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Hakuto

Hakuto 7433

伯東
Hakuto Co., Ltd.
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1-13, Shinjuku 1-Chome, Shinjuku-Ku, Tokyo, Japan 160-8910
https://www.hakuto.co.jp/
03-3225-8910
Summary
Hakuto is a unique mini-conglomerate. It is both an electronics trading company and industrial chemical manufacturer. The origin of the company’s electronics trading business is a trading company founded in 1953 to import raw quartz for use in electronic devices. The industrial chemical manufacturing business started in 1960 as a new unit aimed at diversifying the company’s operations and enhancing stability. At present, Hakuto is a conglomerate centered on these two main businesses. Its operations focus on Japan and the Asia region.
Electronic Equipment, Instruments & Components
Key dates
2014-08-18
Coverage initiation
Full Report
2022-05-02
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Executive summary

Multi-business firm: from electronics trading to chemical manufacturing

Hakuto Co., Ltd. is a mini-conglomerate with two functions: as an electronics trading company and as an industrial chemical manufacturer. The origin of the company’s electronics trading business is a trading company founded in 1953 to import raw quartz for use in electronic devices. The industrial chemical manufacturing business started in 1960 as a new unit aimed at diversifying the company’s operations and enhancing stability. At present, Hakuto is a conglomerate centered on these two main businesses.

Given its manufacturing DNA, Hakuto is a technology-driven company and even its electronics trading business has an engineering division. The trading business provides equipment installation and maintenance services, and employs field application engineers (FAEs) with a high level of technical expertise. Shared Research believes that this focus on technology and synergies between the two seemingly different businesses are sources of Hakuto’s strength. While firms operating in the semiconductor space tend to have large fluctuations in earnings performance, the company’s earnings are relatively stable. In terms of relative size among semiconductor trading companies, Hakuto is medium size but its profit margins match those of the industry leaders.

Trends and outlook

In FY03/22, sales were JPY191.5bn (+15.8% YoY), operating profit was JPY7.3bn (+91.9% YoY), recurring profit was JPY7.4bn (+105.7% YoY), and net income attributable to owners of the parent was JPY5.0bn (+62.2% YoY). In the Electronic Devices and Components segment, the recovery from the effects of the COVID-19 pandemic contributed to a sharp expansion in sales of automotive-use ICs, with sales of industrial equipment and consumer electronics-related components also showing a YoY improvement. In the Electronic and Electric Equipment segment, performance was solid in high-margin vacuum devices and PCB manufacturing equipment. In the Industrial Chemicals segment, the recovery in capacity utilization at customer plants contributed to improved sales in the petroleum/petrochemical and paper/pulp markets, with sales of base materials for cosmetics also increasing. Profit expanded sharply thanks to firm growth in high-margin own-brand products.  

The company's FY03/23 forecast calls for sales of JPY197.0bn (+2.9% YoY), operating profit of JPY7.0bn (-4.2% YoY), recurring profit of JPY6.9bn (-6.9% YoY), and net income attributable to owners of the parent of JPY5.0bn (+0.6% YoY). In the Electronic Devices and Components segment, management looks to improve operational efficiency as it targets growth in consumer electronics, industrial equipment, and automotive-related applications, where it expects demand to continue to expand. In the Electronic and Electric Equipment segment, the company intends to bolster its efforts to secure orders for printed circuit board (PCB) manufacturing equipment and vacuum equipment, where it believes ongoing capital investment is likely to contribute to improved demand. In the Industrial Chemicals segment, the company aims to improve sales of polymerization-inhibitors in the overseas business and expand sales of base materials for cosmetics, where demand is currently robust.   

Hakuto announced its medium-term management plan “Change & Co-Create 2024” on April 30, 2021. The company aims to become a distinguished technology trading company and chemical manufacturer to achieve sustainable growth and increase enterprise value over the medium to long term. In Electronic Devices and Components, it will streamline business operations, expand the solutions business, and strengthen its marketing capabilities, including in overseas markets. In Electronic and Electric Equipment, it will increase the sales share of new products and in-house products, as well as move into new business areas such as healthcare, environment, and energy. In Industrial Chemicals, the company will strengthen its base materials for cosmetics business and create new businesses. Its operating targets are consolidated operating profit of JPY5.0bn or higher, operating profit margin of 3.0% or higher, and ROE of 6.0% or higher in the final year of this plan, FY03/25.

Strengths and weaknesses

Shared Research views the company’s strengths as having a product lineup with varying business cycles, its status as an independent trading company, and the fact that many employees are science and engineering graduates. Weaknesses include Hakuto’s high dependence on semiconductor devices, challenges maintaining its current pace of growth, and a hollowing out of the domestic business.

Key financial data

Income statementFY03/13FY03/14FY03/15FY03/16FY03/17FY03/18FY03/19FY03/20FY03/21FY03/22FY03/23
(JPYmn)Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons. Est.
Sales111,823132,619131,073116,296127,599138,744140,123153,182165,413191,495197,000
YoY-3.7%18.6%-1.2%-11.3%9.7%8.7%1.0%9.3%8.0%15.8%2.9%
Gross profit17,11519,09519,48117,22116,49518,30118,66717,46518,66123,968
YoY-5.3%11.6%2.0%-11.6%-4.2%10.9%2.0%-6.4%6.8%28.4%
Gross profit margin15.3%14.4%14.9%14.8%12.9%13.2%13.3%11.4%11.3%12.5%
Operating profit3,1014,0434,3072,9062,0693,7403,6422,4143,8067,3047,000
YoY-26.6%30.4%6.5%-32.5%-28.8%80.8%-2.6%-33.7%57.7%91.9%-4.2%
Operating profit margin2.8%3.0%3.3%2.5%1.6%2.7%2.6%1.6%2.3%3.8%3.6%
Recurring profit3,4354,2184,5552,8731,9893,7723,5802,1393,6037,4116,900
YoY-18.0%22.8%8.0%-36.9%-30.8%89.6%-5.1%-40.3%68.4%105.7%-6.9%
Recurring profit margin3.1%3.2%3.5%2.5%1.6%2.7%2.6%1.4%2.2%3.9%3.5%
Net income2,0052,3363,3942,0341,9033,2872,4731,4393,0644,9705,000
YoY-10.6%16.5%45.3%-40.1%-6.4%72.7%-24.8%-41.8%112.9%62.2%0.6%
Net margin1.8%1.8%2.6%1.7%1.5%2.4%1.8%0.9%1.9%2.6%2.5%
Per-share data (JPY)
Issued shares end-FY ('000 shares ) 24,13724,13724,13724,13724,13724,13724,13724,13724,13724,137
EPS91.7106.9155.193.087.2154.9118.670.0148.9145.7254.8
EPS (fully diluted)----------
Dividend per share35.035.040.040.040.046.050.050.060.0160.0160.0
Book value per share1,992.52,128.62,318.52,330.42,413.22,568.02,658.12,627.82,818.03,142.8
Balance sheet (JPYmn)
Cash and cash equivalents11,36411,41712,4378,3667,7489,4287,60814,73617,86718,620
Total current assets59,68665,25966,04660,65561,08168,49070,90197,146100,638114,670
Tangible fixed assets6,5458,0407,2936,8506,7646,7396,6386,9036,4116,401
Intangible assets1,5091,3421,3321,109819453325333291285
Investments and other assets6,4358,1668,1127,7499,5959,6438,9607,7529,08010,132
Total assets74,17682,80882,78576,36578,26185,32687,826112,135116,422131,490
Accounts payable13,81717,43116,79015,30916,55718,10418,62318,51919,07924,515
Short-term debt5,9966,4395,3492,3442,2826,4537,75221,15016,54920,312
Total current liabilities24,64428,19625,70620,99321,80527,93030,65044,08543,89455,419
Long-term debt4,1635,6003,8642,5271,4101,26963412,53412,81012,822
Total fixed liabilities5,9788,0836,2804,5973,7073,8132,54014,03914,50914,401
Total liabilities30,62236,28031,98625,59025,51331,74333,19058,12458,40369,821
Total net assets43,55346,52850,79950,77452,74853,58354,63554,01158,01861,668
Total liabilities and net assets74,17582,80882,78576,36478,26185,32687,826112,135116,422131,490
Total interest-bearing debt10,15912,0399,2134,8713,6927,7228,38633,68429,35933,134
Cash flow statement(JPYmn)
Cash flows from operating activities6951,7324,2962,0872,571-459-1,198-16,2887,418872
Cash flows from investing activities-1,846-2,069-37444-1,209214-152-16601-527
Cash flows from financing activities-1,6231,010-3,658-5,469-1,9471,777-69923,547-5,280-379
Financial ratios
ROA (RP-based)4.7%5.4%5.5%3.6%2.6%4.6%4.1%2.1%3.2%6.0%
ROE4.7%5.2%7.0%4.0%3.7%6.2%4.6%2.7%5.5%8.3%
Equity ratio58.7%56.2%61.4%66.5%67.4%63.2%62.2%48.2%49.8%46.9%
Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods

Trends and outlook

Quarterly trends and results

CumulativeFY03/20FY03/21FY03/22FY03/22
(JPYmn)Q1Q1–Q2Q1–Q3Q1–Q4Q1Q1–Q2Q1–Q3Q1–Q4Q1Q1–Q2Q1–Q3Q1–Q4% of Est.FY Est.
Sales35,65772,269113,592153,18235,71975,619121,987165,41344,59291,428139,437191,495103.5%185,000
YoY5.6%5.1%8.2%9.3%0.2%4.6%7.4%8.0%24.8%20.9%14.3%15.8%11.8%
Gross profit4,4169,13413,82317,4654,6478,69413,45318,6615,77511,70817,72223,968
YoY-7.1%-2.2%-1.3%-6.4%5.2%-4.8%-2.7%6.8%24.3%34.7%31.7%28.4%
Gross profit margin12.4%12.6%12.2%11.4%13.0%11.5%11.0%11.3%13.0%12.8%12.7%12.5%
SG&A expenses3,6657,42611,19515,0503,4117,04010,71014,8553,6827,53611,56116,663
YoY0.6%0.6%0.3%0.2%-6.9%-5.2%-4.3%-1.3%7.9%7.0%7.9%12.2%
SG&A ratio10.3%10.3%9.9%9.8%9.5%9.3%8.8%9.0%8.3%8.2%8.3%8.7%
Operating profit7501,7082,6272,4141,2361,6532,7423,8062,0924,1716,1607,304112.4%6,500
YoY-32.6%-12.7%-7.7%-33.7%64.8%-3.2%4.4%57.7%69.3%152.3%124.7%91.9%70.8%
Operating profit margin2.1%2.4%2.3%1.6%3.5%2.2%2.2%2.3%4.7%4.6%4.4%3.8%3.5%
Recurring profit7131,5742,4102,1391,1481,5212,5063,6032,1464,1556,1727,411117.6%6,300
YoY-40.1%-21.3%-16.3%-40.3%61.0%-3.4%4.0%68.4%86.9%173.2%146.3%105.7%74.9%
Recurring profit margin2.0%2.2%2.1%1.4%3.2%2.0%2.1%2.2%4.8%4.5%4.4%3.9%3.4%
Net income4921,1051,7431,4397361,0141,8833,0641,4792,8494,2474,970113.0%4,400
YoY-41.1%-17.9%-7.4%-41.8%49.6%-8.2%8.0%112.9%101.0%181.0%125.5%62.2%43.6%
Net margin1.4%1.5%1.5%0.9%2.1%1.3%1.5%1.9%3.3%3.1%3.0%2.6%2.4%
QuarterlyFY03/20FY03/21FY03/22
(JPYmn)Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
Sales35,65736,61241,32339,59035,71939,90046,36843,42644,59246,83648,00952,058
YoY5.6%4.7%14.1%12.5%0.2%9.0%12.2%9.7%24.8%17.4%3.5%19.9%
Gross profit4,4164,7184,6893,6424,6474,0474,7595,2085,7755,9336,0146,246
YoY-7.1%3.0%0.4%-21.9%5.2%-14.2%1.5%43.0%24.3%46.6%26.4%19.9%
Gross profit margin12.4%12.9%11.3%9.2%13.0%10.1%10.3%12.0%13.0%12.7%12.5%12.0%
SG&A expenses3,6653,7613,7693,8553,4113,6293,6704,1453,6823,8544,0255,102
YoY0.6%0.7%-0.3%-0.3%-6.9%-3.5%-2.6%7.5%7.9%6.2%9.7%23.1%
SG&A ratio10.3%10.3%9.1%9.7%9.5%9.1%7.9%9.5%8.3%8.2%8.4%9.8%
Operating profit750958919-2131,2364171,0891,0642,0922,0791,9891,144
YoY-32.6%13.4%3.3%-64.8%-56.5%18.5%-69.3%398.6%82.6%7.5%
Operating profit margin2.1%2.6%2.2%-3.5%1.0%2.3%2.5%4.7%4.4%4.1%2.2%
Recurring profit713861836-2711,1483739851,0972,1462,0092,0171,239
YoY-40.1%6.3%-5.1%-61.0%-56.7%17.8%-86.9%438.6%104.8%12.9%
Recurring profit margin2.0%2.4%2.0%-3.2%0.9%2.1%2.5%4.8%4.3%4.2%2.4%
Net income492613638-3047362788691,1811,4791,3701,398723
YoY-41.1%20.2%18.8%-49.6%-54.6%36.2%-101.0%392.8%60.9%-38.8%
Net margin1.4%1.7%1.5%-2.1%0.7%1.9%2.7%3.3%2.9%2.9%1.4%
Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods

Change in accounting methodology: Starting in Q1 FY03/19, the company changed the currency conversion method it used for converting the revenues and expenses at its overseas subsidiaries from the market exchange rate on the last day of the accounting period to the average exchange rate over the entire accounting period. This change reduced 1H FY03/18 sales by JPY557mn, operating profit by JPY17mn, both recurring profit and pre-tax profit by JPY18mn, and net income by JPY14mn. The figures for FY03/18 results used in this report, including YoY comparisons, are based on the reported figures prior to this adjustment.

Quarterly sales　　　　　　　　　　　　　　　  Quarterly operating profit
Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods

CumulativeFY03/20FY03/21FY03/22
(JPYmn)Q1Q1–Q2Q1–Q3Q1–Q4Q1Q1–Q2Q1–Q3Q1–Q4Q1Q1–Q2Q1–Q3Q1–Q4
Sales35,65772,269113,592153,18235,71975,619121,987165,41344,59291,428139,437191,495
YoY5.6%5.1%8.2%9.3%0.2%4.6%7.4%8.0%24.8%20.9%14.3%15.8%
Electronic Devices and Components28,04356,87190,823123,70828,74561,46099,824134,94936,38774,534114,486157,119
YoY9.6%8.3%11.5%14.9%2.5%8.1%9.9%9.1%26.6%21.3%14.7%16.4%
% of total78.3%78.3%79.6%80.4%80.1%80.9%81.5%81.2%81.3%81.2%81.8%81.7%
Electronic and Electric Equipment4,6929,77714,25318,2864,0188,41413,41619,0295,15610,28015,20321,609
YoY-14.7%-10.3%-6.3%-15.1%-14.4%-13.9%-5.9%4.1%28.3%22.2%13.3%13.6%
% of total13.1%13.5%12.5%11.9%11.2%11.1%10.9%11.5%11.5%11.2%10.9%11.2%
Industrial Chemicals2,9155,6118,49311,1602,8075,4738,37610,9622,8996,3449,37612,300
YoY8.8%5.6%3.2%2.5%-3.7%-2.5%-1.4%-1.8%3.3%15.9%11.9%12.2%
% of total8.1%7.7%7.4%7.3%7.8%7.2%6.8%6.6%6.5%6.9%6.7%6.4%
Other176350540720328630911472320614885466
YoY1.1%1.4%3.6%4.7%86.4%80.0%68.7%-34.4%-2.4%-2.5%-2.9%-1.3%
% of total0.5%0.5%0.5%0.5%0.9%0.8%0.7%0.3%0.7%0.7%0.6%0.2%
Eliminations-170-342-518-693-179-360-541-722-171-344-515-701
Operating profit7501,7082,6272,4141,2361,6532,7423,8062,0924,1716,1607,304
YoY-32.6%-12.7%-7.7%-33.7%64.8%-3.2%4.4%57.7%69.3%152.3%124.7%91.9%
Electronic Devices and Components2696429275763204755579191,0281,8253,0353,682
YoY-42.2%-24.6%-29.8%-56.7%19.0%-26.0%-39.9%59.5%221.3%284.2%444.9%300.7%
Operating profit margin1.0%1.1%1.0%0.5%1.1%0.8%0.6%0.7%2.8%2.4%2.7%2.3%
Electronic and Electric Equipment2145388989005606101,2741,7705601,2861,7682,104
YoY-45.4%-15.8%17.4%-36.5%161.7%13.4%41.9%96.7%0.0%110.8%38.8%18.9%
Operating profit margin4.6%5.5%6.3%4.9%13.9%7.2%9.5%9.3%10.9%12.5%11.6%9.7%
Industrial Chemicals2294667248382494777608904429381,2161,337
YoY-14.2%-3.1%-4.1%-10.1%8.7%2.4%5.0%6.2%77.5%96.6%60.0%50.2%
Operating profit margin7.9%8.3%8.5%7.5%8.9%8.7%9.1%8.1%15.2%14.8%13.0%10.9%
Other71220219115519622189152197213
YoY-22.2%-29.4%-23.1%31.3%1,200.0%1,191.7%880.0%952.4%-2.2%-1.9%0.5%-3.6%
Operating profit margin4.0%3.4%3.7%2.9%27.7%24.6%21.5%46.8%27.8%24.8%22.3%45.7%
Adjustments3048557918-65-463-28-31-57-34
QuarterlyFY03/20FY03/21FY03/22
(JPYmn)Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
Sales35,65736,61241,32339,59035,71939,90046,36843,42644,59246,83648,00952,058
YoY5.6%4.7%14.1%12.5%0.2%9.0%12.2%9.7%24.8%17.4%3.5%19.9%
Electronic Devices and Components28,04328,82833,95232,88528,74532,71538,36435,12536,38738,14739,95242,633
YoY9.6%7.0%17.3%25.6%2.5%13.5%13.0%6.8%26.6%16.6%4.1%21.4%
% of total78.3%78.4%81.8%82.7%80.1%81.6%82.4%80.5%81.3%81.1%82.9%81.6%
Electronic and Electric Equipment4,6925,0854,4764,0334,0184,3965,0025,6135,1565,1244,9236,406
YoY-14.7%-5.9%3.7%-36.3%-14.4%-13.5%11.8%39.2%28.3%16.6%-1.6%14.1%
% of total13.1%13.8%10.8%10.1%11.2%11.0%10.7%12.9%11.5%10.9%10.2%12.3%
Industrial Chemicals2,9152,6962,8822,6672,8072,6662,9032,5862,8993,4453,0322,924
YoY8.8%2.4%-1.3%0.5%-3.7%-1.1%0.7%-3.0%3.3%29.2%4.4%13.1%
% of total8.1%7.3%6.9%6.7%7.8%6.7%6.2%5.9%6.5%7.3%6.3%5.6%
Other176174190180328302281-439320294271-419
YoY1.1%1.8%8.0%7.8%86.4%73.6%--343.9%-2.4%-2.6%-3.6%-4.6%
% of total0.5%0.5%0.5%0.5%0.9%0.8%--1.0%0.7%0.6%0.6%-0.8%
Eliminations-170-172-176-175-179-181-181-181-171-173-171-186
Operating profit750958919-2131,2364171,0891,0642,0922,0791,9891,144
YoY-32.6%13.4%3.3%-126.8%64.8%-56.5%18.5%-599.5%69.3%398.6%82.6%7.5%
Electronic Devices and Components269373285-351320155823621,0287971,210647
YoY-42.2%-3.6%-39.2%-19.0%-58.4%-71.2%-221.3%414.2%1,375.6%78.7%
Operating profit margin1.0%1.3%0.8%-1.1%0.5%0.2%1.0%2.8%2.1%3.0%1.5%
Electronic and Electric Equipment214324360256050664496560726482336
YoY-45.4%31.2%185.7%-99.7%161.7%-84.6%84.4%-0.0%1,352.0%-27.4%-32.3%
Operating profit margin4.6%6.4%8.0%0.0%13.9%1.1%13.3%8.8%10.9%14.2%9.8%5.2%
Industrial Chemicals229237258114249228283130442496278121
YoY-14.2%10.7%-5.8%-35.6%8.7%-3.8%9.7%14.0%77.5%117.5%-1.8%-6.9%
Operating profit margin7.9%8.8%9.0%4.3%8.9%8.6%9.7%5.0%15.2%14.4%9.2%4.1%
Other75819164412589634516
YoY-22.2%-37.5%-11.1%-1,200.0%1,180.0%412.5%--2.2%-1.6%9.8%-36.0%
Operating profit margin4.0%2.9%4.2%0.6%27.7%21.2%14.6%-27.8%21.4%16.6%-
Adjustments301872418-831949-28-3-2623
Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods

Full-year FY03/22 results (out April 28, 2022)

Full-year FY03/22 results (April 2021–March 2022)

  • Sales: JPY191.5bn (+15.8% YoY)
    Operating profit: JPY7.3bn (+91.9% YoY)
    Recurring profit: JPY7.4bn (+105.7% YoY)
    Net income*: JPY5.0bn (+62.2% YoY)
    *Net income attributable to owners of the parent
Electronics and chemical industry trends

While the electronics industry continued to feel the effects from product price hikes and supply chain disruptions due to global tightness in the supply and demand of semiconductors and electronic components, overall demand was supported by capital investment in the industrial equipment and automotive industries.  

Company performance

In the Electronic Devices and Components segment, the recovery from the effects of the COVID-19 pandemic contributed to a sharp expansion in sales of automotive-use ICs, with sales of industrial equipment and consumer electronics-related components also improving. In the Electronic and Electric Equipment segment, sales were firm in printed circuit board (PCB) manufacturing equipment and vacuum equipment on the back of strong capital investment in semiconductor manufacturing equipment. In the Industrial Chemicals segment, the recovery in capacity utilization at customer plants contributed to improved sales in the petroleum/petrochemical and paper/pulp markets, with sales of base materials for cosmetics also expanding.

Electronic Devices and Components segment

CumulativeFY03/20FY03/21FY03/22
(JPYmn)Q1Q1–Q2Q1–Q3Q1–Q4Q1Q1–Q2Q1–Q3Q1–Q4Q1Q1–Q2Q1–Q3Q1–Q4
Sales28,04356,87190,823123,70828,74561,46099,824134,94936,38774,534114,486157,119
YoY9.6%8.3%11.5%14.9%2.5%8.1%9.9%9.1%26.6%21.3%14.7%16.4%
Segment profit2696429275763204755579191,0281,8253,0353,682
YoY-42.2%-24.6%-29.8%-56.7%19.0%-26.0%-39.9%59.5%221.3%284.2%444.9%300.7%
Operating profit margin1.0%1.1%1.0%0.5%1.1%0.8%0.6%0.7%2.8%2.4%2.7%2.3%
Quarterly
(JPYmn)Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
Sales28,04328,82833,95232,88528,74532,71538,36435,12536,38738,14739,95242,633
YoY9.6%7.0%17.3%25.6%2.5%13.5%13.0%6.8%26.6%16.6%4.1%21.4%
Segment profit269373285-351320155823621,0287971,210647
YoY-42.2%-3.6%-39.2%-19.0%-58.4%-71.2%-221.3%414.2%1,375.6%78.7%
Operating profit margin1.0%1.3%0.8%-1.1%0.5%0.2%1.0%2.8%2.1%3.0%1.5%
Source: Shared Research based on company data
  • Segment sales: JPY157.1bn (+16.4% YoY)
  • Segment profit: JPY3.7bn (+300.7% YoY)

Segment trends

1H FY03/22 sales of general-purpose electronic components such as ICs and connectors for PCs/tablets expanded on firm consumer-related stay-at-home and teleworking demand. At the same time, sales of automotive ICs improved on a recovery in production, and sales of general-purpose electronic parts such as semiconductor devices and LCD panels for the consumer/industrial equipment market and the automotive market increased. Segment profit rose 300.7% YoY.

Electronic and Electric Equipment segment

CumulativeFY03/20FY03/21FY03/22
(JPYmn)Q1Q1–Q2Q1–Q3Q1–Q4Q1Q1–Q2Q1–Q3Q1–Q4Q1Q1–Q2Q1–Q3Q1–Q4
Sales4,6929,77714,25318,2864,0188,41413,41619,0295,15610,28015,20321,609
YoY-14.7%-10.3%-6.3%-15.1%-14.4%-13.9%-5.9%4.1%28.3%22.2%13.3%13.6%
Segment profit2145388989005606101,2741,7705601,2861,7682,104
YoY-45.4%-15.8%17.4%-36.5%161.7%13.4%41.9%96.7%0.0%110.8%38.8%18.9%
Operating profit margin4.6%5.5%6.3%4.9%13.9%7.2%9.5%9.3%10.9%12.5%11.6%9.7%
Quarterly
(JPYmn)Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
Sales4,6925,0854,4764,0334,0184,3965,0025,6135,1565,1244,9236,406
YoY-14.7%-5.9%3.7%-36.3%-14.4%-13.5%11.8%39.2%28.3%16.6%-1.6%14.1%
Segment profit214324360256050664496560726482336
YoY-45.4%31.2%185.7%-99.7%161.7%-84.6%84.4%-0.0%1,352.0%-27.4%-32.3%
Operating profit margin4.6%6.4%8.0%0.0%13.9%1.1%13.3%8.8%10.9%14.2%9.8%5.2%
Source: Shared Research based on company data
  • Segment sales: JPY21.6bn (+13.6% YoY)
  • Segment profit: JPY2.1bn (+18.9% YoY)

Segment trends

Sales of PCB manufacturing equipment and vacuum equipment increased, reflecting higher capital investment related to semiconductors. Segment profit was up 18.9% YoY amid sales growth in high-margin own-brand PCB manufacturing equipment.

Industrial Chemicals segment

CumulativeFY03/20FY03/21FY03/22
(JPYmn)Q1Q1–Q2Q1–Q3Q1–Q4Q1Q1–Q2Q1–Q3Q1–Q4Q1Q1–Q2Q1–Q3Q1–Q4
Sales2,9155,6118,49311,1602,8075,4738,37610,9622,8996,3449,37612,300
YoY8.8%5.6%3.2%2.5%-3.7%-2.5%-1.4%-1.8%3.3%15.9%11.9%12.2%
Segment profit2294667248382494777608904429381,2161,337
YoY-14.2%-3.1%-4.1%-10.1%8.7%2.4%5.0%6.2%77.5%96.6%60.0%50.2%
Operating profit margin7.9%8.3%8.5%7.5%8.9%8.7%9.1%8.1%15.2%14.8%13.0%10.9%
Quarterly
(JPYmn)Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
Sales2,9152,6962,8822,6672,8072,6662,9032,5862,8993,4453,0322,924
YoY8.8%2.4%-1.3%0.5%-3.7%-1.1%0.7%-3.0%3.3%29.2%4.4%13.1%
Segment profit229237258114249228283130442496278121
YoY-14.2%10.7%-5.8%-35.6%8.7%-3.8%9.7%14.0%77.5%117.5%-1.8%-6.9%
Operating profit margin7.9%8.8%9.0%4.3%8.9%8.6%9.7%5.0%15.2%14.4%9.2%4.1%
Source: Shared Research based on company data
  • Segment sales: JPY12.3bn (+12.2% YoY) 
  • Segment profit: JPY1.3bn (+50.2% YoY)
Segment trends

Sales of process additives for the petroleum refining, petrochemical, and paper industries, which were adversely affected in FY03/21 by the pandemic, expanded on a recovery in capacity utilization at customer plants. Sales were also firm in cosmetics-related products. Segment profit was up 50.2% YoY thanks to an increase in sales of high-margin cosmetics-related products.

Other business segment

CumulativeFY03/20FY03/21FY03/22
(JPYmn)Q1Q1–Q2Q1–Q3Q1–Q4Q1Q1–Q2Q1–Q3Q1–Q4Q1Q1–Q2Q1–Q3Q1–Q4
Sales176350540720328630911472320614885466
YoY1.1%1.4%3.6%4.7%86.4%80.0%68.7%-34.4%-2.4%-2.5%-2.9%-1.3%
Segment profit71220219115519622189152197213
YoY-22.2%-29.4%-23.1%31.3%1,200.0%1,191.7%880.0%952.4%-2.2%-1.9%0.5%-3.6%
Operating profit margin4.0%3.4%3.7%2.9%27.7%24.6%21.5%46.8%27.8%24.8%22.3%45.7%
Quarterly
(JPYmn)Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
Sales176174190180328302281-439320294271-419
YoY1.1%1.8%8.0%7.8%86.4%73.6%47.9%-343.9%-2.4%-2.6%-3.6%-4.6%
Segment profit75819164412589634516
YoY-22.2%-37.5%-11.1%-1,200.0%1,180.0%412.5%--2.2%-1.6%9.8%-36.0%
Operating profit margin4.0%2.9%4.2%0.6%27.7%21.2%14.6%-27.8%21.4%16.6%-
Source: Shared Research based on company data
  • Segment sales: JPY466mn (-1.3% YoY)
  • Segment profit: JPY213mn (-3.6% YoY)
  • The segment is mainly engaged in management of the company’s operations and logistics, and in solar power generation.

Company forecast

FY03/21FY03/22FY03/23
(JPYmn)1H Act.2H Act.FY Act.1H Act.2H Act.FY Act.1H Est.2H Est.FY Est.
Sales75,61989,794165,41391,428100,067191,49598,00099,000197,000
YoY4.6%11.0%8.0%20.9%11.4%15.8%7.2%-1.1%2.9%
Gross profit8,6949,96718,66111,70812,26023,968
YoY-4.8%19.6%6.8%34.7%23.0%28.4%
Gross profit margin11.5%11.1%11.3%12.8%12.3%12.5%
SG&A expenses7,0407,81514,8557,5369,12716,663
SG&A ratio9.3%8.7%9.0%8.2%9.1%8.7%
Operating profit1,6532,1533,8064,1713,1337,3043,5003,5007,000
YoY-3.2%205.0%57.7%152.3%45.5%91.9%-16.1%11.7%-4.2%
Operating profit margin2.2%2.4%2.3%4.6%3.1%3.8%3.6%3.5%3.6%
Recurring profit1,5212,0823,6034,1553,2567,4113,5003,4006,900
YoY-3.4%268.5%68.4%173.2%56.4%105.7%-15.8%4.4%-6.9%
Recurring profit margin2.0%2.3%2.2%4.5%3.3%3.9%3.6%3.4%3.5%
Net income1,0142,0503,0642,8492,1214,9702,5502,4505,000
YoY-8.2%513.8%112.9%181.0%3.5%62.2%-10.5%15.5%0.6%
Net margin1.3%2.3%1.9%3.1%2.1%2.6%2.6%2.5%2.5%
Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.

Company forecast for FY03/23 

  • Sales: JPY197.bn (+2.9% YoY)
  • Operating profit: JPY7.0bn (-4.2% YoY)
  • Recurring profit: JPY6.9bn (-6.9% YoY)
  • Net income*: JPY5.0bn (+0.6% YoY)
    *Net income attributable to owners of the parent

The company expects a continued increase in demand for components and equipment as IoT becomes increasingly common in household appliances, functionality improves in communications equipment, and automotive technology becomes increasingly sophisticated. At the same time, the company expects supply and demand to remain tight in semiconductors and other electronic components. The company views lingering global uncertainties, including the potential resurgence of COVID-19 infections, the situation in Ukraine, and the likelihood of further price hikes due to soaring raw material prices, as potential risks that could have an impact on production activities.    

In the Electronic Devices and Components segment, management looks to improve operational efficiency as it targets growth in consumer electronics, industrial equipment, and automotive-related applications, where it expects demand to continue to expand. In the Electronic and Electric Equipment segment, the company intends to bolster its efforts to secure orders for printed circuit board (PCB) manufacturing equipment and vacuum equipment, where it believes ongoing capital investment is likely to contribute to improved demand. In the Industrial Chemicals segment, the company aims to improve sales of polymerization-inhibitors in the overseas business and expand sales of base materials for cosmetics, where demand is currently robust.

Historical earnings forecast accuracy

Results vs. Initial Est.FY03/13FY03/14FY03/15FY03/16FY03/17FY03/18FY03/19FY03/20FY03/21FY03/22
(JPYmn)Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.
Sales (Initial Est.)120,000124,000142,000136,000128,000134,000148,000160,000Undisclosed167,000
Sales (Results)111,823132,619131,073116,296127,599138,744140,123153,182165,413191,495
Results vs. Initial Est.-6.8%7.0%-7.7%-14.5%-0.3%3.5%-5.3%-4.3%-14.7%
Operating profit (Initial Est.)4,5003,5004,2004,4003,3003,2004,5004,000Undisclosed4,000
Operating profit (Results)3,1014,0434,3072,9062,0693,7403,6422,4143,8067,304
Results vs. Initial Est.-31.1%15.5%2.5%-34.0%-37.3%16.9%-19.1%-39.7%-82.6%
Recurring profit (Initial Est.)4,5003,6004,3004,4003,4003,3004,7004,000Undisclosed3,800
Recurring profit (Results)3,4354,2184,5552,8731,9893,7723,5802,1393,6037,411
Results vs. Initial Est.-23.7%17.2%5.9%-34.7%-41.5%14.3%-23.8%-46.5%-95.0%
Net income (Initial Est.)2,9002,5002,8002,9002,3002,4003,4002,800Undisclosed3,000
Net income (Results)2,0052,3363,3942,0341,9033,2872,4731,4393,0644,970
Results vs. Initial Est.-30.9%-6.6%21.2%-29.9%-17.3%37.0%-27.3%-48.6%-65.7%
Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
Company forecast tendencies

The company focuses on profitability, and eschews unreasonable orders. It also tends to give conservative forecasts. Consequently, judging from past estimates and actual results, its earnings tend to be generally stable, other than in unusual circumstances such as are described below, and regularly surpass the initial targets.

Difference between results and initial company forecasts

In FY03/13, profit undershot the initial forecast at all levels from the operating line down, because the recurrence of debt crises in Europe in 1H and economic slowdown in China caused a deceleration in capex. In FY03/16, sales and profits missed initial forecasts due to the negative impact on gross profit of a major customer’s withdrawal from the LED business and provision for inventory that accrued because of a slump in sales of smartphone and tablet components in the Chinese market. In FY03/17, profit undershot the initial forecast. The company revised down its full-year forecast, because steep forex rate fluctuations in Q1 (April–June 2016) eroded profits. Profits recovered somewhat in 2H, but not enough to attain initial forecasts.

Sales and profits exceeded the initial forecast in FY03/18, which the company described as conservative. Earnings made strong progress from Q1 onward, with brisk PCB and FPD manufacturing equipment compensating for delays in booking sales from high-margin projection stepper systems and absorbing sharp yen appreciation in Q4 (January–March 2018) as well. In FY03/20, sales and profits fell short of the initial forecast. Earnings were largely on track until Q3 (October–December 2019), but profits in particular ended far below the initial forecast, because the company wrote down the book value of inventory to reflect lower profitability in view of the expected impact of the spread of COVID-19 pandemic in Q4.

The company did not announce an initial full-year forecast for FY03/21, but posted sales and profit growth on the back of increased demand for parts and components for electronics.
Strong capital investment in the electronics industry, particularly at semiconductor-related companies, contributed to increased demand for electronic components and manufacturing equipment in FY03/22. Moreover, the recovery in demand for automotive ICs contributed to sales and profit coming in well above the company's initial forecasts. 

Long-term outlook

New medium-term management plan “Change & Co-Create 2024” (out April 30, 2021)

Hakuto announced its medium-term management plan, “Change & Co-Create 2024,” on April 30, 2021. The company aims to become a distinguished technology trading company and chemical manufacturer to achieve sustainable growth and increase enterprise value over the medium to long term. In Electronic Devices and Components, it will streamline business operations, expand the solutions business and strengthen its marketing capabilities, including in overseas markets. In Electronic and Electric Equipment, it will increase the sales share of new products and in-house products, as well as move into new business areas such as healthcare, environment, and energy. In Industrial Chemicals, the company will strengthen its base materials for cosmetics businesses and develop new business areas.

Quantitative targets
  • Consolidated operating profit: Over JPY5.0bn in FY03/25 versus JPY3.8bn in FY03/21
  • Consolidated OPM: Over 3.0% in FY03/25 versus 2.3% in FY03/21
  • ROE: Over 6.0% in FY03/25 versus 5.5% in FY03/21

The quantitative targets of the new medium-term plan are consolidated operating profit of JPY5.0bn or higher, operating profit margin of 3.0% or higher, and ROE of 6.0% or higher in FY03/25, the final year of this plan. Target sales based on these figures are estimated at JPY167.0bn, which is roughly the same as the company’s FY03/22 sales forecast. The FY03/25 OPM target of 3.0% is 0.6pp higher than the company’s FY03/22 forecast of 2.4% (estimate by Shared Research from disclosed data). The CAGR of consolidated operating profit from FY03/22 to the final year of the medium-term plan (FY03/25) is 7.7%.

Business structural reforms

The new medium-term plan calls for business structural reforms, with streamlining low-margin businesses and expanding high-margin businesses as a pillar. Reflecting on earnings performance through FY03/21, the company is aware that although sales have grown, operating profit has been weak. By business category, profitability has declined for semiconductor devices due to an increased number of product items and volume undermining efficiency amid the overall trend of universal and diversified products. Further, although components, equipment, and chemicals are profitable, business expansion has been hampered by insufficient use of outside resources and investment. In conclusion, Hakuto has identified the four main points for the medium-term plan.

  1. Business: Invest resources in high-margin businesses
  2. Organization: Create value by sharing information and technologies across business divisions
  3. Technology: Collaborate with outside resources (M&A, open innovation)
  4. Digital transformation (DX): DX strategy that speeds up business reforms
Invest resources in high-margin businesses

Hakuto plans to focus on selected businesses from a profitability perspective, actively investing in profitable businesses while streamlining less profitable businesses through systematization. In addition to organic growth, the company plans to further accelerate business expansion by directing resources to profitable businesses through collaboration and M&A. Profitable businesses selected by the company are components, equipment, and chemicals. In components, Hakuto plans to strengthen marketing to expand new businesses. For equipment, the company will build a structure that helps customers add value by harnessing one-of-a-kind technologies. For chemicals, the company will provide solutions that leverage its core technologies and trading company function. The less profitable businesses that require efficiency improvements are semiconductor devices and businesses handled by overseas subsidiaries. The company aims to add more value to its services by honing its technical and consulting capabilities in semiconductor devices, while it is strengthening area-specific strategies (for Greater China and ASEAN) in the overseas business.

Create value by sharing information and technologies across business divisions

Hakuto’s business can be broadly categorized into semiconductor devices, components, equipment, and chemicals. However, real demand often overlaps multiple categories. The company therefore aims to promote communication and business collaboration between business divisions to strengthen the sharing of information and technologies across the four divisions. Examples are business proposals from one department in the electronics division to another, or a proposal by the chemicals division to the electronics division, which will help to make joint projects profitable. The company’s objective is to create a fifth earnings driver by launching new cross-organizational projects.

Collaborate with outside resources (M&A, open innovation)

The company has expressed its intention to bring in outside capabilities by promoting M&A and open innovation to strengthen its core technologies further and expand its business portfolio. Specifically, this entails an exchange of knowledge and information with external organizations such as universities and research institutes, upstream and downstream companies in commercial distribution, and overseas semiconductor trading companies, signifying a shift in approach from proprietary businesses to bringing in from outside the means to create new technologies. By adopting these methods, Hakuto plans to strengthen its ability to deliver solutions as a technology trading company that its competitors cannot provide.

DX strategy that speeds up business reforms

The company sees DX in two stages—back-end DX and front-end DX. Back-end DX is a major overhaul and streamlining of business processes across all businesses using marketing automation (MA) tools and robotic process automation (RPA). For front-end DX, the company aims for creating a new business model able to provide new value added that leverages its relationships with customers.

Reference: Medium-term management plan “E&C+2020” (out April 28, 2016)

Along with FY03/16 results, Hakuto announced a new medium-term management plan, E&C + 2020, which covered a period through FY03/21. The plan’s vision was to realize sustainable growth and to improve Hakuto’s corporate value by pursuing synergies between electronics and chemicals, and mixing new elements into the company’s technological strength and its unique high value-added business models. The plan had four basic policies: strengthening the profit base, actively cultivating new markets and businesses, strengthening the overseas businesses, and building a management system that drives growth. Numerical targets for FY03/21, the final year in the plan, were sales of JPY180.0bn, operating profit of JPY7.0bn, and ROE of 8% or higher. 

Basic policies in medium-term plan
Strengthening profit base・Focus on selected fields within existing businesses
・Establish new profit streams by developing next generation core items
・Generate greater value by exploiting M&A
Actively cultivate new markets and businesses・Tap opportunities in markets beyond conventional electronics and expand its business domain
(penetrate environmental equipment and medical equipment fields)
・Foster new businesses by integrating group companies and business divisions
Strengthen overseas businesses・Create a marketing framework that emphasizes local businesses in Asia, press ahead with business reforms
・Strengthen automotive businesses by establishing bases in Europe and the UK
Build a management system that drives growth・Efficient and effective management system
(bolster human resource, IT, financial and IR strategies)
Source: Shared Research based on company data
Electronics

This is the main area of Hakuto’s operations and one in which the company can showcase its engineer-based technical support and its ability to respond to needs in areas from planning and design to production. The Electronic Devices and Components segment accounts for the largest portion of sales and while sales in recent years have expanded, segment profit has continued to decline. Amid such an environment, the company is expanding its lineup of ADAS (advanced driver assistance system) products in the automotive field and focusing its attentions on products with high added value, including RFID systems that improve logistics management through the use of wireless technology and module solutions that combine a number of electronic components. The company is also working to entrench digitization and systemization in order to reduce costs. 

With the general nature of its products contributing to sluggish sales in the Electronic and Electric Equipment segment, the company aims to accelerate product development and the company’s expansion into new markets. More specifically, the company intends to expand its lineup of leading products, including the FINLASE laser processing system that can be used for the precision processing of automotive and industrial equipment components, and expand its lineup of medical devices after obtaining the necessary permits and licenses.

Chemicals

In the Industrial Chemicals segment, the company aims promote solutions-based sales and develop its customer base not only in the domestic petroleum, petrochemical, and paper and pulp markets where it already operates, but also in overseas markets with the strong potential for growth. Management is also focused on expanding the scale of its business by improving its product development capabilities. 

Overseas business

Sales are expanding to Japanese and local businesses in the ASEAN community and the company also targets ADAS-related growth in Europe and the US. Management aims to expand its business by responding appropriately to changes in global supply chains brought on by the COVID-19 pandemic.

The business environment changed dramatically after the plan was formulated due to the global COVID-19 pandemic. In regard to progress toward achieving the targets of this medium-term plan, while the COVID-19 pandemic has contributed to changes in the operating environment, the company stated that, in addition to the aforementioned strategies, it was committed to following policies that are mindful of profitability, capital efficiency, and capital costs.

Business

Business description

Multi-business firm: from electronics trading to chemical manufacturing

Hakuto is a unique mini-conglomerate. It is both an electronics trading company and an industrial chemical manufacturer. The company’s electronics trading business started as a trading company founded in 1953 to import raw quartz for use in electronic devices. The industrial chemical manufacturing business started in 1960 to diversify the company’s operations and enhance stability.

What sets Hakuto apart is its technology-oriented structure, its three distinct business segments that provide a stable business foundation, and its diverse product offerings in growth markets. Although at heart an electronics trading company, Hakuto has an engineering division in each of its business areas. That allows the company to provide its customers with comprehensive technical services, including technical support from the planning, development, and design stages through the equipment installation, calibration, and maintenance stages. It also boasts of a strong cohort of field application engineers (FAEs) with technical expertise. Consequently, while firms operating in the electronics-related space tend to have large fluctuations in earnings performance, since Hakuto operates as more than just a trading company, the company’s earnings are relatively stable. In terms of sales, Hakuto is medium sized compared to other semiconductor trading companies, but its profit margins match those of the sector leaders (see the Profitability snapshot, financial ratios section).

Business model

Manufactures own brand and other products for sale

Hakuto is a trading company, but also a manufacturer in the Industrial Chemicals business. It sells own brand products in the Electronic and Electric Equipment business, which makes it unique among electronics trading companies.

Sales channel by product category

In the Electronic Devices and Components business, in addition to sales by the parent, sales are handled by consolidated subsidiaries Hakuto Enterprises Ltd. (Hong Kong), Hakuto Enterprises (Shanghai) Ltd., Hakuto (Thailand) Ltd., Hakuto Singapore Pte. Ltd., Hakuto Taiwan Ltd., Hakuto Trading (Shenzhen) Ltd., Hakuto America, Inc., and Hakuto Czech s.r.o.

In the Electronic and Electric Equipment business, in addition to sales by the parent, sales are handled by consolidated subsidiaries Hakuto Enterprises Ltd. (Hong Kong), Hakuto Enterprises (Shanghai) Ltd., Hakuto (Thailand) Ltd., and Hakuto Taiwan Ltd. Some electronic and electric equipment is bought from affiliate San Ei Giken Inc.

In the Industrial Chemicals business, in addition to sales of in-house manufactured products, the company also sells products manufactured by other companies. In other businesses, the company operates power generation system and consolidated subsidiary Hakuto A&L Co., Ltd. undertakes subcontracted operations on behalf of other group companies.

Unique sales system

Hakuto’s electronics trading business has a unique sales structure, which is a source of the company’s strengths. The two main features of the sales structure are as follows.

Organizational structure that helps to improve relationships with customers

First, Hakuto stands apart from other electronics trading companies in having a “vertical” system of teams that work with each supplier. At other trading companies, the norm is for marketers (who know products well and purchase them from suppliers) and salespeople (who find out customers’ needs and sell products to them) to work separately. At Hakuto, the same account managers fulfill both purchasing and sales roles, making it easier for them to keep track of market trends, the competitive environment, and customer needs, ensuring that orders placed with suppliers are highly in line with customer expectation.

Since each person is responsible for a particular product, a customer may have to deal with multiple salespeople. However, the company believes that this arrangement offers advantages overall, because it deepens relationships with customers. Hakuto does business with top-class companies as a result of this structure, which produces close relationships with both suppliers and customers. This is one of the company’s strengths, especially in the Electronic Devices and Components segment.

In addition, one of the initiatives of Hakuto’s medium-term plan aims to develop a flexible organizational structure that also incorporates a “horizontal” system of teams to strengthen marketing and streamline operations. Going forward, the company plans to utilize sales promotion tools and IT to improve profitability.

Hakuto performs profit management by division. Each division consists of multiple groups, with a structure that aims to increase profit as well as aggressively foster new businesses by combining groups that handle new products at the startup stage with those that handle products at the profit-generating stage.

Maintenance and service structure

Second, Hakuto’s maintenance and service structure is highly regarded. Starting with measuring instruments immediately after its founding, the company handles a diverse range of equipment. Customers feel confident sourcing equipment from Hakuto, which sets up and maintains its products (with a few exceptions). Many of the products sold by Hakuto are niche and specialized equipment. The company’s knowledge of the technologies used in such equipment is a point of difference for the company, boosting customer confidence and helping to raise profitability.

To ensure differentiated technologies are passed down to the next generation, Hakuto has an ongoing program of recruiting science graduates. The company also has a Technical Center in Isehara, Kanagawa Prefecture to hone its maintenance technologies. This is difficult for rivals to emulate, because acquiring expertise takes time. Engaging in unique sales methods while remaining mindful of profitability is one of Hakuto’s strengths in our view.

Risk management for purchased products

Hakuto has an internal rule regarding slow-moving inventory: Product inventory that is two years old must be fully written off. In FY03/20, the company applied this rule early to purchased inventory in anticipation of the risk of inventory moving slowly due to the COVID-19 pandemic putting the brakes on sales activities and socioeconomic activity in general. Consequently, Hakuto booked a loss on write-off, which made a substantial impact on the company’s profit. We note that the allowance will be reversed if the slow-moving inventory were to be sold.

Involvement in new fields to expand business

To maintain sustainable growth, the company continuously reviews and updates its product lineup. The company also collaborates with, and makes investments in, partner companies in fields with strong growth potential. Since FY03/13, the company has established alliances and capital tie-ups with the following partners:

Main business alliances and investments
DateNew transactionSales target
2019
10/15Signed an agreement with FLOSFIA on distribution of corundum structured gallium oxide power devices in Japan
Oct.Re-entered into a distributor contract with RIBER
Aug.Started sales of products from DTEN
5/13Signed contract for exclusive sales rights in Japan with Wave2Wave Solution Corporation and NTT Advanced Technology Corporation
2017
11/7Signed new distributor contract with MAXIM Integrated (US)
10/5Signed a distributor contract with INSPIN
2016
10/16Signed a new distributor contract with OtO Photonics (Taiwan)JPY50mn in FY03/18, JPY100mn in FY03/19
5/23Service started in Hakuto CzechSales mainly of electronic parts and equipment
2/17Started sales of HIKARI Smart Home System with C-Cube
2015
12/25Newly installed solar power system in Isehara Logistics Center for electricity sales
11/12Signed a new distributor contract with Cypress Semiconductor
Source: Shared Research based on company data

Suppliers and customers

Hakuto has around 660 suppliers and 4,500 customers in Japan and overseas (company data). The number has remained stable over the years.

Recognizing the risk of overdependence on specific suppliers or customers whether in Japan or abroad, Hakuto does business with many companies. Its group companies around the world allow it to seamlessly market its products to customers both at home and abroad. The main customers are the group companies of Denso Corporation (TSE1: 6902), Panasonic Corporation (TSE1: 6752), Fujitsu Ltd. (TSE1: 6702), and Aisin Corporation (TSE1:7259). Denso is a major customer that accounts for more than 10% of Hakuto’s total sales.

Hakuto emphasizes profitability over the level of sales. Before commencing sales of a major new product, the company performs a review to examine profitability and identify risk factors before making the final decision. Hakuto sets its own credit parameters for each customer, and conducts business based on those parameters. 

Thanks to this systematic approach, the level of doubtful receivables is low, not exceeding several million yen annually. The company says that this level remained relatively stable even during the 2008 global financial crisis.

Business segments

Electronics trading accounts for 90% of total sales; industrial chemicals manufacturing accounts for 10% of total sales

In FY03/21, the electronics trading business accounted for more than 90% of sales. Less than 10% were from industrial chemicals. The electronics trading business is comprised of two segments—Electronic Devices and Components, and Electronic and Electric Equipment. Within the Electronic Devices and Components segment are three divisions based on sales—semiconductor devices, general electronic components, and optical components. The Industrial Chemicals segment (the only segment categorized as the industrial chemical manufacturing business) comprises petroleum refinery and petrochemical, paper and pulp, and cosmetics base materials and other products.

Sales composition by segment (left), operating profit by segment (center), sales by region (right)
Source: Shared Research based on company data
Note: Percentages for sales, operating profit, and sales by region are calculated based on simple sums of the respective components.
FY03/12FY03/13FY03/14FY03/15FY03/16FY03/17FY03/18FY03/19FY03/20FY03/21
(JPYmn)Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.
Sales116,148111,823132,619131,073116,296127,599138,744140,123153,182165,413
YoY4.7%-3.7%18.6%-1.2%-11.3%9.7%8.7%1.0%9.3%8.0%
Electronic Devices and Components89,66183,951100,94099,30188,09898,554106,223107,668123,708135,390
YoY-6.5%-6.4%20.2%-1.6%-11.3%11.9%7.8%1.4%14.9%9.4%
% of total76.8%74.6%75.7%75.4%75.3%76.8%76.2%76.5%80.4%81.5%
Semiconductor devices59,50955,69465,52665,80161,18662,14171,99677,92690,847101,031
YoY-3.2%-6.4%17.7%0.4%-7.0%1.6%15.9%8.2%16.6%11.2%
% of total50.9%49.5%49.1%49.9%52.3%48.5%51.6%55.4%59.0%60.8%
Electronic components30,15228,25635,35533,50026,91336,41234,22629,74132,86034,359
YoY22.7%-6.3%25.1%-5.2%-19.7%35.3%-6.0%-13.1%10.5%4.6%
% of total25.8%25.1%26.5%25.4%23.0%28.4%24.6%21.1%21.4%20.7%
Electronic and Electric Equipment18,59318,30821,08922,34318,47719,19121,08521,54418,28619,029
YoY-0.3%-1.5%15.2%5.9%-17.3%3.9%9.9%2.2%-15.1%4.1%
% of total15.9%16.3%15.8%17.0%15.8%15.0%15.1%15.3%11.9%11.5%
Industrial Chemicals7,8719,54510,5669,3999,6949,82810,24710,88611,16010,962
YoY9.8%21.3%10.7%-11.0%3.1%1.4%4.3%6.2%2.5%-1.8%
% of total6.7%8.5%7.9%7.1%8.3%7.7%7.4%7.7%7.3%6.6%
Other691696727709707676680688720753
YoY3.6%0.7%4.5%-2.5%-0.3%-4.4%0.6%1.2%4.7%4.6%
% of total0.6%0.6%0.5%0.5%0.6%0.5%0.5%0.5%0.5%0.5%
Eliminations-668-678-705-681-682-652-657-663-693-722
Operating profit4,2223,1014,0434,3072,9062,0693,7403,6422,4143,806
YoY-3.9%-26.6%30.4%6.5%-32.5%-28.8%80.8%-2.6%-33.7%57.7%
Electronic Devices and Components2,3161,7072,6422,9401,1524471,4261,3315761,121
YoY-0.6%-26.3%54.8%11.3%-60.8%-61.2%219.0%-6.7%-56.7%94.6%
Operating profit margin2.6%2.0%2.6%3.0%1.3%0.5%1.3%1.2%0.5%0.8%
Electronic and Electric Equipment1,3021,0558468891,0188041,2541,4189001,770
YoY17.0%-19.0%-19.8%5.1%14.5%-21.0%56.0%13.1%-36.5%96.7%
Operating profit margin7.0%5.8%4.0%4.0%5.5%4.2%5.9%6.6%4.9%9.3%
Industrial Chemicals576343513443587867904932838890
YoY13.5%-40.5%49.6%-13.6%32.5%47.7%4.3%3.1%-10.1%6.2%
Operating profit margin7.3%3.6%4.9%4.7%6.1%8.8%8.8%8.6%7.5%8.1%
Other15141720261927162119
YoY1,212.3%-6.7%21.4%17.6%30.0%-26.9%42.1%-40.7%31.3%-9.5%
Operating profit margin2.2%2.0%2.3%2.8%3.7%2.8%4.0%2.3%2.9%2.5%
Adjustments11-182213121-68127-55793
Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Figures are before elimination of intersegment transactions.
Electronics trading

This is the company’s main profit driver. The company handles a range of products serving electronics manufacturers, from semiconductors and electronic components to manufacturing equipment. Electronic products are characterized by short development and life cycles, with manufacturers having diverse procurement needs for advanced components. Hakuto employs a sales team who possess technical knowledge, allowing it to precisely identify customer needs and then procure and supply high value-added products from around the world. The company’s solutions often include a design component. It acts as a development partner, linking its customers to suppliers and contributing to the development of state-of-the-art products matching customers’ individual needs.

Hakuto operates as more than just an import/export agent and marketer on commission. It is also a “technology trading company” that provides its customers with development support and equipment maintenance. Although at heart a trading company, its staff have technical expertise in several areas, allowing the company to provide its customers with comprehensive support. Other trading companies specializing in electronics tend to strengthen their technical support as part of their strategy to boost value-added. However, Hakuto’s key customers include major manufacturers, government agencies, and research institutes, and hence it has adopted this uncompromising approach to technical expertise as its business philosophy since its founding in 1953.

The following are overviews for each segment.

Electronic Devices and Components

Electronic Devices and ComponentsFY03/12FY03/13FY03/14FY03/15FY03/16FY03/17FY03/18FY03/19FY03/20FY03/21
(JPYmn)Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.
Sales89,66183,951100,94099,30188,09898,554106,223107,668123,708135,390
YoY-6.5%-6.4%20.2%-1.6%-11.3%11.9%7.8%1.4%14.9%9.4%
Segment profit2,3161,7072,6422,9401,1524471,4261,3315761,121
YoY-0.6%-26.3%54.8%11.3%-60.8%-61.2%219.0%-6.7%-56.7%94.6%
Operating profit margin2.6%2.0%2.6%3.0%1.3%0.5%1.3%1.2%0.5%0.8%
Source: Shared Research based on company data

This is Hakuto’s core business. In FY03/21, sales for the segment reached JPY135.4bn (81.5% of total sales) and segment profit came to JPY1.1bn (29.5%). However, with an operating profit margin of 0.8%, profitability was low compared to the other segments. Within the segment are the semiconductor devices, general electronic components, and optical components divisions. Of segment sales, semiconductor devices accounted for 74.6%, general electronic components for 19.1%, and optical components for 6.3%. The company does not disclose a breakdown of operating profit by division, but Shared Research believes that the profitability is strong in the general electronic components and optical components divisions.

Main customers are in the electronics, automotive, and infrastructure sectors. Applications cover a broad spectrum, ranging from consumer products to R&D and production. In semiconductor devices, the company supplies these customers with state-of-the-art semiconductors. The Electronic Devices division procures and supplies these customers with advanced semiconductor equipment, while the Electronic Components division does the same for high quality, high function mechanical components and modular products.

Just over 10% of the segment’s workforce is made up of field application engineers (FAEs), who not only provide technical support for the semiconductors handled but are also involved in design-related activities, such as proposing specific semiconductors to match a customer’s product development needs.

Electronic Devices

The main products handled are microprocessors, graphics semiconductors, microcontrollers, sound generator semiconductors, quartz devices, and other semiconductor devices. Main customer sectors include automotive, manufacturers of consumer equipment and manufacturers of telecom equipment. 

The Electronic Devices division has the largest sales share of the Electronic Devices and Components segment. It handles devices for such applications as automobiles, consumer electronics, motors for consumer equipment and tablets. Because of the great number of products involved and large customer transactions, its contribution to sales is large, but price competition in the segment is also fierce. As a result, the profit margin is low compared to other segments. Nevertheless, at present sales are robust, especially for automobiles where the introduction of smart controls is proceeding at a torrid pace.

Major suppliers include such domestic and overseas semiconductor manufacturers as Asahi Kasei Electronics Co., Ltd. (wholly owned subsidiary of Asahi Kasei Corporation [TSE1: 3407]), Yamaha Corp (TSE1: 7951), STMicroelectronics NV (NYSE: STM), Cypress Semiconductor Corporation, which was acquired by Infineon Technologies (IFX, FWB), SP Media-Tec Co., Ltd. (TPE: 2454), Marvell Technology Group Ltd (NASDAQ: MRVL), and Seiko Epson Corp (TSE1: 6724). Hakuto has recently increased the commercial rights it holds for foreign-branded semiconductors. From FY03/20 onward, sales of Cypress Semiconductor products for automobile use have been increasing. Hakuto’s strategy appears to be that by expanding its product lineup it can achieve an optimal business balance while more dynamically responding to market needs. Consequently, in cultivating new products to sell, Hakuto actively seeks out products from major manufacturers while also working to increase sales of products from many small-scale manufacturers that have original technology and products.

Electronic Components

Main products include various kinds of connectors, LCD panels, RFID-related products, web meeting systems, photovoltaic panels, electrical components and materials, products to prevent electromagnetic interference (EMI), heat sinks, and optical components.

The Electronic Components division within the Electronic Devices and Components segment handles products covering a range of fields, from in-car devices to PCs, telecommunication, industrial, and office automation equipment. The company offers a broad product lineup and thus can cater to a wide range of electronics-related customer needs. Although the company does not disclose the division’s profit margins, Shared Research believes them to be higher than in electronic devices.

According to the company, it expects rapid growth for the optical components business, as a result of the technological innovations now occurring in growth fields like 5G and IoT. Since it has already been involved in these areas for around a decade, the company claims to have a leg up on other trading companies. Moreover, since the LCD panel business has been adversely impacted by the drying up of growth previously seen in the OA equipment market, Hakuto has shifted its focus to growth markets, such as the automobile sector, cultivating new markets such as the radio-frequency identification (RFID) business, and getting involved in new sectors.

Main suppliers of general electronic components are Foxconn Technology Group (TPE: 2354), Amphenol Corp. (NYSE: APH), Samtec, Inc. (unlisted), Innolux Display Corporation (TPE: 3481), and Impinj Inc. (NASDAQ: PI). Main suppliers of optical components are Viavi Solutions Inc. (NASDAQ: VIAV) and Lumentum Holdings (NASDAQ: LITE). Viavi and Lumentum were founded in August 2015 after the split of JDS Uniphase Corporation.

Electronic and Electric Equipment

Electronic and Electric EquipmentFY03/12FY03/13FY03/14FY03/15FY03/16FY03/17FY03/18FY03/19FY03/20FY03/21
(JPYmn)Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.
Sales18,59318,30821,08922,34318,47719,19121,08521,54418,28619,029
YoY-0.3%-1.5%15.2%5.9%-17.3%3.9%9.9%2.2%-15.1%4.1%
Segment profit1,3021,0558468891,0188041,2541,4189001,770
YoY17.0%-19.0%-19.8%5.1%14.5%-21.0%56.0%13.1%-36.5%96.7%
Operating profit margin7.0%5.8%4.0%4.0%5.5%4.2%5.9%6.6%4.9%9.3%
Source: Shared Research based on company data

Main products handled are PCB/IC package manufacturing equipment, vacuum devices and components, physics and water equipment, analytical instruments, and laser processing systems.

In this segment, Hakuto proactively works to acquire distribution agency rights from domestic and overseas manufacturers of equipment and analysis apparatus related to state-of-the-art technologies, while at the same time it deploys a sales team with technical expertise that provides support to meet the varying needs of customers concerning technological trends or R&D. In FY03/21, segment sales reached JPY19.0bn (+4.1% YoY) while segment profit came to JPY1.8bn (+96.7% YoY) with an operating profit margin of 9.3%.

Although the operating profit margin is high compared to the Electronic Devices and Components business, Shared Research thinks that is due to the value added for the technical services required to handle changes in specifications for calibrating and customizing equipment delivered to customers. Roughly 40% of the company’s staff working in this segment are technical service staff who offer total customer support for everything from defining the specifications to providing after-service.

The company develops and manufactures its own brand of products including IC package manufacturing equipment. The company’s Isehara Technical Center in Kanagawa Prefecture provides maintenance services and offers product demonstrations.

Industrial Chemicals

Industrial ChemicalsFY03/12FY03/13FY03/14FY03/15FY03/16FY03/17FY03/18FY03/19FY03/20FY03/21
(JPYmn)Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.
Sales7,8719,54510,5669,3999,6949,82810,24710,88611,16010,962
YoY9.8%21.3%10.7%-11.0%3.1%1.4%4.3%6.2%2.5%-1.8%
Segment profit576343513443587867904932838890
YoY13.5%-40.5%49.6%-13.6%32.5%47.7%4.3%3.1%-10.1%6.2%
Operating profit margin7.3%3.6%4.9%4.7%6.1%8.8%8.8%8.6%7.5%8.1%
Source: Shared Research based on company data

Main products handled are as follows:
Petroleum refinery and petrochemical: corrosion inhibitor, desalting agent, antifoulant, fluid catalytic cracking (FCC) catalyst
Pulp and paper: anti-foaming agent, deposit control agent, felt conditioner, pulp cleansing aid
Automotive: paint overspray detackifier
Water treatment and boiler: water treatment additives, ion exchange resin
Cosmetics: cosmetics base material (Alcasealan®), commissioned cosmetics development

In this segment, the Hakuto group acts both as a manufacturer of original products and a distributor for a number of domestic and overseas manufacturers. Hakuto also provides specialized cleaning services for petroleum and petrochemical plants and a process fluid recycling service, offering customers a package of solutions combined with product sales. 

In FY03/21, segment sales were JPY11.0bn (-1.8% YoY), segment profit was JPY890mn (+6.2% YoY), and the operating profit margin was 8.1%.

The specialty factor for the products the company handles translates into a profit margin for this area above the company’s average. In its specialty chemicals manufacturer capacity, the company aims to help customers enhance productivity as well as improve environmental performance in such fields as petroleum refining, petrochemicals, pulp and paper, and automotive. Hakuto also uses microbial polysaccharide technology to manufacture and supply materials for cosmetics manufacturers on an OEM basis. Product development is carried out at Hakuto’s plant and research laboratory in Yokkaichi, Mie Prefecture. In January 2021, the company announced an absorption-type merger with Hakuto Life Science Co., Ltd., a wholly owned subsidiary that sells cosmetics and cosmetics raw materials, bringing Hakuto Life Science under direct management to expand its business and improve efficiency.

Sales by region

Hakuto is expanding overseas operations in conjunction with that of its domestic customers. Overseas sales are increasing. Since 1973, the company has established offices in Hong Kong, Taiwan and Singapore, and has developed independent businesses to match the needs of local markets. According to the company, around 50% of sales of these overseas operations are from local business, and profit margins are higher than in Japan. There are also many products for which Hakuto’s commercial rights are only valid for overseas offices. In the future, cultivating overseas markets will be a key management priority.

Sales by region
FY03/12FY03/13FY03/14FY03/15FY03/16FY03/17FY03/18FY03/19FY03/20FY03/21
(JPYmn)Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.
Sales116,148111,823132,619131,073116,296127,599138,744140,123153,182165,413
YoY4.7%-3.7%18.6%-1.2%-11.3%9.7%8.7%1.0%9.3%8.0%
Domestic75,23268,78382,65475,28968,62471,42880,90183,10594,49599,234
YoY-2.2%-8.6%20.2%-8.9%-8.9%4.1%13.3%2.7%13.7%5.0%
% of total64.8%61.5%62.3%57.4%59.0%56.0%58.3%59.3%61.7%60.0%
Asia40,16242,35648,70254,81645,67654,39655,85754,17954,22360,840
YoY23.8%5.5%15.0%12.6%-16.7%19.1%2.7%-3.0%0.1%12.2%
% of total34.6%37.9%36.7%41.8%39.3%42.6%40.3%38.7%35.4%36.8%
Other7546841,2639681,9961,7751,9862,8394,4645,339
YoY-52.1%-9.3%84.6%-23.4%106.2%-11.1%11.9%43.0%57.2%19.6%
% of total0.6%0.6%1.0%0.7%1.7%1.4%1.4%2.0%2.9%3.2%
Overseas sales ratio35.2%38.5%37.7%42.6%41.0%44.0%41.7%40.7%38.3%40.0%
Source: Shared Research based on company data

Impact of exchange rates

To hedge forex risks, the company uses forward exchange contracts and other instruments. Basically, the company hedges for both purchases and sales by using forward exchange contracts (for both purchases and sales of foreign currency) to lock in a fixed rate on the settlement dates. In its currency management, the company has adopted an in-company policy of avoiding trying to time the currency market, and instead hedges in order to ensure profits from its product sales transactions. It therefore enters into foreign exchange contracts with the aim of avoiding forex market fluctuations.

As shown in the table below, within the parent’s results—which constitute a major portion of the group’s results—purchases from overseas account for almost half of all purchases. The company has 11 overseas subsidiaries in Asia. Financial statements for each region are prepared in local currency and subsequently converted to yen for the preparation of consolidated statements. Consequently, the exchange rate used at the time of conversion has an impact on the subsequent consolidated statements.

Purchase turnover of the parent by region (includes CoGS and outsourcing costs)
FY03/12FY03/13FY03/14FY03/15FY03/16FY03/17FY03/18FY03/19FY03/20FY03/21
Total71,43969,18685,01880,71173,67178,57799,092103,286127,011120,754
Domestic procurement41,40836,31142,38444,05642,07444,76754,89756,61258,63351,482
Overseas procurement30,03032,87542,63336,65431,59633,80944,19446,67468,37869,272
Overseas ratio42.0%47.5%50.1%45.4%42.9%43.0%44.6%45.2%53.8%57.4%
Source: Shared Research based on company data

Main group companies

The Hakuto group comprises the parent and group companies (12 subsidiaries and two affiliates). The group spans Japan and the Asia region (China, Taiwan, Singapore, and Thailand).

The company’s major consolidated subsidiaries, as of FY03/21, are as follows.

Consolidated subsidiariesConsolidated subsidiaries subsidiaries
CompanyVoting rights ratioBusinesses
DomesticMoldec Co., Ltd100%Manufacture and sales of high precision plastics
Hakuto A&L Co., Ltd.100%Administration and logistics
Hakuto Life Science Co., Ltd.100%Purchase of chemical raw materials and products
OverseasHakuto Enterprises Ltd.100%Export and import of electronic equipment and components
Hakuto Singapore Pte. Ltd.100%Export and import of electronic equipment and components
Hakuto Taiwan Ltd.100%Export and import of electronic equipment and components
Hakuto Enterprises (Shanghai) Ltd.100%Export and import of electronic equipment and components
Hakuto (Thailand) Ltd.100%Export and import of electronic equipment and components
Hakuto Engineering (Thailand) Ltd.100%Export and import of electronic equipment and components
Hakuto Trading (Shenzhen) Ltd.100%Import of electronic components
Hakuto America Ltd.100%Import of electronic components
Hakuto Czech s.r.o.100%Import of electronic components
Source: Shared Research based on company data
Equity-method affiliates
CompanyVoting rights ratio
DomesticSan ei giken inc.33%
ASA Systems Inc.30%
Source: Shared Research based on company data

Profitability snapshot, financial ratios

Comparison between sales of top 10 semiconductor trading companies and Hakuto Co., Ltd.
TickerCompany nameFY03/12FY03/13FY03/14FY03/15FY03/16FY03/17FY03/18FY03/19FY03/20FY03/21
Sales
7433Hakuto Co., Ltd.116,148111,823132,619131,073116,296127,599138,744140,123153,182165,413
2715Elematec Corporation115,417129,405143,442181,876216,824203,004196,238183,399175,654180,218
2737TOMEN DEVICES CORPORATION151,426137,383174,654171,882189,372156,677197,569217,632260,367302,385
3132Macnica Fuji Electronics Holdings, Inc. *188,893196,452255,967284,673405,315398,503504,085524,235521,193553,962
3156Restar Holdings Corporation **257,162284,508317,042280,672288,684273,752301,449205,771379,548323,815
7537MARUBUN CORPORATION242,708220,200260,424280,320279,571270,698347,508326,694287,550289,283
8084Ryoden Trading Company, Limited202,723203,730224,766237,877221,990219,225236,494240,312230,087196,841
8140Ryosan Company, Limited217,887206,534238,399233,552228,149218,003254,077249,688227,297219,884
8150SANSHIN ELECTRONICS CO., LTD.144,159147,963192,240219,091199,075167,654157,257147,879123,085112,791
8154KAGA ELECTRONICS CO.,LTD.229,856216,405257,852255,143245,387227,209235,921292,779443,615422,365
Operating profit
7433Hakuto Co., Ltd.4,2223,1014,0434,3072,9062,0693,7403,6422,4143,806
2715Elematec Corporation4,0814,1475,2467,3756,8685,4066,4806,3354,7655,463
2737TOMEN DEVICES CORPORATION3,4871,9282,3642,4351,9071,2522,5983,5284,5264,997
3132Macnica Fuji Electronics Holdings, Inc. *6,8875,7478,4569,1959,72910,47315,16315,32414,44718,769
3156Restar Holdings Corporation **5,3897,3606,9255,5786,487-6,6034,3844,5086,6376,238
7537MARUBUN CORPORATION2,8422,9913,9124,6883,2122,8833,7715,0482,3691,023
8084Ryoden Trading Company, Limited4,0034,4145,2784,9923,6732,7305,0785,6245,5593,415
8140Ryosan Company, Limited3,5113,6735,1445,9255,5384,6595,6655,2363,1084,628
8150SANSHIN ELECTRONICS CO., LTD.1,0082,0322,5173,2601,9138041,7631,9651,9582,167
8154KAGA ELECTRONICS CO.,LTD.2,0671,2605,1066,3627,7886,8798,1197,57010,01411,467
Operating profit margin
7433Hakuto Co., Ltd.3.6%2.8%3.0%3.3%2.5%1.6%2.7%2.6%1.6%2.3%
2715Elematec Corporation3.5%3.2%3.7%4.1%3.2%2.7%3.3%3.5%2.7%3.0%
2737TOMEN DEVICES CORPORATION2.3%1.4%1.4%1.4%1.0%0.8%1.3%1.6%1.7%1.7%
3132Macnica Fuji Electronics Holdings, Inc. *3.6%2.9%3.3%3.2%2.4%2.6%3.0%2.9%2.8%3.4%
3156Restar Holdings Corporation **2.1%2.6%2.2%2.0%2.2%-1.5%2.2%1.7%1.9%
7537MARUBUN CORPORATION1.2%1.4%1.5%1.7%1.1%1.1%1.1%1.5%0.8%0.4%
8084Ryoden Trading Company, Limited2.0%2.2%2.3%2.1%1.7%1.2%2.1%2.3%2.4%1.7%
8140Ryosan Company, Limited1.6%1.8%2.2%2.5%2.4%2.1%2.2%2.1%1.4%2.1%
8150SANSHIN ELECTRONICS CO., LTD.0.7%1.4%1.3%1.5%1.0%0.5%1.1%1.3%1.6%1.9%
8154KAGA ELECTRONICS CO.,LTD.0.9%0.6%2.0%2.5%3.2%3.0%3.4%2.6%2.3%2.7%
Source: Shared Research based on data for individual companies.
*Established after merger of MACNICA, Inc. and Fuji Electronics Co., LTD, in April 2015. Prior figures are for MACNICA.
**Established after merger of UKC Holdings Corporation and Vitec Holdings Co., Ltd. in April 2019. Prior figures are for UKC Holdings Corporation.
Maintaining stable profit levels in the semiconductor and electronics fields since 2008

In the 2000s, the semiconductor industry saw brisk performance amid fast-growing demand. However, the operating environment changed in fall of 2008 with the onset of the global financial crisis. In 2H 2009, sales across many sectors—including PCs, mobile phones, and automotive—turned stagnant, and the operating performance of semiconductor-related companies deteriorated rapidly. Although there were signs of a recovery in 2011, the impact of sluggish European economies and other factors meant a full recovery did not ensue.

Given these market conditions, the performance of semiconductor-related companies has fluctuated greatly, and industry realignment and consolidation has been an ongoing feature across the globe. In the electronics trading sector, rapid changes in customer performance in the consumer electronics and mobile phone industries has led to large performance fluctuations, and some trading companies have seen performance slide, forcing many companies to restructure.

In this environment, Hakuto has maintained relatively stable profits compared with the industry. Hakuto’s sales are in the mid-range of the top 30 electronics trading companies in Japan. However, operating profit on an absolute basis compares favorably with other companies in the top 10. In terms of OPM, Hakuto consistently ranks high.