| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 3343.53 | 12 |
| Intrinsic value (DCF) | 2848.08 | -4 |
| Graham-Dodd Method | 1392.57 | -53 |
| Graham Formula | n/a |
Kyoei Security Service Co., Ltd. (7058.T) is a leading Japanese security services provider headquartered in Tokyo. Established in 1985, the company specializes in a broad range of security solutions, including facility security, event security, highway security, traffic guidance, parking lot security, and bodyguard services. Additionally, Kyoei offers ancillary services such as parking lot operation management, condominium agency management, and building/equipment management. Operating in Japan's highly regulated security industry, Kyoei benefits from steady demand driven by corporate, residential, and public sector clients. With a market capitalization of ¥3.42 billion, the company maintains a strong cash position (¥3.32 billion) and a conservative capital structure, supported by low debt levels. Kyoei’s diversified service portfolio and established reputation position it as a reliable player in Japan’s security and protection services sector, which is part of the broader Industrials segment.
Kyoei Security Service presents a low-beta (0.251) investment with stable revenue streams, making it attractive for risk-averse investors seeking exposure to Japan’s essential security services market. The company reported ¥9.35 billion in revenue and ¥248.5 million in net income for FY 2024, with a healthy diluted EPS of ¥170.39. Its strong cash position (¥3.32 billion) and minimal capital expenditures suggest financial resilience, while a ¥90 dividend per share indicates shareholder-friendly policies. However, growth prospects may be limited by Japan’s mature security market and demographic challenges. Investors should weigh the company’s stability against potential stagnation in revenue expansion.
Kyoei Security Service operates in a competitive but fragmented Japanese security market, where differentiation is often based on service quality, reliability, and regional coverage. The company’s competitive advantage lies in its diversified service offerings, spanning facility security, event security, and specialized services like airport firefighting. This diversification reduces reliance on any single revenue stream. Kyoei’s strong cash position and low debt (¥860.7 million) provide financial flexibility compared to peers with higher leverage. However, its regional focus (Japan) limits geographic diversification, unlike global competitors. The company’s beta of 0.251 suggests lower volatility, appealing to conservative investors, but may also reflect slower growth compared to more aggressive peers. Kyoei’s challenge is to innovate in a traditional industry while maintaining profitability amid wage pressures and labor shortages in Japan’s aging workforce.