Daiwa Industries: Income Rockets On Cost Control And Better Comparability
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- Now with consistent accounting treatments between the periods, we can see the true earnings growth of Daiwa which was understated in the FY 2022.
- Aided as well by a recovery in the food services industry and cost control, the sales growth yields disproportionate growth in operating income.
- Tax assets are coming in the clutch so that net income actually doubles. Plenty of tax assets left, likely equivalent to about 5% of market cap, not even included in valuation.
- Confidence in food services boosts most discretionary products like ice machines and kitchen equipment.
- Probably no better business in the world at Daiwa’s no-brain valuation.
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