IR & Research Intelligence, Sessa Investment Research

Sessa Investment Research

IR & Research Intelligence

Sponsored research focusing on Japanese small cap.

Equity Bottom-Up

<ul><li>Since this is the final year of the current 5-year MTP, focus growth initiatives for FY26/3 are shifting out with a view toward the next MTP.</li><li>Regarding cash allocation for investments and shareholder returns, in addition to FY26/3 capex plans for IT investment in various key systems, as well as renovation work on the Company’s head office, management announced a new 3-year plan to construct a new mother distribution center in Hyogo Prefecture to cover Western Japan at a total estimated cost of JPY 15bn (internal funds plus bank loans).</li><li>At the same time, it added DOE &gt; 3.0% in addition to targeting a consolidated payout ratio of ≥ 50% to its policy on shareholder returns. </li></ul>

Since this is the final year of the current 5-year MTP, focus growth initiatives for FY26/3 are shifting out with a view toward the next MTP.Regarding cash allocation for investments and shareholder returns, in addition to FY26/3 capex plans for IT investment in various key systems, as well as renovation work on the Company’s head office, management announced a new 3-year plan to construct a new mother distribution center in Hyogo Prefecture to cover Western Japan at a total estimated cost of JPY 15bn (internal funds plus bank loans).At the same time, it added DOE &gt; 3.0% in addition to targeting a consolidated payout ratio of ≥ 50% to its policy on shareholder returns. 

Q1 Follow-Up - SHIMOJIMA (7482 JP) - August 28, 2025

<ul>
<li>Since this is the final year of the current 5-year MTP, focus growth initiatives for FY26/3 are shifting out with a view toward the next MTP.</li>
<li>Regarding cash allocation for investments and shareholder returns, in addition to FY26/3 capex plans for IT investment in various key systems, as well as renovation work on the Company’s head office, management announced a new 3-year plan to construct a new mother distribution center in Hyogo Prefecture to cover Western Japan at a total estimated cost of JPY 15bn (internal funds plus bank loans, see P6 for details).</li>
<li>At the same time, it added DOE &gt; 3.0% in addition to targeting a consolidated payout ratio of ≥ 50% to its policy on shareholder returns.</li>
</ul>


Since this is the final year of the current 5-year MTP, focus growth initiatives for FY26/3 are shifting out with a view toward the next MTP.
Regarding cash allocation for investments and shareholder returns, in addition to FY26/3 capex plans for IT investment in various key systems, as well as renovation work on the Company’s head office, management announced a new 3-year plan to construct a new mother distribution center in Hyogo Prefecture to cover Western Japan at a total estimated cost of JPY 15bn (internal funds plus bank loans, see P6 for details).
At the same time, it added DOE &gt; 3.0% in addition to targeting a consolidated payout ratio of ≥ 50% to its policy on shareholder returns.


Q4 Follow-Up - SHIMOJIMA (7482 JP) - July 22, 2025

<ul><li>While 1H profits struggled under pressure on COS from the weak yen, price hikes for roughly 80% of products were implemented from September, a portion from October, so Q4 will see a full 3-month contribution.</li><li>Note also success in controlling SG&amp;A from Q3. Sapporo-based Ohkura Sangyo will be consolidated from Q1 FY26/3 with the acquisition completed in Jan-2025.</li><li>In this report, we look at three TOPICS. The first is an update on CY2024 booming inbound demand, which is continuing coming into 2025. </li></ul>

While 1H profits struggled under pressure on COS from the weak yen, price hikes for roughly 80% of products were implemented from September, a portion from October, so Q4 will see a full 3-month contribution.Note also success in controlling SG&amp;A from Q3. Sapporo-based Ohkura Sangyo will be consolidated from Q1 FY26/3 with the acquisition completed in Jan-2025.In this report, we look at three TOPICS. The first is an update on CY2024 booming inbound demand, which is continuing coming into 2025. 

Shimojima (7482 JP) - OPM Rebounded from Q2 3.4% → Q3 8.6% on Price Hikes

<ul><li>Founded over a century ago in 1920 as a wholesaler of packaging materials, SHIMOJIMA is a leading trading company specialized in providing comprehensive packaging materials, products and supplies, offering over 1,000,000 items, through its unique wholesale and retail omnichannel distribution structure.</li><li>The Company’s nationwide omnichannel distribution network includes 16 regional sales offices, 18 SHIMOJIMA stores, 20 directly managed Package Plaza stores, and roughly 220 Package Plaza FC stores nationwide, the largest chain of packaging supplies specialty stores in Japan, in addition to the EC site ‘SHIMOJIMA Online Shop,’ as well as sales by Group companies with the ultimate benefit of building an easily identifiable brand image.</li><li>SIR believes this will be a competitive advantage in capturing the upside opportunity from the four simultaneous growth drivers examined in this report.</li></ul>

Founded over a century ago in 1920 as a wholesaler of packaging materials, SHIMOJIMA is a leading trading company specialized in providing comprehensive packaging materials, products and supplies, offering over 1,000,000 items, through its unique wholesale and retail omnichannel distribution structure.The Company’s nationwide omnichannel distribution network includes 16 regional sales offices, 18 SHIMOJIMA stores, 20 directly managed Package Plaza stores, and roughly 220 Package Plaza FC stores nationwide, the largest chain of packaging supplies specialty stores in Japan, in addition to the EC site ‘SHIMOJIMA Online Shop,’ as well as sales by Group companies with the ultimate benefit of building an easily identifiable brand image.SIR believes this will be a competitive advantage in capturing the upside opportunity from the four simultaneous growth drivers examined in this report.

Japan

SHIMOJIMA Co., Ltd. is a wholesaler of packaging materials and office supplies for store operators.  The Company's products include boxes, wrapping materials, paper bags, strings, ribbons, and stationery used by department stores and retailers.

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Shimojima (7482 JP)

Q1 Follow-Up - SHIMOJIMA (7482 JP) - August 28, 2025

Since this is the final year of the current 5-year MTP, focus growth initiatives for FY26/3 are shifting out with a view toward the next MTP.

Sessa Investment Research

Q4 Follow-Up - SHIMOJIMA (7482 JP) - July 22, 2025

Since this is the final year of the current 5-year MTP, focus growth initiatives for FY26/3 are shifting out with a view toward the next MTP.

Sessa Investment Research