| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 882.92 | -13 |
| Intrinsic value (DCF) | 470.65 | -54 |
| Graham-Dodd Method | 192.23 | -81 |
| Graham Formula | 757.50 | -26 |
CTS Co., Ltd. (4345.T) is a Japan-based company specializing in ICT construction services and IT infrastructure solutions for the construction industry. Founded in 1972 and headquartered in Ueda, Japan, CTS provides a diverse range of services, including cloud storage, mobile fixed IP phone services, network construction, AI-driven face recognition, and non-contact temperature detection. The company also offers 3D surveying, construction management, electronic delivery, and equipment inspection services. Beyond ICT, CTS engages in the sale and rental of office furniture, home appliances, and disaster prevention shelter construction. With a market capitalization of approximately ¥32.9 billion, CTS operates in the Industrials sector under Rental & Leasing Services. The company’s diversified service portfolio positions it as a key player in Japan’s construction technology and infrastructure support market, catering to evolving industry demands for digitalization and efficiency.
CTS Co., Ltd. presents a stable investment opportunity with a low beta (0.44), indicating lower volatility relative to the broader market. The company reported solid financials, including ¥11.8 billion in revenue and ¥2.19 billion in net income for the fiscal year ending March 2025. With strong operating cash flow (¥2.84 billion) and a healthy cash position (¥4.53 billion), CTS demonstrates financial resilience. However, its niche focus on Japan’s construction ICT sector may limit growth potential compared to global peers. The dividend yield, supported by a ¥25 per share payout, adds appeal for income-focused investors. Risks include exposure to Japan’s cyclical construction industry and potential margin pressures from competitive IT service providers.
CTS Co., Ltd. holds a competitive edge in Japan’s ICT construction services market through its integrated offerings, combining IT infrastructure, cloud solutions, and AI-driven tools tailored for construction sites. Its specialization in 3D surveying and electronic delivery systems differentiates it from general IT service providers. However, the company faces competition from larger conglomerates offering broader construction and technology services. CTS’s regional focus limits its scalability but strengthens its local market penetration and customer relationships. The company’s ability to provide end-to-end solutions—from network construction to disaster prevention—enhances its value proposition. Yet, reliance on Japan’s construction sector exposes it to macroeconomic fluctuations. To sustain growth, CTS must innovate in AI and IoT applications while exploring partnerships to expand beyond its domestic market.