TOHAN CORPORATION (E02538) Stock Price

Tohan is one of Japan's largest book distribution companies, with its core business centered on distributing books and magazines from publishers to bookstores. In addition to wholesale operations for books and magazines, the company also handles educational products and music-related merchandise, serving as critical distribution infrastructure for the publishing industry. Through its nationwide bookstore network, the company delivers published materials to consumers.

The company's primary customers are bookstores and libraries across Japan, generating revenue by wholesaling products sourced from publishers. It operates major bookstore chains including Book First, Yaesu Book Center, and Sanyo Book Store as subsidiaries, creating a revenue structure that benefits from both wholesale and retail operations. The company is also expanding internationally, including operations in Taiwan.

The business consists of two main pillars: publishing distribution and real estate. The publishing distribution division engages in wholesale of books and magazines, as well as related services including logistics, information systems, and leasing and financial services, functioning as a comprehensive service provider for the publishing industry. The real estate division generates stable revenue through rental and management of owned properties, supporting overall business performance.

Starting in fiscal year 2024, Tohan has launched a new medium-term management plan called "BEYOND" and is leading structural reform in the publishing distribution industry. The company is pursuing the realization of a "New Publishing Distribution Model," undertaking fundamental reforms spanning logistics and transportation, information infrastructure, and transaction structures. Notably, following competitors' withdrawals, Tohan has taken over magazine distribution to major convenience store chains and established a system handling approximately 70% of domestic magazine distribution. To convert this scale expansion into improved profitability, the company is focusing on product development and campaign initiatives to maintain and grow sales.

Key investment areas include building a sustainable logistics system. Through its newly established "Sustainable Logistics Development Division," Tohan is consolidating delivery routes and reviewing transportation methods to address rising freight costs. Additionally, the company is strengthening its sales support structure through promoting on-site waste paper conversion of magazine returns to support bookstore operations, and establishing a new contact center to consolidate order processing. The company is positioning bookstore profitability improvement support as the core of its differentiation strategy.

In new market development, Tohan is working to restore connections between people and books through expanding "HONYAL," a small bookstore opening support package. The company is pursuing a strategy that simultaneously achieves regional revitalization and maintains and expands the bookstore market through collaborative store openings with local governments and local businesses, including municipalities without bookstores. Additionally, as part of business expansion, the company is strengthening its real estate operations, with full occupancy of office buildings on the former headquarters site confirmed for fiscal year 2025, diversifying its revenue base.

Regarding technological innovation, Tohan is promoting market-driven publishing distribution expansion and establishing small-batch printing systems, aiming to build a timely and appropriately-scaled shipment system aligned with market needs. In the character business centered on group company Marimo Craft, the company is accelerating overseas market expansion, including plans for select shop openings in Saudi Arabia, actively pursuing growth opportunities through global expansion.