| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 2940.70 | 0 |
| Intrinsic value (DCF) | 1188.82 | -59 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 1149.03 | -61 |
Nippon Gas Co., Ltd. (8174.T) is a leading Japanese utility company specializing in the supply and sale of LP gas, natural gas, and electricity. Founded in 1955 and headquartered in Tokyo, the company operates through three key segments: LP Gas Business, Electricity Business, and City Gas Business. Nippon Gas serves residential, commercial, industrial, and agricultural customers, offering a comprehensive range of gas appliances, heating systems, and energy solutions. The company also provides remodeling services, consulting, and insurance agency services, positioning itself as a full-service energy provider. With a strong domestic presence, Nippon Gas plays a vital role in Japan's energy infrastructure, ensuring reliable and efficient gas distribution across the country. The company's diversified revenue streams and commitment to innovation in energy solutions make it a key player in Japan's regulated gas sector.
Nippon Gas Co., Ltd. presents a stable investment opportunity within Japan's regulated gas sector, supported by consistent revenue streams and a strong market position. The company's diversified operations across LP gas, natural gas, and electricity provide resilience against sector-specific risks. However, investors should note the company's modest net income margin (~5.6%) and significant total debt (¥47.2 billion), which could pose challenges in a rising interest rate environment. The negative beta (-0.036) suggests low correlation with broader market movements, potentially offering defensive characteristics. Dividend investors may find the ¥92.5 per share dividend attractive, though payout sustainability should be monitored given the capital-intensive nature of the business. Regulatory risks in Japan's utility sector and potential energy transition pressures are key considerations.
Nippon Gas Co., Ltd. maintains a competitive position in Japan's regulated gas market through its extensive distribution network and diversified service offerings. The company's integration across the gas value chain - from supply to appliance sales and maintenance services - creates customer stickiness and recurring revenue streams. Its focus on residential and small commercial customers provides stable demand, though this segment may face increasing competition from electric alternatives. The company's scale in LP gas distribution gives it procurement advantages, while its expansion into electricity and city gas businesses provides growth avenues beyond its core market. However, Nippon Gas operates in a mature market with limited pricing power due to regulation, and its growth prospects are constrained by Japan's demographic challenges. The company's competitive advantage lies in its established infrastructure and customer relationships rather than technological differentiation. Its ability to navigate Japan's energy transition while maintaining profitability will be crucial for long-term competitiveness.