/AJapanPrivateN/AN/ACloudCherryN/AJapanPrivateN/AN/ATalviewN/AJapanPrivateN/AN/AWhatFixN/AJapanPriv

83、ateN/AN/AFreshDeskN/AJapanPrivateN/AN/AChargebeeN/AJapanPrivateN/AN/ASource:Companies data,Yahoo Finance,Google FinanceJapan(Public Companies)Freee KKFounded in 2012 by Daisuke Sasaki(former Google employee),Freeeprovides cloud-based accounting and HR software.As of August 2018,Freee had more than o

84、ne million business accounts,over 5,000 certifiedaccountant advisors,and over 3,500 applications and software wereintegrated with Freee software.Freee became a listed company inDecember 2019 and with its IPO proceeds,the company is well poisedto further expand its business.Freee provides a platform

85、that allows users to read and scan invoices,sorts these invoices,and automatically creates financial statements.The company has partnered with more than 270 banks and otherfinancial institutions in Japan and allows users to manage fundmovement by integrating with their bank accounts.It works on afre

86、emium model,and its paid plan begins at about 10 USD per monthper business.Freee is one of the first Japanese SaaS companies to receive overseasfunding.Some of its major investors include Line Corp.,RecruitHoldings Life Card Co.,Greyhound Capital,and SBI.For now,Freee hasindicated that it doesnt hav

87、e plans to expand overseas anytime soonand plans to continue to focus on Japan in the near term.Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim17RakusRakus was set up in 2001 by the current President and Founder ofcompany Takanori Nakamura.The company was set up with

88、theintention of supporting SMEs through its IT services.Rakus strength isin providing cloud-based solutions to its clients in the small andmedium enterprises.The companys core business includes SaaS-basedproducts for Japanese SMEs.Rakus cloud portfolio increased from 29%in 2017 to 42%in 2019.Thebroa

89、der cloud portfolio has grown at an accelerating pace over the pastseveral years from 29%in 2017 to 42%in 2019,with its digital expensemanagement tool seeing exceptional annual growth 60%from arelatively meaningful revenue base.In Japan,more than half of theSMEs are not yet using cloud-based managem

90、ent platforms.Thisremains a big opportunity for companies such as Rakus.On the other hand,one of the concerns of the company is that it has yetto prove that it can leverage its business to gain larger customers.Plus,it has yet to prove that it can take its SaaS system to expand profitablyoverseas.Sa

91、nsanSansan was founded in 2007 by Chika Terada who understood thechallenges in connecting people efficiently.He found out that networkgaps between humans led to“redundant efforts and misledopportunities.”Sansan is now a leading SaaS solutions provider with 2core products.Its flagship B2B product San

92、san focuses on easingcontact networks within organizations.Its B2C Product(Eight)assistsindividuals to manage their day-to-day business contacts.Sansan is a hybrid CMS/CRM platform for business that creates aninternal contact network based on business cards.This helps employeesfind sales opportuniti

93、es while increasing their productivity andimproving communication.Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim18Instead of manually entering business card information into an ERP,the Sansan scanner and app combination let them scan up to 50business cards per minute

94、 and instantly share digitized contacts acrossthe organization,leading to better operational efficiency and employeeproductivity.Money ForwardFounded in 2012,Money Forward is well known for its automatedhousehold accounting/asset management service Money Forward ME.In 2013,the company released Money

95、 Forward Cloud Accounting/TaxReturn service.At present,Money Forward has 11 main business unitsunder its group.Some of its main products and services are as follows:Money Forward ME Money Forward ME-A personal financialmanagement service which automatically aggregates statementsof bank accounts/cred

96、it cards/securities accounts/FX accounts/pensions/points and compiles a household accounting bookMoney Forward Cloud Accounting/Tax Return-Cloud-basedaccounting software;Money Forward Cloud Tax Return is a cloud-based tax return software for sole proprietorsMONEYPLUS-A practical economic media platf

97、orm that conveysmoney-related themes based on information relevant to usersdaily livesMoney Forward Cloud Invoice-An invoice preparation softwarethat centrally manages the creation,delivery,and receipt ofinvoicesUzabaseUzabase was founded in 2008 and is a company that is currentlyengaged in the oper

98、ation of online information via its primaryplatform,SPEEDA,and social-economic media via the platformNewsPicks.The company provides other business entities with relevantinformation on business news,financial report data,and stock pricestatistics over a range of various industries.This is done global

99、ly acrosstheir offices around the world by teams of specialized analysts.Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim19The company provides Japans largest industry and corporate database.In this respect,Uzabase is reminiscent of Zoominfo Technologies(ZIUS)which is

100、a SaaS intelligence platform for B2B sales and marketingteams.Companies want to know more about their customers andcompetitors and Uzabase is a wealth of sources for this kind ofinformation in japan.Uzabases strengths are that it is well trusted andhas a solid industry reputation.Neo JapanFounded in

101、 1992,NeoJapan provides comprehensive IT servicesincluding the development and sales of packaged software and cloudservices and network infrastructure construction.Broadly,NeoJapansproducts fall under two business segments:System DevelopmentServices and Software Segment.Its main products include a)D

102、esknets NEO-a collaboration softwarewhich consists of a suite of 27 applications,b)AppSuite-a tool to buildcustom business applications,c)ChatLuck-A business communicationtool which facilitates information sharing and joint projects,and d)Desknets SSS-An online sales management system allowing users

103、 tomonitor progress in sales deals.Japan(Private Companies)AbejaAbeja Inc.was founded in 2012 by the current president and CEOYousuke Okada.A tech-guru since the age of 10 he founded a companythat is now considered a market leader in Artificial IntelligenceTechnology in Asia.They also use IoT and Bi

104、g Data in providingsolutions to companies.Abeja consists of a Deep Learning Platformthat assists and provides the company with data collection,automation,analytics,simulation,and visualization via cloud services.Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim20In 2019

105、,CB Insights selected ABEJA as one of the most promising 100AI startups in the world.ABEJA has also implemented its SaaS solution,ABEJA Insight for Retail,to more than 100 corporate enterprises and in520 stores that include leading Japanese retailers and distributors.The main AI Solutions by Abeja i

106、nclude the following:Behavioral Analysis of Skilled Craftsman:AI analyses the workingprocess of skilled craftsman.Applicable for making instructionmanuals for non-experts.Product classification:AI enables automated commodity selectionand assortment work.Demand Prediction at Factory:Prediction of the

107、 volume ofproducts to be manufactured and when to be sold.Possible torealize optimization of stock by AI.Dynamic Pricing:Based on the market demands and commoditysupply circumstances,prices can be changed in real-time.ChinaIn the table below,we highlighted some of the major SaaS related companiesin

108、China.We have included 13 public companies and 6 private companies inChina.The top three SaaS related stocks in China include OneConnectFinancial Technology(OCFT US),Kingdee International Software(268 HK),and Kingsoft Corp(3888 HK).Currently,the Chinese SaaS systems consist largely of CRM,officeauto

109、mation,intelligent manufacturing software,and office collaborationsoftware.In terms of market growth,over 2013-17,Chinas SaaS market grewat a CAGR of 48%to reach RMB 16.9 bn by 2017.The SaaS market in China isestimated to grow at a CAGR of about 40%from 2017 to 2020.Major SaaS Companiesin ChinaCompa

110、nyCodeCountryPublic/privateMkt cap:US$billionMkt cap:Local Currency(CNYbillion;HKD billion)OneConnectOCFTChinaPublic8.3CNY 58.38BKingdee268ChinaPublic8.0HKD 61.82BKingsoft3888ChinaPublic7.6HKD 58.82BTravelsky696ChinaPublic5.5HKD 42.61BAgoraAPIChinaPublic4.6CNY 32.35BFortune TrendSHAChinaPublic3.6CNY

111、 25.40BWeiMob2013ChinaPublic3.4HKD 26.01BLinkage Software Co.688588ChinaPublic2.9CNY 20.44BBaozunBZUNChinaPublic2.6CNY 18.20BYeahka9923ChinaPublic2.1HKD 16.03BJinXianDai300830ChinaPublic1.2CNY 8.17BFang DDDUOChinaPublic0.7CNY 5.19BiClick Interactive AsiaGroupICLKChinaPublic0.4CNY 2.74BAsian SaaS Sta

112、rs:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim21Total50.9DatacanvasN/AChinaPrivateN/AN/AMegviiN/AChinaPrivateN/AN/AJushuitanN/AChinaPrivateN/AN/AGizwitsN/AChinaPrivateN/AN/AGuahaoN/AChinaPrivateN/AN/AMining LampN/AChinaPrivateN/AN/ASource:Companies data,Yahoo Finance,Google Financ

113、eChina(Public Companies)OneConnectOne Connect was founded in 2015 and is an associate of Pan Am Group.The company is involved in the provision of SaaS solutions for financialinstitutions.As of December 2019,the company had more than 3,700customers and this was made up of all of Chinas major banks,99

114、%ofChinas city commercial banks,and 52%of the countrys insurancecompanies.The company utilizes AI,big data,and blockchain to deliverits services.One Connect has been one of the best performing large-cap SaaS stocksin Asia and its stock price is up more than 100%this year.One of thecompanys great str

115、engths is its dominance in providing SaaS solutionsthe major banks and financial institutions in China.The company has been diversifying its customer base so as to reduce itsdependence on large customers making up the majority of revenue.Asa result,the company has continued to expand third party cus

116、tomersand the proportion of revenue made up of third party customersreached 44%in 2019 from 29%in 2017.Main solutions are as follows:FiMAX-This is the main framework which operates OneConnectsBlockchain as a Service(BaaS).FiMAX has been designed with security,privacy,and performance and comes in a o

117、ne-click deploymentpackage.Digital Retail Banking-Through this,customers can improve theirsalesforce efficiency,improve their understanding of end-customers,and deliver comprehensive digital banking capabilities.Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim22SME fin

118、ancing and services-Connects financial institutions with SMEscompanies along the supply chain,government entities,as well asvarious third-party service providers.Using the FiMAX Blockchaintechnology,information transparency is improved and all informationobtained from different parties is integrated

119、 into one place.Risk managementretail banking-Is a risk management solution thathelps retail banks streamline their loan businesses,improve their creditanalytics,reduce delinquency risk,and enhance post-lendingperformance.KingdeeKingdee was founded in 1993 and is listed on the main board of theHong

120、Kong Stock Exchange.Kingdee has been one of the best-performing stocks in Hong Kong this year.The company has excellentfundamentals but the stock price already has had a big run-up this yearwhich is a concern.The company is a provider of enterprise application software and itprovides its products an

121、d services to around 6.8 mn enterprises,government agencies,and other organizations globally.According toIDCs 2H2017 Tracking Report on Chinas Public Cloud Market,Kingdeeheld a market share of 43.6%of the SaaS financial cloud market.According to IDC(International Data Corporation),Kingdee also ranke

122、dfirst in terms of the proportion of Chinese enterprise SaaS vendorsrevenue in 2018.The companys customers include companies such as Huawei,Haier,and China Eastern.Kingdee broadly serves the manufacturing,services,retail and,construction,and real estate industries.Main products provided by Kingdee a

123、re as follows:Kingdee Cloud-This is an independently controllable ERP Cloudservice platform developed based on a Cloud-native architecture and ismainly for large enterprises.Cloud-Hub-This is a social networking style mobile office software.Itallows function reporting,connecting with ERP,connecting

124、with theenterprise ecosystem etc.Key customers include Haier and Vanke.Kingdee KIS Accounting System-This is a cloud-based managementsoftware performing functions such as inventory,production,sales,procurement,e-store,and offline store management via the mobileinternet.It mainly caters to small and

125、micro-businesses.Customersinclude Beauty Blend,Joyoung,Unitek,and Spakct.Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim23KingsoftThe company provides internet and software services and is listed onthe Hong Kong Stock Exchange.At present,the companys serviceoffering i

126、s based on interactive entertainment,internet security,andoffice software with cloud computing being an integral part of theservice offering.The companys key subsidiaries are Seasun,CheetahMobile,Kingsoft Cloud,and WPS.Main products are as follows:Entertainment Software-Engages in research and devel

127、opment ofgames,and the provision of online games,mobile games,and casualgamesCloud Services-Engages in the provision of cloud computing,storageand delivery,and comprehensive cloud-based solutionsOffice Solutions-Engages in the design,development,marketing,andsales of office software.Products under t

128、his include WPS Office which isa substitute to Microsoft Office.Due to teleworking as a result of the pandemic,the company has seen arise in its office software.The MAUs for Kingsoft Docs reached 239 mnat the end of February 2020 compared to 60 mn at the end of 2019.Theoffice software business segme

129、nt appears to be performing well as aresult of the pandemic and this can be expected to continue untiloffices decide to function at 100%occupancy rates.AgoraThe company was founded in 2013 and was listed on NASDAQ in June2020.Agora offers a cloud platform as a service that incorporates video,audio,r

130、eal-time messaging,and real-time recording.Agora servesnumerous sectors including gaming,social,retail,and education.Thecompanys real-time data transmission is handled by the platformsoftware-Defined Real-time Network(SD-RTN),which is a virtualnetwork overlay on top of the public internet.Major clie

131、nts includeXiaomi,Sound Cloud,Vain Glory,Hike,Momo,Talk Space,and MeetMe.Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim24Agora is a pioneer and one of the leading players in the RT-PaaS andthis provides the company with a strong presence in the industry aswell as a f

132、irst-mover advantage.Agora provides an independentplatform which makes it attractive to partners who want to avoidconflicts of interest or rely on one particular cloud service provider.Thecompany also has a loyal customer base.Despite having a loyal customer base,around 40%-50%of thecompanys revenue

133、 is made up of its top ten customers.Therefore,aloss or reduction of the demand from one of these top ten would have asignificant impact on the companys topline.BaozunBaozun was founded in 2006 and is involved in providing e-commercesolutions.Baozun covers all parts of the e-commerce value chain fro

134、mIT solutions,store operations,digital marketing,customer services,warehousing,and fulfillment.Baozun helps companies accomplishtheir e-commerce strategies by providing a technology platform thatintegrates big data,AI,and cloud computing.In 2015,the companywent public and was listed on NASDAQ.The co

135、mpany has shown strong financial performance across both top-line and bottom-line.Revenue has grown at a CAGR of 32%which netprofit has grown at a CAGR of 16%over 2017-19.Despite the stronggrowth in sales and profits,the company has a substantial level of debt.Its gearing ratio increased to 42%from

136、3%during 2018-19.This mayimpair the companys ability to get additional financing in the futureand these debts result in a significant portion of operating cashflowsbeing used up to pay interests and principal.Main products are as follows:Online store and shopping site operation-This service covers a

137、 widerange of channels such as platform stores,brand websites,and socialmedia platforms.Digital marketing-Develops omni-marketing services through multipledimensions such as market insight,big data application,media strategyand buying,brand marketing activities,and content marketing.Technology servi

138、ce-Baozun can provide basic IT services for brandsincluding the development of official online stores and data analysis,aswell as help brands to achieve Omni-channel retail with a full range oftechnical support.Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim25IClick I

139、nteractiveIClick Interactive is one of the largest independent online marketingtechnology platforms in terms of gross billings in China.The companywas founded in 2009 in Hong Kong and was listed on NASDAQ in2017.The companys growth strategy involves transitioning to anintegrated management and marke

140、ting cloud platform,moving towardssmart retail.Its two main platforms include a)iAudience-a marketintelligence platform that provides real-time insights on targetaudiences in China,and b)iAccess-a one-stop cross channel targetingsolution in the digital landscape.Users can easily run ad campaigns.Rec

141、ently,the company was ranked as one of the Top 10 DigitalMarketing Solution Providers in APAC 2020 by CIO Advisor APAC(second year straight)and one of the Top 10 Ad ManagementCompanies 2020 by CIO Advisor APAC.In addition,the company wasalso named as Asia Pacifics Leader in Smart Marketing Solutions

142、 atthe Mediazone Groups(Mediazone)Asias Most Valuable ServiceProviders Awards 2020.These accolades are indicative of the fact thatthe companys services are some of the best in the APAC market.Leading on from this,the company also sees strong demand fromclients during the COVID 19 pandemic.Even thoug

143、h the companys top-line has performed well and isexpected to continue on its growth trajectory,iClick continues to makenet losses.Furthermore,consensus expects losses to continue well into2021 albeit reducing over this time.China(Private Companies)MegviiThe company was founded in 2011 and operates i

144、n the AI landscape.Itscore competencies lie in deep learning.The company provides full-stack solutions that cover algorithms,software,and AI-empowered IoTdevices.The company serves numerous industries including fintech,banks,smartphone companies,third-party system integrators,propertymanagers,school

145、s,logistics companies,and manufacturers.Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim26Megvii has a significant market share of facial recognition,AIsmartphone solutions,face recognition device authentication,and AIsmart city solutions in China.In 2018,Megvii was th

146、e largest serviceprovider of cloud-based identity authentication solutions enabled byfacial recognition in China,capturing a market share of 60%(in termsof revenue).In terms of AI-powered smartphone solutions,thecompany had over 70%market share among Android-basedsmartphones with the facial recognit

147、ion-based device authenticationfeatures made in China.Even though Megvii is a market leader in many technology-basedverticals in China,the company has been blacklisted from listing in theUS.The company was barred from buying US parts without the USgovernments approval.This may impact the companys im

148、port ofimportant components.Furthermore,the company has been targeted for human rightsviolations that have made several prospective foreign investors wary.Megvii,along with seven other Chinese companies has been blacklistedfor human rights violations in relation to Beijings mistreatment ofMuslim min

149、orities.Main products are as follows:MEGVII Brain+-This is the proprietary algorithm platform.It hasthree segments;a)MegEngine the deep learning framework,b)MegData the data management platform,and c)MegCompute the cloudcomputing platform.Core Algorithms-These are the algorithm matrix based on thepr

150、oprietary deep learning frameworkCore System-This is an AI-powered IoT platform.It connects,controls,and coordinates a large network of hardware including AIcameras,sensors,robots,and other smart devices,and seamlesslyintegrates these with different software systems.IndiaIn the table below,we highli

151、ghted some of the major SaaS related companiesin India.We have included 8 public companies and 6 private companies inIndia.The top three SaaS related stocks in India include Tata ConsultancySvcs(TCS IN),Infosys Ltd(INFO IN),and Hcl Technologies(HCLT IN).Again,although these IT giants provide various

152、 SaaS related products,they areviewed more as comprehensive IT service companies.According to NASSCOM(The National Association of Software and ServiceCompanies,India),it estimated that the Indian SaaS market was estimatedto hit US$3.3 billion to US$3.4 billion by 2022,growing at a 42%CAGR from2016 t

153、o 2022.By 2025,NASSCOM estimated India to account for about 8%ofthe global SaaS market.Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim27Major SaaS Companies inIndiaCompanyCodeCountryPublic/privateMkt cap:US$billionMkt cap:Local Currency(INR trillion)Tata Consultancy S

154、ervicesTCSIndiaPublic108.58.1InfosysINFYIndiaPublic52.33.9HCL Technologies532281IndiaPublic24.81.9Wipro LtdWITIndiaPublic22.61.7Tech MahindraTECHMIndiaPublic8.40.6Mphasis526299IndiaPublic2.80.2MindTree532819IndiaPublic2.20.2NIIT532541IndiaPublic1.40.1Total223.1ZohoN/AIndiaPrivateN/AN/APostmanN/AIndi

155、aPrivateN/AN/AAgileCRMN/AIndiaPrivateN/AN/AIBSFintechN/AIndiaPrivateN/AN/AWebEngageN/AIndiaPrivateN/AN/AFreshworksN/AIndiaPrivateN/AN/ASource:Companies data,Yahoo Finance,Google FinanceIndia(Public Companies)InfosysInfosys is one of the leading IT service powerhouses in India.Infosyswas the first IT

156、 company from India to be listed on NASDAQ.Thecompanys end-to-end business solutions from consultancy to businessprocess management excellence in the past 40 years has helped thecompany to acquire a large and loyal client base.Infosys has partneredwith companies like Microsoft,Amazon,HP,and IBM allo

157、wing thecompany to expand on its offerings.Similar to almost all major software vendors,Infosys is alsotransitioning its offering to SaaS.Infosys has partnerships with seven ofthe top 10 independent software vendors(ISVs).The companymaintains very close partnerships with its leading software clients

158、,helping them to develop products,enable application infrastructures,and also create and sell solutions for their products,and such deeprelationships have allowed Infoysys to obtain deeper expertise in thesoftware sector.Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim

159、28Infosys also has an advantage over cost as most development centersare located in India,thus providing the organization with top-notchtechnical talent at comparatively reasonable wage costs given the wagecost differences of India versus the rest of the world.Even so,theorganization invests heavily

160、 on successful training and learningprograms for their employees,to instill a strong sense of motivationamong them.Infosys generates nearly 80%of its revenues from the U.S.and Europe.Hence,one of the weaknesses of the company may be the lack ofrevenues from the emerging and other growing markets.In

161、addition,the company faces high rates of employee attrition despite spendingheavily on training and learning programs for their employees.WiproEstablished in 1945,Wipro is a leading IT service company in Korea.The company focuses on the power of cognitive computing as well ashyper-automation,robotic

162、s,cloud,analytics,and emergingtechnologies.The company breaks down its main service offerings intoa)Data,Analytics,&AI,b)Applications,c)Digital Operations andPlatforms,d)Consulting and e)Infrastructure Services.Wipro has an impressive,rapidly growing SaaS products targeting keyfront office and back-

163、office systems like CRM,ERP,and HCM.Clientsleverage our industry-leading solutions such as Salesforce,Oracle,SAP,and NetSuite to enhance the end-user experience.Wipro has an impressive list of clientele and big-time partnerships withgroups like Cisco,Oracle,EMC,Microsoft,and SAP.It is one of thelarg

164、est IT companies in India with over 130,000 employees and isknown for its extensive work done in research and development.Thecompany is also known to maintain low-cost advantages with high-quality standards in its services.One of the key weaknesses of Wipro isthat it tends to have high employee turn

165、over rates.MindtreeAsian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim29Established in 1999,Mindtree is a listed company with a workforce of21,000 employees.The company experienced strong growth in salesand profits from 2016 to 2018.It also has relatively low debt.One of

166、theconsistent complaints from former employees has been the lack ofadequate pay levels.The companys main units include a)Digital,b)Operations,c)ITConsulting,and d)Engineering R&D.Digital business unit includesCloud,Data Analytics,Internet of Things,AR/VRServices,Conversational AI,Digital Commerce,Di

167、gital Marketing,andMobility.According to Mindtree,about 73%of organizations say that more than80%of their apps will be SaaS by 2020.Mindtree has two decades ofproduct engineering expertise and has deployed 4,000+successfulenterprise cloud migration and its own SaaS platforms have beenimplemented for

168、 multiple customers.India(Private Companies)ZohoZoho is more known for its strength in its CRM software.Withapplications like Zoho CRM,Zoho One,Zoho Campaigns,and Sales IQ,there is sufficient focus on good office functionality via integratedsolutions.Despite providing a useful package of software,Zo

169、ho is also abit weak in terms of being a little too ambitious with its many differentvarieties of software and applications.This could potentially beoverwhelming to someone trying to start off with using Zohos coreservices such as their CRM,Sales,and Marketing software andapplications.Zoho commenced

170、 operations in 1996 as AdventNet Inc.as a companyspecializing in data management.In June 2001,Zoho expanded itsoperations to Japan and was vastly helped by the then-boomingJapanese market.Following on in their success they released Zoho CRMwhich is to date one of its bestselling applications,used to

171、 assistsalespeople with managing their databases to closing prospect clientsand engaging with them through the app.In 2008,Zoho reached its first major milestone by gaining a base of 1million users.This trend in development saw them reach a 15 millionuser base by the year 2015.By 2019,the company ac

172、hieved 50 millionactive users on Zoho.Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim30PostmanPostman was initially started as a simple project in 2014 by AbhinavAsthana,Postmans current CEO and co-founder.The initial intentionwas to create a tool that would simplify

173、application programminginterface(API)testing processes.Postman runs an(API)developmentplatform called the Postman API Platform.The main services provided under this platform include clientinterfaces that provide services such as accessing Postman data throughPostman API,Partners and integrations thr

174、ough the Postman APINetwork,and enterprise services such as configuring single-sign-on(SSO)to simplify user authentication,audit logs and dedicated IPaddresses.Postman Inc.boasts of an impressive reach of 11 million developersacross 500,000 companies and 250 million APIs developed.This surgecan be q

175、uantified through a large number of requests for APIdevelopment that came in which increased by over 36%to 13 millionper day in 2019 vs 2018.The reviews on Postman Inc.and its servicesare mostly positive as its core strength is delivering exactly what theclient is looking for.It also has a user-frie

176、ndly interface and is relativelycost-effective.Agile CRMEstablished in 2013 by founder/CEO Manohar Chapalamadugu,AgileCRM is an all-in-one CRM system that automates the procedures ofsales,marketing,and service automation all within one platform.Someof the features offered by Agile CRM are sales trac

177、king,marketingautomation,telephony,and contact management.Although thecompanys headquarters is based in Dallas,Texas,many of thecompanys employees are in India.Agile CRMs strengths include its ability to penetrate many smallbusinesses that are in the startup phase and growing steadily.Manyclients ha

178、ve recommended the companys CRM system for its user-friendly interface and the ability to touch every important point withinAsian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim31a business process.There is also ease of the sales and marketingprocedures for sales executives

179、 when converting leads.Agile has alsobeen complimented for its affordability alongside the softwaresautomation setup.FreshworksFounded in 2010 by Girish Mathrubootham(who previously worked atZoho),Freshworks provides fully integrated CRM software systems.Freshworks today caters to over 150,000 busin

180、esses around the worldwith significant clients in their base including Toshiba,Cisco,Honda,and Hugo Boss across 127 countries.Its main products are as follows:a)Freshdesk-Customer servicesoftware with Bots and self-service features,b)Freshsales-Software forsales teams,including AI-based lead scoring

181、,email,and phone activitysyncing,c)Freshservice-Software for IT service desk solutions in thecloud,and d)Freshchat-Business to client engaging chat software overweb,social messengers,or mobile.Freshworks was last valued at about US$3.5 billion at the end of 2019.In 2018,Freshworks boasted of attract

182、ing the highest venture capital atthe time in comparison to any other Indian SaaS firm,having raisedUS$149 mn.One of the concerns about Freshworks is that it has beenclashing with Zoho as the latter company has sued Freshworks over“trade secret misuse”.AustraliaIn the table below,we highlighted some

183、 of the major SaaS related companiesin Australia.We have included 11 public companies in Australia.The topthree SaaS related stocks in Australia include Atlassian Corp(TEAM US),Afterpay Touch(APT AU),and Xero Ltd(XRO AU).The SaaS industry in Australia has flourished on the back of the increaseduse o

184、f SaaS products for businesses.This is similar to other APAC regionswhich are also transitioning to SaaS as part of business operations.Moreover,the outstanding performance and success of unicorn companiesAtlassian and Canva have put Australia on the global SaaS radar.In Australia,the SaaS market ma

185、kes up the majority of the public cloudservices industry.According to Gartner,61%of cloud services revenue camefrom SaaS products in 2018 in Australia.IDC mentioned that about 58%ofAsian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim32Australian companies have implemented

186、SaaS services by the end of2018.Gartner predicts the SaaS market to grow at a CAGR of 19%over2018-22 to reach AUD 7,264 mn in 2022.Major SaaS Companies inAustraliaCompanyCodeCountryPublic/privateMkt cap:US$billionMkt cap:Local Currency(AUD billion)AtlassianTEAM AustraliaPublic42.761.0AfterPayAPTAust

187、raliaPublic13.318.9XeroXROAustraliaPublic9.113.0Wisetech GlobalWTCAustraliaPublic4.86.8Altium LimitedALUAustraliaPublic3.04.3Technology One LimitedTNEAustraliaPublic1.92.7Bravura SolutionsBVSAustraliaPublic0.81.1FineosASXAustraliaPublic0.71.0Hansen TechnologiesLimitedHSNAustraliaPublic0.40.6WhispirW

188、SPAustraliaPublic0.20.4Citadel Group LtdCGLAustraliaPublic0.20.2Total77.1Source:Companies data,Yahoo Finance,Google FinanceAustralia(Public Companies)AtlassianAtlassian is one of the biggest SaaS companies in Asia,in terms ofmarket cap.Atlassian was put together in 2002 by college friends,MikeCannon

189、-Brookes and Scott Farquhar.The company now has over170,000 global clients,including 85 of the Fortune 100.Atlassian develops tools for software development,projectmanagement,and content management.Its tools largely focus onimproving collaboration within an organization.Some of the companyspopular p

190、roducts include Jira-a software that allows developers totrack issues and bugs and Trello,a project collaboration managementtool.Its other main products include Bitbucket(gift code management),Atlassian Access(Security and control for cloud),Opsgenie(Modernincident management system),and Confluence(

191、DocumentCollaboration).For the companys Jira software,some of the key advantages include a)high levels of customization,b)supports roadmap requirements,c)provides a single view for all user stories and can generate the neededreports for various purposes,d)smoothly integrates with numerousAsian SaaS

192、Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim33popular third-party software,and e)works with different kinds of users.Some of the concerns about Jira software include reports are notreusable,limited file size upload,and not the best mobile app.AfterpayAfterpay was established

193、in 2014 by founders,Nicholas Molnar andAnthony Eisen with the creative mindset of building Afterpay as a toolto help people capitalize on their money and manage spendingresponsibly.The company uses its technology to provide retailpayments between merchants and end customers by offering a buy now,pay

194、 later service.The company has two main solutions:a)After Pay-This an e-commerce platform where customers can buy the product andpay for it later.b)Pay Now-This function allows customers to pay ontime.Afterpay has been one of the best-performing stocks in the Australianstock market,especially after

195、the lows in March 2020.Afterpays saleswere more than 100%up in the 2019-20 financial year.Afterpay hashigh brand recognition in Australia.Afterpay is one of the companies that have benefited from the trend ofBuy Now Pay Later(BNPL),which has also correlated with a decline inthe use of credit cards.T

196、he number of people using credit cards peakedin 2016-17,but has been steadily falling since in Australia.It was aboutthe same time that the use of BNPL started to pick up.In 2015-16,about$100 million was spent through BNPL products.By 2019-20,thathad risen to about$700 million.This trend has only be

197、en exacerbatedby the COVID-19 crisis.Buy now pay later(BNPL)services are platforms that allow you to payfor something in installments,delaying the full repayment until later.BNPL helps alleviate some of this stress by not charging interest,unlikea credit card,and by offering staggered payments allow

198、ing customers totry something before they commit to a full purchase.Some of the key BNPL competitors in Australia include the following:(Afterpay,Zip(Zip Money and ZipPay),humm,Bundll,Laybuy,Latitude Pay,Klarna,and Openpay).Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas

199、Kim34XeroXERO was founded in 2006 by Craig Walker and was listed just a yearlater in 2007.XERO is a company dedicated to cloud-based accountingsoftware.XERO caters to small businesses,accountants,andbookkeepers.The software helps users track and manage cash flowprocesses,invoicing,payments,payments,

200、and pay runs.Xero wasvoted the best SaaS company in 2017 by the Cloud Awards.In 2017,Frost&Sullivan also awarded Xero the Australian Financial AccountingSaaS vendor of the year.The company is considered one of the leaders in the cloud-basedaccounting software in Australia.The company has a successfu

201、l trackrecord with a solid client base.Some of the concerns about thecompany include lack of success in marketing products other than itscloud-based accounting software.There is also a lack of investmentgoing into research and development for the company in comparisonto other fast-growing players.Wi

202、setech GlobalEstablished in 1994,Wisetech Global is a leading,global developer ofcloud-based software solutions for the logistics industry.Today thecompany has an impressive statistic of over 12,000 clients across 7,000sites in more than 150 countries.Their software solution is identifiedand renowne

203、d for productivity,extensive functionality,comprehensiveintegration,deep compliance capabilities,and global reach.Thecompany was listed in 2016.Wisetech saw quality growth in FY2019 with revenues up by 57%to$348.3 million and EBITDA up 39%to 108.1 million.This showed apositive global growth and indu

204、stry penetration that has been driven bythe companys geographic expansion,excellent products,and highcustomer loyalty.Adding to the strengths of the company,the companyhad less than 1%customer attrition rate for its CargoWise One globalplatform.A key concern for the company is the collapse of the gl

205、oballogistics traffic due to the COVID-19 pandemic.Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim35Technology One LimitedFounded in 1987,Technology One is one of the leading suppliers ofenterprise software solutions for businesses and governmentdepartments in Austral

206、ia.Technology Ones global SaaS ERP solutioncontinued to grow right into FY2019,up 44%to$102 million.Thegrowth came with no acquisitions,but instead with a new 88 enterprisecustomers to their global SaaS platform,reaching a total of 435enterprise customers(as of November 2019).Technology One is espec

207、ially strong among the local Australian andNew Zealand governments as more than 70%of Australian and NewZealand residents live in a council whose local governments arepowered by TechnologyOnes enterprise software.The company alsohad some greater success in acquiring new,large enterprise customersfro

208、m its competitors.In 2019,18 organizations replaced itscompetitors systems,including systems from Oracle,SAP,andMicrosoft.Bravura SolutionsBravura Solutions has more than 30 years of experience deliveringsoftware solutions for wealth management and funds administrationsectors.Bravuras services inclu

209、de minimizing risk,enhanced customerservice,increasing operational and cost efficiency,and helpingbusinesses innovate and grow.The company has offices acrossAustralia,New Zealand,United Kingdom,Europe,Africa,India,andAsia.Clients of the company include TAL,BNP Paribas,and FidelityInternational.The c

210、ompany has a strong sales pipeline mainly because existingcustomers are continuously expanding on the use of Bravuras productportfolio.Even in the past,the companys topline has grown at a CAGRof 14%over 2015-2019 and S&P expects the companys revenue tocontinue growing at double-digit rates until 202

211、2.The companys netprofit margins have also remained at 12%-14%over the last few years.Overall,the companys financials appear to be quite healthy in terms ofboth top-line and earnings growth.Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim36Hansen Technologies LtdHansen

212、 Technologies was founded in 1971,and the company was listedin June 2000.Hansen Technologies is involved in the development ofsoftware that supports creating,selling,and delivering products andservices including data management,billing,and customer care.Theindustries served by the company include ma

213、inly energy,water,utilities,and telecom.KoreaIn the table below,we highlighted some of the major SaaS related companiesin Korea.We have included 10 public companies and 6 private companies inKorea.The top three SaaS related stocks in Korea include Douzone Bizon(012510 KS),Ahnlab Inc(053800 KS),and C

214、afe24 Corp(042000 KS).Major SaaS Companies inKoreaCompanyCodeCountryPublic/privateMkt cap:US$billionMkt cap:Local Currency(KRW trllion)Douzone Bizon012510KoreaPublic2.63.1Ahnlab053800KoreaPublic0.50.6Cafe24042000KoreaPublic0.40.5Rsupport131370KoreaPublic0.40.5Webcash053580KoreaPublic0.30.4Hancom0305

215、20KoreaPublic0.30.4KoreaCenter290510KoreaPublic0.30.4Ezwel090850KoreaPublic0.10.1Exem205100KoreaPublic0.10.1Wise I-Tech065370KoreaPublic0.10.1Total5.2Younglimwon SoftlabKoreaPrivateNANABespin GlobalKoreaPrivateNANAClass101KoreaPrivateNANAToss Lab-JandiKoreaPrivateNANABlue Night Corp-AlbamKoreaPrivat

216、eNANASpoqa-Dodo PointKoreaPrivateNANASource:Companies data,Yahoo Finance,Google FinanceAsian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim37Korea(Public Companies)We have provided many insights on numerous SaaS relatedcompanies in Korea in the past three years,which you c

217、an see below.Overall,Korea has not been overly aggressive as compared to otherAsian countries such as India and Australia in investing andexpanding in the software sector in the past several decades.There are many reasons for this including the lack of emphasis onthe software sector by the governmen

218、t and the major chaebols andthe reliance on the products offered by the global softwaremultinationals such as Microsoft and SAP.However,due to therapidly expanding market potential,there are many Koreancompanies that are more aggressive in expanding in the SaaS sector.Douzone Bizon(012510 KS)Duzonbi

219、zon:Cloud-Based Software Providing an Edge AmidstCOVID-19 Carnage(April 2020)Duzonbizon-Time to Take Profits;Company Buying a BigBuilding Destroying Value(August 2019)Duzonbizon:Capitalizing on the Growth of Cloud Based CRMSoftware in Korea(January 2019)Cafe24 Corp(042000 KS)Cafe24 Vs.Shopify-An Exc

220、essive Divergence in Prices?(August2019)Cafe24:A Compelling E-Commerce Growth Story at AttractivePrices(April 2019)Cafe24 Update:Risks Now Outweigh Rewards(April 2018)Cafe24:Valuation Analysis(January 2018)Cafe24 IPO Preview(Part 2):Koreas Shopify,But at What Price?(January 2018)Hancom Inc(030520 KS

221、)Korea Small Cap Gem#2:Hancom Inc(May 2020)K Co Ltd(290510 KS)Koreacenter IPO Valuation Analysis(October 2019)Koreacenter IPO Preview(October 2019)Ezwelfare(090850 KS)Korea Small Cap Gem#4:Ezwelfare Co(July 2020)Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim38Korea(P

222、rivate Companies)YoungLimWon Soft Lab(YSL KS)Younglimwon Soft Lab IPO Valuation Analysis(July 2020)Younglimwon Soft Lab IPO Valuation Analysis(July 2020)Southeast AsiaIn the table below,we highlighted some of the major SaaS related companiesin Southeast Asia(focus on Singapore,Malaysia,&Thailand).We

223、 haveincluded 7 public companies and 19 private companies in Southeast Asia.The top three SaaS related stocks in Southeast Asia include Silverlake Axis(SILV SP),Humanica PCL(HUMAN TB),and Netbay.Southeast Asia(Singapore,Malaysia,Thailand)7 public companies&19 private companiesCompany(Country)CodeCou

224、ntryPublic/privateMkt cap:US$billionMkt cap:Local Currency(SGDbillion;THB billion)Silverlake Axis(Singapore)5CPSingaporePublic0.5SGD 0.73BSynagie(Singapore)V2YSingaporePublic0.0SGD 0.06BRevez(Singapore)RCUSingaporePublic0.0SGD 0.04BOpensys(Malaysia)OPENSYSMalaysiaPublic0.1RM 0.22BIFCA(Malaysia)IFCAM

225、SCMalaysiaPublic0.1RM 0.22BNetbay(Thailand)NetbayThailandPublic0.2THB 6.2BHumanica(Thailand)HUMANThailandPublic0.2THB 5.5BTotal1.1Trax(Singapore)SingaporePrivateNANAPracto(Singapore)SingaporePrivateNANADeskera(Singapore)SingaporePrivateNANANear(Singapore)SingaporePrivateNANACapillary Tech(Singapore)

226、SingaporePrivateNANATradeGecko(Singapore)SingaporePrivateN/AN/AFinalcad(Singapore)SingaporePrivateN/AN/AAnyMind Group(Singapore)SingaporePrivateN/AN/ADropee(Malaysia)MalaysiaPrivateN/AN/APiktochart(Malaysia)MalaysiaPrivateN/AN/AStoreHub(Malaysia)MalaysiaPrivateN/AN/ANiagawan(Malaysia)MalaysiaPrivate

227、N/AN/AAvana(Malaysia)MalaysiaPrivateN/AN/AAsian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim39Healthmetrics(Malaysia)MalaysiaPrivateN/AN/AOnERP Pro(Thailand)ThailandPrivateN/AN/ASeniorSoft(Thailand)ThailandPrivateN/AN/ARemoteCare(Thailand)ThailandPrivateN/AN/ACloudHM Co(

228、Thailand)ThailandPrivateN/AN/AProperty Flow(Thailand)ThailandPrivateN/AN/ASource:Companies data,Yahoo Finance,Google FinanceSoutheast Asia(Public Companies)HumanicaFounded in 2007,Humanica PLC is one of the leading business softwaresolutions providers(ERP,HR,&SME solutions)in Thailand.Bycombining it

229、s in-house HRIS Software with superior payrolloutsourcing services,the company assists its clients in transformingtheir businesses through process automation.The key solutions includeattendance management,payroll management,employee assessments&surveys,recruitment,onboarding,and pension accounting.H

230、umanica also prides itself on being the longest standing SAP GoldPartner,with expert teams having thirty years of experience in ERPsystems implementation.Humanica PLC went public in December of2017 and it has more than 3,000 clients in the Asia Pacific.Southeast Asia(Private Companies)DeskeraAsian S

231、aaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim40Deskera is a private company that was founded in 2008 by the currentFounder and CEO Shashank Dixit.Deskera has a fully integrated,cloud-based ERP suite.The solutions provided by Deskera allow small andmid-sized enterprises to

232、track finances,manage clients whilst alsoassisting with the hiring and managing of employees.The companys products have generally received positive reviews interms of simple functionality and integration as well as being cost-effective.However,there have been some negative reviews from ex-employees

233、about excessive work and poor time management workingconditions.APPENDIX I(Countries Specific)1)Japan-Major SaaS Related Companies;Publicly Listed(KeyFinancials)The table below provides the main financials of the 7 SaaS related companiesin Japan,including sales,operating profit,and net profit from 2

234、016 to 2019.CompanyTickerUnitItem200191Q20191Q 2020Freee KK4478JPYmSalesN/A1,2022,4154,5168741,491JPYmOPN/A(2,206)(3,401)(2,830)(640)(486)JPYmNPN/AN/A(3,406)(2,778)N/AN/ARakus3923JPYmSales4,9326,4098,74311,6081,9862,590JPYmOP9751,2411,4691,174463509JPYmNP7328751,0Sansan4443JPYm

235、Sales4,8397,32410,20613,3622,2833,100JPYmOP(778)(3,061)(849)75770248JPYmNP(790)(3,085)(945)33953106Money Forward3994JPYmSales1,5422,9004,5957,1571,3982,394JPYmOP(877)(797)(796)(2,446)(984)(631)JPYmNP(889)(842)(833)(2,620)1,165679Base*4477JPYmSales4431,1472,3523,849N/A1,124JPYmOP(563)(1,261)(798)(455

236、)N/A(26)JPYmNP(567)(1,268)(854)(276)N/A(29)Uzabase3966JPYmSales3,0824,5669,34012,5212,8473,171JPYmOP251546830(1,236)(380)(263)JPYmNP269441562(1,750)(296)(473)NeoJapan3921JPYmSales2,1172,3122,6623,7437791,322Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim41JPYmOP392433

237、528699173282JPYmNP297324382495119200Source:Companies data,Yahoo Finance,Google Finance;Note:*Basesfinancials in 2016 and 2017 are standalone;its financials in 2018,2019 and1Q 2020 are consolidatedThe average operating margin of the SaaS related companies in Japanimproved from-47.1%in 2017 to-33.0%in

238、 2018,to-15.2%in 2019.It alsoimproved materially from-18.1%in 1Q 2019 to-2.9%in 1Q 2020.Japan-Major SaaS Related Companies;Publicly Listed(Operating Margins,%)OP Margins(%)201720182019 1Q20191Q2020Freee KK-183.5%-140.8%-62.7%-73.2%-32.6%Rakus19.4%16.8%10.1%23.3%19.7%Sansan-41.8%-8.3%5.7%3.1%8.0%Mone

239、y Forward-27.5%-17.3%-34.2%-70.4%-26.4%Base-127.1%-109.9%-33.9%NA-2.3%Uzabase12.0%8.9%-9.9%-13.3%-8.3%NeoJapan18.7%19.8%18.7%22.2%21.3%Average-47.1%-33.0%-15.2%-18.1%-2.9%Median-27.5%-8.3%-9.9%-5.1%-2.3%Source:Companies data,Yahoo Finance,Google FinanceSource:Companies data,Yahoo Finance,Google Fina

240、nceThe SaaS related companies in Japan have some of the highest sales growthin Asia.The average annual sales growth of the 7 SaaS related companies inJapan was 65.7%in 2018 and 49.3%in 2019.Japan-Major SaaS Related Companies;Publicly Listed(%YoYChange in Sales)%YoY Change in Sales20Q2020A

241、sian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim42Freee KKNA100.9%87.0%70.6%Rakus29.9%36.4%32.8%30.4%Sansan51.4%39.4%30.9%35.8%Money Forward88.1%58.4%55.8%71.2%Base158.9%105.1%63.6%NAUzabase48.2%104.6%34.1%11.4%NeoJapan9.2%15.1%40.6%69.7%Average64.3%65.7%49.3%48.2%Media

242、n49.8%58.4%40.6%52.7%Source:Companies data,Yahoo Finance,Google FinanceSource:Companies data,Yahoo Finance,Google FinanceThe average and median P/S valuation multiples of the 7 SaaS relatedcompanies in Japan were 22.4x and 18.3x,respectively in 2019.Japan-Major SaaS Related Companies;Publicly Listed

243、(P/S)ValuationMultiplesP/S(x)20172018 2019 2020*Freee KK210.2 104.656.042.4Rakus33.124.318.320.5Sansan24.517.613.414.5Money Forward55.535.022.516.8Base105.251.331.426.8Uzabase16.68.16.16.0NeoJapan14.612.79.06.4Average65.736.222.419.1Median33.124.318.316.8Source:Companies data,Yahoo Finance,Google Fi

244、nanceNote:*2020 refers to 1Q 2020 annualizedAsian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim43Source:Companies data,Yahoo Finance,Google Finance2)China-Major SaaS Related Companies;Publicly Listed(KeyFinancials)The table below provides the main financials of the 13 Saa

245、S relatedcompanies in China.Of these 13 companies,only five of them generatepositive operating profits.CompanyTickerUnitItem20019OneConnectOCFTCNYmnSalesN/A5821,4142,328CNYmnOPN/A(890)(1,114)(1,701)CNYmnNPN/A(607)(1,190)(1,688)Kingdee00268CNYmnSales 1,862 2,3042,8093,326CNYmnOP24942145342

246、4CNYmnNP288310412373Kingsoft03888CNYmnSales 3,834 5,1815,9068,218CNYmnOP925814(302)(194)CNYmnNP(292)3,297(165)(2,083)Travelsky000696CNYmnSales 6,223 6,7347,4728,122CNYmnOP2,177 2,4732,3192,464CNYmnNP2,421 2,2492,3252,543Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim4

247、4AgoraAPIUSDmnSalesN/AN/A4464USDmnOPN/AN/A0(6)USDmnNPN/AN/A0(6)Fortune Trend688318CNYmnSales6CNYmnOPN/AN/AN/AN/ACNYmnNP4WeiMob2013CNYmnSales1895348651,437CNYmnOP(85)3(42)38CNYmnNP(81)3(1,091)311Linkage Software Co.688588CNYmnSalesN/AN/A467597CNYmnOPN/AN/AN/AN/ACNYmnNPN/AN/A9115

248、0BaozunBZUNCNYmnSales 3,390 4,1495,3937,278CNYmnOP0CNYmnNP8Yeahka09923CNYmnSalesN/A3059932,258CNYmnOPN/A(51)33353CNYmnNPN/A(342)(183)85JinXianDai300830CNYmnSales289350406461CNYmnOPN/AN/AN/AN/ACNYmnNP68757590Fang DDDUOCNYmnSales 1,476 1,7992,2823,599CNYmnOP(364)(5)69(537)CNYmnNP

249、(332)1104(510)iClick Interactive Asia GroupICLKUSDmnSales95125160199USDmnOP(29)(15)(28)(12)USDmnNP(27)(25)(33)(11)Source:Companies data,Yahoo Finance,GoogleFinanceAsian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim45The average operating margin of the SaaS related compani

250、es in Chinaimproved from-11.5%in 2017 to-4.4%in 2018,to-3.8%in 2019.China-Major SaaS Related Companies;Publicly Listed(Operating Margins,%)OP Margins(%)201720182019OneConnect-153.0%-78.8%-73.1%Kingdee18.3%16.1%12.7%Kingsoft15.7%-5.1%-2.4%Travelsky36.7%31.0%30.3%AgoraNA0.5%-9.3%Fortune TrendNANANAWei

251、Mob0.5%-4.9%2.6%Linkage Software Co.NANANABaozun7.6%8.0%6.3%Yeahka-16.8%3.3%15.6%JinXianDaiNANANAFang DD-0.3%3.0%-14.9%iClick Interactive Asia Group-12.1%-17.2%-6.1%Average-11.5%-4.4%-3.8%Median0.5%1.7%0.1%Source:Companies data,Yahoo Finance,Google FinanceSource:Companies data,Yahoo Finance,Google F

252、inanceThe SaaS related companies in China have some of the highest sales growthin Asia.The average annual sales growth of the 13 SaaS related companies inChina was 54%in 2018 and 42%in 2019.China-Major SaaS Related Companies;Publicly Listed(%YoY Change inSales)%YoY Change in Sales201720182019OneConn

253、ectNA 142.9%64.7%Kingdee23.7%21.9%18.4%Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim46Kingsoft35.2%14.0%39.1%Travelsky8.2%11.0%8.7%AgoraNANA47.4%Fortune Trend-5.6%15.4%15.9%WeiMob182.2%62.0%66.1%Linkage Software Co.NANA27.7%Baozun22.4%30.0%35.0%YeahkaNA 225.9%127.4%

254、JinXianDai21.1%16.1%13.6%Fang DD21.9%26.9%57.7%iClick Interactive Asia Group31.3%27.7%24.6%Average37.8%54.0%42.0%Median22.4%26.9%35.0%Source:Companies data,Yahoo Finance,Google FinanceSource:Companies data,Yahoo Finance,Google FinanceThe average and median P/S valuation multiples of the 13 SaaS rela

255、tedcompanies in China were 25.3x and 16.3x,respectively in 2019.China-Major SaaS Related Companies;Publicly Listed(P/S)Valuation MultiplesP/S(x)201720182019OneConnect100.341.325.1Kingdee24.119.816.7Kingsoft10.29.06.4Travelsky5.75.14.7AgoraNA 105.871.8Fortune Trend150.3 130.3 112.4WeiMob43.827.116.3L

256、inkage Software Co.NA43.834.3Baozun4.43.42.5Yeahka47.314.56.4JinXianDai23.420.117.7Fang DD2.92.31.4Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim47iClick Interactive Asia Group21.917.113.7Average39.533.825.3Median23.419.816.3Source:Companies data,Yahoo Finance,Google

257、 FinanceSource:Companies data,Yahoo Finance,Google Finance3)India-Major SaaS Related Companies;Publicly Listed(KeyFinancials)The table below provides the main financials of the 8 SaaS related companiesin India.Of these 8 companies,all of them generate positive operatingprofits.CompanyTickerUnitItem2

258、0019 1Q20191Q2020TataConsultancyServicesTCSINRmnSales 1,179,660 1,231,040 1,464,630 1,569,490 381,720 383,220INRmnOP304,490307,080374,500385,80092,20090,480INRmnNP262,890258,260314,720323,40081,31070,080InfosysINFYUSDmnSales10,20810,93911,79912,7803,1313,121USDmnOP2,5752,6702,7312,7486507

259、21USDmnNP2,1402,4862,1992,331546558HCLTechnologies532281USDmnSales6,9757,8388,6329,9362,3682,355USDmnOP1,4141,5521,6881,946408483Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim48USDmnNP1,2621,3601,4411,554321386WiproWITINRmnSales550,402544,871585,845610,232147,161 149

260、,100INRmnEBIT93,87984,29499,910105,73025,37326,938INRmnNP84,89580,08190,03197,21823,87423,900Tech MahindraTECHMINRmnSales291,408307,729347,421368,677NANAINRmnOP35,25437,90153,74044,287NANAINRmnNP28,12937,99842,97640,330NANAMphasis526299INRmnSales59,97363,77578,19388,238NANAINRmnOP8,1068,23213,36313,

261、990NANAINRmnNP7,9158,37410,73311,848NANAMind TreeMINDTREEINRmnSales52,36454,62870,21577,64318,34219,088INRmnOP5,3335,7009,0038,1441,1722,623INRmnNP4,1865,7017,5416,3099272,130NIIT532541INRmnSales28,02129,89136,76241,839NANAINRmnOP3,6023,7785,2565,516NANAINRmnNP2,5012,8024,0334,440NANASource:Companie

262、s data,Yahoo Finance,Google FinanceThe average operating margin of the SaaS related companies in Indiadeclined slightly from 18.1%in 2018 to 16.8%in 2019.India-Major SaaS Related Companies;Publicly Listed(Operating Margins,%)%YoY Change in Sales201720182019Tata Consultancy Services24.9%25.6%24.6%Inf

263、osys24.4%23.1%21.5%HCL Technologies19.8%19.6%19.6%Wipro Ltd15.5%17.1%17.3%Tech Mahindra12.3%15.5%12.0%Mphasis12.9%17.1%15.9%MindTree10.4%12.8%10.5%NIIT12.6%14.3%13.2%Average16.6%18.1%16.8%Median14.2%17.1%16.6%Source:Companies data,Yahoo Finance,Google FinanceAsian SaaS Stars:Opportunities,Market Out

264、performance,&Key ChallengesDouglas Kim49Source:Companies data,Yahoo Finance,Google FinanceThe average annual sales growth of the 8 SaaS related companies in Indiawas 16.8%in 2018 and 11.1%in 2019.India-Major SaaS Related Companies;Publicly Listed(%YoY Change in Sales)%YoY Change in Sales201720182019

265、Tata Consultancy Services4.4%19.0%7.2%Infosys7.2%7.9%8.3%HCL Technologies12.4%10.1%15.1%Wipro Ltd12.4%10.1%15.1%Tech Mahindra5.6%12.9%6.1%Mphasis6.3%22.6%12.8%MindTree4.3%28.5%10.6%NIIT6.7%23.0%13.8%Average7.4%16.8%11.1%Median6.5%15.9%11.7%Source:Companies data,Yahoo Finance,Google FinanceAsian SaaS

266、 Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim50Source:Companies data,Yahoo Finance,Google FinanceThe average and median P/S valuation multiples of the 8 SaaS relatedcompanies in India were 2.9x and 2.5x,respectively in 2019.India-Major SaaS Related Companies;Publicly Listed(P

267、/S)Valuation MultiplesP/S(x)2017 2018 2019Tata Consultancy Services6.65.55.2Infosys4.84.44.1HCL Technologies3.22.92.5Wipro Ltd3.12.92.8Tech Mahindra2.01.81.7Mphasis3.32.72.4MindTree3.02.32.1NIIT3.62.92.6Average3.73.22.9Median3.22.92.5Source:Companies data,Yahoo Finance,Google FinanceAsian SaaS Stars

268、:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim51Source:Companies data,Yahoo Finance,Google Finance4)Australia-Major SaaS Related Companies;Publicly Listed(Key Financials)The table below provides the main financials of the 11 SaaS relatedcompanies in Australia,which has some of the h

269、ighest numbers of relativelylarge pure-play SaaS companies in Asia.CompanyTickerUnitItem20019AtlassianTEAMUSD mnSales4576268811,210USD mnOP(6)(56)(46)(63)USD mnNP4(38)(113)(638)AfterPayAPTAUD mnSalesN/AN/A142264AUD mnOPN/AN/A(2)(32)AUD mnNPN/AN/A(9)(44)XeroXROUSD mnSales295407553718USD mn

270、OP(71)(29)(9)33USD mnNP(69)(28)(27)3Wisetech GlobalWTCAUD mnSales8AUD mnOP5425880AUD mnNP2324154Altium LimitedALUUSD mnSales94111140172USD mnEBIT25304057USD mnNP23283853Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim52Technology One LimitedTNEAUD mnSales249

271、273253286AUD mnOP53582375AUD mnNP41452259Bravura SolutionsBVSAUD mnSales8AUD mnEBIT12243243AUD mnNP(7)142733FineosFCLEUR mnSales415463EUR mnEBIT(3)2-EUR mnNP(4)1(1)Hansen Technologies LimitedHSNAUD mnSales1AUD mnEBIT36334033AUD mnNP26242922WhispirWSPAUD mnSales15222831AUD mnEBI

272、T(15)(11)(9)(16)AUD mnNP(8)(14)(17)(15)Citadel Group LtdCGLAUD mnSales839710698AUD mnPBT13212514AUD mnNP9131811Source:Companies data,Yahoo Finance,Google FinanceThe average operating margin of the SaaS related companies in Australiadeclined slightly from 7.6%in 2018 to 5.9%in 2019.Australia-Major Sa

273、aS Related Companies;Publicly Listed(Operating Margins,%)OP Margins(%)201720182019Atlassian-8.9%-5.2%-5.2%AfterPayNA-1.1%-12.0%Xero-7.1%-1.6%4.6%Wisetech Global27.0%26.4%23.0%Altium Limited26.6%28.3%33.1%Technology One Limited21.2%9.1%26.2%Bravura Solutions12.7%14.2%16.5%Fineos-7.5%4.3%0.0%Hansen Te

274、chnologies Limited18.8%17.2%14.3%Whispir-52.6%-32.0%-50.2%Citadel Group Ltd21.9%24.0%14.6%Average5.2%7.6%5.9%Median15.7%9.1%14.3%Source:Companies data,Yahoo Finance,Google FinanceAsian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim53Source:Companies data,Yahoo Finance,Goog

275、le FinanceThe average annual sales growth of the 11 SaaS related companies inAustralia remained stable at 25.6%in 2018 and 25.8%in 2019.Australia-Major SaaS Related Companies;Publicly Listed(%YoY Change inSales)%YoY Change in Sales201720182019Atlassian37.0%40.7%37.3%AfterPayNANA 85.6%Xero38.0%35.8%2

276、9.9%Wisetech Global49.6%44.1%57.2%Altium Limited18.5%26.3%22.6%Technology One Limited9.8%-7.4%13.1%Bravura Solutions3.9%15.4%16.3%FineosNA 30.9%16.7%Hansen Technologies Limited17.2%32.1%0.2%Whispir46.3%29.3%11.9%Citadel Group Ltd17.4%8.7%-6.9%Average26.4%25.6%25.8%Median18.5%30.1%16.7%Source:Compani

277、es data,Yahoo Finance,Google FinanceAsian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim54Source:Companies data,Yahoo Finance,Google FinanceThe average and median P/S valuation multiples of the 11 SaaS relatedcompanies in Australia were 17.9x and 11.4x,respectively in 2019

278、.Australia-Major SaaS Related Companies;Publicly Listed(P/S)ValuationMultiplesP/S(x)20172018 2019Atlassian68.348.535.3AfterPayNA 133.171.7Xero22.416.512.7Wisetech Global44.330.719.6Altium Limited27.221.617.6Technology One Limited9.910.79.4Bravura Solutions5.64.94.2Fineos14.811.39.7Hansen Technologie

279、s Limited3.22.42.4Whispir16.512.711.4Citadel Group Ltd2.62.42.5Average21.526.817.9Median15.712.711.4Source:Companies data,Yahoo Finance,Google FinanceAsian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim55Source:Companies data,Yahoo Finance,Google Finance5)Korea-Major SaaS

280、Related Companies;Publicly Listed(KeyFinancials)The table below provides the main financials of the 10 SaaS relatedcompanies in Korea.All of these companies generated positive operatingprofits in 2019.CompanyTickerUnitItem200191Q20191Q 2020Douzone Bizon012510Won bnSales176.8204.4226.9262.

281、762.571.2Won bnOP38.450.554.066.813.916.3Won bnNP28.239.742.551.011.410.4Ahnlab053800Won bnSales142.9150.3159.8167.039.440.4Won bnOP15.216.717.718.42.93.0Won bnNP14.616.322.819.14.13.3Cafe24042000Won bnSales101.9142.6165.4217.249.752.1Won bnOP(2.1)7.415.69.81.9(2.0)Won bnNP(1.3)5.1(28.2)7.81.1(2.3)R

282、support131370Won bnSales21.423.124.728.56.87.6Won bnOP(0.2)3.45.55.81.71.2Won bnNP(0.2)2.75.08.93.1(20.3)Webcash053580Won bnSales91.877.478.061.215.214.0Won bnOP3.53.85.99.31.62.3Won bnNP(0.5)3.65.59.33.71.5Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim56Hancom030520

283、Won bnSales101.2121.2212.9319.371.988.4Won bnOP29.029.042.433.25.514.4Won bnNP15.320.410.822.11.99.0KoreaCenter290510Won bnSales37.4133.2189.7251.560.764.9Won bnOP4.66.39.610.81.92.4Won bnNP4.84.74.97.01.11.0Ezwel090850Won bnSales52.358.473.182.321.225.9Won bnOP0.64.37.09.43.85.5Won bnNP(0.3)2.21.74

284、.72.83.9Exem205100Won bnSales27.533.732.434.55.07.1Won bnOP1.45.44.56.3(1.4)0.6Won bnNP2.60.06.34.9(1.1)1.2Wise I-Tech065370Won bnSales17.116.216.519.74.15.7Won bnOP0.71.11.72.90.10.0Won bnNP0.81.21.52.70.10.1Source:Companies data,Yahoo Finance,Google FinanceThe average operating margin of the SaaS

285、related companies in Koreaimproved slightly from 13.3%in 2018 to 13.6%in 2019.The improvement inoperating margin was especially more apparent from 7.1%in 1Q 2019 to10.9%in 1Q 2020.Korea-Major SaaS Related Companies;Publicly Listed(Operating Margins,%)OP Margins(%)20Q2019 1Q2020Douzone Biz

286、on24.7%23.8%25.4%22.2%22.9%Ahnlab11.1%11.1%11.0%7.4%7.4%Cafe245.2%9.4%4.5%3.8%-3.8%Rsupport14.7%22.3%20.4%25.0%15.8%Webcash4.9%7.6%15.2%10.5%16.4%Hancom23.9%19.9%10.4%7.6%16.3%KoreaCenter4.7%5.1%4.3%3.1%3.7%Ezwel7.4%9.6%11.4%17.9%21.2%Exem16.0%13.9%18.3%-28.0%8.5%Wise I-Tech6.8%10.3%14.7%1.6%0.6%Ave

287、rage11.9%13.3%13.6%7.1%10.9%Median9.2%10.7%13.1%7.5%12.1%Source:Companies data,Yahoo Finance,Google FinanceAsian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim57Source:Companies data,Yahoo Finance,Google FinanceThe average annual sales growth of the 10 SaaS related compani

288、es in Koreawas 18.2%in 2018 and 16.6%in 2019.Korea-Major SaaS Related Companies;Publicly Listed(%YoYChange in Sales)%YoY Change in Sales20Q2020Douzone Bizon15.6%11.0%15.8%13.9%Ahnlab5.2%6.3%4.5%2.5%Cafe2439.9%16.0%31.3%4.8%Rsupport7.9%6.9%15.4%11.8%Webcash-15.7%0.8%-21.5%-7.9%Hancom19.8%7

289、5.7%50.0%22.9%KoreaCenter256.1%42.4%32.6%6.9%Ezwel11.7%25.2%12.6%22.2%Exem22.5%-3.9%6.5%42.0%Wise I-Tech-5.3%1.9%19.4%39.0%Average35.8%18.2%16.6%15.8%Median13.6%9.0%15.6%12.8%Source:Companies data,Yahoo Finance,Google FinanceAsian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas

290、 Kim58Source:Companies data,Yahoo Finance,Google FinanceThe average and median P/S valuation multiples of the 10 SaaS relatedcompanies in Korea were 5.3x and 4.1x,respectively in 2019,which are lowerthan the multiples in Australia,Japan,and China but higher than the ones inIndia.Korea-Major SaaS Rel

291、ated Companies;Publicly Listed(P/S)ValuationMultiplesP/S(x)2017 2018 2019 2020*Douzone Bizon15.313.811.911.0Ahnlab4.03.83.63.8Cafe243.53.02.32.4Rsupport20.319.016.515.5Webcash5.25.16.57.1Hancom3.11.81.21.1KoreaCenter2.82.01.51.4Ezwel2.41.91.71.4Exem3.94.13.94.7Wise I-Tech6.26.15.14.4Average6.76.15.4

292、5.3Median4.04.03.74.1Source:Companies data,Yahoo Finance,Google FinanceNote:*2020 refers to 1Q 2020 results annualizedAsian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim59Source:Companies data,Yahoo Finance,Google Finance6)Southeast Asia-Major SaaS Related Companies;Publi

293、clyListed(Key Financials)The table below provides the main financials of the 7 SaaS related companiesin Southeast Asia,including Singapore,Malaysia,and Thailand.CompanyTickerUnitItem20019Silverlake Axis(Singapore)5CPRM mn Sales 636.3 506.4 541.8 680.8RM mnOP 277.7 144.5 157.0 272.9RM mnNP

294、 273.9NM 134.1 245.6Synagie(Singapore)V2YSGDmnSales3.78.016.119.4SGDmnOP-2.3-3.2-6.7-9.5SGDmnNP-2.3-3.4-7.4-8.4Revez(Singapore)RCUSGDmnSalesNM0.00.55.6SGDmnOPNM-0.2-0.30.5SGDmnNPNM0.1-0.60.0Opensys(Malaysia)OPYSRM mn Sales94.796.195.4 102.9RM mnOP8.411.315.316.4RM mnNP6.06.710.211.1IFCA(Malaysia)IFC

295、ARM mn Sales75.488.893.285.6RM mnOP19.029.632.725.5Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim60RM mnNP0.59.611.45.9Netbay(Thailand)NetbayTHBmnSales 272.9 314.8 361.6 411.6THBmnOP95.1 122.7 148.9 170.5THBmnNP89.3 115.8 148.8 179.1Humanica(Thailand)HUMANTHBmnSales

296、347.7 478.9 515.1 598.8THBmnOP73.6 109.7 155.7 155.5THBmnNP71.595.1 121.9 147.0Source:Companies data,Yahoo Finance,GoogleFinanceThe average operating margin of the SaaS related companies in SoutheastAsia was 16.2%in 2019.Southeast Asia-Major SaaS Related Companies;Publicly Listed(OperatingMargins,%)

297、OP Margins(%)201720182019Silverlake Axis(Singapore)28.5%29.0%40.1%Synagie(Singapore)-40.0%-41.6%-49.0%Revez(Singapore)NM-55.1%9.5%Opensys(Malaysia)11.8%16.0%15.9%IFCA(Malaysia)33.3%35.1%29.8%Netbay(Thailand)39.0%41.2%41.4%Humanica(Thailand)22.9%30.2%26.0%Average15.9%7.8%16.2%Median25.7%29.0%26.0%Sou

298、rce:Companies data,Yahoo Finance,Google FinanceSource:Companies data,Yahoo Finance,Google FinanceAsian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim61The average annual sales growth of the 7 SaaS related companies inSoutheast Asia was 22.5%in 2018 and 12.7%in 2019.Southea

299、st Asia-Major SaaS Related Companies;Publicly Listed(%YoYChange in Sales)201720182019Silverlake Axis(Singapore)-20.4%7.0%25.7%Synagie(Singapore)116.2%101.3%20.5%Revez(Singapore)NMNMNMOpensys(Malaysia)1.5%-0.7%7.8%IFCA(Malaysia)17.8%5.0%-8.2%Netbay(Thailand)15.4%14.9%13.8%Humanica(Thailand)37.7%7.6%1

300、6.2%Average28.0%22.5%12.7%Median16.6%7.3%15.0%Source:Companies data,Yahoo Finance,Google FinanceSource:Companies data,Yahoo Finance,Google FinanceThe average and median P/S valuation multiples of the 7 SaaS relatedcompanies in Southeast Asia were 6.1x and 3.3x,respectively in 2019.Thesevaluation mul

301、tiples are relatively similar to the ones found in Korea,although they are much lower than the other three major countries,including China,Japan,and Australia.Southeast Asia-Major SaaS Related Companies;Publicly Listed(P/S)ValuationMultiplesP/S(x)2017 2018 2019Silverlake Axis(Singapore)4.44.13.3Syna

302、gie(Singapore)7.53.73.1Revez(Singapore)NMNM7.1Opensys(Malaysia)2.32.32.1IFCA(Malaysia)2.52.42.6Netbay(Thailand)19.717.115.1Humanica(Thailand)11.510.79.2Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim62Average8.06.76.1Median6.03.93.3Source:Companies data,Yahoo Finance,

303、Google FinanceSource:Companies data,Yahoo Finance,Google FinanceAsian SaaS Report(Sources)Asian SaaS Report(Sources)https:/ SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim63https:/ SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim64http:/ have no pos

304、ition(s)in the any of securities referenced in this insightViews expressed in this insight accurately reflects my/our personal opinion(s)about the referenced securities and issuers and/orother subject matter as appropriate.This insight does not contain and is not based on any non-public,material inf

305、ormation.To the best of my/our knowledge,the views expressed in this insight comply with Singapore law as well as applicable law in thecountry from which it is postedI/We have not been commissioned to write this insight or hold any specific opinion on the securities referenced thereinI/We have signe

306、d the Insight Provider Agreement and this insight does not violate any of the terms specified therein.Douglas Kim(24 Jul 2020)Asian SaaS Stars:Opportunities,Market Outperformance,&Key ChallengesDouglas Kim65SMARTKARMA RESEARCH:This publication is published by Smartkarma Innovations Pte Ltd(Smartkarm

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