Research Coverage of Japanese Listed Companies, Shared Research Inc

Shared Research

Research Coverage of Japanese Listed Companies

Shared Research Inc

Pioneering research coverage of Japanese listed companies. Now customizable and interactive for global institutional investors. Corporate access reimagined.

Equity Bottom-Up

<ul><li>FY03/25 revenue was JPY615.8bn (+1.7% YoY), operating profit JPY19.1bn (+3.6% YoY), net income JPY13.9bn (-28.4% YoY).</li><li>FY03/26 forecasts revenue JPY640.0bn (+3.9% YoY), operating profit JPY19.0bn (-0.7% YoY), net income JPY30.0bn (+115.8% YoY).</li><li>Shareholder return policy includes a 40% payout ratio, JPY100 minimum dividend, and flexible share buybacks.</li></ul>

FY03/25 revenue was JPY615.8bn (+1.7% YoY), operating profit JPY19.1bn (+3.6% YoY), net income JPY13.9bn (-28.4% YoY).FY03/26 forecasts revenue JPY640.0bn (+3.9% YoY), operating profit JPY19.0bn (-0.7% YoY), net income JPY30.0bn (+115.8% YoY).Shareholder return policy includes a 40% payout ratio, JPY100 minimum dividend, and flexible share buybacks.

Megmilk Snow Brand (2270 JP): Full-year FY03/25 flash update

<ul><li>Megmilk Snow Brand's cumulative Q3 FY03/25 revenue was JPY469.7bn (+2.0% YoY), with operating profit at JPY16.3bn (+0.0% YoY).</li><li>Dairy Products segment revenue reached JPY197.8bn (+1.5% YoY), while operating profit was JPY8.0bn (+0.7% YoY).</li><li>Beverages and Desserts segment revenue totaled JPY203.8bn (+3.8% YoY), with operating profit at JPY5.5bn (+0.4% YoY).</li></ul>

Megmilk Snow Brand's cumulative Q3 FY03/25 revenue was JPY469.7bn (+2.0% YoY), with operating profit at JPY16.3bn (+0.0% YoY).Dairy Products segment revenue reached JPY197.8bn (+1.5% YoY), while operating profit was JPY8.0bn (+0.7% YoY).Beverages and Desserts segment revenue totaled JPY203.8bn (+3.8% YoY), with operating profit at JPY5.5bn (+0.4% YoY).

Megmilk Snow Brand (2270 JP): Q3 FY03/25 flash update

<ul><li>Revenue for 1H FY03/25 was JPY311.7bn (+2.0% YoY), with operating profit at JPY11.8bn (+5.1% YoY).</li><li>Dairy Products segment revenue was JPY128.5bn (+1.5% YoY), operating profit decreased to JPY4.5bn (-11.7% YoY).</li><li>Beverages and Desserts segment revenue was JPY136.7bn (+3.5% YoY), operating profit increased to JPY4.9bn (+33.9% YoY).</li></ul>

Revenue for 1H FY03/25 was JPY311.7bn (+2.0% YoY), with operating profit at JPY11.8bn (+5.1% YoY).Dairy Products segment revenue was JPY128.5bn (+1.5% YoY), operating profit decreased to JPY4.5bn (-11.7% YoY).Beverages and Desserts segment revenue was JPY136.7bn (+3.5% YoY), operating profit increased to JPY4.9bn (+33.9% YoY).

Megmilk Snow Brand (2270 JP): Coverage initiation,1H FY03/25 flash update

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Thematic (Sector/Industry)

<ul>
<li>With energy costs still rising and ongoing supply-chain issues exacerbated by the re-emergence of Covid problems in China, Japanese consumers suddenly face the prospect of genuine price inflation.</li>
<li>How will they respond? Some retailers are trying to resist higher prices at the expense of profits and others have no choice but to raise prices.</li>
<li>We look at the wholesale, retail and consumer response to inflation and which retailers stand to benefit or lose from inflation.</li>
</ul>


With energy costs still rising and ongoing supply-chain issues exacerbated by the re-emergence of Covid problems in China, Japanese consumers suddenly face the prospect of genuine price inflation.
How will they respond? Some retailers are trying to resist higher prices at the expense of profits and others have no choice but to raise prices.
We look at the wholesale, retail and consumer response to inflation and which retailers stand to benefit or lose from inflation.


Widespread Price Rises at Japanese Retail and Wholesale

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

China Youran Dairy Group Ltd / Equity Capital Markets

<div>
<p><a href="https://www.smartkarma.com/entities/china-youran-dairy-group-ltd" target="_blank" data-smartkarma-citation="entities:31075:1" rel="noopener">China Youran Dairy Group Ltd (9858 HK)</a> is the world’s largest raw milk provider as measured by herd size of dairy cows as of 30 June 2020 and raw milk production volume in 1H20, according to Frost &amp; Sullivan. Youran was once a wholly-owned subsidiary of <a href="https://www.smartkarma.com/entities/inner-mongolia-yili-indus-a" target="_blank" data-smartkarma-citation="entities:3220:1" rel="noopener">Inner Mongolia Yili Industrial Group (A) (600887 CH)</a> until PAG Capital’s investment in 2015.</p>
<p>At the proposed IPO price range of HK$6.98-8.66 per share, Youran will have a market cap of HK$26,492-32,868 million ($3.4-4.2 billion). At the mid-point of the IPO price range, the gross proceeds are HK$5,595 million ($722 million). The primary/secondary split is 69%/31%. The selling shareholder is PAG Capital.</p>
<p>The cornerstone support is unusually low. Two cornerstone investors will purchase $50 million worth of the offer shares (6.94% of the offer shares at the mid-point of the IPO price range). The cornerstone investors are CITIC-Prudential Life Insurance and Harvest Fund Management.</p>
</div><div>
<p>In <a href="https://www.smartkarma.com/insights/china-youran-dairy-group-ipo-initiation-ecownomics" target="_blank" data-smartkarma-citation="insights:51709" rel="noopener">China Youran Dairy Group IPO Initiation: Ecownomics</a>, we stated that notwithstanding its high revenue dependence on Yili, Youran is capitalising on the favourable demand-supply imbalance for raw milk in China by delivering strong organic growth (on a pro-forma basis), rising margins and accretive acquisitions. We concluded that Youran is worth a look.</p>
<div class="content-highlight"><p>Based on our forecasts, Youran is attractively valued to its H-share peer group, which are largely downstream players, at the low-end of the IPO price range. Compared to <a href="https://www.smartkarma.com/entities/china-modern-dairy-holdings" target="_blank" data-smartkarma-citation="entities:6785:1" rel="noopener">China Modern Dairy (1117 HK)</a>, an upstream dairy peer (arguably the key listed comp), Youran trades at a substantial premium on a CY2021 P/E basis but trades at a substantial discount on a CY2021 PEG basis. Overall, we are inclined to participate at most at the low end of the IPO price range due to the decent upside potential. </p></div>
</div>


China Youran Dairy Group Ltd (9858 HK) is the world’s largest raw milk provider as measured by herd size of dairy cows as of 30 June 2020 and raw milk production volume in 1H20, according to Frost &amp; Sullivan. Youran was once a wholly-owned subsidiary of Inner Mongolia Yili Industrial Group (A) (600887 CH) until PAG Capital’s investment in 2015.
At the proposed IPO price range of HK$6.98-8.66 per share, Youran will have a market cap of HK$26,492-32,868 million ($3.4-4.2 billion). At the mid-point of the IPO price range, the gross proceeds are HK$5,595 million ($722 million). The primary/secondary split is 69%/31%. The selling shareholder is PAG Capital.
The cornerstone support is unusually low. Two cornerstone investors will purchase $50 million worth of the offer shares (6.94% of the offer shares at the mid-point of the IPO price range). The cornerstone investors are CITIC-Prudential Life Insurance and Harvest Fund Management.

In China Youran Dairy Group IPO Initiation: Ecownomics, we stated that notwithstanding its high revenue dependence on Yili, Youran is capitalising on the favourable demand-supply imbalance for raw milk in China by delivering strong organic growth (on a pro-forma basis), rising margins and accretive acquisitions. We concluded that Youran is worth a look.
Based on our forecasts, Youran is attractively valued to its H-share peer group, which are largely downstream players, at the low-end of the IPO price range. Compared to China Modern Dairy (1117 HK), an upstream dairy peer (arguably the key listed comp), Youran trades at a substantial premium on a CY2021 P/E basis but trades at a substantial discount on a CY2021 PEG basis. Overall, we are inclined to participate at most at the low end of the IPO price range due to the decent upside potential. 


China Youran Dairy Group IPO: Valuation Insights

Japan

MEGMILK SNOW BRAND Co., Ltd.  was formed through the merger of Snow Brand Milk Products and Nippon Milk Community Co.  The Company will manage the operations of group companies involved in the manufacture and sales of milk and dairy products.

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Megmilk Snow Brand (2270 JP)