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Kirin Holdings Co Ltd 2503

Morningstar Rating
JPY 2,280.00 +12.00 (0.53%)
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Company Report

Kirin's Health Science Growth Prospects Remain Uncertain; Brewery and Pharma Growth Lift Profits

Kirin is stepping up investment to transform itself into a wellness specialist over the long run. The secular volume decline in the domestic beer market has prompted Kirin to seek new growth avenues, of which it identifies wellness leveraging its pharmaceutical know-how and beverage resources as the third growth pillar. Meanwhile, margin expansion of the cash cow brewery business combined with overseas growth of the pharmaceutical sales will bolster mid-term profits. Kirin is pining hopes on the underpenetrated craft beer to invigorate the torpid beer consumption at home.

Price vs Fair Value

2503 is trading at a 13% discount.
Price
JPY 2,268.00
Fair Value
JPY 3,327.00
Uncertainty
Medium
1-Star Price
JPY 8,564.00
5-Star Price
JPY 2,671.00
Economic Moat
Tcrkb
Capital Allocation
Qglnclm

Bulls Say, Bears Say

Bulls

Kirin’s health science profits will improve after the downsizing of commoditized amino acids business ends while new nutritional ingredients and Blackmores start making contribution.

Bears

The strategic shift to the health and wellness field raises concerns over Kirin’s long-term outlook, given a lack of track record in areas outside brewing business and unclear competitive advantages

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News

Trading Information

Previous Close Price
JPY 2,268.00
Day Range
JPY 2,245.002,295.50
52-Week Range
JPY 1,983.002,295.50
Bid/Ask
JPY 2,279.50 / JPY 2,280.00
Market Cap
JPY 1.85 Tril
Volume/Avg
2.3 Mil / 3.1 Mil

Key Statistics

Price/Earnings (Normalized)
11.94
Price/Sales
0.86
Dividend Yield (Trailing)
3.21%
Dividend Yield (Forward)
3.21%
Total Yield
3.23%

Company Profile

Kirin is the second largest brewer by value in Japan, with an estimated 35.7% volume share in beer and beer-like category as of 2022. It holds a top share in happoshu (low-malt beer) and new genre (no-malt beer) categories. Apart from beer, it also operates a wide range of acholic and soft beverage products in Japan. It made several acquisitions including Lion Nathan and National Foods in Oceania, the Brazilian brewer Schincariol, and Myanmar Brewery, but has divested most of the acquired businesses except Lion. It has shifted focus back to the domestic brewery after a painful exit from Brazil in 2017 and identified craft beer and wellness as new growth drivers. Overseas business represents about 40% of group’s sales. It also owns a 48.6% stake in the largest Filipino brewer San Miguel.
Sector
Consumer Defensive
Industry
Beverages - Brewers
Stock Style Box
Large Core
Total Number of Employees
33,739

Competitors

Valuation

Metric
2503
2502
Price/Earnings (Normalized)
11.9416.28
Price/Book Value
1.621.13
Price/Sales
0.861.00
Price/Cash Flow
8.167.73
Price/Earnings
2503
2502

Financial Strength

Metric
2503
2502
Quick Ratio
0.870.39
Current Ratio
1.420.61
Interest Coverage
18.8713.57
Quick Ratio
2503
2502

Profitability

Metric
2503
2502
Return on Assets (Normalized)
5.92%3.32%
Return on Equity (Normalized)
15.10%7.45%
Return on Invested Capital (Normalized)
8.24%4.53%
Return on Assets
2503
2502
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