Transferring Coverage of No-Moat Sega Sammy With High Uncertainty Rating

We think Sega Sammy will benefit from new opportunities through the globalization of its well-established intellectual property with expanding platforms and markets. In addition, the acquisition of Rovio has also helped to expand its IP library, providing positive synergy in growing its mobile game business and expanding its global presence. We expect all of this to improve Sega Sammy’s competitiveness and growth outlook. Coupled with the steady operation and decent profitability at their pachinko and pachislot machine business, this should allow it to generate economic profit well into the future, unlocking the company’s long-term value.