| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 1065.93 | -29 |
| Intrinsic value (DCF) | 2925.80 | 95 |
| Graham-Dodd Method | 1238.39 | -17 |
| Graham Formula | 972.07 | -35 |
TDSE Inc. (7046.T) is a Tokyo-based IT consulting firm specializing in data science, artificial intelligence (AI), and digital transformation (DX) solutions for Japanese enterprises. Operating in the Information Technology Services sector, the company provides cutting-edge analytics consulting, IoT data utilization, and AI-driven tools like Scorobo (an AI engine for finance, marketing, and HR) and NetBase (a social listening platform). With a strong focus on data-driven decision-making, TDSE supports industries ranging from manufacturing to fintech. Since its founding in 2013 (formerly Tecnos Data Science Engineering), the company has capitalized on Japan's growing demand for DX services, evidenced by its ¥2.52B revenue in FY2024. Its asset-light model, with ¥1.79B in cash and minimal debt, positions it for strategic growth in Japan's $30B+ IT services market.
TDSE presents a niche growth opportunity in Japan's digital transformation space, with a low-beta (0.229) profile suggesting defensive characteristics. The company's ¥200M net income and 9.6% net margin reflect profitability in specialized AI consulting, while its ¥1.07B operating cash flow supports ongoing R&D. Key risks include client concentration (common in IT services) and Japan's slower enterprise tech adoption versus global peers. The ¥10/share dividend indicates a 1-2% yield at current prices, but the primary appeal lies in growth potential as Japanese firms accelerate DX spending. Valuation appears reasonable at ~1.1x revenue, though investors should monitor scalability of its proprietary tools like Scorobo.
TDSE competes in Japan's fragmented IT consulting market by combining domain expertise in AI/analytics with industry-specific solutions. Its Scorobo AI engine differentiates it from generalist consultancies, particularly in finance and marketing verticals. However, the company faces pressure from three fronts: 1) Global giants (Accenture, IBM) with broader DX capabilities, 2) Domestic IT services firms (like NTT Data) with deeper client relationships, and 3) Emerging AI startups. TDSE's advantage lies in agile implementation of niche AI use cases, but scaling requires overcoming Japan's preference for established vendors. The ¥602M capex suggests ongoing platform investment, critical to maintaining edge in fast-evolving AI/analytics. While NetBase competes with Brandwatch and Talkwalker in social analytics, its localization for Japanese language/culture provides defensibility. The firm's challenge is transitioning from project-based consulting to scalable product revenue.