UBS: Fast Take: Fuji Seal International "Q4 results: Positive. Actual result..."

研报英文原文证据摘录

UBS: Fast Take: Fuji Seal International "Q4 results: Positive. Actual result..."

Forecast returns

Forecast price appreciation 53.2%

Forecast dividend yield 2.9%

Forecast stock return 56.0%

Market return assumption 7.6%

Forecast excess return 48.5%

Company Description

Fuji Seal began in 1897 making barrel stoppers for alcoholic beverages, and then cap seals in

1958. In 1961, it made the world's first shrink label, growing with adoption of glass and PET

bottle products. It has c60% domestic and estimated top global share of c15%. It stands out

for line engineering and manufacturing labelers, pouch-making machines, and cartoning

machinery. With solution labels and prod equip leveraging label and container features, it can

meet diverse packaging needs, lowering labour/streamlining production. Clients are global

beverage firms, food makers, household goods producers, and pharma.

Valuation Method and Risk Statement

Our price target for Fuji Seal is based on DCF (discounted cash flow).

Risks include reduced volume on a significant cooling in consumption and customer inventory

adjustments. While price pass throughs are considered feasible in the event of rising raw

material costs for labels and pouches, there is a temporary risk of margin compression if costs

rise sharply over a short period. There is a risk of earnings deteriorating if there are raw

material shortages or supply constraints due to natural disasters or the spread of infectious

diseases. Although the company produces products locally for consumption, 20% of shrink

labels sold in the US are supplied from Mexico, posing a risk of earnings deterioration if tariffs

continue to rise. The company operates globally, exposing it to the risk of an earnings