I want to introduce USS Co., Ltd.
"USS" stands for "Used Car System Solutions," the company's name. This company is the number one used car auction operator in Japan.
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The sales and other figures used in this article are current as of the time of writing. Depending on your viewing period, the figures may have changed significantly.
Table of Contents(目次)
| Founding of a company | 1980 |
| Stock exchange listings | ［Japan] Tokyo, Nagoya |
| Securities Code | 4732 |
| Yahoo Finance | USS Co., Ltd. (4732.T) |
| Fiscal year-end | March 31 |
| Dividend Payment Shareholder Fixed Date | March 31 (When interim dividends are paid, the shareholder fixed date for interim dividend payment is September 30.) |
| Number of shares per unit | 100 shares |
Company Profile
USS was established in 1980 for the purpose of operating used car auctions. With 48,379 used car auction members, USS is the largest used car auction operator in Japan. The company also operates a used car purchase store and focuses on purchasing used cars. The number of used cars sold and contracted at auctions is 3.93 million and 2.58 million, respectively.
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Differentiation from other companies
At a time when used car auctions were conducted by hand, USS was one of the first companies to take the IT plunge and establish fair and impartial auctions. The company also developed its own 10-step vehicle inspection standards and created a system to evaluate vehicles against these standards.
The standards were well received and became the industry standard.
Used EV Vehicle Initiatives
USS is working on a response to used EV vehicles. Aiming to establish a vehicle inspection system, the company is developing a battery diagnostic device.
About Corporate Performance
(The image attached below is a webmaster's re-display of the information on https://irbank.net/E05045/results, converted to dollar amounts. * FY2024 is a forecast.)
Sales, Operating income, Operating Profit Ratio, Net income
A noteworthy aspect of USS is its high operating profit margin. In recent years, the figures have been around 50%. USS is a leading used car auction company, and its monopoly position allows it to operate efficiently, resulting in high profit margins.
Net sales, operating income, and net income have also been rising steadily and are expected to reach record highs in FY2024. USS, as a leading company, is able to raise its commissions at the time of closing as needed. This allows the company to steadily increase its performance.
EPS, ROE
EPS is steadily rising (except when affected by COVID-19). ROE has been above 15% for the last three years, including FY2024 projections.
Total Assets, Net Assets, BPS
Total assets, net assets, and BPS are basically increasing steadily.
Cash Flow
Operating cash flow is always positive. Used car auction companies do not need to make investments like large factories, so the amount of investment cash flow is not very high. So, the free cash flow figure is also high.
USS has expressed a strong commitment to shareholder returns. Dividends are increased annually and the payout ratio is as high as 55%. The company is also active in share buybacks, and over the past eight years, the total return ratio has been at least 50%, with some years exceeding 100%!
General Review
As a leading used car auction company, we could confirm that the company boasts high profit margins and high shareholder returns. Because of their already large size, they may not have the explosive power of startups, but they will continue to expand their performance and increase returns to shareholders.
Should I hold the stock or not?
I have a small stake in this company. I would really like to buy a lot of them, but my assets are still small, so I will mainly buy smaller startups while subbing out larger, more stable companies like USS. However, as my assets expand, I plan to increase my holdings of USS.
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