Will the business model of a sharing platform grow? / 4384: Raksul

 

Today I would like to talk about “Raksul” Recently, Raksul’s TV commercial that Non-san(Japanese actress) is appearing broadcasted. Therefore, I think the company name Raksul is quite familiar in Japan. 

Raksul’s main business is internet printing and advertising sharing platform “Raksul” This service prints during non-operating hours of printing presses owned by affiliated printing companies nationwide. So it is a business model that provides high quality printed matter at a low unit price. This printing business accounts for 90% of a company. 

 Another pillar of their business is the logistics sharing platform “Hakobel”. They make effective use of the non-operating hours of affiliated shipping companies nationwide. So it is a business model that provides a high-quality and low-priced shipping system. This delivery business accounts for 10% of a company. 

The company’s name “Raksul” is very similar to “Rakus”, which is listed on TSE Mothers, and it is confusing, but ”Rakus” is mainly a cloud service for small and medium-sized companies, and the stock price is growing rapidly, far exceeding the highest price before Corona. 

Relationship between Raksul and I 

Raksul’s stock price rose sharply from 3,740 yen to 4,280 yen (+540 yen) +14% due to the announcement of the listing market change from TSE Mothers to TSE First Section in August 2019. I bought Raksul for 4,255 yen on September 10, 2019. In addition to the momentum of the change to the first section of the Tokyo Stock Exchange, I thought that if the announcement of financial results for the full year in 9/12 was good, Raksul could aim for a stock price explosion and a new high.   

After the closing of market in September 12, 2019, the full-year financial results were announced.  

Sales 11,174→17,168 (Million Yen)【Year to year comparison+54%】 

Business profit 93→143 (Million Yen)【Year to year comparison+55%】 

What is it! This is the one called fantastic financial results. Both sales and Business profit are 150% of the previous year. Great! This is a successful example of my prediction being perfect. By the way, how much the stock price went up at the closing of market on 9/13 the next day… 

4,180 yen → 3,920 yen (-6%) 

eh?? Is it going down? why? Even though sales and business profit are over +50% compared to the previous year?? Is this something wrong? I wonder if it will go up from tomorrow… While I was thinking, the stock price went down steadily. On 9/24, it fell to 3,500 yen (-16% compared to the closing price on 9/12). Stock price went down under these favorable conditions, So I thought that I could not expect it anymore and sold it all for 3,545 yen on 9/24. I was a shareholder for only two weeks. 

This is deja vu… Although it was a good financial result, it fell down…  I had the same feeling in the 2018 financial results of “Oisix Ra Daichi” [3182]. Oisix Ra Daichi’s 2018 financial result was excellent!  

Sales 39,987 (million yen) → 64,026 【+ 60% year-on-year】 

Operating income 891 (million yen) → 2,312 【+ 159% year-on-year】 

Sales were 1.6 times higher! The business profit was 2.6 times higher! Despite this, 

 1,559 yen → 1,188 yen [-24% compared to the previous day’s closing price] 

This plunge in stock prices was said to be a disappointing sale because it did not reach market consensus. 
Market consensus is the average value of the forecasts of experts in stock analysis research. “It was a good performance, but not as good as everyone thought it was. So bad!” Everyone thought it was good performance, but it seems that the stock price will rise when it is far better than it. So it was said that savvy investors don’t carry over their stocks on the day announced their financial statements. I think these comments cheats at rock-paper-scissors. 

I researched various things about Raksul 

Here is a summary of Raksul’s sales and business profit over the last three years. Sales are growing steadily, and business profit has been in surplus for the second consecutive year. It seems that the growth of operating income from 2018 to 2019 has slowed down a little against the growth of sales. It’s 93 → 143 (million yen), which is + 50%, but I’m a little worried. 

Looking at it on a quarterly basis, business profit was in surplus for the sixth consecutive quarter. But in the 4th quarter of 2019, operating income is in the red. Compared to the same period of the previous year, sales increased by 49% from 3235 to 4820 (million yen), but business profit decreased significantly from 149 to -6 (million yen). 

After the announcement of financial results for the full year of 2019, the stock price showed a sharp downward trend. The reason was that the growth was large in the full year of 2019, but did investor dislike the slowdown in sales in 4Q and the deficit in business profit in 4Q? Dangerous… I’m also thinking about the reason for the retrofitting. .. .. 

4Q business profit deficit is due to heavy investment in advertising and transportation, and lost sales due to consecutive holidays (expected to be 100 to 200 million yen). 

So what is Raksul’s share of the domestic online printing market? I imaged that Raksul was the pioneer of the domestic online printing market and the No.1 in the industry. However, that was a completely wrong recognition. I felt that the effect of TV commercials was amazing. 

The figure below shows the sales ratio of the domestic online printing market for in 2019. The No.1 is “Printpac” Sales in 2019 were 32.8 billion yen, accounting for 1/3 of the market share. TV commercials are also famous. “Net de Insa-tsu ♪ Printpac Hayainsa-tsu Yasuinsa-tsu Printpac siyo♪” This song stuck in my head. 

No.2 is “Graphic”, the company headquartered in Kyoto with sales of 25.9 billion yen. I didn’t know about “Graphics” o far. No.1 “Printpac” and No.2 “Graphic” account for nearly 60% of the market share. Raksul is finally in No.3 with 2019 sales of 17.1 billion yen. Raksul has also increased sales in recent years, but it seems that the industry leader is still ahead. 

What will happen to Raksul in the future? 

What about the domestic printing market, which accounts for 90% of Raksul’s sales? 

According to 2016 data, the domestic printing market is shrinking, Compared with 10 years ago, 6.8 -> 5.8 (trillion yen), -15% down. The cause is a decrease in publication printing, which has dropped sharply 2.2 -> 1.1 (trillion yen), -50% down. It is understandable that books and magazines are said to not sell. It’s half that of 10 years ago, so I think the publishing industry is in trouble. On the other hand, Raksul’s market for commercial and office printing has a relatively small decline 3.2 -> 2.9 (trillion yen),  -9% down. 

The commercial and office printing market has decreased -9% down.in the last decade. But the online printing market is only 3% among commercial and office printing market. It is only 100 billion yen out of 3 trillion yen. 

I think it is clear that the online printing market using the Internet will expand in the future. Its spread may occur suddenly at a tremendous speed, like an avalanche. In Germany, the online printing market will account for as much as 30% of the commercial and office printing market in 2019. If Japanese market will reaches that level, it would become a 1 trillion yen market. The market size is 10 times larger than now. I think this is a promising factor.

Raksul’s 4Q business profit deficit is due to a large amount of investment in advertising and transportation, but it is understandable to think that the investment is for the expanding online printing market. Considering the 1 trillion yen market, RAKSUL’s No.1 in the industry is not impossible.

It is a transportation business that is expected to grow as another pillar of Raksul, So far, Raksul have been focusing on the final delivery (market size 4 trillion yen) called the last mile. In addition, their business is expanding the area of ​​urban and intercity transportation. The market size will be 10 trillion yen. It is larger than the current mainstay online printing business. Of course there are many competitors. But it can be very interesting if Raksul will have a business with Amazon.

Finally, considering the direction of RAKSUL’s business, I would like to introduce the comment of CEO Mr. Matsumoto.

“Looking at the printing industry, the market size is 6 trillion yen. But only two major companies, DNP(Dai Nippon Printing) and Toppan Printing, each account for 1.5 trillion yen, for total of 3 trillion yen. On the other hand, there were 30,000 small and medium-sized printing companies underneath. At that time, there were 45,000 convenience stores nationwide, so you can understand that there are so many printing companies. And the utilization rate of each company is only 40%. It was found that the printing industry has a subcontracting structure of 1 trillion yen centered on major companies, resulting in enormous inefficiency. We would like to bring the Internet to traditional industries that have not been digitized, change the industrial structure, and make a big impact on the world. Raksul is developing its business with that in mind. “

Bringing efficiency and new demand digging through the Internet to these industries that have not been transformed by digital is now a very popular business. There are many companies that have grown with this business model. MonotaRO (3064), M3 (2413), AS ONE (7476), GA Technologies (3491).

I’m looking forward to Raksul’s future leap forward. At the moment I’m a non-holder, but I’d like to watch it in case I want to get along again in the future.

 

 

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