| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 1509.21 | 45 |
| Intrinsic value (DCF) | 277.45 | -73 |
| Graham-Dodd Method | 1106.58 | 7 |
| Graham Formula | n/a |
Futaba Industrial Co., Ltd. (7241.T) is a leading Japanese manufacturer specializing in automotive and industrial components. Established in 1935 and headquartered in Okazaki, Japan, the company produces a diverse range of automobile parts, including exhaust systems, body frame components, suspension parts, and fuel system components. Additionally, Futaba Industrial supplies precision parts for office equipment such as copiers and printers, as well as assembly and welding equipment for automotive manufacturers. Operating in the Auto - Parts sector under the Consumer Cyclical industry, the company serves both domestic and international markets. With a market capitalization of approximately ¥66.67 billion (as of latest data), Futaba Industrial leverages its engineering expertise and manufacturing capabilities to maintain a strong position in the automotive supply chain. The company's product portfolio addresses key industry trends such as emissions control, vehicle lightweighting, and fuel efficiency.
Futaba Industrial presents a moderately conservative investment profile within the auto parts sector, evidenced by its beta of 0.507 indicating lower volatility than the broader market. The company generated ¥707.1 billion in revenue with ¥6.2 billion net income in its latest fiscal year, demonstrating stable operations. While operating cash flow of ¥24.8 billion appears healthy, investors should note the significant capital expenditures (-¥25.4 billion) and moderate debt levels (¥53.9 billion total debt against ¥13.7 billion cash). The dividend yield appears modest at ¥40 per share. The company's fortunes are tied to automotive production cycles, though diversification into industrial equipment provides some buffer. Key considerations include exposure to Japan's automotive sector (particularly Toyota given its Aichi prefecture location), competitive pressures in auto parts manufacturing, and ability to adapt to electric vehicle transition.
Futaba Industrial competes in the highly competitive automotive components sector where scale, technological capability, and customer relationships determine success. The company's competitive advantages include: 1) Specialized expertise in exhaust systems and structural components where it has developed proprietary manufacturing techniques; 2) Long-standing relationships with Japanese automakers benefiting from proximity to major OEMs in the Aichi region; 3) Diversification across different vehicle systems and industrial applications that mitigates dependence on any single product line. However, the company faces challenges from larger global suppliers with greater R&D resources, particularly in electrification technologies where traditional exhaust system expertise becomes less relevant. Futaba's domestic manufacturing base provides quality advantages but may limit cost competitiveness against lower-cost regional suppliers. The company's mid-size scale (¥700bn revenue) positions it as a significant Tier 2 supplier rather than a global Tier 1, making it dependent on Japanese automakers' supply chains. Its future competitiveness will depend on ability to transition product portfolio toward EV components and maintain technological edge in structural parts where it currently specializes.