TSURUHA HOLDINGS (3391): Changing our impairment loss and synergy assumptions, lowering earnings estimates and price target

研报英文原文证据摘录

TSURUHA HOLDINGS (3391): Changing our impairment loss and synergy assumptions, lowering earnings estimates and price target

ce to be maintained when 1Q results are announced.

• For the Tsuruha group, we currently forecast sales growth of 4.5% YoY in 1Q, gross

margin improvement of 0.46ppt, a 4.4% increase in expenses, and a 15% increase in

operating profit to ¥14.4 billion. For the Welcia group, we forecast sales growth of

4.9%, gross margin improvement of 0.84ppt, a 2% increase in expenses, and a 75%

increase in operating profit to ¥13.7 billion. We expect the gross margin to improve

markedly at both groups because we assume synergies will emerge from 1Q, as

planned. Specific drivers of synergies include (1) merchandise integration, (2)

negotiations to unify terms and conditions for wholesale/direct sales, (3)

negotiations to unify terms and conditions for transactions with manufacturers (non-

food products), (4) private brand effects, and (5) improvement in delivery and

logistics efficiency. All of these measures were carefully prepared prior to the

merger, and we expect a total synergy benefit of ¥15 billion in FY2026, in line with

plan.

• MTP envisions creation of life stores: Tsuruha Holdings aims to create stores that

are more closely tied to the life of customers. In Phase 1, the three-year period

through FY2028, the company aims to build a value creation base. Specifically, it

will decide and implement concrete actions for each area of operations (stores,

dispensing, merchandising, DX, services, etc). In Phase 2, the three-year period

through FY2031, it plans to fully operate the value creation base with the aim of

achieving sales of ¥3 trillion in FY2031.

• Challenges and points to watch: Focus points for the merger and realization of