| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 2380.24 | 520 |
| Intrinsic value (DCF) | 644.98 | 68 |
| Graham-Dodd Method | 2176.29 | 467 |
| Graham Formula | 171.14 | -55 |
Faltec Co., Ltd. (7215.T) is a Japan-based automotive parts manufacturer specializing in resin molding, surface treatment, press processing, and electrical/electronic components. Founded in 1917 and headquartered in Kawasaki, the company serves global automotive OEMs with products like radiator grilles, plating solutions, fog lamps, and telematics units. As a subsidiary of TPR Co., Ltd., Faltec operates in the Auto - Parts sector (Consumer Cyclical), leveraging its expertise in precision manufacturing and surface treatment technologies. Despite recent financial challenges, the company maintains a niche position in high-value automotive components, particularly in exterior parts and electronic systems. With ¥81.9 billion in revenue (FY 2024) and a market cap of ¥3.3 billion, Faltec competes in the demanding Japanese automotive supply chain, where quality and technological specialization are critical differentiators.
Faltec presents a high-risk investment case with significant challenges. The company reported a net loss of ¥790 million in FY2024, though operating cash flow remained positive at ¥6.6 billion. Its low beta (0.08) suggests minimal correlation with broader market movements, but also reflects limited growth prospects. The balance sheet shows ¥14.5 billion in cash against ¥26.6 billion in debt, indicating leverage concerns. While the automotive parts sector offers long-term growth potential, especially in electronic components, Faltec's lack of profitability and dividend payments (¥0/share) make it suitable only for speculative investors betting on a turnaround or acquisition by parent TPR Co. The capital-intensive nature of the industry (¥4.3 billion in FY2024 capex) further pressures margins.
Faltec occupies a specialized niche in Japan's automotive supply chain, competing through three core capabilities: (1) integrated surface treatment technologies (plating/sputtering), (2) precision resin molding for exterior components, and (3) electronic subsystems like telematics units. However, its competitive position is hampered by scale disadvantages versus larger Japanese suppliers. The company's ¥81.9 billion revenue is dwarfed by tier-1 suppliers like Denso (¥6.2 trillion revenue). Faltec's strength lies in custom solutions for exterior trim and radar-compatible components (millimeter wave radar covers), but R&D limitations restrict penetration into high-growth areas like EV-specific parts. Its subsidiary status under TPR Co. provides some stability but may limit strategic flexibility. The negative EPS (-¥84.24) reflects pricing pressures from automakers and rising material costs—common challenges for mid-tier suppliers. While Faltec's technologies have applications in premium vehicles, its dependence on the Japanese domestic market (85% of sales) exposes it to production volatility. The lack of meaningful IP portfolio in emerging areas (e.g., ADAS sensors) further weakens its positioning against innovators like Nidec.