re: JAPAN - Ticker: JP:2511 Marusan-ai, traded on the NAGOYA stock exchange, now around 430 Yen
I found this company in Japan when looking for a clone of "Medifast" (Amex: MED) a maker of nutritional products and "fitness nutraceutics" in the us. MEdifast has been a highflyer, rising from $1 to $13 and emerged from the OTC to the Amex during the last 12 months. It's ratios are quite expensive as a result of it's fantastic ride - Price/Book of 17, Price/Sales of 5. Not exactly cheap.. That prompted me to look for alternatives.
One interesting firm in this regard is the Japanese company "Marusan-Ai" - carrying the Japanese Stock number 2551 trading around 430 Yen in Nagoya, the 3rd biggest market in Japan. They are among the world's biggest Soya Drink manufacturers. Heavily active in OTHER SOYA PRODUCTS also. Gross margin around 30-40% - very high for a food and beverage operation. In the US they own 1/3 to 1/4 of "American Soy Products" the BIGGEST (!) US based Soy Drink producer. Annual Sales around 17-bn Yen, around $150m USD. PSR of 0.26, PBK around 2. If you compare this to Medifast (Amex: MED, PBK 14, PSR 7) one would scratch on his head why not invest into Marusan. YahooJapan and Bigcharts allow you to plot a stock chart of your choice on japan stocks. For FY 2003 Marusan earned around 33 Yen per Share - Yahoo Japan features this but Wright Investor's have not yet updated their data with the FY2003 results : biz.yahoo.co.jp
IMHO this has potential for at least a 5-bagger in 1-2 years. Driving force behind the new popularity of Soya drinks and products seems to be fitness, wellness and the realization that good parts of the western population do suffer from obesity.
Wright Profile -
Ticker: 2551
2002 Sales: 16,996,000,000 Yen
Primary SIC: Food preparations (2099)
Major Industry: Food & Beverages
Sub Industry: Miscellaneous Food
Country: Japan
Currency: Japanese Yen
Website: marusanai.co.jp
Fiscal Year ends: September
Employees: 369
Market Capitalization: 4,387,487,900
Total Shares Outstanding: 10,572,260
Closely Held Shares: 6,485,380
Company Description
Marusan-Ai Company Limited. The Group's principal activity is to manufacture processed foods of soybeans. The Group also develops and conducts research on soybeans and micro organisms. Soybean drinks accounted for 55% of fiscal 2002 revenues, Soybean paste, 38% and Other, 7%.
Competitor Analysis
Marusan-Ai Company Limited operates within the Food preparations sector. This analysis compares Marusan-Ai Company Limited with three other companies in this sector in Japan: Nichiro Sunfoods Co., Ltd. (2002 sales of 14.43 billion Japanese Yen [US$121.06 million] of which 55% was Processed Foods), OHMORIYA Co., Ltd. (16.75 billion Japanese Yen [US$140.51 million] of which 40% was Home-Use Nori), and Yutaka Foods Corporation (18.57 billion Japanese Yen [US$155.80 million] of which 38% was Instant Noodles).
Sales Analysis
During the year ended September of 2002, sales at Marusan-Ai Company Limited were Y17.00 billion (US$142.60 million). This is an increase of 3.7% versus 2001, when the company's sales were Y16.39 billion. This was the third consecutive year of growth at Marusan-Ai Company Limited.
The company currently employs 369. With sales of Y17.00 billion (US$142.60 million) , this equates to sales of US$386,440 per employee. This is lower than the three comparable companies, which had sales between US$517,347 and US$641,586 per employee. Note that some of the figures stated herein could be distorted based on exact classification of employees and subcontractors.
Sales Comparisons (Fiscal Year ending 2002) Company Year Ended Sales (blns) Sales Growth Sales/ Emp (US$) Largest Region
Marusan-Ai Company Limited Sep 2002 16.996 3.7% 386,440 N/A
Nichiro Sunfoods Co., Ltd. Mar 2002 14.429 -2.4% 517,347 N/A
OHMORIYA Co., Ltd. Sep 2002 16.747 0.9% 641,586 N/A
Yutaka Foods Corporation Mar 2002 18.570 14.5% 560,440 N/A
Marusan-Ai Sales & Profitability Summary
Figures expressed in billions of Japanese Yen
Year Sales Sales Growth EBITDA % of sales Inc. bef Extra % of sales Emps Sales/ Empl
2000 15.800 n/c 5.904 37.4% 0.244 1.5% 366 43,169,399
2001 16.389 3.7% 5.985 36.5% 0.142 0.9% 369 44,414,634
2002 16.996 3.7% 5.604 33.0% 0.304 1.8% n/a n/a
Recent Stock Performance
For the 52 weeks ending 5/29/03, the stock of this company was down 1.2% to Y415.00. During the past 13 weeks, the stock has fallen 1.2%. During the past 52 weeks, the stock of Marusan-Ai Company Limited has performed worse than the three comparable companies, which saw gains between 1.8% and 48.9%.
During the 12 months ending 3/20/03, earnings per share totalled Y26.09 per share. Thus, the Price / Earnings ratio is 15.91. These 12 month earnings are lower than the earnings per share achieved during the last fiscal year of the company, which ended in September of 2002, when the company reported earnings of 28.75 per share. Earnings per share rose 106.2% in 2002 from 2001.
This company is currently trading at 0.26 times sales. Marusan-Ai Company Limited is trading at 2.22 times book value. The company's price to book ratio is higher than that of all three comparable companies, which are trading between 0.57 and 1.24 times book value.
Summary of company valuations Company Date P/E Price/ Book Price/ Sales 52 Wk Pr Chg
Marusan-Ai Company Limited 5/29/03 15.9 2.22 0.26 -1.20%
Nichiro Sunfoods Co., Ltd. 5/27/03 15.9 0.72 0.19 25.00%
OHMORIYA Co., Ltd. 5/30/03 9.5 0.57 0.26 1.80%
Yutaka Foods Corporation 5/30/03 11.0 1.24 0.61 48.85%
The market capitalization of this company is Y4.39 billion (US$36.81 million) . Closely held shares (i.e., those held by officers, directors, pension and benefit plans and those shareholders who own more than 5% of the stock) amount to over 50% of the total shares outstanding: thus, it is impossible for an outsider to acquire a majority of the shares without the consent of management and other insiders. The capitalization of the floating stock (i.e., that which is not closely held) is Y1.70 billion (US$14.23 million) . These shares are not very liquid.
Dividend Analysis
During the 12 months ending 3/20/03, Marusan-Ai Company Limited paid dividends totalling Y6.50 per share. Since the stock is currently trading at Y415.00, this implies a dividend yield of 1.6%. The company has paid a dividend for 3 straight years. During the same 12 month period ended 3/20/03, the Company reported earnings of Y26.09 per share. Thus, the company paid 24.9% of its profits as dividends.
Profitability Analysis
On the Y17.00 billion in sales reported by the company in 2002, the cost of goods sold totalled Y11.39 billion, or 67.0% of sales (i.e., the gross profit was 33.0% of sales). This gross profit margin is lower than the company achieved in 2001, when cost of goods sold totalled 63.5% of sales.
In 2002, earnings before extraordinary items at Marusan-Ai Company Limited were Y304.00 million, or 1.8% of sales. This profit margin is an improvement over the level the company achieved in 2001, when the profit margin was 0.9% of sales.
The company's return on equity in 2002 was 18.0%. This was significantly better than the 9.3% return the company achieved in 2001. (Extraordinary items have been excluded).
Profitability Comparison Company Year Gross Profit Margin EBITDA Margin Earns bef. extra
Marusan-Ai Company Limited 2002 33.0% N/A 1.8%
Marusan-Ai Company Limited 2001 36.5% N/A 0.9%
Nichiro Sunfoods Co., Ltd. 2002 N/A 22.1% 1.2%
OHMORIYA Co., Ltd. 2002 N/A 39.4% 2.5%
Yutaka Foods Corporation 2002 N/A 17.6% 5.5%
Inventory Analysis
As of September 2002, the value of the company's inventory totalled Y1.06 billion. Since the cost of goods sold was Y11.39 billion for the year, the company had 34 days of inventory on hand (another way to look at this is to say that the company turned over its inventory 10.8 times per year). In terms of inventory turnover, this is an improvement over September 2001, when the company's inventory was Y1.06 billion, equivalent to 37 days in inventory.
Financial Position
As of September 2002, the company's long term debt was Y5.91 billion and total liabilities (i.e., all monies owed) were Y13.32 billion. The long term debt to equity ratio of the company is 2.99. This is significantly higher than where the long term debt to equity ratio was in September 2001, when the long term debt to equity ratio was only 2.26.
Financial Positions
Company Year LT Debt/ Equity Days Inv.
Marusan-Ai Company Limited 2002 2.99 34
Nichiro Sunfoods Co., Ltd. 2002 0.37 18
OHMORIYA Co., Ltd. 2002 0.00 140
Yutaka Foods Corporation 2002 0.00 13
Japanese Companies in the US
No. 329, February 1997 - Issue Index
The four owners of AMERICAN SOY PRODUCTS INC. in Saline, Michigan will spend $12.3 million to boost the firm's capacity to make soy beverages and vegetable-fruit drinks. The factory now can produce about 16.8 million quart- size bottles a year. Once the expansion is completed, it will be able to turn out 43.2 million bottles annually. At something close to that level American Soy expects annual sales of about $22 million. Its Japanese owners are KAWASHO CORP., MARUSAN-AI CO., LTD. and MUSO CO., LTD.
Michigan Agriculture Director Applauds Plant Expansion at American Soy Products in Saline
September 9, 1998
Michigan Department of Agriculture (MDA) Director Dan Wyant today congratulated American Soy Products, Inc. on the official dedication of a major expansion of its soymilk plant in Saline, Michigan. The 65,000 square foot, state-of-the-art facility is the largest soymilk processing plant in North America.
"This is a tremendous project for the State of Michigan and agriculture in this state," Wyant said. "American Soy Products is definitely a leader in adding value to Michigan agriculture, and an innovator in identifying international organic markets and capital to make this plan a reality."
Representing Wyant at the dedication program in Saline was Robert Craig, Director of MDA's Office of Agriculture Development.
"We are thrilled to see private companies, like American Soy Products, take the responsibility and the risk to move ahead with ventures like these," Craig said. "While Michigan ranks 11th in production of soybeans, we now rank first in a value-added food: soymilk."
Craig also mentioned MDA's efforts to involve more companies in value-added agriculture, including a September 3 conference in Lansing attended by nearly 300 farmers and other agricultural representatives. Also on August 25, MDA, Michigan State University and other public and private partners participated in the official launch of the Thumb Oilseed Producers Cooperative project to press a variety of oils from Michigan-grown soybeans and canola. Finally he indicated that MDA is targeting the organic foods industry as it is growing rapidly. Wyant will soon publicly announce the formation of the MDA Organic Foods Advisory Committee, which can help develop a strategic plan to foster that growth. According to the U. S. Department of Agriculture, the U.S. organic food market was valued at $2.5 billion in 1997 and is projected to grow rapidly to $10 billion by 2002.
"We expect to see more of these types of value-added agriculture processing plants and joint ventures in the future," Wyant said. "With only 40 percent of Michigan-grown crops processed in Michigan, we have tremendous room for improvement." The American Soy Products facility is a joint venture between a leading U.S. natural food company&emdash;Eden Foods, Inc. in Clinton, Michigan&emdash;and three Japanese firms&emdash;Kawasho International (USA), Inc., Marusan-Ai Company, Ltd., and Muso Company, Ltd.
The Michigan Department of Agriculture is the official state agency charged with serving, promoting and protecting the food, agriculture and agricultural economic interests of the people of the State of Michigan.
American Soy Products, Inc. (ASP) Storefront - 2002
ASP is a JV of US based Eden foods and 3 Japanese Companies, among them Marusan-Ai. American Soy Products, Inc. (ASP) is dedicated to the development of the highest quality food products and processing technologies. This Michigan-based corporation, founded in 1985, is a Japanese/American joint venture partnership. The original plant was built in 1986 and was soon converted into a full organic operation. Today, American Soy Products is the largest North American soymilk producer and a recognized leader in the expanding low acid foods aseptic processing industry.
American Soy Products produces high quality soymilk from organically grown soybeans, filtered water, barley, barley malt and other ingredients. Using Japanese engineering, ASP employs a process designed to properly prepare soybeans for human consumption. Only whole organic soybeans are used and the entire process -- from start to finish -- takes an hour and a half.
Soymilk is used as a food beverage, as well as a cooking and baking ingredient. It has no cholesterol, is high in protein, low in sodium and lactose free.
The company contracts directly with organic soybean farmers located in a six-state area in and around Michigan. ASP is also active in the export of organic food grade soybeans to Japan.
In strategic partnership with Eden Foods, Inc., headquartered in Clinton, Michigan, ASP supplies America's most popular soy- milk, to more than 10,000 specialty retail stores and supermarkets in all 50 states, as well as throughout Canada. Made with organic soybeans and sweetened with barley malt and comes in three flavors (original, vanilla, and carob) as well as a vitamin and mineral fortified version.
In addition to manufacturing soy beverages, ASP pioneered a new beverage segment by creating a 100% fruit and vegetable combination called VRUIT. A healthy alternative to cola, sodas, and juice "drinks," VRUIT--made with 100 percent pure and natural ingredients and added Vitamin C and Beta-Carotene-- is available in four varieties--Apple Carrot, Orange Veggie Blend, Berry Veggie and Tropical Blend. ASP also recently introduced a new line of soy beverages called SOY FUSION, in two flavors, Berry and Matcha Green Tea. ASP also employs the latest methods in both low and high acid food processing technology and aseptic packaging. These processes enable ASP to fill an aseptic package with a product which then has an indefinite shelf life without refrigeration. ASP currently employs 42 people at its newly expanded 65,000-square-foot facility in Saline, Michigan.
Contact Information
americansoy.com
American Soy Products, Inc. (ASP)
1474 North Woodland Drive
Saline, Michigan 48176
United States
Phone: 734-429-2310
Fax: 734-429-2112 |
