Cosmo Bio (Company note – basic)

Share price (4/15)	￥1,112	Dividend Yield (12/25 CE)	4.5 %
52weeks high/low	￥888/1,229	ROE(12/24)	3.0 %
Avg Vol (3 month)	4.7 thou shrs	Operating margin (12/24)	3.2 %
Market Cap	￥6.73 bn	Beta (5Y Monthly)	0.23
Enterprise Value	￥3.57 bn	Shares Outstanding	6.048 mn shrs
PER (12/25 CE)	14.8 X	Listed market	TSE Standard
PBR (12/24 act)	0.71 X

Click here for the PDF version of this page

PDF version

Contribute to the advancement of life sciences by providing research reagents and life science equipment

Summary

◇ Cosmo Bio Co., Ltd is a trading company specialising in the life sciences with the aim of “Contribute to the advancement of life sciences”. Founded in 1983 as a subsidiary of the former Maruzen Oil, the Company went through an MBO and is now an independent, specialised trading company. Approximately 80% of sales are research reagents used in research facilities of pharmaceutical companies, universities and research institutions the Company’s strengths include its excellent customer base, its extensive procurement network, which includes more than 12 million products and services from over 500 suppliers in Japan and overseas, and its highly specialized personnel and sales force, which accurately grasp the needs of domestic customers. In recent years, the Company has been promoting measures to expand its business in Japan and overseas, including the provision of contract services, the sale of its own products, and the provision of its own contract services, in addition to its purchasing and sales.

◇ Expected stable growth and risk factors in the reagent market: The domestic life science research reagent market is estimated to be worth approximately 120 billion yen and is growing steadily at an annual rate of around 3%. Given trends in R&D expenditure by client pharmaceutical companies and Grants-in-Aid for Scientific Research, a budget indicator for universities and research institutions, long-term stable growth is also expected.

The Competitors in this market are the Japanese subsidiaries of foreign reagent manufacturers, subsidiaries or business divisions of major domestic chemical manufacturers, and independent trading companies, including the Company itself. The Company’s current market share is estimated to be around 5%.

There are two main risks to be aware of: firstly, there is the risk of losing commercial rights due to the reorganization of reagent suppliers through M&A (a common occurrence in North American bio-related ventures); and secondly, there is the risk of exchange rate fluctuations (a time lag occurs before the cost of yen-denominated purchases can be passed on to customers, and there is a tendency for profits to be affected in yen appreciation phases and losses to be affected in yen depreciation phases).

◇  “Three-year plan” and “Towards achieving management that is conscious of capital costs and share price”: The Company is implementing a three-year plan covering the period from FY12/2023 to FY12/2025. In March 2024, Mr. Shibayama was appointed Representative Director and President, and in August 2024, he announced “Measures towards achieving management that is conscious of capital costs and share price”. This breaks down the primary measures of the three-year plan into stages based on a time axis and presents specific measures aimed at achieving an ROE of 8% or more and a PBR of 1.0. If the various measures are successful, they will also mitigate the risks mentioned above, so the progress of these measures is attracting much attention.

◇ FY12/2024 results: Net sales of 10.03 billion yen (+ 7.5% YoY), operating profit of 318 million yen (- 38.7% YoY), net profit attributable to owner of parent of 262 million yen (- 40.8% YoY). Although sales reached 10 billion yen for the first time, profits decreased due to an increase in the COGS ratio caused by the depreciation of the yen (actual rate: 149 Yen/USD, depreciation of 9 Yen) and an increase in SGAE due to the Company’s increased business activities. Furthermore, strategic measures are being steadily implemented, and the Company is also increasing dividends and acquiring treasury stock without damaging its financial position.

◇ FY12/2025 company forecast: Net sales of 10.7 billion yen (+6.6% YoY), operating profit of 490 million yen (+53.8% YoY), net profit attributable to owner of parent of 430 million yen (+64.1% YoY), assumed exchange rate of 152 Yen/USD. The plan is to increase profits by offsetting the deterioration in the COGS ratio due to the depreciation of the yen and the increase in SGAE with productivity improvements through DX.

◇ Share price observation: In the most recent six months, the share price has fluctuated between 1,000 and 1,200 yen. Although there is a tendency for the share price to move in line with the dollar-yen exchange rate, the fact that the yen has weakened has provided support for the share price, and the Company has managed to complete its FY12/2024 accounts without any significant shocks. The stock market values the Company’s positive earnings, sound finances, low PBR, dividend yield in the 4% range, commitment to achieving ROE of 8% and PBR of 1, and share buybacks. Although it is impossible to take one’s eyes off the foreign exchange trends, if the effects of the Company’s various measures start to appear in its financial figures, it could develop into a company aiming for a PBR of 1.

Table of contents

Summary	1
Key financial data	2
Company profile	3
History/Breakdown of most recent sales/Company’s group	3
Business overview	5
Japanese research reagent market/products and services	5
Corporate uniqueness, strengths/risk factors	8
Earnings trend	9
Growth strategy: “Three-year plan” and “Towards achieving management that is conscious of capital costs and share price”	11
Financial results	15
Full-year results for FY12/2024	16
FY12/2025 full-year forecast	17
Share price trends and catalysts	18
Financial data	20
Corporate data	22
Corporate profile/history	22
The top management/Corporate governance	23
Major shareholders/Shareholding by ownership	24

Key financial data

Source: Omega Investment from company materials

Company profile

Cosmo Bio is a trading company specialising in the life-science field, focusing on reagents^*, with the Group’s objective of “Contribute to the advancement of life sciences”. Its main business is purchasing and wholesale research reagents, equipment, contract services and clinical reagents related to life sciences. Reagents’ market size is different from those of diagnostics and therapeutics. Still, they are essential products and services indispensable for life science researchers worldwide to develop new drugs.

History

The company’s history can be traced back to 1983 when it was founded as Maruzen Oil Biochemical Co., Ltd as a subsidiary of the former Maruzen Oil (now Cosmo Oil) for basic biotechnology research reagent business. The company subsequently renamed itself to Cosmo Bio Co., Ltd. (1985) following a merger and restructuring of the parent company. In the same year, the company began selling equipment for bio-research. In September 2000, the company became independent frThe company’s history can be traced back to 1983 when it was founded as Maruzen Oil Biochemical Co., Ltd as a subsidiary of the former Maruzen Oil (now Cosmo Oil) for basic biotechnology research reagent business. The company subsequently renamed itself to Cosmo Bio Co., Ltd. (1985) following a merger and restructuring of the parent company. In the same year, the Company began selling equipment for bio-research. In September 2000, the Company became independent from Cosmo Oil through an MBO. In August 2004, it established Cosmo Bio USA, Inc. in San Diego, California, one of the world’s leading bioresearch centers and the location of many bio-ventures. It was made a base to search for reagents and promote the export of Japanese-made reagents (became a consolidated subsidiary in January 2018) . In September 2005, the Company was listed on the JASDAQ market. Subsequently, the Company expanded its operations by investing in and merging with companies in related fields. In December 2006, Primary Cell Co., Ltd. became a subsidiary, and Cosmo Bio entered the manufacturing business. In March 2010, BM Equipment Co., Ltd. was consolidated as a trading subsidiary that imports equipment and consumables for life science research. In October 2017, the Company relocated and consolidated its Sapporo business facilities and opened the Sapporo Office, establishing a structure to reinforce its recent focus on contract services and manufacturing and sales. (See also the Alignment Chart on p. 22)

Breakdown of most recent sales

Research reagents and Equipment for 79% and 21% of the Company’s FY12/2024 sales of 10,037 million yen, respectively.

Breakdown of sales by product

*Reagents: according to the Japan Reagents Association, reagents are legally defined as ‘chemical substances used for the detection or quantification of substances by chemical methods, experiments in the synthesis of substances or for physical properties’.
The general concept is also defined as “chemicals used for measurement standards, detection and confirmation of substances, quantification, separation and purification, synthesis experiments and measurement of physical properties in testing and research cases, such as inspection, testing, research and experiments, in the form of supply suitable for small quantities with guaranteed quality for the respective purpose of use”. More specifically, they are agents used for experiments, research, and measurements and include chemical substances, components extracted from the body of a living organism (proteins, cells, nucleic acids, etc.), and solvents used to react with them. Reagents for life science are mainly extracted from living organisms or synthesised from such substances and are supplied in small quantities, such as several tens of micrograms.
On the other hand, diagnostic reagents are drugs doctors use in various tests to diagnose health or disease conditions. They are also known as in vitro diagnostic drugs or clinical diagnostic reagents and are distinguished from reagents.
Generally, we take therapeutic drugs (ethical drugs) to cure diseases. They are administered to treat various diseases and are researched, developed, manufactured, and marketed by major national and international pharmaceutical companies.
The domestic market for life science research reagents is around 120 billion yen (2021, company data), the market size for diagnostics is about 800 billion yen (2021, Japan Association of Clinical Reagents Industries), and the market for therapeutic drugs (ethical drugs) is approximately 9.4 trillion (2021, IQVIA) being by far the largest.

Company’s group

The company’s group comprises Cosmo Bio (the company), two consolidated subsidiaries: BM Equipment and Cosmo Bio USA, Inc., and the non-consolidated subsidiary Proteintech Japan Co., Ltd. For their respective businesses and product flows, see the diagram below. BM Equipment and Proteintech Japan are located on the same floor in the head office in Koto-ku, Tokyo, where Cosmo Bio is based, to facilitate communication as a group.

Overview of the company’s group and product flow

Source: Company materials

In addition to Koto-ku, Tokyo, mentioned above, where the company’s head office is located, the company’s other operating bases include the Sapporo Office and the Shinsuna Logistics Centre. As mentioned in history, the Sapporo Office (Otaru, Hokkaido) was established in October 2017 by relocating and consolidating the company’s Sapporo area business facilities. The facility is responsible for contract services and manufacturing and sales, which are the company’s growth areas of focus.

The Shinsuna Distribution Centre was opened in January 2013. The company runs a system to hold an inventory of hot-selling products (the Group’s products and inventory on its BS at end-December 2023 amounted to about 1 billion yen) and ship them. The company can respond precisely to the needs of pharmaceutical companies, universities, and research institutions, which often require prompt deliveries.

Source: Company materials, etc.

Business overview

Provides essential reagents and equipment for life science researchers worldwide

The company provides life science researchers worldwide with research reagents that are integral to the basic research process. The development of pharmaceuticals usually takes a long period, over ten years, involving basic research, applied research, development and clinical trials. In recent years, the development of antibody drugs and the linkage with IT, such as in silico (including the application of quantum computers to accelerate the process), are expected. Still, steady research activities in the research field are necessary.

The reagents and equipment provided by the company are essential items in basic research at pharmaceutical companies, universities, and research institutions, and demand is expected to grow steadily to ensure a stable and constant profit margin.

Life science research and User demographic

Source: Company materials

Japanese life science research reagents market

The domestic life science research reagent market has grown at an average annual growth rate of about +3% so far, and the market size is estimated to be around 120 billion yen in 2023.

The market shares by operators are shown in the chart on the right below. Japanese subsidiaries of reagent companies in North America and elsewhere and group companies or business units of major Japanese chemical manufacturers account for a certain share. Two independent specialist trading companies, including the company, are also in the Top 10, and their share is estimated to be around 5%. Although competition between the companies is intense, each has its own areas of specialisation, and they can secure a certain level of sales and profits.

Source: Omega Investment from company materials

Next examines the status of the reagents’ users. As mentioned, the customers of reagents are pharmaceutical companies, universities, research institutions and other research facilities in the life sciences sector.

Firstly, the total R&D expenditure of Japan’s top 10 largest pharmaceutical companies was worth 2.2 trillion yen in FY2022 and is growing steadily, as shown below. Much of the company’s reagent business is estimated to be related to research expenditure in Japan, and it appears that this part of the business is also generally performing well.

Trends in research and development expenditure of major domestic pharmaceutical companies

Note: Total R&D expenditure of Takeda Pharmaceutical, Daiichi Sankyo, Astellas, Otsuka HD, Eisai, Chugai Pharmaceutical, Sumitomo Pharma, Ono Pharmaceutical, Shionogi&Co and Kyowa Kirin Co. Mitsubishi Tanabe Pharma has been excluded because it was not possible to obtain consecutive figures.
Source: Prepared by Omega Investment from the companies’ annual reports.

Next, trends in Grants-in-Aid for Scientific Research (KAKENHI) at Japanese universities and educational institutions are as follows. University-related budgets have often been cut, but Grants-in-Aid for Scientific Research are on an increasing trend to promote contemporary demands and innovation in academia while reforming the system. The underlying trend can be considered solid, although the rise in utility costs has put pressure on field budgets at some points.

As described above, the life science research reagent market can be considered a stable growth market.

Trends in Grants-in-Aid for Scientific Research

Source: Prepared by Omega Investment from the Ministry of Education website and other sources

The range of products and services offered by the company

The company introduces 12 million state-of-the-art products from some 500 suppliers worldwide, adds its value and provides them to life science researchers through its approximately 200 distributors. Furthermore, in addition to the traditional trading company business, in recent years, the Company has promoted the development and manufacture of its own products and the provision of its own contract services. Examples of current products and services are as follows.

Corporate uniqueness/strengths

Strong relationships of trust with clients and suppliers: In research and development, where reagents are used, a single reagent is rarely used in large quantities. A variety of reagents in microgram quantities are required at each research level. The company is attentive to diverse needs based on 40 years of building trusting relationships with clients and solid relationships with suppliers of state-of-the-art reagents, mainly in North America.

Providing state-of-the-art information in the life-science field: As a specialist life sciences trading company, in addition to the information-gathering capabilities of its head office, the company, in cooperation with COSMO BIO USA, INC, also exhibits and participates in various bio-related events, providing cutting-edge information in the life sciences sector to anticipate the needs of its clients.

Responding to user needs by manufacturing and developing in-house products: In addition to its principal business as an importer and trading company, it manufactures and sells cells that cannot be replaced by imported cells and provides contract services using cells. To achieve further growth, the company plans to focus on the manufacture and sale of its own products and the provision of contract services.

Accumulation and possession of various know-how related to the reagent business: Products in the life sciences sector, especially those related to reagents, require different knowledge and know-how than the import and export of ordinary products. Many of the products handled by the company need to comply with various laws and administrative guidance, such as the Pharmaceutical and Medical Device Act (Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices), the Poisonous and Deleterious Substances Control Act and the Narcotics and Psychotropics Control Act. These laws vary from country to country, and knowledge and information on the differences between countries are also important. In addition, some reagents are of animal origin and are subject to animal quarantine. Furthermore, some reagents, such as proteins, nucleic acids, and cells, are of biological origins. Appropriate temperature control is required, such as packing dry ice during international transport procedures. The company’s know-how and expertise in these reagents are one of its strengths.

Risk factor

–Commercial rights risk: Of the Company’s more than 500 suppliers, 400 are overseas, mainly in North America. If the management rights of these companies were to change hands through M&A, the Company could lose its commercial rights in Japan. Overseas suppliers could also independently build up their own sales networks in Japan or switch to competing companies.

–Exchange rate risk: Approximately two-thirds of the Company’s purchases are in US dollars, so the cost of sales rises and falls with exchange rate fluctuations. Two-thirds of the Company’s purchases are in US dollars. Based on internal policy, the Company makes forward exchange contracts within a certain range of actual demand. Still, when the yen suddenly weakens, the cost of sales rises sharply as the price increase is delayed, which significantly impacts business performance. (See the figure below)

–Competitive risk: There is also intense competition within the industry in the domestic market.

–Regulatory risk: Some of the Company’s products require compliance with various laws and regulations. An accident or other event could result in a violation of the law, and if these laws and regulations are revised, new measures will be required.

The Yen-dollar exchange rate and COGS ratio

Source: Omega Investment from company materials

Earnings trend

The company’s long-term financial performance is reviewed. Sales have generally risen steadily due to the steady market expansion mentioned earlier and the company’s precise business development. In terms of profits, the company has been profitable since its establishment, providing investors with some degree of reassurance.

However, the operating profit fluctuated between 100 million yen and 1 billion yen, as shown in the graph below. As mentioned above, the high volume of imported products means that, in some cases, there are advantages to the strong yen and disadvantages to the weak yen, affecting the COGS ratio. SG&A expenses have generally trended lower as sales have grown. Still, the operating profit margin has been affected by fluctuations in the COGS ratio, which has fluctuated between the 2% and 11% range.

As a result, ROA and ROE have also fluctuated widely: while at one time, ROE exceeded 8% and was close to 10%, it has fallen into the low single digits in the last two years. In the long term, ROE has often been below the guideline of 8% in many financial years, and improvements in capital efficiency through upgrading the business structure are awaited. As discussed later, it is hoped that the steady implementation of the Group’s Three-Year Plan, which is currently underway, will increase ROE.

Sales/Profit by Segment

Source: Omega Investment from company materials

ROA／ROE

Source: Omega Investment from company materials

The Company’s revenues and profits tend to be weighted towards the January-March period (Q1), as the financial year of many of its customers ends in March.

Sales/Profit by Segment (Quarterly basis)

Source: Company materials

Growth strategy： “Three-year plan” and “Towards achieving management that is conscious of capital costs and share price”

If we summarize the characteristics and issues related to the Company’s business and corporate value,

• The Company has established a firm position in procuring and selling research reagents, which continue to grow steadily. It has a stable base of high-quality customers, including domestic pharmaceutical companies, universities, and research institutions, and it continues to operate profitably.
• However, because it is a trading company, its operating profit margin is not high, and because it is highly dependent on imports from overseas, it is easily affected by exchange rates. The operating profit margin fluctuates wildly, from the 2% range to the 11% range.
• As a result, the Company has had to adopt a conservative financial management approach and has been in a net cash position. ROA and ROE are generally low, and ROE has not yet reached a stable level of over 8%.
• The share price also continues to trend below 1x PBR.

In response to these management issues, the Company announced its “Three-Year Plan (2023–2025)” when it announced its financial results for the fiscal year ending December 2022. After the change of president in March 2024, in August 2024, the Company announced “Towards Achieving Management that is Conscious of Capital Costs and Share Price”. This breaks down the primary measures of the three-year plan into stages based on a time axis and presents specific measures aimed at achieving an ROE of 8% or more and a PBR of 1. The following is a summary of the main points.

1)  New Three-Year Plan (2023-2025): “Contribute to the advancement of life sciences” as the Group’s objective

The group has set out its purpose as “Contribute to the advancement of life sciences” and established a group philosophy and policy. As specific long-term strategies, the group plans to: 1) create products and services that will become new growth pillars; 2) expand into markets other than research-use markets with a focus on life science; 3) strengthen synergies between group companies; 4) expand overseas development, including export business; and 5) achieve stable and sustainable growth.

Source: Company materials

Source: Company materials

The trading company function of the Company’s current primary business, “Distribution”, is in the lower left quadrant of the business overview matrix. The Company’s strategy is to use this as a starting point to strengthen and expand the trading company function by developing “selling of services” as a contract service intermediary, and to strengthen the manufacturing function further and develop the manufacturing and sales of in-house products and in-house contract services to achieve growth and high added value. If this strategy is realized, the Company will be taking on new risks regarding its manufacturing capabilities. Still, it is expected that the Company’s overall profitability will increase in scale and quality through increased revenue, improved profit margins, and a reduction in its dependence on imports and foreign exchange. Furthermore, as the Company’s overseas expansion progresses, it will also reduce its foreign exchange risk. This is expected to reduce the cost of capital and improve capital efficiency, so the impact on corporate value is also expected to be significant. This is a plan that deserves attention.

2)  “Towards achieving management that is conscious of capital costs and share price”

This was announced in August 2024, and it breaks down the primary measures of the “three-year plan”, which was mainly an explanation of business strategy, into stages based on a time axis. It shows specific measures for achieving an ROE of 8% or more and a PBR of 1x, which is also very important for share price formation. The key points are as follows.

• The Company has committed to achieving an ROE of 8% and a PBR of at least 1x.
• In addition to showing the path to profit growth in the numerator towards achieving an ROE of 8%, the Company has also demonstrated its plan for capital allocation in terms of the denominator of shareholders’ equity and has calculated the surplus capital.
• Based on the above, the Company has divided the measures it should take to improve corporate value into stages. It implements those that can be implemented immediately, such as strengthening stakeholder engagement and shareholder returns.

Source: Company materials

Source: Company materials

3)  Progress

Progress for FY12/2024 is as follows: STEP0 and STEP1 have already been started, and STEP2 is currently being developed.

Rebuilding the revenue base

• Organizational reform (April 2024): Strengthening of “marketing,” “in-house development,” and “recruitment and training of human resources.” A system has been established to promote price management aimed at improving gross profit and focusing on products with high added value and high profit contribution.
• DX promotion (August 2024 -): This is already underway. Aiming to improve productivity through business process improvement, establish new competitive advantages, and maximize customer value.

STEP1

• Change in dividend policy: The Company changed its standard from the previous dividend payout ratio of 30% to 40% to “whichever is higher, DOE of 3.5% or dividend payout ratio of 60%”. The dividend per share for FY12/2024 was increased by 20 yen to 50 yen, resulting in a dividend payout ratio of 111% and DOE of 3.7%.
• Resolution to acquire treasury stock: The Company acquired a maximum of 400,000 treasury stocks worth 300 million yen between August 6, 2024, and July 31, 2025. As of the end of February 2025, 148,800 shares worth 167 million yen had been acquired, and the Company was steadily executing the plan.

STEP2

• Strengthen trading company functions
• Strengthen manufacturing functions

Source: Company materials

4) Initiatives for FY12/2025

The key points for FY12/2025 will be the continuation of DX promotion to strengthen the earnings base and the start of operations for Scientist³, which falls under STEP2 and is positioned as a contract service intermediary in the high-value-added area of trading company functions. Attention will be focused on whether these will begin to contribute to earnings.

Source: Company materials

5) Key measures for strengthening manufacturing functions

Finally, we will look at the specific initiatives for improving manufacturing in STEP 3. We will also be watching the development of these businesses as they play a role in the Company’s medium- to long-term growth strategy.

	Overview	Aims
①Primary cell and other reagent production and contract testing	Cells are isolated from living organisms and cultured until the first passaging (primary cells) is provided. Customers can conduct drug research and development using cells close to actual cells.	Provide reagents and services not available on the market ⇒ Enhanced research reagents and services
②Custom peptide synthesis and antibody production	Custom synthesis of peptides with sequences that meet researchers’ requirements and contract antibody production using these peptides as materials (antigens) are also offered.	While providing peptides for research use, we also offer production and services that go one step beyond research use, such as supplying peptides as raw materials.
③Protein production using genome-edited chickens (Chicken egg bioreactor business).	Technology that modifies chickens through genome editing to produce eggs containing large amounts of useful proteins in the egg white part of the egg. Produces the desired protein in large quantities at low cost.	Production is mainly aimed at supplying raw materials, not research reagents.

Source: Omega Investment from company materials

Financial results

1) FY12/2024 results: 7.5% increase in revenue, 38.7% decrease in operating profit

Revenue of 10.03 billion yen (+ 7.5% YoY), operating profit of 318 million yen (- 38.7% YoY), net profit attributable to owner of parent of 262 million yen (- 40.8% YoY). Although sales reached 10 billion yen for the first time, profits decreased due to an increase in the COGS ratio caused by the depreciation of the yen (actual rate: 149 Yen/USD, depreciation of 9 Yen) and an increase in SG&A expenses due to the intensification of business activities. The dividend per share was 50 yen (an increase of 20 yen). Furthermore, strategic measures are being steadily implemented, and the Company is also increasing its dividends and acquiring treasury stock without damaging its financial position.

Source: Company materials

2)FY12/2025 Earnings Forecast

Net sales of 10.7 billion yen (+6.6% YoY), operating profit of 490 million yen (+53.8% YoY), profit attributable to owner of parent of 430 million yen (+64.1% YoY), assumed exchange rate of 152 Yen/USD. The company plans to increase profits by offsetting the deterioration in the COGS ratio due to the weak yen and the increase in SG&A expenses with productivity improvements through DX. The dividend per share will remain unchanged at 50 yen.

Source: Company materials

Share price trends and catalysts

The Company’s share price has generally fluctuated between 900 and 1,300 yen over the past five years. In the most recent six months, the share price has recovered, fluctuating between 1,000 and 1,200 yen. In addition, the Company’s share price valuation is low, with a forecast PER of 15.3 times and a PBR of 0.74 times for the fiscal year ending December 2025, so there is little sense of overheating. The company’s share price relative to the TOPIX has also begun to bottom out.

Although there is a tendency to be linked to the dollar-yen exchange rate, the fact that the depreciation of the yen has paused is supporting stock prices at the moment, and the Company is also managing its FY12/2024 accounts without any significant shocks. In addition to its black-figure business performance, sound finances and low PBR, the Company’s commitment to achieving an 8% ROE and a PBR of 1x, as indicated in its August 2024 announcement “Towards achieving management that is conscious of capital costs and share price”, as well as its dividend policy changes and share buybacks, are all considered to be highly valued. Expectations are rising for the abilities of the Company’s new president, Shibayama.

The catalysts that will move the share price in the short term are (1) the end of the weak yen, (2) the emergence of DX effects and a return to increased revenue and profits, and (3) effective management of foreign exchange risk (including increased overseas sales). Meanwhile, from a medium-term perspective, (3) establishing a growth base in manufacturing functions and contract service intermediation (for the time being, the start of operation of Scientist³) and (4) setting the direction of the next three-year plan are cited.

The Company has taken the necessary steps to reform its business structure. By using its strong financial base to invest in strategic businesses with good returns, and if it can see an improvement in capital efficiency and a shift up in the scale of its business, it should be able to achieve a stable ROE of 8% and a PBR of over 1. At that point, it should also be able to diversify its shareholder base and improve the liquidity of its shares.

Source: Company materials

Financial data

Company data

History

Month/Year	Event
Aug. 1983	Maruzen Oil Biochemicals Co. Ltd. was established as a subsidiary of Maruzen Oil (now Cosmo Oil Co., Ltd.) in Minato-ku, Tokyo, for the purpose of marketing basic biotechnology research reagents.
Apr. 1986	Company name changed to Cosmo Bio Ltd. and sales of bio-research equipment begun.
Dec. 1986	Licensed to sell medicines
Apr. 1998	Establishment of wholly-owned subsidiary CB Development Co., Ltd. to search for suppliers.
Sep. 2000	Independence from Cosmo Oil through a management buyout (MBO). CB Development Co., Ltd. became a non-subsidiary company through a share transfer.
Dec. 2000	Absorption merger of CB Development Co., Ltd.
Aug. 2004	Establishment of wholly-owned subsidiary Cosmo Bio USA Inc. in San Diego, California, USA, to search for suppliers and promote exports.
Sep. 2005	Listed on the JASDAQ stock exchange.
Dec. 2006	Acquired 80% of the shares of Primary Cell Co., Ltd., a company engaged in the research, development, manufacture and sale of primary cultured cells (primary cells) and contract analysis using these cells, and made it a subsidiary.
Nov. 2007	Acquired 30% of the outstanding shares of BM Equipment Co., Ltd., an importer and distributor of consumables and equipment for bio-research, and made it an equity-accounted affiliate.
Jul. 2008	Primary Cell Co., Ltd., a consolidated subsidiary, became a wholly owned subsidiary.
Mar. 2010	Acquired an additional 33% of the outstanding shares of BM Equipment Co., Ltd., making it a consolidated subsidiary with a total shareholding of approximately 63%.
Jan. 2013	Relocated the distribution centre and started operation at the Shinsuna Logistics Centre.
Jul. 2013	Merged with Primary Cell Co., Ltd.
Jul. 2013	Listed on the JASDAQ (Standard) of the Tokyo Stock Exchange following the merger of the Tokyo Stock Exchange and the Osaka Securities Exchange.
Nov. 2016	Established a joint venture Proteintech Japan Co., Ltd. with Proteintech Group, Inc.
Oct. 2017	Relocated and consolidated Sapporo business facilities and opened the Sapporo Site.
Jan. 2018	Cosmo Bio USA, became a consolidated subsidiary.
Mar. 2022	Transition to a company with an audit committee
Apr. 2022	Listed on the TSE Standard following the reorganisation of the Tokyo Stock Exchange.

Top management

President： Norihiko Shibayama

Apr. 1994    Joined Maruzen Petrochemical Co., Ltd.
Oct. 2000    Joined the Company
Apr. 2012 General Manager, Information Systems Department
Mar. 2014   Director, BM Equipment Co., Ltd.
Nov. 2016   General Manager of General Affairs Department and General Manager of the Information Systems Department
Mar. 2017   Director and General Manager of the General Affairs Department and Information Systems Department
Mar. 2020   Managing Director and General Manager of the General Affairs Department and Information Systems Department 
Director and General Manager of General Affairs Department, BM Equipment Co., Ltd.
Mar. 2022  President and Representative Director of BM Equipment Co., Ltd. (to present)
Apr. 2022  Managing Director and General Manager of the General Affairs Department
Mar. 2023   Senior Managing Director and General Manager of the General Affairs Department
Nov. 2023 Representative Director, Senior Managing Director and General Manager of the General Affairs Department of the company, acting for the President and CEO
Mar. 2024 Representative Director and President (to present)

Managing Director ： Junko Tochigi

Apr. 1998    Joined the Company
Apr. 2013    Head of Product Communications Department
Mar. 2017   Director and Head of Product Communications Department
Apr. 2017    Director and Head of Corporate Planning Department
Mar. 2021   Director, BM Equipment Co., Ltd
Mar. 2022   President and Representative Director, Cosmo Bio USA, Inc.  (to present), Representative Director, Proteintech Japan Co., Ltd. (to present)
Mar. 2023    Managing director and Head of Corporate Planning Department (to present)

Director ： Masanori Hayashi

Apr. 1994   Joined Kyowa Hakko Kogyo Co., Ltd.
May. 2012   Joined the Company
Apr. 2019    Head of Finance Department
Mar. 2022   General Manager, Finance Department, BM Equipment Co., Ltd
Mar. 2023   Director and Head of Finance Department (to present)
Mar. 2024  Director, General Manager of Finance Department BM Equipment Co., Ltd (to present)

Director, Full-time Audit and Supervisory Committee：Kazutoshi Sato

Apr. 1987   Joined Sumitomo Real Estate Sales Co., Ltd.
Jan. 1993   Joined Cosmo Oil Co., Ltd.
Jun. 2011   Branch Manager, Sapporo Branch, Cosmo Oil Co., Ltd.
Jun. 2014   Branch Manager, Takamatsu Branch, Cosmo Oil Co., Ltd.
Oct. 2015   Cosmo Oil Marketing (Japan) Co., Ltd., Takamatsu Branch  Branch manager
Jun. 2017   Director, Executive Officer and General Manager, General Affairs Department, Maruzen Petrochemical Co., Ltd.
Mar. 2020   Outside auditor of the company  Auditor of BM Equipment Co., Ltd. (present post)Mar. 2022   Director and full-time audit committee member (to present)

Director, Audit and Supervisory Committee Member：Haruo Sasaki

Nov. 1974    Joined Chuo Audit Corporation
Feb. 1990  Established Sasaki Accounting Office, Director (to present)
Dec. 2000   Outside auditor of the Company
Mar. 2022   Director and Audit Committee member (to present)

Director, Audit and Supervisory Committee Member：Kazuya Shimamura

Oct. 1995    Joined Deloitte Touche Tohmatsu (now Deloitte Touche   Tohmatsu LLC)
Apr. 1998  Registered as a chartered accountant
Oct. 2004  Registered as a lawyer  Joined Abe, Ikubo & Katayama Law Office
Mar. 2008   Established Shimamura Law & Accounting Office,Representative (to present)
Mar. 2014   Outside director of the Company
Mar. 2022   Director and Audit Committee member (to present)

Director, Audit and Supervisory Committee Member：Junichiro Haraguchi

Apr. 1984 Joined Tokyo Small and Medium Business Investment & Consultation Co., Ltd.
Apr. 2017 Counsellor, Acting Chief Examiner, Tokyo Small and Medium Business Investment & Consultation Co., Ltd.
Oct. 2020 Acting Director of Tokyo Small and Medium Business Investment & Consultation Co., Ltd.
Apr. 2021 Specially Appointed Counsellor (Operations Department 5 and Sales Management Department), Tokyo Small and Medium Business Investment & Consultation Co., Ltd.
Apr. 2023 Specially Appointed Counsellor (Operations Department 5 and Business Management Department), Tokyo Small and Medium Business Investment & Consultation Co., Ltd. (to present)
Mar. 2024 Director and Audit Committee member of the Company (to present)

Mr

Mr Norihiko Shibayama was appointed representative director on 26 March 2024, and Mr Haruhisa Sakurai, who has served as representative director, was appointed adviser.

Skills matrix of the Board of Directors’ Members

Source: Company materials

Corporate governance structure

Source: Omega Investment from company materials

Major shareholders

Note: The percentage of shares held to the total number of shares issued (%) excludes treasury shares (317,801 shares).
Source: Omega Investment from company materials

Shareholding by ownership (As of June 30, 2024)

Source: Omega Investment from company materials