Don Quijote Holdings / 7532
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R Don Quijote Holdings / 7532 COVERAGE INITIATED ON: 2010.01.06 LAST UPDATE: 2018.03.09 Shared Research Inc. has produced this report by request from the company discussed in the report. The aim is to provide an “owner’s manual” to investors. We at Shared Research Inc. make every effort to provide an accurate, objective, and neutral analysis. In order to highlight any biases, we clearly attribute our data and findings. We will always present opinions from company management as such. Our views are ours where stated. We do not try to convince or influence, only inform. We appreciate your suggestions and feedback. Write to us at [email protected] or find us on Bloomberg. Research Coverage Report by Shared Research Inc. Don Quijote Holdings / 7532 RCoverage LAST UPDATE: 2018.03.09 Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp INDEX How to read a Shared Research report: This report begins with the trends and outlook section, which discusses the company’s most recent earnings. First-time readers should start at the business section later in the report. Key financial data ------------------------------------------------------------------------------------------------------------------------------------- 3 Recent updates ---------------------------------------------------------------------------------------------------------------------------------------- 4 Highlights ------------------------------------------------------------------------------------------------------------------------------------------------------------4 Trends and outlook ----------------------------------------------------------------------------------------------------------------------------------- 6 Monthly trends -----------------------------------------------------------------------------------------------------------------------------------------------------6 Quarterly trends and results -----------------------------------------------------------------------------------------------------------------------------------7 Full-year company forecasts (as of beginning FY06/18) -------------------------------------------------------------------------------------------- 23 Business ------------------------------------------------------------------------------------------------------------------------------------------------ 41 Business description -------------------------------------------------------------------------------------------------------------------------------------------- 41 Strengths and weaknesses ------------------------------------------------------------------------------------------------------------------------------------ 49 Market and value chain ---------------------------------------------------------------------------------------------------------------------------------------- 51 Strategy ------------------------------------------------------------------------------------------------------------------------------------------------------------- 53 Historical financial statements ------------------------------------------------------------------------------------------------------------------ 55 Income statement ----------------------------------------------------------------------------------------------------------------------------------------------- 74 Balance sheet ----------------------------------------------------------------------------------------------------------------------------------------------------- 75 Cash flow statement -------------------------------------------------------------------------------------------------------------------------------------------- 77 Other information ---------------------------------------------------------------------------------------------------------------------------------- 78 History -------------------------------------------------------------------------------------------------------------------------------------------------------------- 78 Results briefing summaries ----------------------------------------------------------------------------------------------------------------------------------- 80 News and topics ------------------------------------------------------------------------------------------------------------------------------------------------- 89 Top management ----------------------------------------------------------------------------------------------------------------------------------------------- 93 Major shareholder ----------------------------------------------------------------------------------------------------------------------------------------------- 94 Investor relations ------------------------------------------------------------------------------------------------------------------------------------------------ 94 Company profile ------------------------------------------------------------------------------------------------------------------------------------------------- 95 02/96 Don Quijote Holdings / 7532 RCoverage LAST UPDATE: 2018.03.09 Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp Key financial data Income statement FY06/05 FY06/06 FY06/07 FY06/08 FY06/09 FY06/10 FY06/11 FY06/12 FY06/13 FY06/14 FY06/15 FY06/16 FY06/17 FY06/18 (JPYmn) Cons. Cons. Cons. Cons. Cons. Cons. Cons. Cons. Cons. Cons. Cons. Cons. Cons. Est. Sales 232,778 260,779 300,660 404,924 480,856 487,571 507,661 540,255 568,377 612,424 683,981 759,592 828,798 920,000 YoY 20.7% 12.0% 15.3% 34.7% 18.8% 1.4% 4.1% 6.4% 5.2% 7.7% 11.7% 11.1% 9.1% 11.0% Gross profit 53,448 60,354 73,123 108,709 127,240 123,506 129,074 139,543 149,807 161,018 181,741 201,893 218,580 240,000 YoY 20.7% 12.9% 21.2% 48.7% 17.0% -2.9% 4.5% 8.1% 7.4% 7.5% 12.9% 11.1% 8.3% 9.8% GPM 23.0% 23.1% 24.3% 26.8% 26.5% 25.3% 25.4% 25.8% 26.4% 26.3% 26.6% 26.6% 26.4% 26.1% SG&A expenses 42,634 48,500 59,537 92,728 110,068 102,439 103,738 110,223 117,438 126,726 142,638 158,708 172,395 189,000 YoY 26.6% 13.8% 22.8% 55.7% 18.7% -6.9% 1.3% 6.3% 6.5% 7.9% 12.6% 11.3% 8.6% 9.6% Operating profit 10,814 11,854 13,586 15,981 17,172 21,067 25,336 29,320 32,369 34,292 39,103 43,185 46,185 51,000 YoY 1.9% 9.6% 14.6% 17.6% 7.5% 22.7% 20.3% 15.7% 10.4% 5.9% 14.0% 10.4% 6.9% 10.4% OPM 4.6% 4.5% 4.5% 3.9% 3.6% 4.3% 5.0% 5.4% 5.7% 5.6% 5.7% 5.7% 5.6% 5.5% Recurring profit 12,841 14,396 15,774 17,204 15,989 21,109 25,138 29,283 33,201 35,487 40,160 43,797 45,523 53,800 YoY 1.9% 12.1% 9.6% 9.1% -7.1% 32.0% 19.1% 16.5% 13.4% 6.9% 13.2% 9.1% 3.9% 18.2% RPM 5.5% 5.5% 5.2% 4.2% 3.3% 4.3% 5.0% 5.4% 5.8% 5.8% 5.9% 5.8% 5.5% 5.8% Net in co me 7,163 10,725 10,638 9,303 8,554 10,238 12,663 19,845 21,141 21,471 23,148 24,938 33,082 32,200 YoY 4.6% 49.7% -0.8% -12.6% -8.1% 19.7% 23.7% 56.7% 6.5% 1.6% 7.8% 7.7% 32.7% -2.7% Net margin 3.1% 4.1% 3.5% 2.3% 1.8% 2.1% 2.5% 3.7% 3.7% 3.5% 3.4% 3.3% 4.0% 3.5% Per share data (JPY, adjusted for stock splits) Shares issued (year end; '000) 66,033 71,338 71,845 72,022 72,022 72,095 77,031 77,135 77,864 78,394 157,919 158,118 158,179 - EPS 112 158 149 131 124 147 168 257 273 275 147 158 209 204 Book value per share 800 1,018 1,146 1,200 1,284 1,461 1,605 1,856 2,136 2,390 1,345 1,464 1,638 - Dividend per share 13 17 20 22 23 25 28 31 33 36 40 22 26 27 Balance sheet (JPYmn) Cash and cash equivalents 15,055 27,792 38,164 38,381 42,563 41,734 35,031 34,237 31,698 42,690 49,717 42,894 76,430 Accounts receivable 2,311 2,617 3,296 4,397 4,612 4,045 4,585 4,889 5,371 5,730 6,820 7,720 8,966 Inventories 39,447 44,400 50,962 67,411 70,651 74,452 81,582 83,641 85,997 89,105 94,580 117,400 123,969 Total current assets 61,193 79,742 97,151 116,580 123,802 128,198 134,515 138,816 143,391 158,834 175,981 195,977 227,585 Total assets 150,048 167,534 209,865 276,288 297,527 302,029 341,300 362,651 386,622 432,135 505,666 560,568 642,868 Accounts payable 22,671 26,197 28,684 39,172 41,062 42,670 42,430 44,793 48,036 55,118 60,556 70,194 85,661 Total interest-bearing debt 65,208 55,238 75,727 112,954 126,725 116,244 133,580 133,342 126,506 134,531 167,507 186,499 211,068 Tot al liabilit ies 97,920 94,793 127,395 191,663 207,555 195,269 216,058 216,916 216,444 238,971 284,299 316,021 362,938 Shareholders' equity 52,128 72,064 81,717 84,899 92,096 107,407 127,087 146,590 167,233 187,637 209,682 231,788 258,282 Cash flow statement (JPYmn) Cash flow s from operat ing act ivit ies 8,431 10,427 15,811 7,788 19,513 18,885 26,029 33,962 38,270 39,684 42,520 29,110 56,441 Cash flow s from invest ing act ivit ies -14,950 2,070 -24,924 -38,960 -29,855 -16,497 -44,789 -29,794 -23,293 -36,593 -52,641 -52,197 -40,593 Cash flow s from financing act ivit ies 12,669 227 19,487 31,368 14,316 -5,475 7,274 -4,637 -9,510 4,440 16,176 17,148 17,644 Financial rat ios ROA (RP-based) 8.6% 8.6% 7.5% 6.2% 5.4% 7.0% 7.4% 8.1% 8.6% 8.2% 7.9% 7.8% 7.1% ROE 15.3% 17.2% 13.7% 11.3% 10.0% 10.5% 11.1% 14.9% 13.7% 12.1% 11.6% 11.2% 13.5% Equit y rat io 34.7% 43.0% 38.9% 30.7% 31.0% 35.6% 37.2% 39.5% 43.0% 43.0% 43.0% 43.0% 43.0% Source: Shared Research based on company data Note: Figures may differ from company materials due to differences in rounding methods. Note: The company executed a 2-for-1 stock split effective July 1, 2015. 03/96 Don Quijote Holdings / 7532 RCoverage LAST UPDATE: 2018.03.09 Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp Recent updates Highlights On March 9, 2018, Don Quijote Holdings Co., Ltd. announced sales figures for February 2018; see the Monthly trends section for details. On March 8, 2018, Shared Research updated the report following