Yamato Holdings: Overvalued With Razor-Thin Margins

2025-02-21 17:22:15 ET

Summary

• Yamato Holdings Co., Ltd. is marked as a hold due to declining revenues and thin margins despite its significant market share in Japan's parcel delivery market.
• Investing directly on the Tokyo Stock Exchange is recommended over OTC listings due to liquidity issues affecting price performance.
• The company's operating profits declined by nearly 50% in the first nine months of FY25, with mixed results across different business segments.
• Despite potential upside beyond FY25, the competitive market and outdated delivery model make YATRY stock less attractive for investment currently.

In October 2024, I added Yamato Holdings Co., Ltd. (YATRF, YATRY) to my coverage . While the stock has upside, I marked shares a hold because revenues were declining. We also note that if investors are interested in purchasing Yamato Holdings, rather than investing in the OTC ticker YATRY representing one unsponsored ADS or YATRF representing one ordinary share, buying directly from the Tokyo Stock Exchange where it trades under the code 90640 would likely be beneficial. The reason is that the OTC listings have low volumes that could make it more difficult to acquire or sell shares at desired quantities and at desired prices due to a lack of liquidity that could prevent proper price making....

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