| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 488.88 | 3 |
| Intrinsic value (DCF) | 337.83 | -29 |
| Graham-Dodd Method | 201.95 | -57 |
| Graham Formula | 336.87 | -29 |
Gendai Agency Inc. (2411.T) is a Tokyo-based advertising and promotion services company specializing in integrated marketing solutions. Established in 1995, the firm operates across Japan, offering a comprehensive suite of services including traditional and digital advertising, video/web content production, sales promotions, and event management. With a market cap of ¥4.67 billion, Gendai Agency serves clients through mass media campaigns, newspaper flyers, and retail activations while maintaining ancillary operations in real estate. The company’s hybrid model—combining creative production with data-driven research—positions it as a nimble player in Japan’s ¥8.3 trillion advertising industry. Its strong cash position (¥3.69 billion) and low debt (¥674 million) reflect financial stability in the competitive Communication Services sector. Gendai’s localized expertise and diversified service portfolio make it a relevant partner for brands targeting Japanese consumers.
Gendai Agency presents a conservative investment profile with modest growth potential. Its low beta (0.162) suggests resilience to market volatility, supported by a debt-to-equity ratio of just 18% and a healthy cash balance covering 5.5x total debt. The company generated ¥358 million net income in FY2024 with a 4.7% net margin, though revenue declined 9% YoY (¥7.68 billion). A ¥20/share dividend yields ~1.7%, appealing to income-focused investors. Risks include Japan’s shrinking ad spend (-2.3% CAGR projected to 2026) and reliance on domestic demand (100% Japan revenue). Competitive pressures from digital-native agencies may limit pricing power. Valuation appears reasonable at 6.1x P/E, but investors should monitor client concentration and ability to pivot toward high-growth digital channels.
Gendai Agency occupies a niche position in Japan’s fragmented advertising sector, differentiating through integrated offline/online campaigns and hyper-localized service. Unlike global networks (e.g., Dentsu), Gendai’s small scale allows for agility in customizing promotions for regional retailers and SMEs—its core clientele. However, this specialization limits scalability versus automated ad-tech platforms. The company’s ¥5.1 billion operating cash flow demonstrates execution capability, but R&D spending is minimal (implied by ¥52 million CapEx), raising questions about long-term tech competitiveness. Gendai’s real estate operations provide ancillary revenue diversification, though this segment lacks synergies with core advertising. Key advantages include deep relationships with local media (critical for flyer distribution) and a capital-light model (93% of assets are liquid). Threats include Dentsu’s dominance in premium accounts (47% Japan market share) and digital specialists like CyberAgent (4751.T) capturing online ad growth. Gendai’s survival hinges on maintaining cost leadership in traditional channels while selectively expanding digital content production.