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住友林業、実は米国で大化け？バフェットも注目の住宅株 — Transcript

by つばめ投資顧問の長期投資研究所 · 4,294 words · 731 segments · language en · Watch on YouTube

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0:00Hello. I'm Motomura, an advisor at
0:02Tsubame TS.
0:03I'm Takoi.
0:03Today, I'd like to talk about Sumitomo
0:06Forestry. As of today's recording,
0:10Sumitomo Forestry's stock price has
0:12fallen to about half of its previous
0:14peak. On the other hand, the dividend
0:19yield has reached 4%, making it look
0:21quite undervalued. That being said, why
0:25has the stock price dropped by half?
0:29I'm sure those who hold the stock are
0:31feeling uneasy and worried. However,
0:35from a mid-to long-term perspective, I
0:37think it has great potential and is an
0:40interesting stock. Is that so? A
0:43housing business like Sumitomo Forestry
0:45doesn't seem like it would grow that
0:47rapidly, but is that really the case?
0:50Actually, they are taking various steps
0:52to accelerate growth. If those measures
0:56go well, I think the growth potential
0:58will become quite significant.
1:00I see. Let's take a closer look, shall
1:04we? First, I'd like to check the stock
1:08price trend. The stock price at the
1:11time of recording today is 1,239 yen.
1:15The stock reached its peak in October
1:192024, when it climbed to 2,430 yen.
1:23Comparing that to the current price of
1:261,239 yen, it has fallen by about half.
1:29The P/E ratio is 12.7 x and the yield
1:31is about 4%, which is the current
1:34situation. For a dividend-focused
1:36investor, a 4%yield sounds high, but
1:39I'm curious about the reason for this
1:4150%drop. If you look at the performance
1:47, while sales are growing steadily, the
1:49ordinary profit has recently started to
1:51drop sharply.
1:55You can see a chart showing it grew
1:57significantly and is now declining
1:59again.
2:00Yes. The reason the situation is like
2:03this is that the external environment
2:05is actually quite poor. When you say
2:08external environment, what parts are
2:10you referring to?
2:12Sumitomo Forestry might have the image
2:14of a Japanese housing manufacturer, but
2:17its overseas ratio is extremely high.
2:22If you look here, this compares last
2:24year's sales and ordinary profit with
2:26this year's performance, and this
2:28yellow part is massive, isn't it? Both
2:32in sales and ordinary profit. This
2:35yellow part is actually the overseas
2:36housing business.
2:38So is it about two-thirds?
2:41That's right. In the most extreme case,
2:45looking at last year's ordinary profit
2:47base, they were truly earning about
2:49two-thirds from the overseas housing
2:51business. And now it has dropped to
2:54nearly half, so that means business
2:56overseas is doing poorly, right? On the
2:59other hand, the brown part for Japan
3:01hasn't changed much at all, has it?
3:03That's exactly it. Actually, Japan is
3:06often viewed with concern because of
3:08the declining population, but it's
3:10holding firm, while on the other hand,
3:12the overseas side has dropped sharply,
3:14which is the current situation.
3:16When you say overseas, where are we
3:18talking about? Which countries
3:19specifically?
3:20This is from the latest earnings
3:22presentation material, and the ratio
3:24for the U.S. has become very high.
3:27Overseas, they are operating in various
3:29regions such as the U.S., Australia,
3:32Indonesia, and Vietnam, but the main
3:34one is the U.S. The ratio of the U.S.
3:36is the highest, so that is the core of
3:39their business.
3:42Sales for the U.S. housing business are
3:44458.3 billion, and Australia is 217.9
3:47billion, so within this overseas
3:49segment, the image is that two-thirds
3:52is the U.S.
3:54That's right. Australia is doing quite
3:58well with both sales and profits
4:00growing, but in the U.S., while sales
4:02are growing, profits are decreasing,
4:05which is the current situation. The
4:10reason it looks like this is because
4:12the extreme increase in sales is
4:13actually due to recent acquisitions,
4:15and since that revenue is being added
4:17here, the overall sales figure is
4:19growing. The chart here shows the
4:24figures excluding the impact of those
4:27acquisitions; without them, the
4:29cumulative sales for the most recent
4:31two quarters were 347.3 billion yen, so
4:33sales are actually down on that basis
4:36as well. But regardless, the main issue
4:40is that profits have fallen
4:41significantly, right?
4:42That’s correct. Profits are down.
4:45Ordinary profit is down 34%excluding
4:47acquisitions. And even including the
4:50impact of acquisitions, it's a 44%
4:51decline, so that seems to be where the
4:53problem lies.
4:54Yes. Looking at the U.S. housing market
4:57, this chart on the bottom right shows
4:59how things compare to last year,
5:01excluding the influence of the acquired
5:03companies. Among those figures, I think
5:07we really need to pay attention to the
5:09number of units sold. The number of
5:12units is actually over 500 less than
5:14the previous year. Furthermore, the
5:17average selling price has also dropped.
5:20As a result, profit margins are now
5:22lower, and that is the current
5:24situation.
5:26Since sales volume is down 10%and the
5:28unit price has dropped, that is a
5:30pretty significant blow.
5:32Yes. I agree. The reason volume is down
5:37is simply that the market is bad, and
5:39regarding the note about lower unit
5:41prices and increased incentives, it
5:43means they can no longer sell at
5:45previous price points. So, they are
5:49lowering the sales price—in other
5:51words, offering discounts—and
5:53increasing those incentives. As for the
5:56incentives, since mortgage interest
5:58rates are currently very high, they are
6:01subsidizing interest by offering to
6:03cover about 1%or 2%of the rate on the
6:05seller's side. Well, as a result, unit
6:08sales prices are falling and profit
6:10margins are shrinking; that's the
6:11situation occurring right now. When you
6:16say the outlook is bad, was the US
6:18economy actually doing poorly?
6:20As for the economic sentiment itself, I
6:22believe we are in a phase of cooling
6:24down an overheated market, especially
6:27since AI investment is still extremely
6:29active. However, interest rates remain
6:34at historically high levels, which in
6:36turn causes mortgage rates to rise as
6:38well. This is leading to a trend where,
6:44well, housing purchases are declining.
6:47No one wants to take out a mortgage
6:49when rates are high, and I feel like
6:51people in Japan are having similar
6:53sentiments right now. That's right. Now
6:56, what I'm showing here are the 15-year
6:58and 30-year fixed-rate mortgages. These
7:02show the US fixed mortgage interest
7:04rates; the blue line is the 30-year,
7:06and the green line is the 15-year. They
7:09are showing similar movements. If you
7:12look here, you can see rates shot up
7:15starting around 2022, and currently,
7:17the 30-year fixed mortgage has climbed
7:20to 6.7%. On the other hand, up until
7:25about mid-2024, buying demand remained
7:28high enough that homes were still
7:30selling despite rising rates, but with
7:32high rates persisting, we are now
7:34seeing a gradual decline in purchasing.
7:39Regarding this, in the US, real wages
7:41initially rose—meaning salaries grew
7:44faster than inflation—so people
7:46seemed comfortable spending, but
7:48recently, they say real wages are
7:50falling. That is correct. So the US
7:55market sentiment is quite poor, and
7:57compared to the past, the age group for
8:00first-time homebuyers is gradually
8:02shifting higher. It suggests that for
8:07those with lower household incomes, the
8:09hurdle to purchasing a home has risen
8:11significantly. Previously, people would
8:16buy homes at around 32 or 33, but due
8:18to rising interest rates, it's now a
8:20situation where only those with higher
8:23household incomes can afford to buy. It
8:26seems that lately, the average age for
8:28a first-time home purchase has reached
8:30around 40, which is the current
8:32situation we are seeing. And honestly,
8:34it feels like this trend isn't going to
8:36stop anytime soon, as there's
8:37speculation that the U.S. might raise
8:39interest rates again. It looks like
8:42inflation is accelerating, which means
8:44they'll have to raise rates further, so
8:46it does leave a rather grim impression.
8:50That's right. So, in terms of market
8:54conditions, I think the U.S. housing
8:56market has been structurally
8:58deteriorating for the past few years.
9:05That leads to another concern. You
9:08mentioned figures excluding the impact
9:10of acquisitions, but they went ahead
9:12with this acquisition in such a tough
9:14environment, didn't they?
9:16That is exactly right.
9:18Is that really going to be okay?
9:19Well, looking at it from a
9:21mid-to-long-term perspective, I believe
9:23it was a move to increase their
9:24potential. However, as you say, in the
9:27short term, this acquisition is
9:29certainly a topic that is amplifying
9:31anxiety about whether they'll be
9:33alright.
9:34I am curious, what exactly is Sumitomo
9:36Forestry thinking with this? It is
9:41certainly a source of great anxiety,
9:44but in reality, Sumitomo Forestry has
9:46grown its U.S. residential business
9:48through M&As, and there is no doubt
9:50that this latest move is intended to
9:52accelerate that growth. Oh, is that so?
9:58Could you please tell me more about
9:59that? What I’m showing here is the
10:04history of Sumitomo Forestry’s
10:06residential business in the United
10:08States; they have actually been
10:10acquiring numerous U.S. homebuilders
10:12since the early 2000s. They have
10:16particularly accelerated these efforts
10:19since around 2014. Around this time,
10:21they carried out a series of
10:23acquisitions. The reason they did this
10:26is that, during this period, U.S.
10:28homebuilders were going bankrupt one
10:30after another. Due to the Lehman Shock,
10:35economic conditions were very poor,
10:37causing a slump in housing orders, and
10:39many small and medium-sized local
10:41homebuilders lacked the financial
10:43strength to survive, leading to their
10:45bankruptcy. Sumitomo Forestry, however,
10:52was a company that was generating solid
10:55cash flow in Japan, so by acquiring
10:57those companies and injecting capital,
10:59they made proactive investments to
11:01prepare for the eventual recovery in
11:03housing demand.
11:08Was their expansion into the U.S.
11:09already underway before that?
11:13They had entered the market, but as you
11:15can see here in this green graph of
11:16sales volume, it wasn't that
11:18significant. Broadly speaking, the
11:22history is that their sales volume grew
11:24steadily as a result of these numerous
11:26acquisitions. So, while we mentioned
11:31earlier that about half of their
11:32earnings now come from overseas, they
11:34simply built it up in this way.
11:38When the economic climate in the U.S.
11:40is poor, it is indeed very bad, but it
11:43is actually a market where you can earn
11:45quite a lot. Furthermore, because so
11:50many homebuilders went bankrupt
11:52following the Lehman Shock as I
11:54mentioned, the number of new housing
11:56starts dropped drastically for a time,
11:58yet the country's population, led by
12:00the Millennial generation, continued to
12:03grow, which severely disrupted the
12:05supply-demand balance. So, when the
12:09economic climate is relatively good,
12:11it’s a market where things sell even
12:13at high prices. Sumitomo Forestry
12:17successfully seized these opportunities
12:19by acquiring U.S. homebuilders when the
12:21housing market was poor, then earning
12:23solid profits when it recovered. That
12:27is the history of how they have grown
12:29over the years. When times are bad, are
12:32companies essentially sold for almost
12:35nothing—or at least at very low
12:37prices? That’s right. Their financial
12:40situations were likely poor, so I
12:42believe they have been successful in
12:44acquiring them at reasonable prices
12:46under those specific circumstances.
12:49Looking at the performance graph from
12:51earlier, it has grown tremendously
12:53since 2020, hasn't it? Is it fair to
12:55say that this growth is the result of
12:57those previous acquisitions paying off?
12:59Exactly as you say. Especially during
13:02that time, there was demand for remote
13:04work, and the economy was really
13:06heating up. Plus, with interest rates
13:11falling, people who previously couldn't
13:13afford homes jumped at the chance to
13:15take out mortgages and acquire new
13:17properties—it was a real boom period.
13:21In that sense, there is definitely an
13:23aspect where they significantly boosted
13:25their performance. Since they started
13:28ramping up acquisitions around 2014, it
13:30took about six years to really blossom,
13:32didn't it? That is correct. While the
13:37current housing market in North America
13:39is in a very difficult state,
13:41structurally speaking, there is still a
13:43shortage of housing demand. Making
13:49these acquisitions now to ensure they
13:51can capture additional sales when the
13:53market eventually improves is, in a
13:55sense, Sumitomo Forestry's specialty.
14:03It’s not as if we’ll see immediate
14:05results; it’s more about what happens
14:07when the business climate recovers. If
14:12we’re looking for a support pillar, I
14:14feel like we should focus on why
14:16Sumitomo Forestry is doing so well in
14:18the United States. Is there really a
14:22reason why a Japanese builder would
14:24succeed so well in America? What are
14:27your thoughts on that? Regarding why
14:30they have been successful so far, there
14:32is a good explanation in the
14:34acquisition documents for Trophy Point
14:36Homes, which they just acquired, so
14:38I’ve shown it here. To put it very
14:43broadly, the U.S. housing market is
14:46significantly behind Japan in terms of
14:48efficiency. The general background is
14:53that by injecting Japanese-style
14:55methods into that market, they have
14:57promoted greater efficiency. But what
15:01specifically does that involve? One
15:04point is the value chain. There is the
15:08matter of making that more efficient.
15:11Actually, almost all the houses that
15:13Sumitomo Forestry has acquired are
15:16wood-frame detached homes. With U.S.
15:23housing until now, builders had to
15:25procure lumber and similar materials
15:27themselves, and it was a very
15:29inefficient procurement process. When
15:36you say inefficient, what does that
15:38look like?
15:39Well, basically, they didn't have the
15:41scale to negotiate pricing with
15:42suppliers, so if they couldn't get it
15:44from one source, they would just try
15:46another. It was that kind of situation.
15:50To put it in simpler terms. However, as
15:52I mentioned earlier, Sumitomo Forestry
15:54is a financially strong company that is
15:57capable of generating a certain amount
15:59of cash in Japan, so by joining their
16:01group, these companies became able to
16:03leverage Sumitomo Forestry's
16:05procurement capabilities. Naturally,
16:08this increases their price negotiation
16:10power and also enables them to ensure a
16:12stable supply. Lumber is extremely
16:16bulky, so by injecting the know-how for
16:18transporting such materials efficiently
16:20—which they have cultivated through
16:22their operations in Japan and other
16:24areas—they have been able to improve
16:26the efficiency of the value chain,
16:28which I think is a successful pattern.
16:32So, does that mean the supply chain in
16:34the US was unexpectedly underdeveloped
16:36in this area?
16:38It seems it was not. When you look into
16:42local information, it becomes clear
16:44that they are quite far behind Japan in
16:46this regard. Actually, there is another
16:50area where they are lagging behind, and
16:52that is the FITP business. Apparently,
16:56this stands for "Fully Integrated
16:58Turnkey Provider."
17:00Yes.
17:02In the US, it seems they were using a
17:03method where the framing of a house is
17:05assembled on-site.
17:07By "on-site," do you mean the location
17:09where the house is being built?
17:11Naturally, there are "framers" there
17:13who assemble the housing framework—in
17:15other words, the construction personnel
17:17. While there are such workers, they
17:20are currently facing a severe shortage
17:22of these craftsmen. So, it seems there
17:26was a problem where, even though there
17:28was demand, the assembly process could
17:30not progress easily. That is where
17:32companies like Sumitomo come in; in
17:34Japan, all housing manufacturers are
17:36very advanced in the method of
17:37installing components that have been
17:39assembled to some extent in a factory
17:41at the construction site. For example,
17:44structural components like walls,
17:46floors, and roofs are processed to a
17:48high quality in a factory, brought to
17:51the site, and assembled there. If you
17:53do it this way, you can make the work
17:55on-site significantly more efficient,
17:57right? That’s what’s known as
17:58pre-fabrication, isn’t it? Yes,
18:00exactly. While the Japanese style of
18:06quick, full-scale prefabricated
18:07assembly isn't common in the US housing
18:10market, it seems there's a background
18:12of them incorporating elements where
18:14parts are pre-assembled and then
18:15brought to the site for construction.
18:21So, it feels like Sumitomo Forestry is
18:23exporting Japanese housing know-how to
18:26the United States? Yes. That's exactly
18:28right. Naturally, as the scale grows,
18:33things that smaller builders couldn't
18:35do become possible with major capital,
18:37and by introducing the know-how to
18:39accurately capture demand and construct
18:41quickly, they’ve been able to
18:43increase sales volume when the housing
18:45market improves, which I think is a
18:47success pattern. In Japan, honestly,
18:52they are probably smaller in scale
18:54compared to Daiwa House or Sekisui
18:56House, but you could say they are a
18:58company that has succeeded greatly by
19:01expanding overseas.
19:02That's true. They are certainly one of
19:05the Japanese housing manufacturers that
19:07moved out early and are doing very well
19:09.
19:10And from what I can see, other
19:12companies seem to be moving toward
19:14entering the US market after seeing
19:16Sumitomo Forestry's success. I feel
19:19like I’ve seen Daiwa House and others
19:21doing something similar.
19:23That's right. As you say, even though
19:27the Japanese market is stable, it's a
19:29shrinking market, so there’s an
19:31aspect where they feel they can't just
19:33stand by and watch.
19:36That’s interesting, though. The fact
19:39that they can export their know-how in
19:41this way is really a key point, I think
19:43.
19:45That said, it seems like it will take
19:47time.
19:47Yes. I agree. While they’ve done very
19:52well following their successful
19:54patterns to date, this acquisition of
19:56TPH is quite a major endeavor. Even
20:01compared to companies Sumitomo Forestry
20:03has acquired in the past,
20:06I think this chart illustrates well how
20:08this acquisition makes them the
20:10equivalent of the fifth-largest builder
20:12in the US. Naturally, because they’ve
20:17made a larger acquisition than ever
20:19before, while there is potential for
20:21greater benefits when market conditions
20:23improve, I also get the impression that
20:25they’ve made a very high-stakes move.
20:28The acquisition price was quite
20:30substantial, wasn't it? Ah,
20:32How much did they buy it for, anyway?
20:33Actually, it was 650 billion yen, and
20:36while the goodwill is still an estimate
20:38, it’s said to be around 140 billion
20:40yen.
20:40Hmm.
20:41That’s what’s being said.
20:42The premium paid over net assets was
20:44240 billion yen.
20:45That’s right. As a result of this
20:48acquisition, and this is the plan, the
20:51equity ratio, which was over 40%at its
20:53peak, is projected to be 30.5%by the
20:56end of June 2026. Also,
21:00interest-bearing debt has increased
21:02significantly due to this acquisition.
21:06And, there is a metric called the net D
21:08/E ratio, which compares net assets to
21:11debt, and that has recently exceeded 1.
21:14So, in this way, interest-bearing debt
21:16is also swelling significantly.
21:19That is correct. With 1.3 trillion yen
21:21in interest-bearing debt, if interest
21:23rates rise in this environment, not
21:26only will houses be harder to sell, but
21:28the company's own finances will also be
21:30under some pressure. Depending on the
21:33circumstances—and while we don't know
21:35the exact terms of the borrowing—
21:37there is a risk that payments could
21:39increase, which would put pressure on
21:41profits. That is the situation they are
21:44facing.
21:44That's right. Yeah. So, while they are
21:47obviously taking that risk and
21:48following their past successful
21:50patterns, they are making a fairly big
21:52gamble.
21:53Indeed. Going forward, the question is
21:58whether they can generate solid results
22:00that justify these significant risks,
22:02especially since it’s a region that
22:04Sumitomo Forestry struggled to enter on
22:07its own. But it is an extremely
22:09attractive region. It seems they had
22:14their sights set on securing this area,
22:16and by acquiring TPH, they’ve managed
22:18to gain a foothold in places like
22:20California and Nevada. Plus, TPH is
22:26known among U.S. homebuilders for
22:28having the skills to construct various
22:30grades of housing. Like the four levels
22:34shown here, for example. At the entry
22:37level, it's a price range that is more
22:39accessible for first-time buyers. And
22:42one step up, the "move-up" level
22:44targets those looking to relocate to
22:46homes that meet needs based on
22:48life-stage changes; these are homes a
22:50rank higher than the entry level.
22:53So, it's about continuously moving up
22:55the ranks, then.
22:56That’s exactly it. It means they are
22:59capable of responding to a diverse
23:00lineup of needs. And on top of that—
23:02although it’s not in these materials
23:04—this company also offers a wide
23:06range of services, including home loans
23:08and other related financial businesses.
23:11They have a robust offering in that
23:13area, which seems to be a sales
23:15technique to somehow stimulate user
23:17purchasing desire even when the market
23:19environment is poor. Well, I think
23:23offering these kinds of services across
23:25the board is one of the reasons they
23:27wanted to acquire them. Certainly, once
23:32these pieces are in place, Sumitomo
23:35Forestry, which was previously just one
23:37of many home builders operating in the
23:39U.S., will start to look like a company
23:41with a significant presence there. That
23:46applies to their scale, of course, but
23:48also to their services. So, if they can
23:51effectively share these resources with
23:53other home builders and create some
23:55kind of synergy, that could be very
23:57interesting. Regarding that ranking
24:01from earlier—the chart showing them
24:03reaching fifth place after the
24:05acquisition—I noticed that D.R.
24:07Horton is a company that I believe
24:08Buffett had purchased.
24:11That's right.
24:12So that means Buffett is paying a
24:13tremendous amount of attention to this
24:15sector, doesn't it? At the very least,
24:17he’s watching this industry, so it
24:19wouldn't be strange if Sumitomo
24:20Forestry became a target as well.
24:22Well, if that happens, it would be
24:23quite interesting.
24:24I agree. He’s already focusing on
24:26Japan, and if they’re already
24:28operating in the U.S., he’d likely
24:30feel quite familiar with the territory.
24:32So, perhaps something like that could
24:34serve as a catalyst.
24:36It might just come up.
24:37Yes. I’d like to keep a close eye on
24:39that as well. Now, the fact that it
24:43takes time is a difficult point for
24:45investors, but with a 4%yield, it's
24:47something to consider. They have a
24:51growth strategy in place, so I feel I
24:53can take a long-term view, but one last
24:55thing I'm curious about is the
24:57sustainability of the dividends. What
24:59do you think about that?
25:01Well, this is the annual dividend
25:03history for Sumitomo Forestry, and it
25:05seems there are cases where they have
25:07cut dividends.
25:08That's true. Well, looking at the
25:10fundamentals, they've adjusted their
25:12earnings forecast downward, and it
25:14seems this has happened in the past as
25:15well. Um, regarding dividends, it looks
25:18like there's a lower limit for the
25:20annual dividend per share. The lower
25:23limit seems to be 50 yen.
25:24Even if it decreases, basically, the
25:26idea is that it won't go below that
25:28amount.
25:29Yes. That's right.
25:30What was the most recent dividend per
25:32share, exactly?
25:33The most recent dividend per share was
25:3653 yen.
25:36So, with the forecast at 50 yen, it’s
25:38already hitting that lower limit.
25:40It seems they’re saying it won't be
25:42lowered any further.
25:43I see. So, basically, if you buy at the
25:45current stock price, a 4%yield should
25:48be maintained at this 50-yen level.
25:50At the current stock price, that would
25:52be the case.
25:54It’s a policy, so it’s not 100%
25:56guaranteed to be followed, but
25:58there’s a good chance it will be
26:00maintained. At 4%, I feel like I could
26:04hold onto it for a while.
26:06That’s true. I think it’s a
26:09trade-off: you get 4%in exchange for
26:11taking on significant risk while it
26:13holds high potential.
26:14Exactly. So, it really comes down to
26:16identifying where the bottom is. It’s
26:19a matter of how much worse the business
26:21environment will get; once we see signs
26:23of improvement, it should start to turn
26:25around.
26:25Yes. When that happens, the trends in
26:28unit sales prices and sales volume will
26:31be key. Especially for Sumitomo, I
26:34think watching their US housing
26:36business will be a major point.
26:40If you can notice those changes
26:41sensitively, I feel you could make some
26:43good investments. Looking at articles
26:47about the US, there are things like
26:49charts that quantify the US housing
26:51market sentiment. In the US, one
26:57indicator used to gauge the housing
26:59market is the trend in housing
27:01inventory, and looking at the current
27:03situation, that inventory has been
27:05steadily increasing since the time it
27:07was most scarce. As of August, it had
27:15risen to about 1.62 million units,
27:17meaning that while there is underlying
27:19demand, high interest rates are making
27:22it difficult for people to buy, so
27:24inventory is piling up.
27:26So, an increase in inventory basically
27:28means it’s stock that isn't selling
27:30right now, right?
27:31That’s exactly right. Therefore, if
27:33this trend were to reverse and we saw
27:35inventory decreasing, it might suggest
27:37that demand is starting to recover. I
27:41think looking at it that way can be
27:43helpful, so keeping an eye on these
27:45indicators provides a good hint.
27:47So, if we hear that US housing
27:49inventory is decreasing, we should
27:51think "Sumitomo Forestry," right?
27:53That’s correct. Yes.
27:56Now, could you please summarize
27:57today’s discussion?
27:58For Sumitomo Forestry, specifically.
28:00The stock price has halved from its
28:02peak, and the dividend yield is
28:04currently around 4%. In the long term,
28:06they are a housing manufacturer
28:08developing a business with significant
28:10potential, centered primarily in the US
28:12. On the other hand, since they have
28:16grown through acquisitions, this major
28:18move also carries risks, so that’s
28:19the kind of company they are. However,
28:23if they leverage long-term macro
28:25tailwinds and their existing strategies
28:27and strengths, there is a possibility
28:30they could take another big step
28:31forward.
28:33I agree. I have the impression that the
28:35potential for that significant leap has
28:37grown quite large with this acquisition
28:39. There was also talk in this
28:41discussion about how it might become a
28:43Buffett stock. I really hope you will
28:46all keep a close eye on Sumitomo. Here
28:48at Tsubame Investment Advisory, we
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29:28Thank you.

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