3 drugstore stocks bought by funds that made intensive investments in trading company stocks ahead of Buffett! Expectations for a reorganization?
It seems that the asset management company Orvis Investments, which concentrated on investing in Japanese trading company stocks ahead of famous investor Warren Buffett and also accurately captured this year's bank stock appreciation, is aiming for the drugstore industry next. $TSURUHA HOLDINGS INC(TSUSF.US$Ya $SUGI HOLDINGS CO.LTD.(SGIPF.US$Stock buybacks are conspicuous. President Tokikoku Tsukasa of Orvis Investments Japan Corporation pointed out in response to Bloomberg's coverage that the drugstore industry has the following three medium-term growth drivers.
[Drugstore medium- to long-term growth drivers]
① There is room for conformism and balance: The US has already been consolidated into about 2 major companies (CVS Health, Walgreens Boots Alliance), but there is a high possibility that Japan will reorganize in the future
② You can gain share of dispensing pharmacies: By using one corner of the sales floor, there is no need for additional costs such as real estate
③ You can earn supermarket shares: We have secured high profit margins for pharmaceuticals and cosmetics, making it possible to sell food at low prices
① There is room for conformism and balance: The US has already been consolidated into about 2 major companies (CVS Health, Walgreens Boots Alliance), but there is a high possibility that Japan will reorganize in the future
② You can gain share of dispensing pharmacies: By using one corner of the sales floor, there is no need for additional costs such as real estate
③ You can earn supermarket shares: We have secured high profit margins for pharmaceuticals and cosmetics, making it possible to sell food at low prices
While they are buying Tsuruha HD, Sundrug, and Sugi HD, stock prices have risen drastically $Kusuri No Aoki Holdings(3549.JP$The number of shares held was reduced in the fall.
◆ $Tsuruha Holdings(3391.JP$
It is one of the top drugstores and is based in Hokkaido. Lady Pharmacies etc. are under the umbrella. The number of people taking off their masks has increased, and cosmetics are doing well. Stores that handle dispensing have been expanded, and the number of prescriptions accepted has also increased. Profitability has also improved due to food price increases. The Hong Kong investment fund, Oasis Management, which is the second-largest shareholder, pointed out inadequate governance, saying “the founder's influence is too strong,” and confronted Tsuruha HD. Tsuruha HDStock prices skyrocketed when it was reported that they were considering delisting due to acceptance of acquisitions and that multiple funds, such as US Bain, were making a name for themselves.In response to Bloomberg's coverage, the Oasis side showed the idea of tolerating the delisting of Tsuruha HD. The largest shareholder is AEON. AEON has Welcia HD, which competes with Tsuruha, under its umbrella. Consolidated sales for the fiscal year ending 2014/5 are expected to be 1.33 trillion yen, up 6.5% from the previous fiscal year, and net profit is expected to increase 2.5% to 25.8 billion yen.
It is one of the top drugstores and is based in Hokkaido. Lady Pharmacies etc. are under the umbrella. The number of people taking off their masks has increased, and cosmetics are doing well. Stores that handle dispensing have been expanded, and the number of prescriptions accepted has also increased. Profitability has also improved due to food price increases. The Hong Kong investment fund, Oasis Management, which is the second-largest shareholder, pointed out inadequate governance, saying “the founder's influence is too strong,” and confronted Tsuruha HD. Tsuruha HDStock prices skyrocketed when it was reported that they were considering delisting due to acceptance of acquisitions and that multiple funds, such as US Bain, were making a name for themselves.In response to Bloomberg's coverage, the Oasis side showed the idea of tolerating the delisting of Tsuruha HD. The largest shareholder is AEON. AEON has Welcia HD, which competes with Tsuruha, under its umbrella. Consolidated sales for the fiscal year ending 2014/5 are expected to be 1.33 trillion yen, up 6.5% from the previous fiscal year, and net profit is expected to increase 2.5% to 25.8 billion yen.
◆ $Sundrug(9989.JP$
A major player based in western Tokyo. In October '22ShikokuThe drugstore and Oya were acquired. In 23/11, it was announced that it would acquire 33.4% of Kirindo Holdings' shares and make it a company subject to the Equity Act. Kirindo HDKansai regionIt incorporates a network of approximately 300 stores that develop mainly. Kirindo HD teamed up with the US investment fund Bain Capital to do an MBO (acquisition in which the management team participated), and it was delisted in '21. Consolidated sales for the fiscal year ending 2014/3 are expected to increase 8.2% to 747 billion yen, and net profit is expected to increase 5.8% to 27.2 billion yen.
A major player based in western Tokyo. In October '22ShikokuThe drugstore and Oya were acquired. In 23/11, it was announced that it would acquire 33.4% of Kirindo Holdings' shares and make it a company subject to the Equity Act. Kirindo HDKansai regionIt incorporates a network of approximately 300 stores that develop mainly. Kirindo HD teamed up with the US investment fund Bain Capital to do an MBO (acquisition in which the management team participated), and it was delisted in '21. Consolidated sales for the fiscal year ending 2014/3 are expected to increase 8.2% to 747 billion yen, and net profit is expected to increase 5.8% to 27.2 billion yen.
◆ $Sugi Holdings(7649.JP$
“Sugi Pharmacy” is developed in the Tokai region. The formulation is strong.In the center of urban areas where there are many visitors to JapanThe store is expanding. In October, a store was opened in Malaysia as a joint venture with a local chain. Expansion to Indonesia, Singapore, and Brunei is also in view in the future. They also supply products in partnership with companies in Taiwan, Vietnam, Hong Kong, Malaysia, etc. In Japan, residential facility management for patients with intractable diseasesCapital and business alliance formed with Nippon Hospice HoldingsIt was concluded this year. We supply daily necessities and pharmaceuticals to facility residents. Consolidated sales for the fiscal year ending 24/2 are expected to increase 8.5% to 724.5 billion yen, and net profit is expected to increase 5.2% to 20 billion yen.
“Sugi Pharmacy” is developed in the Tokai region. The formulation is strong.In the center of urban areas where there are many visitors to JapanThe store is expanding. In October, a store was opened in Malaysia as a joint venture with a local chain. Expansion to Indonesia, Singapore, and Brunei is also in view in the future. They also supply products in partnership with companies in Taiwan, Vietnam, Hong Kong, Malaysia, etc. In Japan, residential facility management for patients with intractable diseasesCapital and business alliance formed with Nippon Hospice HoldingsIt was concluded this year. We supply daily necessities and pharmaceuticals to facility residents. Consolidated sales for the fiscal year ending 24/2 are expected to increase 8.5% to 724.5 billion yen, and net profit is expected to increase 5.2% to 20 billion yen.
The earnings forecast for the end of this fiscal year almost all companies anticipates an increase in sales and profit, but there is a difference in the year-to-date stock price gain/fall rate.
The fund's performance for the past year (as of the end of November) is an additional 30.6% (after deduction of management fees), which greatly exceeds TOPIX's 22.2%. As of the end of November, 3 drugstore brands have cut into the 10th place.
―MooMoo News Kathy
Sources: Bloomberg, IR materials from various companies, Orvis Investments website, Nihon Keizai Shimbun, Minkabu, moomoo
Sources: Bloomberg, IR materials from various companies, Orvis Investments website, Nihon Keizai Shimbun, Minkabu, moomoo
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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