Konami: Winner stays on - buy the World Cup reset

Our top pick in Japan Video Gaming. Konami's shares have had a middling year, and lagged peers during the recent sector recovery, but we think they now offer the best risk-reward in our coverage. Management commentary, the high-frequency data we track, and comparisons with trading patterns during the Qatar World Cup in 2022 all point to a durable turn in the post-tournament cycle for eFootball billings. Trading on 20-21x FY+1 PE on our estimates, Konami's shares still screen cheap compared with peers, many of which now trade on above-average valuation multiples compared to history. Sensor Tower data points to eFootball monthly billings and ARPDAU normalising down to trend-line levels, and Konami calls September billings fully reset and reflective of low promotional activity. We expect billings growth to remain solid, while lower mobile platform fees should continue to serve as a tailwind for group-level profits. Good news elsewhere includes Silent Hill Townfall, Castlevania and Yu-Gi-O