Indus Capital partner John Pinkel has pitched Tokyo-listed confectionery and gift sweets manufacturer and retailer Kotobuki Spirits, arguing the stock offers exceptional returns on capital, consistent growth and an increasingly attractive valuation. 

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“Japan is notoriously a market with low returns on investor capital,” Pinkel said. Yet Kotobuki has generated an average return on invested capital of 30 per cent over the past three years, compared with about 9 per cent for the broader Japanese market. 

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The company operates 47 brands selling premium gift sweets, tapping into Japan’s so-called omiyage tradition of buying regional treats when travelling. 

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Kotobuki has compounded revenue at 10 per cent and profits at 15 per cent over the past decade, delivering annualised dollar returns to shareholders of 14 per cent. 

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Pinkel highlighted its ability to scale, with incremental returns on invested capital of 39 per cent over the past seven years. 

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“We think this is outside the AI debate,” he said, describing it as a business Indus expects to own “five years from now, as we have owned for the last five years”. 

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The timing is particularly attractive, with Kotobuki trading at its lowest valuation in a decade.

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