Japan Experts, Extraordinary Performance, Astris Advisory Japan

Astris Advisory Japan

Japan Experts, Extraordinary Performance

Our Corporate Advisory service is designed to give clients access to a wider range of investors. These include Japan specialists as well as global investors. The goal is to help achieve a fair equity valuation.

Equity Bottom-Up

Japan Elevator Service Holding / Equity Bottom-Up

<ul><li>Solid execution and high earnings visibility – The key takeaway from Q1-3 FY3/25 results is that JES is a robust business with strong fundamentals, with double-digit sales (+16.6% YoY) and OP growth (+28.2% YoY).</li><li>Quarterly Q3 FY3/25 OPM reached a historic high of 17.9%, driven by operating leverage with recurring revenue volume from growing maintenance contracts and improving the productivity of its in-house engineers while not introducing any price hikes.</li><li>The resultant gains in market share from OEMs and sustainable margin expansion position the company to continue generating value, especially in an inflationary environment that drives demand for cost-effective and high-quality service.</li></ul>

Solid execution and high earnings visibility – The key takeaway from Q1-3 FY3/25 results is that JES is a robust business with strong fundamentals, with double-digit sales (+16.6% YoY) and OP growth (+28.2% YoY).Quarterly Q3 FY3/25 OPM reached a historic high of 17.9%, driven by operating leverage with recurring revenue volume from growing maintenance contracts and improving the productivity of its in-house engineers while not introducing any price hikes.The resultant gains in market share from OEMs and sustainable margin expansion position the company to continue generating value, especially in an inflationary environment that drives demand for cost-effective and high-quality service.

Japan Elevator Service Holdings (6544 JP) - Sustainable Margin Expansion

<ul><li>Ongoing growth and margin expansion – The company continues to display positive characteristics of a high-quality franchise business with growth opportunities, with Q1-2 FY3/25 results showing sustained double-digit sales (+17.0% YoY) and OP growth (+30.6% YoY).</li><li>Maintenance contracts grew 13.8% YoY organically, and Modernization units remain on a positive trajectory with strong underlying demand given the company’s competitive advantage as an independent provider.</li><li>The company has maintained FY3/25 guidance; we believe the earnings outlook for H2 FY3/25 remains positive given the increasing utilization at the JIK (JES Innovation Center Kansai) and geographic reach, and ongoing productivity enhancement of its engineers resulting in operating leverage.</li></ul>

Ongoing growth and margin expansion – The company continues to display positive characteristics of a high-quality franchise business with growth opportunities, with Q1-2 FY3/25 results showing sustained double-digit sales (+17.0% YoY) and OP growth (+30.6% YoY).Maintenance contracts grew 13.8% YoY organically, and Modernization units remain on a positive trajectory with strong underlying demand given the company’s competitive advantage as an independent provider.The company has maintained FY3/25 guidance; we believe the earnings outlook for H2 FY3/25 remains positive given the increasing utilization at the JIK (JES Innovation Center Kansai) and geographic reach, and ongoing productivity enhancement of its engineers resulting in operating leverage.

Japan Elevator Service Holdings (6544 JP) - Demonstrating High-Quality Characteristics

<ul><li>Q1 FY3/25 results demonstrated a strong start to the FY, with high double-digit growth for both sales (+20.9% YoY) and OP (+39.1% YoY).</li><li>Profitability improved YoY driven by 1) high demand for Repair work improving the sales mix, and 2) continued sales volume expansion driving operating leverage.</li><li>The company continues to gain maintenance market share from OEMs by remaining price- competitive, continues to expand its nationwide network, and has sufficient headcount to cater to growing demand. </li></ul>

Q1 FY3/25 results demonstrated a strong start to the FY, with high double-digit growth for both sales (+20.9% YoY) and OP (+39.1% YoY).Profitability improved YoY driven by 1) high demand for Repair work improving the sales mix, and 2) continued sales volume expansion driving operating leverage.The company continues to gain maintenance market share from OEMs by remaining price- competitive, continues to expand its nationwide network, and has sufficient headcount to cater to growing demand. 

Japan Elevator Service Holdings (6544) - Q1 FY3/25 Results Update

<ul>
<li>Solid execution, high earnings visibility – Q1-3 FY3/2024 results demonstrated a continuation of positive developments in 1) sustained growth in maintenance and repair services, and 2) stronger than expected demand for modernization services.</li>
<li>We believe JES is providing in-demand high-quality services driven by secular growth as building owners convert to reputable independent providers for cost management, and structural demand driving modernization of aging elevators.</li>
<li>The company is on track to increase service capacity with the new JES Innovation Center Kansai (JIK) due to commence operations in April 2024.</li>
</ul>


Solid execution, high earnings visibility – Q1-3 FY3/2024 results demonstrated a continuation of positive developments in 1) sustained growth in maintenance and repair services, and 2) stronger than expected demand for modernization services.
We believe JES is providing in-demand high-quality services driven by secular growth as building owners convert to reputable independent providers for cost management, and structural demand driving modernization of aging elevators.
The company is on track to increase service capacity with the new JES Innovation Center Kansai (JIK) due to commence operations in April 2024.


Japan Elevator Service Holdings (6544) - Business Model Generating Value and Proving Resilient

<ul><li>Success of disruptive innovation – we believe Q1-2 FY3/2024 results were ahead of the run-rate for FY guidance, driven by 1) sustained growth in maintenance and repair service contracts, and</li><li>2) stronger than expected demand for modernization services, resulting in gross margin improvement QoQ in Q2 FY3/2024 via amplified proposal effectiveness and increases in pricing.</li><li>We expect to see JES continue to successfully disrupt the market via innovation, driven by secular growth as building owners convert to reputable independent providers for cost management and structural demand from aging elevators requiring modernization.</li></ul>

Success of disruptive innovation – we believe Q1-2 FY3/2024 results were ahead of the run-rate for FY guidance, driven by 1) sustained growth in maintenance and repair service contracts, and2) stronger than expected demand for modernization services, resulting in gross margin improvement QoQ in Q2 FY3/2024 via amplified proposal effectiveness and increases in pricing.We expect to see JES continue to successfully disrupt the market via innovation, driven by secular growth as building owners convert to reputable independent providers for cost management and structural demand from aging elevators requiring modernization.

Japan Elevator Service Holdings (6544 JP) - Game-Changer Continuing to Excel

Japan

Japan Elevator Service Holdings Co. Ltd. offers elevator and escalator maintenance, inspection and renewal services.

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Japan Elevator Service Holding (6544 JP)

Japan Elevator Service Holdings (6544 JP) - Sustainable Margin Expansion

The key takeaway from Q1-3 FY3/25 results is that JES is a robust business with strong fundamentals, with double-digit sales (+16.6% YoY) and OP...

Astris Advisory Japan

Japan Elevator Service Holdings (6544 JP) - Demonstrating High-Quality Characteristics

The company continues to display positive characteristics of a high-quality franchise business with growth opportunities, with Q1-2 FY3/25 results...

Astris Advisory Japan

Japan Elevator Service Holdings (6544) - Q1 FY3/25 Results Update

Q1 FY3/25 results demonstrated a strong start to the FY, with high double-digit growth for both sales (+20.9% YoY) and OP (+39.1% YoY).

Astris Advisory Japan

Japan Elevator Service Holdings (6544) - Business Model Generating Value and Proving Resilient

The company is on track to increase service capacity with the new JES Innovation Center Kansai (JIK) due to commence operations in April 2024.

Astris Advisory Japan

Japan Elevator Service Holdings (6544 JP) - Game-Changer Continuing to Excel

We believe Q1-2 FY3/2024 results were ahead of the run-rate for FY guidance, driven by 1) sustained growth in maintenance and repair service contracts

Astris Advisory Japan

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