STRATEGY NOTE Kobe Bussan: Main business remains steady despite fluctuations in profits due t... Market analysis and investment strategy INSIGHT Reading markets through structure

Overview

  • Sales: +6.9% *Operating profit: +19.6%
  • Final profit: -44.2%
  • YoY: Increase in sales, increase in operating income, decrease in final income

One word: Our core business is strong, but profits are distorted by exchange rates.

Financial Highlights (Simple Table)

IndicatorsContents
Sales+6.9%
Operating profit+19.6%
Final profit-44.2%
Factor 1Loss on valuation of foreign exchange derivatives
Factor 2Increase in customer attraction under inflation

What happened (most important)

Quantity

1,126 Key point

Price

Key point Key point

Cost

Key point Key point

Exchange

Key point= originally lower costs Key pointtemporary factor)

=> Essence: Sales improved, but final profit worsened due to accounting factors

Latest materials (3 months)

  • 2026 1Q financial results: operating profit increase, final profit decrease
  • CPI increase: Food +5.2%
  • Foreign exchange fluctuations: Derivative loss realization

Impact on stock price: Key point→ short-term downward pressure Key point

Business structure

Target: Kobe Bussan

  • Revenue source: Gyomu Super (FC + product supply) *Profit margin: Operating profit margin approximately 7% level
  • Strengths:
  • Direct import + in-house manufacturing
  • Maintain low price
  • Inflation resistant
  • Weaknesses:
  • Foreign exchange dependence (import ratio)
  • Derivative opacity

Implications for stock prices

Positive

Key point 12%

Negative

Key point Key point

Weaving

Key point: Approximately 3,571 yen Key point: Approximately 2,790 yen (approximately ▲22%)

=> Market is highly aware of risk

Short term (6 months)

  • Foreign exchange trends (yen appreciation/yen depreciation) *Derivative gain/loss *Profit recovery rate for next fiscal year

Attention: Key point

Mid-term (1 year)

  • Continued store expansion
  • PB ratio increase
  • Maintaining demand in an inflationary environment

Evaluation points: Key point

Scenario analysis

Bullish: 30% Key point→ Profit recovery → Stock price rise

Neutral: 50% Key point→ remain unchanged

Bearish: 20% Key point→ downward pressure

Risk (simple table)

RiskContents
Foreign exchangeDerivative profit/loss fluctuations
Raw materialsFood price rise
DemandChange in thrift orientation

Summary

Key point Key point Key point

Highlights: Key point Key point

The following materials: Key point Key point