(7686) Kakuyasu Group - New Analyst Report 6/21

◆ Company Overview
・The Kakuyasu Group (hereafter, the company) mainly sells alcoholic beverages to both restaurants and households in metropolitan areas such as the 23 wards of Tokyo.

◆ Financial results for the fiscal year ending March 24
・The financial results for the 24/3 fiscal year were net sales of 129,406 million yen (up 12.6% from the previous fiscal year) and operating profit of 2,867 million yen (up 257.0% from the same period). Since the novel coronavirus disaster calmed down, it was the highest performance ever in terms of both sales and profit, driven by an expansion in demand for individual restaurants.

◆ Earnings forecast for the fiscal year ending 25/3
・Regarding financial results for the 25/3 fiscal year, the company plans sales of 137,400 million yen (up 6.2% from the previous fiscal year) and operating profit of 3600 million yen (up 25.6% from the same period).
・The Securities Research Center (hereafter, the Center) predicted sales of 137,795 million yen (up 6.5% from the previous fiscal year) and operating profit of 3,664 million yen (up 27.8% from the same period) for the 25/3 fiscal year, which is on par with the company plan. Continuing from the previous fiscal year, sales expansion for individual restaurants with high profit margins was expected to be 2.7%, an increase of 0.5 percentage points from the previous fiscal year.

◆ Future highlights
・Our center predicted that sales would increase 6.0% from the previous fiscal year in the 26/3 fiscal year and 5.5% increase in sales in the 27/3 fiscal year, and that the operating profit margin on sales would rise to 2.8% for the 26/3 period and 2.9% for the 27/3 period.
・The logistics network, which has been strengthened in response to the novel coronavirus disaster, has enhanced the company's competitive advantage, and it is thought that stable business expansion can be expected for the time being, mainly for restaurants, in a form that demonstrates that advantage. Progress in expanding market share for restaurants in the Tokyo metropolitan area will be one of the points of interest in the future. At the same time, I would like to keep an eye on the progress of expansion in Kyushu, where we have already expanded, and the state of full-scale handling of products other than alcoholic beverages.