Kirin Holdings: Tax Regulations Weaken Competitiveness And Pharma Business Stake Is Too Small
- The Beer Tax Unification Act will damage Kirin’s competitive pricing in the beer-substitute market for the medium to long term.
- Kirin’s 53.8% stake in pharmaceutical company Kyowa Kirin causes problems over parent attributable net income and free cash flow disclosure.
- The shares are trading on PER FY12/2021 16.3x which is at a premium to peers. We are sellers
Kirin Holdings (OTCPK:KNBWY) (OTCPK:KNBWF) is facing two difficult challenges which it appears unable to solve. The Beer Tax Unification Act will damage Kirin’s competitive pricing in the beer-substitute market for the medium to long term. Having a pharmaceutical business is high margin and defensive but causes problems over parent attributable net income and free cash flow disclosure. With the shares trading at a premium to peers, we are sellers.