Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Securities analyst covering electronics, precision equipment & robotics, engineering, construction, transport and other sectors for more than 25 years in Japan and 3 years in Korea. Permanent resident of Japan.

Senior Technology Analyst, Japanese Equities

Monotaro (3064 JP): Strong April Data Drives Shares to New High

Monotaro (3064 JP): Share Price Hits New High; Outperforming VONA

MonotaRO (3064 JP): Share Price Up, Sales Growth Down

MonotaRO (3064 JP): Strong Sales Growth Maintained in 4Q

MonotaRO (3064 JP): Strong 3Q, Guidance Raised

MonotaRO (3064 JP): Sales Accelerate Again in 3Q

ja research

ja research is an independent research platform focused exclusively on Japanese equities. Leveraging data and graphic analysis provided by Japan Analytics, we provide insights on small and medium-sized companies that have been ignored by the sell-side as well as challenging conventional wisdom on larger companies. We also offer analyst and corporate access, the latter with translation if required. 

Equity Bottom-Up

<p>FY Dec-17 consolidated results were in line with the upward revision to guidance issued last October. Sales were up 26.9% to ¥88.3 billion, operating profit up 24.7% to ¥11.8 billion and net profit up 32.9% to 8.5 billion. The operating margin dropped from 13.6% to 13.4% due to operating losses of ¥0.3 billion at subsidiaries in Korea and Indonesia. Overseas sales were up 45% to ¥3.7 billion, or 4.2% of total consolidated sales. The effective tax rate declined from 33% to 29%.</p><p>For FY Dec-18, management is guiding for a 24% increase in sales to ¥109.5 billion, a 20% increase in operating profit to ¥14.2 billion and a 19% increase in net profit to ¥10.0 billion. These estimates assume a 22% increase in the domestic (parent company) customers base, a 60% increase in overseas sales to ¥5.9 billion (5.4% of total consolidated sales) and a combined operating loss of ¥0.4 billion at overseas subsidiaries - including a new subsidiary in China. This seems reasonable.</p><p>Looking out to FY Dec-20, we expect overall sales growth to drop to about 15% per annum while overseas sales rise by two-thirds to account for about 7% of the total. Korea should turn profitable while Indonesia and China continue to lose money due to the cost of expansion. As a result, the consolidated operating margin is likely to drop below 13%. Nevertheless, both operating and net profit should increase by about 60% over the next three years.</p><div class="content-highlight"><p>MonotaRO is the only pure-play e-commerce MRO (Maintenance, Repair and Operation) investment in the Japanese stock market. With over 10,000 SKUs (stock keeping units - i.e., individual items, including gloves, hand and power tools, hardware, painting supplies, etc.) for sale to construction companies, manufacturers, auto repair shops and other customers, the company is well-positioned to benefit from the growth of Japan's B2B MRO market. Consolidated subsidiaries in South Korea and Indonesia give MonotaRO potential for meaningful expansion outside Japan as well.</p></div>

FY Dec-17 consolidated results were in line with the upward revision to guidance issued last October. Sales were up 26.9% to ¥88.3 billion, operating profit up 24.7% to ¥11.8 billion and net profit up 32.9% to 8.5 billion. The operating margin dropped from 13.6% to 13.4% due to operating losses of ¥0.3 billion at subsidiaries in Korea and Indonesia. Overseas sales were up 45% to ¥3.7 billion, or 4.2% of total consolidated sales. The effective tax rate declined from 33% to 29%.For FY Dec-18, management is guiding for a 24% increase in sales to ¥109.5 billion, a 20% increase in operating profit to ¥14.2 billion and a 19% increase in net profit to ¥10.0 billion. These estimates assume a 22% increase in the domestic (parent company) customers base, a 60% increase in overseas sales to ¥5.9 billion (5.4% of total consolidated sales) and a combined operating loss of ¥0.4 billion at overseas subsidiaries - including a new subsidiary in China. This seems reasonable.Looking out to FY Dec-20, we expect overall sales growth to drop to about 15% per annum while overseas sales rise by two-thirds to account for about 7% of the total. Korea should turn profitable while Indonesia and China continue to lose money due to the cost of expansion. As a result, the consolidated operating margin is likely to drop below 13%. Nevertheless, both operating and net profit should increase by about 60% over the next three years.MonotaRO is the only pure-play e-commerce MRO (Maintenance, Repair and Operation) investment in the Japanese stock market. With over 10,000 SKUs (stock keeping units - i.e., individual items, including gloves, hand and power tools, hardware, painting supplies, etc.) for sale to construction companies, manufacturers, auto repair shops and other customers, the company is well-positioned to benefit from the growth of Japan's B2B MRO market. Consolidated subsidiaries in South Korea and Indonesia give MonotaRO potential for meaningful expansion outside Japan as well.

モノタロウ（3064 JP）：2018年に営業利益20%増を計画

MonotaRO Co Ltd

モノタロウ（3064 JP）：2018年に営業利益20%増を計画