The article was written using Google Translate to translate a Japanese sentence into English.
This article is an output of what I researched for study purposes and my previous knowledge, and I hope that beginners of investing will read it and deepen their knowledge.
From the fiscal year ending March 2024, the annual dividend will increase by 8 yen per share to 55 yen, and we can expect future growth.
It is an attractive NISA stock as it has shareholder benefits and is a good dividend stock, but the apparel industry is a tough industry with many competitors and if you are left behind in the trends, your business performance will deteriorate.
Although it has a good dividend yield and shareholder benefits, it can be said that it is a stock that is a bit risky to hold for a long time.table of contents
- United Arrows Co., Ltd.
- Stock price indicators (stock price, PER, PBR, etc.) and evaluation as a new NISA stock
United Arrows Co., Ltd.
Company Profile
- Established: 1989
- Head office: Shibuya-ku, Tokyo
- Representative Director and President: Yoshinori Matsuzaki
- Number of employees: Approximately 3575 people
- Business content: Planning, manufacturing, and sales of apparel products
Business content
- UNITED ARROWS: Original brand for men, women and kids
- BEAUTY & YOUTH: Suitable for young people to adults, it is not too casual and features a clean design.
- GREEN LABEL RELAXING: A brand that is widely supported by fashion items for families with children and people of various age groups, and is based on the concept of cheap clothes with a high fashion sense.
- Others: Handling domestic and international famous brands
Strengths
- Unique editorial power:
United Arrows selects domestic and international brands with a unique sense and proposes products using its unique editorial power. - High-quality products:
United Arrows is committed to providing high-quality products.
Rather than mass production, the company’s strength seems to be that it is moving ahead with product development by focusing on sustainability activities, expanding its customer base, and expanding the range of value it provides.
- Customer Satisfaction:
United Arrows is known as a company with high customer satisfaction.
Even though the corona vortex has passed, it seems that fewer customers are casually visiting stores, but United Arrows’ brand strategy is able to meet the needs of many people as it is generating solid profits. I think it means something.
In addition, we are working to build an advanced supply chain by implementing accurate demand understanding using AI and product management using AI through our DX strategy.
assignment
- Intensifying competition:
The apparel market is becoming increasingly competitive worldwide.
Fast Retailing Co., Ltd.↓
- Rise of EC:
With the rise of EC, there are concerns about its impact on store sales.
In April 2021, the company established the DX Promotion Center and is accelerating the digital shift in advertising and sales promotion, leveraging the rich customer experience in stores and combining it with information obtained digitally to make proposals to customers. By doing so, we are working to prevent people from leaving the store by posting information on SNS through store staff blogs, and as an online shop, we will renew our EC site and EC app in March 2022, and take a new step to address the issue. Masu.
- Shortage of human resources:
Due to aging and population decline, the shortage of human resources is becoming more serious.
Future prospects
United Arrows is committed to enriching people’s lives through the planning, manufacturing, and sale of apparel products, with the corporate message of “Creating a better tomorrow for our customers with sincerity and a sense of beauty, and continuing to create standards for lifestyle culture.” I will continue to create.
Stock price indicators (stock price, PER, PBR, etc.) and evaluation as a new NISA stock
United Arrows stock price index as of February 24, 2024
- Stock price: 1780 yen
- PER:10.17x
- PBR:1.53 times
- Market capitalization: Approximately 53.8 billion yen
- Number of shares issued: Approximately 110 million shares
- Sales (compared to previous period): Approximately 130.1 billion yen (9.9%)
- Operating income (compared to previous year): Approximately 6.3 billion yen (278%)
- LENGTH:7.18%
- ROE:13.61%
- Dividend yield: 3.09%
- Shareholder benefits: We provide shareholder benefits to shareholders listed in the shareholder register with March 31st of each year as the vesting date, and we will present shareholder benefit coupons with a 15% discount based on the number of shares held as shown below.
- 2 tickets for shareholders holding 100 shares or more
- 4 tickets for shareholders holding 200 shares or more
- 6 tickets for shareholders holding 500 shares or more
- 10 tickets for shareholders holding 1,000 shares or more
Created with reference to SBI Securities.
Source https://www.sbisec.co.jp/ETGate/
Overall, PBR and PER are considered to be relatively cheap within the same industry, and ROE and ROA are rising due to increased operating income.
The forecast for next fiscal year is sales of approximately 138 billion yen (6.3%) and operating income of approximately 7 billion yen (10%), with reductions in discounts and brick-and-mortar stores in urban areas going well, and personnel costs increasing. Operating income is steadily increasing due to efficiency improvements and other factors.
It is thought that there are a relatively large number of investors who expect the stock price to rise with the lending/debt ratio of margin transactions remaining at 26.08 times and the turnover period of 2.3 days, and we believe that the price movement is a little calm.
As a NISA stock, in addition to its good dividend yield, it has the advantage of offering shareholder benefits, and as long as there is no deterioration in social conditions or scandals, we can expect the stock price to rise due to its high profits for two consecutive years.
And since the stock price is close to the lowest price in the past few years, it is also a good performance, so it can be said that it is currently undervalued .
The disadvantage is that the apparel industry has many competitors, and it is not easy to know the latest trends and turn them into products, and if you are left behind, your business performance may deteriorate.
Especially for companies like Fast Retailing, which have low prices, good designs, and are very large in terms of market capitalization, depending on trends, there is a high possibility that something disadvantageous for United Arrows will occur, which can be called a risk .
However, since it is highly unique, it is a difficult world, but I think that it will be able to overcome it successfully.
You may refer to this article when purchasing stocks, but in the end it is a personal decision.
We recommend methods to reduce the risk of stock price fluctuations, such as purchasing while looking for trends and dollar-cost averaging, which involves purchasing one share at a time.
This article was created based on Brad’s question.
Thank you for reading to the end.
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Source: United Arrows
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