As the Spring 2024 job market kicks off in earnest, 6 stocks are rising due to the ripple effects of rising wage increases | Special Feature – Stock Tan News
Wage increases at a level above the rate of inflation are essential to the “virtuous circle of growth and distribution” that the Kishida administration emphasizes. As the tax system to promote wage increases is expanded, there have been numerous announcements and reports of wage increases by companies.
―Unprecedented pressure on the economic world, subsequent efforts linked to support for job changes, the consumption of “small luxury” and child support―
The 2024 Spring Labor Management Negotiations (Spring Labor Negotiations) are about to begin. In an effort to create a “virtuous circle” of sustained price and wage increases, the government is placing unprecedented pressure on the business community to raise wages. If a wage increase is implemented at a level higher than the inflation rate, it is expected that it will not only have a positive effect on consumption activities, but will also increase the need to change jobs to escape from a low-wage environment, creating a group of stock This will benefit the business environment, in which investing is becoming increasingly attractive
●Expectations are high as the rate of wage increase exceeds that of the previous year
This year’s spring trade union is considered a major turning point for the Japanese economy. If wage increases cannot be achieved at a level that exceeds price growth in an inflationary environment, the risk of a decline in domestic consumption will increase and the yellow light will shine on the realization of the “virtuous cycle of growth and distribution” that l Kishida administration emphasizes.
Although the increase in labor costs associated with wage increases is a negative factor for the performance of individual companies, it has a positive effect on the economy as a whole. According to the 2023 edition of the White Paper on Labor Economics, drawn up by the Ministry of Health, Labor and Welfare in September last year, if wages for all workers increased by 1%, the economic effect would be about 2.2 trillion yen in production and about 5,000 yen in employee compensation, which is expected to be worth 100 million yen. The rate of wage increase in major private companies during the spring union of 2023 was 3.60%. According to a summary from the Japan Center for Economic Research, the average salary increase rate expected by private research organizations during this year’s spring union is 3.85%, a prevailing assumption that it will exceed the year’s level last.
●Deeply rooted anxiety about retirement: some of the money will be used for wealth management
By the way, the burden of social security costs weighs heavily on the working generation. It is also true that there is a sense of uncertainty as to whether wage increases for the working generation, forced to save money, will lead directly to an increase in consumption. Of course, if the movement to allocate a portion of wage increases to asset management to ensure vital funds after retirement, Nomura Holdings [東証Ｐ]Headquarters of Ya Daiwa Securities Group [東証Ｐ]SBI Holdings [東証Ｐ]This will definitely have a positive effect on companies like
On the other hand, it is unlikely that all of the increased income of the working generation, worried about retirement, will be allocated to saving and creating assets. Even if consumption activity does not increase strongly from a macro perspective, it is entirely possible that people engage in “small luxury” consumption behaviors, such as purchasing products they would not normally buy as a reward for themselves. Furthermore, if the disparity in wage increase rates between companies were to widen, this would encourage a shift of human resources from companies with poor salary increase prospects to companies with favorable treatment. Recruiting companies [東証Ｐ]and the “BizReach” vision. [東証Ｐ]Recruiting services-related titles like these should be added to the list of titles with “salary increase merits.”
Furthermore, the tax reform project for the 2018 fiscal year, approved by the Council of Ministers in December last year, provides for the expansion of the tax system to promote wage increases. For large and medium-sized companies that have implemented a salary increase of 7% or more, a new system will be established where the tax deduction rate for the total salary increase will be 25%. The government will also introduce a system in which a 5% tax deduction rate will be added to companies that have obtained Kurumin certification, which certifies companies with extensive child support measures.
Large and medium-sized enterprises will be able to receive a tax deduction of up to 35%, while small and medium-sized enterprises will receive a tax deduction of up to 45%. For example, to obtain the Kurumin certification, which provides tax breaks. It can be assumed that in the future initiatives such as companies paying their employees for babysitting or the creation of nurseries within workplaces will become even more widespread. From these perspectives, we will select stocks whose prices are likely to be supported by the growing momentum towards wage increases.
●6 titles with “salary increase benefits”
◎Beauty garage [東証Ｐ]
The company sells products wholesale to nail salons, nail salons, nail salons, etc. Sales for the second quarter of the fiscal year ended April 2024 (May through October) were 14,341 million yen, an increase of 13.4% compared to the same period last year, and operating profit was 766 million yen, an increase of 50.3%, indicating trading conditions are excellent. There was a stage when the stock price fell below 2,000 yen in December, but the price remained below the 200-day moving average was not long, and the stock price was reluctant to fall due to of convenience. The number of users who have made six or more purchases in the last year has increased by double digits, and the number of repeat customers continues to grow. An increase in the income of the working generation will in itself be positive for the hairdressing industry, so expectations are high for a scenario where business results improve.
◎ＭＳ－Ｊａｐａｎ [東証Ｐ]
We provide job change services specializing in corporate management and professionals in the accounting and legal fields. Both sales and trailing profit for the fiscal year ending March 2024 are expected to reach record levels with double-digit growth compared to the previous fiscal year. The number of new entrants and job opportunities in the recruitment industry are expected to increase significantly. In September last year, the company began to seriously attract new financial professionals, with the aim of further expanding its business. The dividend yield is at the high level of 4.59%. If the price breaks above last year’s high of 1,305 yen, it will likely further strengthen its upward trend.
◎Teno.Participations [東証Ｓ]
The main objective is the management of nursery schools. The establishment of a new deduction for certified companies such as Kurumin, which promotes child support under the wage increase promotion tax system, will likely expand the need for in-company daycare centers. The stock price fluctuated in December last year as news spread of the government’s support for the introduction of housework support services for companies, but has currently remained at the 500 yen level. If, through the release of earnings forecasts for the current fiscal year, there is widespread belief that the growth trajectory remains unchanged and that there is a clear path to earnings recovery, the stock will likely exhibit sustained bullish momentum .
◎crushed [東証Ｇ]
It’s still fresh in our minds that spending on cakes increased as a form of revenge after the coronavirus pandemic. The company, which operates a website for the purchase of ingredients and packaging materials for desserts and baking, is based on a scenario in which some of the revenge spending of the “small luxury” of the working generation, which has become increasingly thrifty in an inflationary environment, they will be spent on sweets, which will have a positive effect on the company’s business. Operating profit for the fiscal year ending in September 2024 is expected to increase 4.8% year-on-year to 836 million yen, setting a new record for the fourth consecutive year. While this may fall short of the average annual growth rate target (11%) for operating profit by the fiscal year ending September 2026 set out in the medium-term management plan, upward pressure on the share price provides an entry point for investors It is possible to accept that it has taken shape.
◎Adventure [東証Ｇ]
It manages the travel booking site “SkyTicket”. As of the first quarter (July-September) of the fiscal year ending June 2024, 57% of the company’s revenue was tied to domestic airline tickets. Due to the cancellation of domestic airline tickets due to the typhoon and the impact of upfront investments, the final profit of the first quarter was sluggish at 419 million yen, down 50.2% from the same period of the year last. The stock price took into account the impact of the runway closure caused by the plane crash at Haneda Airport in January this year and fell below the 75-day moving average. However, since October last year, the price has remained below 5,000 yen, supported by the buy-in, and has continued to show a steady downward trend. It should also be noted that in March last year the company announced the start of preparations to apply for the change of classification on the TSE primary market.
◎I style [東証Ｐ]
She runs @cosme, a comprehensive cosmetics and beauty website. The large flagship store “@cosme OSAKA” opened in Osaka and EC is doing well, and sales for the first quarter (July-September) of the fiscal year ending June 2024 were the highest ever. Operating income also increased by 55.4% year-on-year to 368 million yen, showing strong growth potential. Last November they announced the opening of the site on Amazon.co.jp. If the purse strings of businessmen, who have become more frugal due to rising prices, loosen even a little, leading to an increase in consumption of cosmetics, probably the stock price, which remains at the 400 level yen, could increase significantly. .
