| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 4467.03 | 35 |
| Intrinsic value (DCF) | 1125.27 | -66 |
| Graham-Dodd Method | 5830.02 | 77 |
| Graham Formula | 2959.01 | -10 |
Komeri Co., Ltd. is a leading Japanese home improvement retailer operating a nationwide chain of 1,214 stores as of March 2022. Headquartered in Niigata, the company specializes in hard merchandise (tools, hardware, building materials) and green merchandise (plants, gardening supplies) through its four store formats: Power, PRO, Hard and Green, and Athena. Founded in 1952, Komeri serves both DIY consumers and professional contractors, with a strong rural presence complementing urban locations. As Japan's aging housing stock drives renovation demand and gardening remains a popular leisure activity, Komeri benefits from stable sector tailwinds. The company maintains a vertically integrated supply chain and private label products to enhance margins. With ¥379 billion in annual revenue and a ¥138 billion market cap, Komeri ranks among Japan's top home improvement players, competing through localized assortments and community-focused store operations.
Komeri presents a stable defensive investment within Japan's consumer cyclical sector, offering a 1.3% dividend yield and low beta (0.001) suggesting minimal correlation to market volatility. The company generates consistent profitability (¥13.7B net income) and positive operating cash flow (¥23.1B), though capital expenditures (¥17.6B) indicate ongoing store network investments. Risks include Japan's demographic decline potentially limiting long-term growth, high debt-to-equity ratio (¥34.9B debt vs ¥16.3B cash), and intensifying competition from e-commerce and general merchandise stores. Valuation appears reasonable at 10x P/E, supported by Japan's resilient home improvement market. Investors should monitor same-store sales growth and margin trends in the face of input cost inflation.
Komeri maintains competitive advantage through its dense store network (particularly in rural areas), specialized gardening expertise, and hybrid retail model combining large-format Power stores with neighborhood Hard & Green locations. Unlike urban-focused competitors, Komeri's regional dominance provides localized inventory advantages and lower logistics costs. The company's private label products (30% of sales) deliver higher margins than national brands. However, Komeri lags in digital transformation compared to rivals like Cainz, with e-commerce representing <5% of sales. Its PRO format for contractors remains underdeveloped relative to DCM's professional focus. While store productivity (¥312M/store) trails industry leaders, Komeri's asset-light franchise model (40% of stores) provides capital efficiency. The company's main challenges include share loss to home centers with superior DIY appeal (like Joyful Honda) and pressure from general merchandisers (Aeon) expanding home categories. Strategic advantages include longstanding supplier relationships and agricultural cooperatives partnerships driving green merchandise sales.