| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 671.38 | 151 |
| Intrinsic value (DCF) | 180.74 | -33 |
| Graham-Dodd Method | 922.19 | 244 |
| Graham Formula | 859.85 | 221 |
Tensho Electric Industries Co., Ltd. (6776.T) is a Tokyo-based manufacturer specializing in plastic products for diverse industries, including automotive, medical, logistics, and consumer electronics. Founded in 1936, the company operates in Japan and internationally, offering a broad product portfolio ranging from medical waste containers to automotive parts (exterior, interior, and engine components) and home appliance components. Tensho’s proprietary products like Mippail and Tensert racks highlight its innovation in logistics and storage solutions. With a market cap of ¥4.32 billion (JPY), Tensho serves cyclical sectors, particularly automotive (Consumer Cyclical), where its plastic components are critical to supply chains. The company’s dual focus on industrial applications and niche original products positions it as a versatile player in Japan’s manufacturing ecosystem.
Tensho Electric Industries presents a mixed investment profile. Its diversified product line and established presence in automotive and logistics sectors provide stability, while a beta of 1.135 suggests moderate volatility relative to the market. Revenue of ¥26.9 billion (JPY) and net income of ¥948 million (JPY) in FY2024 reflect steady operations, though high total debt (¥8.1 billion) against cash reserves (¥5.2 billion) raises liquidity concerns. The dividend yield (~0.09% at a ¥5/share payout) is nominal, likely limiting income-seeking investors. Growth prospects hinge on Japan’s auto sector recovery and demand for lightweight plastic components, but competition and input cost pressures pose risks. Investors should weigh its niche expertise against sector cyclicality and leverage.
Tensho Electric Industries competes in fragmented markets where specialization and cost efficiency are critical. Its competitive advantage lies in: (1) **Diversified Applications**: Unlike pure-play automotive parts suppliers, Tensho serves medical, logistics, and electronics sectors, mitigating cyclical risks. (2) **Proprietary Products**: Niche offerings like Mippail storage solutions carve defensible niches. (3) **Domestic Integration**: As a Japanese supplier, it benefits from local auto supply chains (e.g., Toyota, Honda). However, Tensho lacks the scale of global peers, limiting R&D and pricing power. Margins may be pressured by larger competitors’ economies of scale, while reliance on Japan’s auto sector (25% of global output) exposes it to regional downturns. The company’s debt load further restricts agility in capex or M&A compared to cash-rich rivals. To sustain competitiveness, Tensho must deepen client relationships and invest in high-margin segments like medical containers.