Company Reports

As the largest commercial kitchen equipment manufacturer in Japan, Hoshizaki uses its domestic network of 430 offices/branches to not only sell its products but also provide maintenance services to its customers throughout Japan promptly. This allows Hoshizaki to have a competitive advantage with scale in Japan, where the majority of its total sales are generated. Hoshizaki’s sales are primarily direct, which allows the company to maintain relationships with its customers. These factors have allowed the company to attain the leading market share with its key products, such as commercial refrigerators, ice machines, and beer dispensers, as well as a brand (known for its penguin logo in Japan) in the "cold" kitchen equipment space. We expect the company’s strong reputation and its vast service network to allow it to maintain the leading domestic share and prevent competitors from making a material impact on its incumbent status in the future.

Hoshizaki reported 14.7% revenue growth year-over-year for the June Quarter of fiscal 2026, driven by positive foreign exchange movements and 60% growth in China, while operating margins declined by 120 basis points. Management also announced a partnership with Japan Activation Capital.

Hoshizaki marked record-high March-quarter sales of JPY 135 billion, with all overseas regions growing by double digits and group operating margin at 12.6%. Shares fell 6% on the next trading day.

As the largest commercial kitchen equipment manufacturer in Japan, Hoshizaki uses its domestic network of 430 offices/branches to not only sell its products but also provide maintenance services to its customers throughout Japan promptly. This allows Hoshizaki to have a competitive advantage with scale in Japan, where the majority of its total sales are generated. Hoshizaki’s sales are primarily direct, which allows the company to maintain relationships with its customers. These factors have allowed the company to attain the leading market share with its key products, such as commercial refrigerators, ice machines, and beer dispensers, as well as a brand (known for its penguin logo in Japan) in the "cold" kitchen equipment space. We expect the company’s strong reputation and its vast service network to allow it to maintain the leading domestic share and prevent competitors from making a material impact on its incumbent status in the future.

Hoshizaki posted a record JPY 485 billion in sales in 2025, up 9% year on year, as overseas sales rose nearly 14% and accounted for 53% of the total. For 2026, Hoshizaki expects 7% sales growth with margin steady with 2025 at 10.7% but slightly lower than 2024's 11.5%.

As the largest commercial kitchen equipment manufacturer in Japan, Hoshizaki uses its domestic network of 430 offices/branches to not only sell its products but also provide maintenance services to its customers throughout Japan promptly. This allows Hoshizaki to have a competitive advantage with scale in Japan, where the majority of its total sales are generated. Hoshizaki’s sales are primarily direct, which allows the company to maintain relationships with its customers. These factors have allowed the company to attain the leading market share with its key products, such as commercial refrigerators, ice machines, and beer dispensers, as well as a brand (known for its penguin logo in Japan) in the "cold" kitchen equipment space. We expect the company’s strong reputation and its vast service network to allow it to maintain the leading domestic share and prevent competitors from making a material impact on its incumbent status in the future.

In the third quarter, Hoshizaki posted JPY 127 billion in sales and JPY 15.8 billion in operating profit. Overseas sales exceeded domestic sales for four straight quarters. Guidance remained unchanged for fiscal 2025 (ending December 2025). Hoshizaki shares fell 6% after the announcement on Nov. 7.

As the largest commercial kitchen equipment manufacturer in Japan, Hoshizaki utilizes its domestic network of 430 offices/branches to not only sell its products but also to provide maintenance services to its customers throughout Japan promptly. This allows Hoshizaki to have a competitive advantage with scale in Japan, where the majority of its total sales are generated. Hoshizaki’s sales are primarily direct, which allows the company to maintain relationships with its customers. These factors have allowed the company to attain the leading market share with its key products, such as commercial refrigerators, ice machines, and beer dispensers, as well as a brand (known for its penguin logo in Japan) in the "cold" kitchen equipment space. We expect the company’s strong reputation and its vast service network to allow it to maintain the leading domestic share and prevent competitors from making a material impact on its incumbent status in the future.

Hoshizaki posted 9.4% year-on-year sales growth in the first half of fiscal 2025 (ending December 2025), with record net profit of JPY 21.9 billion despite yen appreciation. Guidance is unchanged, targeting 3.3% sales growth and JPY 38.3 billion net profit. Shares jumped 13% the next trading day.

As the largest commercial kitchen equipment manufacturer in Japan, Hoshizaki utilizes its domestic network of 430 offices/branches to not only sell its products but also to provide maintenance services to its customers throughout Japan promptly. This allows Hoshizaki to have a competitive advantage with scale in Japan, where the majority of its total sales are generated. Hoshizaki’s sales are primarily direct, which allows the company to maintain relationships with its customers. These factors have allowed the company to attain the leading market share with its key products, such as commercial refrigerators, ice machines, and beer dispensers, as well as a brand (known for its penguin logo in Japan) in the "cold" kitchen equipment space. We expect the company’s strong reputation and its vast service network to allow it to maintain the leading domestic share and prevent competitors from making a material impact on its incumbent status in the future.

Hoshizaki's March-quarter sales were JPY 118 billion, up 11.1% year on year. Operating margin was 13.1%, compared with 14.1% in the previous March quarter. Management has maintained its fiscal 2025 (ending December 2025) guidance of sales growth at 3.3% and operating margin at 11.6%.

As the largest commercial kitchen equipment manufacturer in Japan, Hoshizaki utilizes its domestic network of 440 offices/branches to not only sell its products but to promptly provide maintenance services to its customers throughout Japan. This allows Hoshizaki to have a competitive advantage with scale in Japan, where the majority of its total sales are generated. Hoshizaki’s sales is mainly done directly, which allows the company to maintain relationships with its customers. These factors have allowed the company to attain the leading market share with its key products such as commercial refrigerators, ice machines, and beer dispensers, as well as a brand (known for its penguin logo in Japan) in the "cold" kitchen equipment space. We expect the company’s strong reputation and its vast service network to allow the company to maintain the leading domestic share and prevent competitors from making a material impact on its incumbent status in future.

As the largest commercial kitchen equipment manufacturer in Japan, Hoshizaki utilizes its domestic network of 440 offices/branches to not only sell its products but to promptly provide maintenance services to its customers throughout Japan. This allows Hoshizaki to have a competitive advantage with scale in Japan, where the majority of its total sales are generated. Hoshizaki’s sales is mainly done directly, which allows the company to maintain relationships with its customers. These factors have allowed the company to attain the leading market share with its key products such as commercial refrigerators, ice machines, and beer dispensers, as well as a brand (known for its penguin logo in Japan) in the "cold" kitchen equipment space. We expect the company’s strong reputation and its vast service network to allow the company to maintain the leading domestic share and prevent competitors from making a material impact on its incumbent status in future.

Wide-moat Hoshizaki reported an impressive 19.2% year-on-year revenue growth in 2024, surpassing our estimate of 16.1%, with growth in all areas exceeding our previous estimates. We raise our companywide revenue estimate for 2025 to JPY 479 billion from JPY 446 billion, reflecting the company’s stronger momentum, especially in Europe and Asia. Hoshizaki has expanded its sales channels through a series of acquisitions. The brand portfolio is becoming more competitive as more leading regional brands, which local customers adore, join the Hoshizaki family.

Wide-moat Hoshizaki marked another strong quarter result, with quarterly revenue growth of 15% year on year, ahead of our previous estimate of 9%. While Japan segment sales increased by 5.5% year on year as inbound travel continues to grow, we were also surprised by 8% year-on-year sales growth in Americas, driven by strong demand in dispenser products as well as the 44.5% year-on-year sales growth in Asia especially thanks to better-than-expected business expansion in India. Based on the upbeat results, we raise our fiscal 2024 companywide revenue growth assumption to 16.2% from 12.4%, reflecting our view that the strong momentum will continue at least one more quarter in Japan, Americas, and Asia. Meanwhile, we raise our companywide operating margin assumption for fiscal 2024 to 12.1% from 11.2%, as we are encouraged by an operating margin of 13.7% in the September quarter, which surpassed our previous forecast of 11.5% mainly due to the increasing portion of own manufactured products sales. As a result, we raise our fair value estimate for Hoshizaki to JPY 5,700 from JPY 5,500. We are also impressed by the newly announced equity buyback program, with the buyback amount set at up to JPY 10 billion right after the completion of the previous buyback program in July. As the share price hiked nearly 20% since the result announcement on Nov. 12, we think Hoshizaki’s midterm outlook is priced in.

As the largest commercial kitchen equipment manufacturer in Japan, Hoshizaki utilizes its domestic network of 440 offices/branches to not only sell its products but to promptly provide maintenance services to its customers throughout Japan. This allows Hoshizaki to have a competitive advantage with scale in Japan, where the majority of its total sales are generated. Hoshizaki’s sales is mainly done directly, which allows the company to maintain relationships with its customers. These factors have allowed the company to attain the leading market share with its key products such as commercial refrigerators, ice machines, and beer dispensers, as well as a brand (known for its penguin logo in Japan) in the "cold" kitchen equipment space. We expect the company’s strong reputation and its vast service network to allow the company to maintain the leading domestic share and prevent competitors from making a material impact on its incumbent status in future.

While wide-moat Hoshizaki’s June-quarter revenue growth of 20% year on year was above our previous estimate, the decline in operating margin to 11% from 12% was a negative surprise, mainly due to an inflation accounting treatment of its recently consolidated Turkey-based subsidiary, Ozti. As the inflationary environment in Turkey persists, the company expects further related costs in the second half of fiscal 2024. As a result, we cut our operating income by 4% to JPY 47 billion for fiscal 2024, assuming 12% revenue growth and 11.2% operating margin. However, we maintain our fair value estimate of JPY 5,500 per share, as our medium-term outlook remains unchanged. We think the market is overly concerned about the profitability of Hoshizaki’s overseas business being affected by the consolidation of Ozti and the strengthening yen. Over the longer term, we expect margins to improve for Ozti, as the inflationary environment in Turkey settles down and capacity utilization increases from selling its basic/medium-range products through Hoshizaki’s sales channels in emerging markets.

As the largest commercial kitchen equipment manufacturer in Japan, the company utilizes its domestic network of 440 offices/branches to not only sell its products but to promptly provide maintenance services to its customers throughout Japan. This allows Hoshizaki to have a competitive advantage with scale in Japan, where the majority of its total sales are generated. Hoshizaki’s sales is mainly done directly, which allows the company to maintain relationships with its customers. These factors have allowed the company to attain the leading market share with its key products such as commercial refrigerators, ice machines, and beer dispensers, as well as a brand (known for its penguin logo in Japan) in the "cold" kitchen equipment space. We expect the company’s strong reputation and its vast service network to allow the company to maintain the leading domestic share and prevent competitors from making a material impact on its incumbent status in future.

Hoshizaki’s March-quarter operating income of JPY 15.2 billion was stronger than expected, mainly due to a favorable product mix contributing to the Japan segment’s high operating margin of 17.6%, which was 2.8 percentage points above our estimate. The company has been providing solutions comprising products and equipment from other manufacturers, but is now focusing on the sales of its own manufactured products to increase profitability. We expect this to improve Hoshizaki’s margins in the near term, assuming much of the sales growth will come from existing restaurants amid the surge in inbound demand. However, over the longer term, we forecast the mix to revert from increased sales to larger commercial facilities/new restaurants, which will require solutions that also include non-Hoshizaki products like gas equipment, work tables, kitchen sinks, and so on. Therefore, we raise our fiscal 2024 operating income projection by 11% to JPY 49 billion, but our medium-term outlook and fair value estimate of JPY 5,500 remain unchanged. We believe Hoshizaki’s shares are fairly valued.

Hoshizaki’s fiscal 2024 operating income guidance of JPY 44 billion aligns with our projection but falls short of market expectations. Our 2024 operating income estimate is unchanged; however, we raise our medium-term projection based on a more robust outlook from consolidating Turkey-based Ozti in the second quarter of 2024. While the combination of fixed costs from Ozti’s capacity expansion and one-time cost accounting treatments from the company will limit the profit contribution in 2024, we expect the company will utilize Ozti’s established channels to increase sales in growing markets in Europe, Middle East, and Africa over the longer term. As such, we expect capacity utilization to improve and revise our 2027 operating income estimate to JPY 54 billion, up from JPY 50 billion, thus raising our fair value estimate of Hoshizaki to JPY 5,500 from JPY 5,200. We believe shares are fairly valued.