PPIH Beat Guidance as Expected but Results Ahead of our Estimates; Cautious Outlook as Usual

Narrow-moat Pan Pacific International Holdings, or PPIH, beat its full-year guidance as we had expected but the results came in 1%-4% above our projections. The company also hiked the dividend by more than 30% to JPY 15 from JPY 11.50 per share. As usual, management has taken a conservative stance, guiding a marginal 1.3% increase in operating profits for fiscal 2021 ending in June given obliterated tourism sales and high comparison hurdles resulting from the last-minute demand prior to the October tax hike as well as stock-pilling demand amid the pandemic outbreak.