阿尔弗雷萨（2784）：2025财年3月业绩新中期计划聚焦长期增长

FY3/25AFY3/26EFY3/27E3,069,185.73,112,172.93,156,091.458,109.054,506.356,581.2213,927.0221,853.7225,992.1229,978.538,081.041,506.343,081.2 FY3/28E58,583.244,583.2 Miyabi Yamakita * | Equity Analyst+81 3 6830 3610 | myamakita@jefferies.comStephen Barker * | Equity Analyst813 6830 3612 | sbarker@jefferies.com The Long View: AlfresaInvestment Thesis / Where We DifferWe have an overall positive impression of Alfresa's leading position inJapan's pharma wholesaling business, and its leading expertise in medicalequipment and diagnostics wholesaling. We also like the company'sspecialty drug distribution system, NOVUMN, and its self-medicationproducts wholesaling business, which will likely benefit from rising inboundtourism. However, the company's valuations already reflect these positivefactors, so we rate the stock a Hold.Base Case,¥2200, +4%•Pharmaceuticaldrugmoderately at 1.5% CAGR from FY3/24 toFY3/29.•PT ¥2,200 is based on a PBR 0.8x afterearnings on FY3/26 BPS.Sustainability MattersTop Material Issue(s): 1) Sustainable distribution:Building a safe and secure distribution networkto distribute pharmaceutical drugs which are essential for patients, even during emergencies2)Decarbonization:Transporting products with environmentally friendly activities to reducegreenhouse gas emissions and environmental impact.Company Target(s): 1)FY3/2024: 10% carbon reduction, FY3/2031: 30% carbon reduction (comparedwith FY3/2021), FY3/2051: Carbon-neutral.2)Proportion of women in managerial positions of 10%or higher in FY3/2031.Qs to Mgmt: 1)If being Carbon-neutral is so important, why will it take you nearly 30 years to getthere?2)Japanese government set a target of at least 30% for proportion of female board membersby 2030. Why is your goal more moderate than this government goal?Please see important disclosure information on pages 4 - 9 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. marketgrows Upside Scenario,¥3400, +60%•Increase gross margin by facilitating pricenegotiations with medical institutions.•Pharmaceuticaldrugdramatically thanks to innovative drug marketgrowth.•PT ¥3,400 is based on a 5-year historical highPBR 1.2x on FY3/26 BPS. Downside Scenario,¥1100, -48%•Gross margin deterioration due to tougherprice negotiations with medical institutions.•Pharmaceutical drug market shrinks due tostricter drug price revision rules.•PT ¥1,100 is based on a 5-year historical lowPBR 0.4x on FY3/26 BPS.Catalysts•Price negotiation result for FY3/26•Pharmaceutical drug market trend•Quarterly medical product sales trend marketgrows 2 Exhibit 3 - Alfresa PL (¥mn).SalesYoY%Cost of salesGross profitYoY%Margin %Total selling, general and administrative expensesOperating incomeYoY%Margin %EBITDATotal non-operating incomeTotal non-operating expensesOrdinary incomeYoY%Margin %Total extraordinary gainsTotal extraordinary lossesIncome before income taxesTotal income taxesNet incomeNet income attributable to non-controlling interestsNet income attributable to owners of the parentYoY%Margin %EPSYoY%Source: Company info., JefferiesPlease see important disclosure information on pages 4 - 9 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. Company DescriptionAlfresaAlfresa is a Japanese pharmaceutical and medical equipment wholesaler. The company has 4 business segments: Ethical PharmaceuticalsWholesaling,Self-Medication Products Wholesaling,Manufacturing,and Medical-related.The company was founded in 1949 and isheadquartered in Tokyo, Japan.Company Valuation/RisksAlfresaValuation:Our price target of ¥2,200 is based on PBR 0.8x on FY3/26 BPS.Risks:The biggest risk is that the Japanese government may tighten drug price cut rules and the pharmaceutical drug market shrinks. There isalso the risk that overseas pharmaceutical manufacturers terminate transactions with some wholesalers. In addition, we should pay attentionto risk of suspension of nomination and surcharges for violations of the Antimonopoly Law. Upside risk is the pharmaceutical market to growfaster than we anticipate.Analyst Certification:I, Miyabi Yamakita, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) andsubject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations orviews expressed in this research report.I, Stephen Barker, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) andsubject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations orviews expressed in this research report.Registration of non-US analysts:Miyabi Yamakita is employed by Jefferies (Japan) Limited, a non-US affiliate of Jefferies LLC and is