Deep-dive 2021-15: Okamoto
Okamoto Industries (5122 JP) is a family-run household products and industrial materials company based in Japan.
The company is best known for its condom business, which ranks as the #3 globally. The brand name is strong in Asia, where Okamoto dominates the premium segment. The operating margin for Okamoto’s condom business is around 30%, and it has a clear technological leadership that protects it from the competition.
The growth potential for Okamoto’s condom business comes primarily from China, where usage rates are low compared to Hong Kong or Japan. Okamoto’s management believes that the Chinese market will grow 2-3x in the future. Given Okamoto’s already strong brand name in China, Okamoto is well-placed to capitalise on future growth in China’s condom industry.
Besides condoms, Okamoto also sells a range of other household products such as dehumidifiers, heating pads, rubber boots and gloves. These products are almost entirely sold within Japan. While it is a slow-growth busine…