Entered Kawasumi Laboratories (TYO:7703)

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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2 thoughts on “Entered Kawasumi Laboratories (TYO:7703)”

  1. 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.

    You can improve your results and save a lot of time with a subscription to my systematic net-net research on SeekingAlpha: http://seekingalpha.com/account/research/subscribe?slug=ruerd-heeg&source=auths_effs_ruerd-heeg

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    1. 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

      Like

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