| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 1500.24 | 27 |
| Intrinsic value (DCF) | 596.99 | -49 |
| Graham-Dodd Method | 2327.07 | 97 |
| Graham Formula | 1205.97 | 2 |
Nagoya Electric Works Co., Ltd. (6797.T) is a leading Japanese manufacturer specializing in industrial electrical equipment, traffic control systems, and security solutions. Headquartered in Ama, Japan, the company has been a key player in the Security & Protection Services sector since its founding in 1958. Nagoya Electric Works provides a diverse product portfolio, including variable message sign systems for roads, rivers, and parking lots, alongside comprehensive after-sale services. The company also engages in design, construction, and supervision services, reinforcing its integrated approach to infrastructure and security solutions. Operating primarily in Japan, Nagoya Electric Works leverages its expertise in industrial electrical applications to serve both public and private sector clients. With a market capitalization of approximately ¥13.7 billion, the company maintains a stable financial position, supported by consistent revenue streams and a debt-free balance sheet. Its focus on innovation and reliability positions it as a trusted provider in Japan's industrial and security equipment market.
Nagoya Electric Works presents a stable investment opportunity with low volatility (beta of 0.349) and a solid financial foundation, including ¥4.99 billion in cash and no debt. The company reported ¥17.58 billion in revenue and ¥1.68 billion in net income for FY 2024, with a diluted EPS of ¥287.08. Its operating cash flow of ¥1.41 billion and disciplined capital expenditures (-¥211 million) reflect efficient financial management. The dividend payout of ¥42.5 per share adds to its appeal for income-focused investors. However, its Japan-centric operations may limit growth potential compared to global competitors, and reliance on domestic infrastructure spending could pose cyclical risks. The company’s niche focus on traffic control and security systems provides stability but may require diversification to sustain long-term growth.
Nagoya Electric Works holds a competitive edge in Japan’s industrial electrical and traffic control markets due to its specialized product offerings and strong local presence. Its expertise in variable message sign systems and integrated security solutions differentiates it from broader industrial players. The company’s debt-free balance sheet and consistent profitability underscore its financial stability, allowing for reinvestment in R&D and customer service. However, its regional focus limits exposure to international growth opportunities, where larger multinational competitors may have an advantage. The company’s after-sale services and construction supervision capabilities enhance customer retention but may face pricing pressure from low-cost manufacturers. While Nagoya Electric Works benefits from Japan’s robust infrastructure spending, its growth is tied to domestic demand, making it vulnerable to local economic fluctuations. Competitors with global operations or diversified industrial portfolios may offer more scalable growth, but Nagoya’s niche specialization provides resilience in its core markets.