Hoshizaki's Wide Moat Based on Dominant Domestic Market Presence

As the largest commercial kitchen equipment manufacturer in Japan, the company utilizes its domestic network of 440 offices/branches to not only sell its products but to promptly provide maintenance services to its customers throughout Japan. This allows Hoshizaki to have a competitive advantage with scale in Japan, where the majority of its total sales are generated. Hoshizaki’s sales is mainly done directly, which allows the company to maintain relationships with its customers. These factors have allowed the company to attain the leading market share with its key products such as commercial refrigerators, ice machines, and beer dispensers, as well as a brand (known for its penguin logo in Japan) in the "cold" kitchen equipment space. We expect the company’s strong reputation and its competitive advantage in scale to allow the company to maintain the leading share and prevent competitors from making a material impact on its incumbent status in future.