| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 1100.29 | -22 |
| Intrinsic value (DCF) | 664.43 | -53 |
| Graham-Dodd Method | 911.71 | -35 |
| Graham Formula | 85.84 | -94 |
HOUSE OF ROSE Co., Ltd. is a leading Japanese retailer specializing in cosmetics and personal care products, operating primarily under its flagship HOUSE OF ROSE brand. Founded in 1978 and headquartered in Tokyo, the company runs a network of 248 stores across Japan, offering a diverse range of beauty and wellness products, including skincare, makeup, hair care, and fragranced sundry goods. Additionally, HOUSE OF ROSE operates relaxation and fitness salons under the Curves brand, catering to women's health and wellness needs. The company's vertically integrated business model allows it to maintain strong control over product quality and customer experience. Operating in the competitive Japanese cosmetics retail sector, HOUSE OF ROSE differentiates itself through its curated product selection and salon services. With a market capitalization of approximately ¥6.4 billion, the company plays a significant role in Japan's consumer cyclical sector, particularly in specialty retail.
HOUSE OF ROSE presents a niche investment opportunity in Japan's competitive cosmetics retail sector. The company's modest market capitalization (¥6.4 billion) and low beta (0.057) suggest relative stability but limited growth potential. While revenue stands at ¥11.99 billion, net income of ¥122 million indicates thin margins, common in retail. Positive operating cash flow (¥490 million) and strong cash position (¥3.15 billion) against minimal debt (¥80 million) demonstrate financial stability. The dividend yield (¥25 per share) may appeal to income-focused investors. However, the company's small scale and concentration in Japan's saturated beauty market pose challenges against larger competitors. The Curves fitness salon segment provides diversification but faces its own competitive pressures. Investors should weigh the company's stable financials against limited growth prospects in a mature market.
HOUSE OF ROSE operates in a highly competitive segment of Japan's consumer cyclical sector, competing with both mass-market retailers and premium beauty specialists. The company's primary competitive advantage lies in its specialized focus on women's cosmetics and wellness, combining retail with salon services—a relatively unique model in Japan's beauty market. Its vertically integrated operations allow for better margin control compared to pure-play retailers. However, the company faces significant challenges from larger competitors with greater scale, brand recognition, and omnichannel capabilities. HOUSE OF ROSE's store footprint (248 locations) gives it regional presence but pales against nationwide chains. The Curves fitness salon business provides differentiation but competes with growing digital fitness solutions. While the company maintains a strong cash position, its limited investment in digital transformation (evidenced by modest capex) may hinder competitiveness against e-commerce-savvy rivals. HOUSE OF ROSE's niche positioning protects it somewhat from direct competition with global beauty giants, but its small scale limits bargaining power with suppliers and ability to fund innovation.