Meiji Holdings Co Ltd

2269: XTKS (JPN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	¥‎4,986.00	Ztgmglq	Ttfhxbxgx

Meiji’s Profit Downward Revision a Surprise; Successful Probiotic Roll-Out a Key to Profit Recovery

Jeanie Chen

Feb 9, 2022

Narrow-moat Meiji’s further downward revision of its full-year guidance, reducing operating profits by 10% in just three months, was a surprise. Sluggish sales of its moaty lucrative probiotics, a lingering concern, combined with cost inflation and delayed fee revenue of the vaccine business, is attributable to the cut in profit guidance. We have adjusted our forecasts, which, partially offset by increased time value of money, leaves an immaterial impact on our fair value estimate of JPY 9,800. Our profit estimates remain a touch above the fiscal 2021 guidance.

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