Stock Analysis & Valuation Shirai Electronics Industrial Co., Ltd. (6658.T)

• Previous Close: ¥758.00
• Sector Valuation Confidence Level: Low

Valuation method	Value, ¥	Upside, %
Artificial intelligence (AI)	930.30	23
Intrinsic value (DCF)	247.18	-67
Graham-Dodd Method	958.16	26
Graham Formula	1355.29	79

Strategic Investment Analysis

Company Overview

Shirai Electronics Industrial Co., Ltd. (6658.T) is a Japan-based manufacturer specializing in printed circuit boards (PCBs) and visual inspection machines. Founded in 1966 and headquartered in Shiga, the company produces transparent flexible boards, double-sided/multi-layer PCBs, high-functionality boards, and MEMS field products, along with transparent heater film solutions. These components are critical for various electronic applications, serving industries such as consumer electronics, automotive, and industrial automation. Operating both domestically and internationally, Shirai Electronics leverages its expertise in PCB manufacturing to cater to the growing demand for advanced electronic components. With a market capitalization of approximately ¥8.46 billion, the company plays a niche but vital role in the global electronics supply chain. Its focus on high-quality, specialized PCBs positions it as a key player in Japan's technology hardware sector.

Investment Summary

Shirai Electronics Industrial Co., Ltd. presents a mixed investment profile. On the positive side, the company reported solid FY2024 financials, with ¥28.8 billion in revenue and ¥1.49 billion in net income, translating to a diluted EPS of ¥104.37. Its operating cash flow of ¥3.17 billion and manageable debt levels (¥5.41 billion total debt against ¥1.99 billion cash) suggest reasonable financial health. The company also pays a dividend (¥30 per share), which may appeal to income-focused investors. However, its small market cap (~¥8.46 billion) and low beta (0.488) indicate limited liquidity and lower volatility, which could deter growth-oriented investors. The company operates in a competitive niche (PCB manufacturing), where larger global players dominate. While its specialization in high-functionality boards and MEMS products provides some differentiation, investors should weigh its modest growth prospects against sector-wide competition and supply chain risks.

Competitive Analysis

Shirai Electronics Industrial Co., Ltd. competes in the highly specialized PCB and visual inspection equipment market, where it differentiates itself through its focus on transparent flexible boards and high-functionality PCBs. The company’s strengths lie in its long-standing expertise (founded in 1966) and its ability to serve niche applications, such as MEMS and transparent heater films. However, its competitive positioning is challenged by larger global PCB manufacturers that benefit from economies of scale and broader product portfolios. Shirai’s domestic focus (Japan) may limit its growth compared to multinational competitors, though its international operations provide some diversification. The company’s financials suggest stable but not explosive growth, with revenue of ¥28.8 billion in FY2024. Its competitive advantage hinges on technological specialization rather than cost leadership, making it vulnerable to pricing pressures from larger rivals. Additionally, the PCB industry is cyclical and sensitive to electronic component demand fluctuations, which could impact Shirai’s performance. While the company maintains a solid balance sheet, its ability to invest in R&D and expand market share remains constrained relative to industry giants.

Major Competitors

• Daikin Industries, Ltd. (6367.T): Daikin Industries is a diversified electronics and industrial components manufacturer with a strong global presence. While not a direct PCB competitor, its scale and R&D capabilities in electronic materials pose indirect competition. Strengths include brand recognition and financial resources, but its broader focus dilutes its PCB specialization compared to Shirai.
• Tokyo Electron Limited (8035.T): Tokyo Electron is a major player in semiconductor production equipment, including PCB-related technologies. Its strengths lie in advanced manufacturing solutions and global reach, but its focus on semiconductors rather than standalone PCBs limits direct overlap with Shirai. However, its technological edge in inspection systems could challenge Shirai’s visual inspection machine segment.
• Nippon Mektron, Ltd. (JP3732000005): Nippon Mektron is a direct competitor in flexible PCB manufacturing, with a stronger international footprint than Shirai. Its strengths include high-volume production capabilities, but it may lack Shirai’s specialization in transparent and high-functionality boards. Nippon Mektron’s larger scale gives it cost advantages but may reduce flexibility in niche markets.
• TTM Technologies, Inc. (TTMI): TTM Technologies is a global PCB manufacturer with significant scale and diverse end-market exposure (aerospace, automotive). Its strengths include advanced technology and broad geographic reach, but its focus on high-volume production may not directly compete with Shirai’s niche offerings. TTM’s size allows for greater R&D investment, posing a long-term threat.
• Hon Hai Precision Industry Co., Ltd. (Foxconn) (2317.TW): Foxconn is a dominant electronics manufacturing services (EMS) provider with in-house PCB capabilities. Its strengths include massive scale and vertical integration, but its focus on assembly rather than specialized PCB manufacturing reduces direct competition. However, Foxconn’s pricing power could pressure smaller players like Shirai in the broader supply chain.