| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | 17.12 | -47 |
| Graham Formula | 17.34 | -46 |
ONTSU Co., Ltd. is a diversified Japanese company operating primarily in the karaoke equipment rental and sales sector, as well as fitness club management. Headquartered in Osaka, the company was founded in 1981 and has expanded its operations to include real estate leasing, coin parking lot management, and fitness services under brands like JOYFIT, JOYFIT24, FIT365, and LAVA. ONTSU operates through three key segments: Karaoke-related Business, Sports Business, and IP Business. The company's karaoke segment provides essential equipment and services to entertainment venues across Japan, while its sports division manages a network of gyms and yoga studios catering to health-conscious consumers. With a market capitalization of approximately ¥6.5 billion, ONTSU plays a significant role in Japan's rental and leasing services industry, part of the broader industrials sector. The company's diversified business model allows it to capitalize on Japan's leisure and wellness trends while maintaining a stable revenue stream from its real estate operations.
ONTSU Co., Ltd. presents a mixed investment profile. On the positive side, the company operates in stable industries (karaoke equipment and fitness clubs) with recurring revenue models, demonstrated by its ¥4.4 billion revenue and positive operating cash flow of ¥1.06 billion in FY2024. The low beta of 0.326 suggests lower volatility compared to the broader market, potentially appealing to conservative investors. However, the company's modest net income of ¥222 million and diluted EPS of ¥1.08 indicate relatively thin margins. The dividend yield appears minimal with a ¥0.24 per share payout. While the company maintains a healthy cash position (¥2.47 billion) and manageable debt (¥1.95 billion), investors should note the competitive nature of both the karaoke equipment rental and fitness club industries in Japan. The company's diversification across multiple business segments provides some risk mitigation but may also limit focus and growth potential in any single area.
ONTSU Co., Ltd. operates in two distinct competitive arenas: karaoke equipment/services and fitness clubs. In the karaoke segment, ONTSU benefits from established relationships with entertainment venues across Japan, though it faces competition from specialized equipment providers and larger entertainment service companies. The company's equipment rental model provides stable recurring revenue but may be vulnerable to shifts in Japan's entertainment spending patterns. In the fitness segment, ONTSU's JOYFIT and FIT365 brands compete in Japan's crowded gym market, where low-cost 24-hour gyms have proliferated. While ONTSU's multiple brand strategy allows it to target different customer segments (from budget-conscious to premium), it lacks the scale of Japan's largest gym chains. The company's real estate operations provide additional revenue streams but don't appear to be a core differentiator. ONTSU's main competitive advantages include its diversified business model that balances leisure (karaoke) and health (fitness) sectors, and its established presence in regional Japanese markets. However, it lacks the brand recognition and marketing budgets of larger national competitors in either segment. The company's ability to maintain reasonable profitability (4.9% net margin) in competitive industries suggests some operational efficiency, but growth may be constrained without significant investment or differentiation.