| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 2830.47 | -20 |
| Intrinsic value (DCF) | 26984.61 | 658 |
| Graham-Dodd Method | 1428.91 | -60 |
| Graham Formula | 3598.29 | 1 |
Sugi Holdings Co., Ltd. is a leading Japanese drugstore chain, operating over 1,190 stores nationwide as of 2019. Headquartered in Obu, Japan, the company specializes in pharmaceutical retail, offering prescription and over-the-counter medications, health and beauty products, and daily necessities. Additionally, Sugi Holdings provides visiting nursing and home care support services, positioning itself as a comprehensive healthcare provider. Founded in 1976, the company has grown to become a key player in Japan's healthcare sector, benefiting from the country's aging population and increasing demand for accessible healthcare services. With a market capitalization exceeding ¥555 billion, Sugi Holdings is a significant contributor to Japan's pharmaceutical retail industry, leveraging its extensive store network and integrated healthcare services to maintain a competitive edge.
Sugi Holdings presents a stable investment opportunity within Japan's healthcare sector, supported by its extensive retail network and diversified service offerings. The company's strong revenue of ¥878 billion and net income of ¥25.7 billion reflect its solid operational performance. With a low beta of 0.443, Sugi Holdings exhibits lower volatility compared to the broader market, appealing to risk-averse investors. The company's healthy operating cash flow of ¥36.9 billion and manageable debt levels further underscore its financial stability. However, investors should consider the competitive nature of Japan's drugstore market and potential regulatory changes impacting pharmaceutical retail. The dividend yield, supported by a ¥35 per share payout, adds to its attractiveness for income-focused portfolios.
Sugi Holdings competes in Japan's highly fragmented drugstore market, where scale and location are critical success factors. The company's competitive advantage lies in its extensive store network, which ensures broad customer reach and brand recognition. Its integration of healthcare services, such as visiting nursing and home care support, differentiates it from pure-play retail competitors. However, Sugi Holdings faces intense competition from larger rivals like Matsumotokiyoshi and Tsuruha Holdings, which boast even more extensive networks and stronger bargaining power with suppliers. The company's focus on suburban and regional markets, as opposed to urban centers, allows it to capture underserved demographics but may limit growth in high-traffic areas. Additionally, Sugi Holdings' relatively smaller scale compared to industry leaders could hinder its ability to achieve the same economies of scale. Nevertheless, its consistent profitability and strategic service diversification position it well for sustained growth in Japan's aging society.