Asian Dividend Gems: Septeni Holdings

• Septeni Holdings is one of the leaders in Japan in the digital marketing business which mainly includes digital advertising, marketing support, data & AI-driven solutions.

• The company has also aggressively raised dividend payouts which is a clear sign of improving corporate governance.

• The company is also well positioned to deliver sales growth rate of about 5-7% per year in the next 2-3 years with 20%+ per year growth in operating profit.

Key Investment Highlights

Despite all the doom and gloom about declining population in Japan, there are some business segments that are expected to experience healthy growth rates in the coming decade. One of them includes the Internet advertising market in Japan which was worth 3.7 trillion yen in 2024. The company expects this market to grow to about 5 trillion yen in 2030, representing a 5% CAGR in this period.

Septeni Holdings is one of the leaders in Japan in the digital marketing business which mainly includes digital advertising, marketing support, data & AI-driven solutions. The company has a consistent record of growing its sales and profits. Its balance sheet has also improved in the past several years.

The company has also aggressively raised dividend payouts which is a clear sign of improving corporate governance. Thus, dividend yield which was in the low 1% range in FY21 to FY23 has increased significantly and we expect the company's dividend yield could range in the 4-6% per year in the next several years.

The company is also well positioned to deliver sales growth rate of about 5-7% per year in the next 2-3 years with 20%+ per year growth in operating profit.The company's 2025 guidance is to achieve consolidated sales of 30.3 billion yen (up 7.1% YoY) and operating profit of 4 billion won (up 25.1% YoY). After excellent results in 1Q 2025, the company is well on its way to meeting/or beating these initial financial guidance.

Its valuations are also reasonable as it is trading at EV/EBITDA of 11.6x which is 21% lower than its five year historical EV/EBITDA multiples. All in all, we have a positive view of Septeni Holdings and we believe it could outperform the market in the next 1-2 years.

How Did We Find Septeni Holdings?

We found Septeni Holdings through Smartkarma Smartscreen. The following were the three major criteria that we used:

• Country - Japan only

• Market cap - $500 million or higher

• Dividends - 5 out of 5 only

Using these three criteria, there many many companies that showed up of which the company was ranked number 55. Among the various companies in this list, we thought Septeni Holding was one of the more interesting companies to write about at this time. The company currently has a Smartscore of 4 out of 5. It has 4 out of 5 rating for Value, Resilience, and Momentum but only 3 out of 5 rating for Growth category.

Septeni Holding Smartscore (Source: Smartkarma)