Itoham Yonekyu Holdings (TSE:2296) - Share price, News & Analysis

Q: What is the Fair Price of 2296 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

2296 (¥666) is trading above our estimate of [[fair value]] (¥447.5)

2296 fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	1/6
Past Performance	2/6
Financial Health	6/6
Dividends	2/6

2296 Stock Overview

Itoham Yonekyu Holdings Inc. engages in the manufacture and sale of processed meat and processed/precooked food products in Japan.

Rewards

Price-To-Earnings ratio (10.5x) is below the JP market (12.2x)

Earnings are forecast to grow 2.16% per year

Trading at good value vs. peer average Price-To-Earnings ratio

Trading at good value vs. industry average Price-To-Earnings ratio

Trading below our calculated fair Price-To-Earnings ratio

Risk Analysis

Dividend of 3.6% is not well covered

Itoham Yonekyu Holdings Competitors

Nippon Suisan Kaisha

TSE:1332

JP¥169.6b

Morinaga&Co

TSE:2201

JP¥192.8b

Morinaga Milk Industry

TSE:2264

JP¥192.4b

Ezaki Glico

TSE:2206

JP¥226.7b

Price History & Performance

Summary of all time highs, changes and price drops for Itoham Yonekyu Holdings
Historical stock prices
Current Share Price	JP¥666.00
52 Week High	JP¥735.00
52 Week Low	JP¥628.00
Beta	0.23
1 Month Change	-0.30%
3 Month Change	-3.34%
1 Year Change	-7.37%
3 Year Change	-0.89%
5 Year Change	-35.84%
Change since IPO	-9.88%

Shareholder Returns

	2296	JP Food	JP Market
7D	0.5%	1.7%	-3.9%
1Y	-7.4%	0.9%	-8.2%

Return vs Industry: 2296 underperformed the JP Food industry which returned 0.9% over the past year.

Return vs Market: 2296 matched the JP Market which returned -8.2% over the past year.

Price Volatility

Is 2296's price volatile compared to industry and market?
2296 volatility
2296 Average Weekly Movement	1.7%
Food Industry Average Movement	2.3%
Market Average Movement	3.5%
10% most volatile stocks in JP Market	7.4%
10% least volatile stocks in JP Market	1.8%

Stable Share Price: 2296 is less volatile than 75% of JP stocks over the past 3 months, typically moving +/- 2% a week.

Volatility Over Time: 2296's weekly volatility (2%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1928	8,089	Isao Miyashita	https://www.itoham-yonekyu-holdings.com

Itoham Yonekyu Holdings Inc. engages in the manufacture and sale of processed meat and processed/precooked food products in Japan. It offers ham/sausage, pizza/snacks, noodles, and cheese products. The company was founded in 1928 and is headquartered in Tokyo, Japan.

Itoham Yonekyu Holdings Fundamentals Summary

How do Itoham Yonekyu Holdings's earnings and revenue compare to its market cap?
2296 fundamental statistics
Market Cap	JP¥192.67b
Earnings (TTM)	JP¥18.34b
Revenue (TTM)	JP¥864.09b

10.5x

P/E Ratio

0.2x

P/S Ratio

Is 2296 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
2296 income statement (TTM)
Revenue	JP¥864.09b
Cost of Revenue	JP¥732.97b
Gross Profit	JP¥131.12b
Other Expenses	JP¥112.78b
Earnings	JP¥18.34b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Nov 08, 2022

Earnings per share (EPS)	63.39
Gross Margin	15.17%
Net Profit Margin	2.12%
Debt/Equity Ratio	14.3%

How did 2296 perform over the long term?

See historical performance and comparison

Dividends

3.6%

Current Dividend Yield

37%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 2296 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 2296?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 2296. This is calculated by dividing 2296's market cap by their current preferred multiple.
What is 2296's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	JP¥192.67b

2296 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.2x
Enterprise Value/EBITDA	5.3x
PEG Ratio	4.9x

Price to Earnings Ratio vs Peers

How does 2296's PE Ratio compare to its peers?

2296 PE Ratio vs Peers

The above table shows the PE ratio for 2296 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	11.6x
1332 Nippon Suisan Kaisha	10.4x	5.1%	JP¥169.6b
2201 Morinaga&Co	7.3x	-2.1%	JP¥192.8b
2264 Morinaga Milk Industry	7x	-8.2%	JP¥192.4b
2206 Ezaki Glico	21.9x	6.9%	JP¥226.7b
2296 Itoham Yonekyu Holdings	10.5x	2.2%	JP¥192.7b

Price-To-Earnings vs Peers: 2296 is good value based on its Price-To-Earnings Ratio (10.5x) compared to the peer average (11.6x).

Price to Earnings Ratio vs Industry

How does 2296's PE Ratio compare vs other companies in the JP Food Industry?

Price-To-Earnings vs Industry: 2296 is good value based on its Price-To-Earnings Ratio (10.5x) compared to the JP Food industry average (16.4x)

Price to Earnings Ratio vs Fair Ratio

What is 2296's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

2296 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	10.5x
Fair PE Ratio	15.4x

Price-To-Earnings vs Fair Ratio: 2296 is good value based on its Price-To-Earnings Ratio (10.5x) compared to the estimated Fair Price-To-Earnings Ratio (15.4x).

Share Price vs Fair Value

What is the Fair Price of 2296 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 2296 (¥666) is trading above our estimate of fair value (¥447.5)

Significantly Below Fair Value: 2296 is trading above our estimate of fair value.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is Itoham Yonekyu Holdings forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

2.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2296's forecast earnings growth (2.2% per year) is above the savings rate (0.04%).

Earnings vs Market: 2296's earnings (2.2% per year) are forecast to grow slower than the JP market (8.6% per year).

High Growth Earnings: 2296's earnings are forecast to grow, but not significantly.

Revenue vs Market: 2296's revenue (1.1% per year) is forecast to grow slower than the JP market (4.2% per year).

High Growth Revenue: 2296's revenue (1.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 2296's Return on Equity is forecast to be low in 3 years time (6.1%).

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Past Performance

How has Itoham Yonekyu Holdings performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

7.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 2296 has high quality earnings.

Growing Profit Margin: 2296's current net profit margins (2.1%) are lower than last year (2.7%).

Past Earnings Growth Analysis

Earnings Trend: 2296's earnings have grown by 7.6% per year over the past 5 years.

Accelerating Growth: 2296's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 2296 had negative earnings growth (-18.3%) over the past year, making it difficult to compare to the Food industry average (-0.8%).

Return on Equity

High ROE: 2296's Return on Equity (7%) is considered low.

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Financial Health

How is Itoham Yonekyu Holdings's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 2296's short term assets (¥261.5B) exceed its short term liabilities (¥145.0B).

Long Term Liabilities: 2296's short term assets (¥261.5B) exceed its long term liabilities (¥25.4B).

Debt to Equity History and Analysis

Debt Level: 2296's net debt to equity ratio (0.9%) is considered satisfactory.

Reducing Debt: 2296's debt to equity ratio has reduced from 20.3% to 14.3% over the past 5 years.

Debt Coverage: 2296's debt is well covered by operating cash flow (49.1%).

Interest Coverage: 2296 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Itoham Yonekyu Holdings's current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

3.60%

Current Dividend Yield

Dividend Yield vs Market

Itoham Yonekyu Holdings Dividend Yield vs Market

How does Itoham Yonekyu Holdings dividend yield compare to the market?
Segment	Dividend Yield
Company (Itoham Yonekyu Holdings)	3.6%
Market Bottom 25% (JP)	1.7%
Market Top 25% (JP)	3.8%
Industry Average (Food)	1.7%
Analyst forecast in 3 Years (Itoham Yonekyu Holdings)	3.6%

Notable Dividend: 2296's dividend (3.6%) is higher than the bottom 25% of dividend payers in the JP market (1.67%).

High Dividend: 2296's dividend (3.6%) is low compared to the top 25% of dividend payers in the JP market (3.76%).

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, 2296 has been paying a dividend for less than 10 years.

Growing Dividend: 2296's dividend payments have increased, but the company has only paid a dividend for 6 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (36.7%), 2296's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (95.8%), 2296's dividend payments are not well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

1.7yrs

Average management tenure

CEO

Isao Miyashita (54 yo)

no data

Tenure

Mr. Isao Miyashita serves as the President at Itoham Yonekyu Holdings Inc. and serves as it's Chief Executive Officer since 2021. Mr. Miyashita has been the President of Yoshinoya Co., Ltd. since February...

Leadership Team

Experienced Management: 2296's management team is not considered experienced ( 1.7 years average tenure), which suggests a new team.

Board Members

Experienced Board: 2296's board of directors are not considered experienced ( 1.3 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

What is the ownership structure of 2296?
Owner Type	Number of Shares	Ownership Percentage
Individual Insiders	2,953,670	1.0%
Institutions	57,567,620	19.9%
General Public	102,720,607	35.5%
Public Companies	126,058,000	43.6%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Top Shareholders

Top 25 shareholders own 63.62% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
40.02%	Mitsubishi Corporation	115,779,000	¥77.1b	0%	no data
4.15%	Ito Memorial Foundation, Endowment Arm	12,000,000	¥8.0b	0%	60.11%
3.55%	S Foods Inc.	10,279,000	¥6.8b	0%	no data
2.14%	Ito Cultural Foundation, Endowment Arm	6,200,000	¥4.1b	0%	100%
1.7%	The Vanguard Group, Inc.	4,929,672	¥3.3b	0.77%	no data
1.51%	Nomura Asset Management Co., Ltd.	4,357,000	¥2.9b	-2.03%	0.01%
1.32%	Dimensional Fund Advisors LP	3,806,362	¥2.5b	4.1%	no data
1.09%	Mizuho Financial Group, Inc., Asset Management Arm	3,152,000	¥2.1b	0%	0.06%
1.09%	Sumitomo Mitsui Financial Group Inc., Asset Management Arm	3,151,000	¥2.1b	0%	0.04%
1.09%	MUFG Bank, Ltd.,Investment Banking Arm	3,151,000	¥2.1b	0%	0.07%
0.95%	Nissay Asset Management Corporation	2,749,000	¥1.8b	0%	0.02%
0.94%	Koichi Ito	2,731,663	¥1.8b	0.02%	no data
0.92%	BlackRock, Inc.	2,675,200	¥1.8b	2.9%	no data
0.78%	Norges Bank Investment Management	2,250,067	¥1.5b	0%	no data
0.69%	Nikko Asset Management Co., Ltd.	1,987,900	¥1.3b	-2.7%	no data
0.68%	Daiwa Asset Management Co. Ltd.	1,956,400	¥1.3b	-1.46%	0.01%
0.24%	Mitsubishi UFJ Kokusai Asset Management Co., Ltd.	693,600	¥461.9m	-0.67%	no data
0.2%	WisdomTree Asset Management, Inc.	566,000	¥377.0m	-0.35%	0.02%
0.13%	Charles Schwab Investment Management, Inc.	370,786	¥246.9m	2.33%	no data
0.096%	PGIM, Inc.	276,278	¥184.0m	20.8%	no data
0.095%	Bessemer Investment Management LLC	274,645	¥182.9m	20.86%	no data
0.071%	Asset Management One Co., Ltd.	204,700	¥136.3m	6.56%	no data
0.057%	Goldman Sachs Asset Management, L.P.	166,200	¥110.7m	81.05%	no data
0.057%	Teachers Insurance and Annuity Association-College Retirement Equities Fund	165,800	¥110.4m	-4.99%	no data
0.057%	SEI Investments Company	165,093	¥110.0m	58.15%	no data

Data	Last Updated (UTC time)
Company Analysis	2022/10/01 00:00
End of Day Share Price	2022/09/30 00:00
Earnings	2022/06/30
Annual Earnings	2022/03/31