Beauty Kadan Holdings Co.,Ltd. (3041) Stock Price

Beautica Danholds is a corporate group centered on the production and sales of floral arrangements and decorations using fresh flowers. The company handles everything from production to installation of fresh flower altars and tribute flowers for funerals, as well as table flowers and bouquets for weddings.

Its primary customers are funeral homes, wedding venues, and fresh flower retailers. Revenue is generated mainly through production and installation services, as well as wholesale sales of fresh flowers. The company minimizes inventory losses through concentrated production and efficient procurement, while combining direct imports from overseas with refrigerated transportation to ensure stable quality and supply.

The company's business is divided into four segments: fresh flower altar services, fresh flower wholesale, wedding floral decoration, and other operations. The other segment includes funeral planning and consulting, employment support, agriculture, restaurants, and fertilizer manufacturing and sales. The company leverages synergies by sharing procurement and customer information across business divisions.

The company aims to enhance corporate value through its medium-term management plan (fiscal year ending June 2025 through June 2027) by strengthening group revenue capacity and advancing sustainable management. Specifically, the company prioritizes capital efficiency and positions return on equity (ROE) as a key performance indicator. The target ROE for the fiscal year ending June 2025 was set at 12.3%, but actual results reached only 7.4% (compared to 5.2% in the previous period). The company targets ROE of 15% or higher in the medium to long term. The company is also focused on improving the operating profit margin on sales and enhancing capital efficiency to balance strategic investments with shareholder returns.

In priority investment areas, the company is strengthening its holding company functions and concentrating investments in growth sectors, with mergers and acquisitions (M&A) as a clear expansion strategy. The company also emphasizes enhancing human capital value through personnel system reforms, improved compensation, and strengthened recruitment of new graduates and mid-career hires. To improve operational efficiency, the company is advancing digital transformation (DX), including development of web-based ordering systems and implementation of construction information aggregation and analysis through integration with customer relationship management (CRM) systems, aiming to reduce lead times and improve profit margins. On the product side, the company is differentiating itself through increased sales of high-value-added altar options and derivative products such as "flower cushions."

For business expansion, the company plans to expand its existing fresh flower altar business through M&A and new customer acquisition, with particular focus on expanding bridal floral arrangements in the Kansai and Kyushu regions. In fresh flower wholesale, the company will develop new products through refinement of imported materials and cultivation of new production sources, while expanding its foundation through M&A of wholesalers and trading companies for business succession. Additionally, the company is strengthening production capacity centered in the Yatsushiro area of Kumamoto Prefecture and developing new revenue streams including retail and e-commerce operations leveraging hotel shop locations, plant leasing services, after-bouquet products, and novelty items for automobile dealerships.

In technological innovation, the company is addressing social issues through digital technology, including expansion of funeral-related services "@Funeral" and deployment of columbarium and temple visit management applications. On the environmental front, the company is collaborating with universities and research institutions to promote the reuse and recycling of discarded flowers and reduce waste, while advancing environmentally conscious products and decarbonization initiatives to strengthen SDGs alignment. Through these measures, the company aims to achieve both improved profitability and the establishment of a sustainable business foundation.