| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 1943.54 | -31 |
| Intrinsic value (DCF) | 624.83 | -78 |
| Graham-Dodd Method | 2186.58 | -22 |
| Graham Formula | 2816.00 | 0 |
NHK Spring Co., Ltd. (5991.T) is a leading Japanese manufacturer specializing in precision springs, automotive components, and industrial machinery products. Headquartered in Yokohama, the company operates across four key segments: Automotive Suspension Springs, Automotive Seating, Precision Springs and Components, and Industrial Machinery & Equipment. NHK Spring supplies critical components to global automotive manufacturers, including suspension springs, seating systems, and powertrain components, while also serving the data communications and semiconductor industries with high-precision products like HDD suspensions and test sockets. With a history dating back to 1936, NHK Spring has established itself as a trusted supplier in Japan and internationally, leveraging its expertise in metal fabrication and spring technology. The company's diversified product portfolio caters to both consumer cyclical and industrial markets, positioning it as a key player in the auto parts sector. NHK Spring's innovation in lightweight materials and precision engineering aligns with industry trends toward vehicle electrification and advanced manufacturing.
NHK Spring presents a stable investment opportunity with moderate growth potential in the auto parts sector. The company's diversified revenue streams across automotive and industrial applications provide resilience against cyclical downturns in any single market. With a market cap of ¥324 billion and a beta of 0.598, the stock demonstrates lower volatility than the broader market. Financials show solid fundamentals with ¥766.9 billion in revenue and ¥39.2 billion net income for FY2024, supported by strong operating cash flow of ¥66.7 billion. The company maintains a healthy balance sheet with ¥103.2 billion in cash against ¥51.1 billion debt, and offers a dividend yield of approximately 2.1% based on the ¥69 per share dividend. However, investors should monitor exposure to the cyclical automotive industry and potential margin pressures from raw material costs. The capital expenditure of ¥33.3 billion indicates ongoing investments in production capabilities.
NHK Spring competes in the specialized automotive components and precision springs market through its technological expertise and long-standing relationships with Japanese automakers. The company's competitive advantage stems from its deep domain knowledge in spring manufacturing and metal processing, particularly in suspension systems where it holds significant market share in Japan. Its vertical integration capabilities allow for tight quality control and customization that global OEMs value. In automotive seating, NHK Spring differentiates through ergonomic designs and lightweight materials, though it faces intense competition from larger global suppliers. The precision components business benefits from high barriers to entry due to stringent technical requirements in HDD and semiconductor applications. However, the company's international presence remains limited compared to multinational competitors, with revenue concentration in Japan creating both stability and geographic risk. NHK Spring's R&D focus on advanced materials and electrification components positions it well for industry shifts, but scaling these innovations globally presents challenges against established Western and Chinese suppliers with broader distribution networks.