Inbound Demand in Japan and Overseas Acquisitions To Drive Hoshizaki’s Sales Growth

Hoshizaki’s fourth-quarter revenue, ending December, was slightly above our expectations, up 23.9% year on year, supported by postpandemic demand for commercial kitchen equipment worldwide and the acquisition of Italy-based Brema. In the company’s largest market, Japan, investments by restaurants especially picked up, and according to the Japan Food Service Association, domestic chain restaurant sales have finally recovered to 2019 levels in the fourth quarter. While capital investments by pubs/bars remain low compared to restaurants, we expect related investments to pick up in 2023, supported by the recent reopening of borders. Our outlook remains largely unchanged and we maintain our fair value estimate at JPY 5,000. We believe the company’s shares are fairly valued, as expectations of postpandemic growth are priced in.