| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 297.04 | 2 |
| Intrinsic value (DCF) | 1890.47 | 550 |
| Graham-Dodd Method | 44.88 | -85 |
| Graham Formula | 56.50 | -81 |
Ten Allied Co., Ltd. (Ticker: 8207.T) is a Japan-based food service company operating approximately 120 restaurants and bars under the Tengu Name brand. Founded in 1969 and headquartered in Tokyo, the company specializes in casual dining and bar services, catering to Japan's dynamic consumer cyclical sector. Formerly known as Tengu Chain Co., Ltd., the company rebranded in 1977 to reflect its diversified operations. With a market capitalization of ¥10.46 billion, Ten Allied serves as a niche player in Japan's competitive restaurant industry, focusing on localized dining experiences. The company's financials indicate modest revenue growth, with ¥11.15 billion in annual revenue and ¥27.65 million in net income for FY 2024. Despite thin margins, Ten Allied maintains a strong cash position (¥3.93 billion) and low leverage, positioning it for stability in Japan's evolving food service market.
Ten Allied Co., Ltd. presents a mixed investment profile. The company operates in Japan's highly competitive restaurant sector, where differentiation is key. While its modest net income (¥27.65 million) and diluted EPS (¥0.82) suggest limited profitability, its strong cash reserves (¥3.93 billion) and low beta (0.4) indicate financial stability and lower volatility. The absence of dividends may deter income-focused investors, but the company's debt-to-equity ratio appears manageable. Risks include Japan's stagnant consumer spending and intense competition from larger chains. However, Ten Allied's niche focus on local dining experiences could offer resilience in a market shifting toward authenticity. Investors should weigh its stable balance sheet against thin operating margins.
Ten Allied Co., Ltd. competes in Japan's fragmented restaurant industry, where scale and brand recognition are critical. The company's competitive advantage lies in its localized Tengu Name restaurants, which cater to regional tastes—a differentiator against larger, standardized chains. However, its small footprint (~120 locations) limits economies of scale compared to national players. The company's financials reflect this challenge, with razor-thin net margins (~0.25%). Ten Allied's strengths include a debt-light balance sheet (¥2.88 billion total debt vs. ¥3.93 billion cash) and a focus on owned operations rather than franchising, ensuring quality control. Yet, its lack of international presence contrasts with rivals expanding abroad. The company's beta of 0.4 suggests lower market correlation, possibly due to its niche positioning. To compete, Ten Allied must innovate its menu offerings and enhance operational efficiency, as larger rivals leverage technology and supply chain advantages.