Stock Analysis & Valuation Ohmoto Gumi Co., Ltd. (1793.T)

• Previous Close: ¥1,571.00
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, ¥	Upside, %
Artificial intelligence (AI)	907.94	-42
Intrinsic value (DCF)	468.40	-70
Graham-Dodd Method	2124.38	35
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

Ohmoto Gumi Co., Ltd. (1793.T) is a well-established Japanese construction and civil engineering firm headquartered in Okayama. Founded in 1907, the company provides a comprehensive range of services, including civil engineering, building construction, carpentry, electrical, plumbing, and real estate development. Ohmoto Gumi operates across multiple segments, from infrastructure projects to interior finishing, making it a versatile player in Japan's industrials sector. With a strong regional presence and expertise in specialized construction services, the company serves both public and private sector clients. Ohmoto Gumi’s diversified project portfolio and long-standing industry experience position it as a reliable contractor in Japan’s competitive engineering and construction market. The company’s focus on technology development and consulting further enhances its value proposition in infrastructure and urban development projects.

Investment Summary

Ohmoto Gumi presents a stable but low-growth investment opportunity, given its modest beta (0.128) and entrenched position in Japan’s construction sector. The company reported ¥83.06 billion in revenue and ¥1.02 billion in net income for FY 2024, with a diluted EPS of ¥71.43. Its strong operating cash flow (¥12.28 billion) and healthy cash reserves (¥18.57 billion) provide financial stability, while a ¥76 dividend per share indicates shareholder returns. However, the company operates in a mature industry with limited international exposure, which may constrain growth. Investors should weigh its steady cash flows against Japan’s stagnant construction demand and potential regulatory risks in public infrastructure spending.

Competitive Analysis

Ohmoto Gumi’s competitive advantage lies in its diversified service offerings and long-standing regional expertise in Japan’s construction sector. Unlike larger global contractors, Ohmoto Gumi focuses on mid-sized projects, leveraging its specialization in carpentry, electrical, and plumbing works. The company’s ability to handle both civil engineering and real estate development provides cross-project synergies. However, it faces intense competition from larger Japanese construction firms with greater financial resources and government contract access. Ohmoto Gumi’s relatively small market cap (¥30.17 billion) limits its ability to compete for mega-projects against industry giants. Its conservative financials (low debt at ¥8.1 billion) ensure stability but may hinder aggressive expansion. The company’s regional concentration in Okayama and surrounding areas could be a weakness if local infrastructure spending slows, though it mitigates risk by engaging in consulting and technology development.

Major Competitors

• Kajima Corporation (1812.T): Kajima is one of Japan’s 'Big Four' construction firms, with a strong presence in large-scale infrastructure and international projects. It outperforms Ohmoto Gumi in revenue scale and global reach but lacks the latter’s regional specialization. Kajima’s higher debt exposure could be a risk in economic downturns.
• Taisei Corporation (1801.T): Taisei is another major Japanese contractor with expertise in skyscrapers and transportation infrastructure. It has superior technological capabilities (e.g., seismic-resistant construction) but operates in a different tier of projects compared to Ohmoto Gumi’s mid-sized focus.
• Nishimatsu Construction Co., Ltd. (1820.T): Nishimatsu is a mid-tier competitor with a balanced portfolio of civil engineering and building works. Like Ohmoto Gumi, it emphasizes regional projects but has a slightly stronger presence in urban redevelopment. Its financials are comparable, though Nishimatsu has more international exposure.
• Penta-Ocean Construction Co., Ltd. (1893.T): Penta-Ocean specializes in marine and coastal engineering, a niche where Ohmoto Gumi has limited presence. It is a key player in Japan’s port and offshore wind projects but lacks Ohmoto Gumi’s breadth in general construction services.