Opened a small position in Kawasumi Laboratories. KL manufactures and sells medical devices relating to hemodialysis, blood banking, infusion therapy etc. The devices are mainly of a more simple and disposable nature.
It’s not wide moat medtech business, but more of a commodity market. However, the company has a very low valuation, is trading below NCAV and have a strong balance sheet. The company has been profitable during the last years, although poor margins as with most Japanese net-nets. Dividends looks ok and the company performed a 5% share repurchase last year.
Entered at ~0.63 of NCAV or 660¥.
| Market cap | 14 400 M¥ (126 MUSD) |
| Total cash | 15 501 M¥ |
| Total liabilities | 5 637 M¥ |
| P/S | 0.54 |
| P/B | 0.40 |
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Also long Kawasumi Laboratories. In terms of Liquidation Value/Market cap (including non-current stock investments and land) the stock is still cheap. The ratio is 1.5 at 725 JPY. It also has a pretty high and constant ratio Gross Profit/Total Assets (excluding cash), even increasing a bit over the last 7 years. That indicates a competitive advantage.
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Hi Ruerd,
I’ve come across your newsletter earlier. 🙂
I am sure it´s a lot of value, but for the time being I prefer to go at it alone.
Kawasumi is one that I can hold on to for a while. “Profitable” medical device companies selling at net-net valuations are rare.
/BH
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