Stock Analysis & Valuation Apple International Co., Ltd. (2788.T)

• Previous Close: ¥350.00
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, ¥	Upside, %
Artificial intelligence (AI)	426.20	22
Intrinsic value (DCF)	5088.58	1354
Graham-Dodd Method	984.46	181
Graham Formula	4446.63	1170

Strategic Investment Analysis

Company Overview

Apple International Co., Ltd. (2788.T) is a leading Japanese company specializing in the purchase, sale, and export of used cars, operating both domestically and internationally. Founded in 1996 and headquartered in Yokkaichi, Japan, the company also engages in the franchise business of used cars and operates an auto auction platform. Serving the Auto - Dealerships sector within the Consumer Cyclical industry, Apple International has established a strong presence in Japan's used car market, leveraging its extensive network and auction expertise. With a market capitalization of approximately ¥4.7 billion, the company plays a vital role in the secondary automotive market, catering to both individual buyers and dealers. Its diversified business model, including franchising and auctions, positions it as a key player in Japan's automotive ecosystem.

Investment Summary

Apple International Co., Ltd. presents a niche investment opportunity in Japan's used car market, supported by its established franchise and auction operations. The company reported revenue of ¥43.8 billion and net income of ¥1.2 billion in the latest fiscal year, with a diluted EPS of ¥92.75. However, negative operating cash flow (-¥1.2 billion) and high total debt (¥7.9 billion) raise liquidity concerns. The stock's beta of -0.363 suggests low correlation with broader market movements, potentially offering defensive characteristics. Investors may be attracted by the dividend yield (¥15 per share), but should weigh the risks associated with debt levels and cash flow challenges against the company's market position in a competitive industry.

Competitive Analysis

Apple International Co., Ltd. competes in Japan's fragmented used car market, where scale, network reach, and digital capabilities are critical. The company's competitive advantage lies in its integrated business model, combining direct sales, franchising, and auto auctions—allowing it to capture multiple revenue streams within the used car value chain. Its auction platform provides a unique edge in inventory sourcing and price discovery. However, the company faces intense competition from larger domestic players with stronger financial resources and digital platforms. While its niche focus on used cars avoids direct competition with new car dealerships, it must contend with online marketplaces disrupting traditional used car sales. The company's relatively small scale (¥4.7B market cap) limits its ability to compete on pricing or technology investments compared to industry leaders. Success will depend on maintaining strong regional dealer relationships and optimizing its auction platform's efficiency.

Major Competitors

• Gulliver International Co., Ltd. (7191.T): Gulliver International is one of Japan's largest used car retailers with nationwide coverage and strong brand recognition. Its advantages include superior scale, extensive inventory, and a well-developed digital platform. However, it focuses primarily on retail sales rather than auctions, differing from Apple International's mixed model. Gulliver's larger size gives it better purchasing power but may make it less agile in niche markets.
• Aichi Corporation (7259.T): Aichi operates used car auctions and sales, competing directly with Apple International's auction business. It benefits from a strong logistics network and dealer relationships. However, Aichi has faced profitability challenges recently, potentially giving Apple International an edge in operational efficiency. Both companies share similar exposure to regional used car market fluctuations.
• B-CASHA, Inc. (3048.T): B-CASHA focuses on online used car sales and financing, representing the digital disruptor model. Its tech-driven approach poses a long-term threat to traditional players like Apple International. However, B-CASHA lacks physical auction capabilities and franchise networks, areas where Apple International maintains an advantage with traditional dealers.
• Life Corporation (8194.T): Life Corp operates supermarket-style used car outlets, competing on price and volume. Its standardized retail model contrasts with Apple International's diversified approach. Life's stronger financial position allows for aggressive expansion, but it doesn't engage in auctions or exports, leaving those market segments open for Apple International.