Stock Analysis & Valuation NARUMIYA INTERNATIONAL Co., Ltd. (9275.T)

• Previous Close: ¥1,680.00
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, ¥	Upside, %
Artificial intelligence (AI)	3150.12	88
Intrinsic value (DCF)	553.05	-67
Graham-Dodd Method	599.98	-64
Graham Formula	1764.41	5

Strategic Investment Analysis

Company Overview

NARUMIYA INTERNATIONAL Co., Ltd. (9275.T) is a leading Japanese apparel manufacturer and retailer specializing in clothing for newborns, kids, juniors, women, and men. Headquartered in Tokyo, the company operates under multiple brands and manages an extensive retail network of 658 stores across Japan, complemented by a robust e-commerce platform. NARUMIYA INTERNATIONAL also provides logistics, packaging, and photography services, enhancing its integrated supply chain and customer experience. As a subsidiary of World Co., Ltd., it benefits from strong corporate backing while maintaining agility in the competitive consumer cyclical sector. The company’s diversified product portfolio and omnichannel presence position it well in Japan’s apparel market, catering to a broad demographic with quality fashion offerings. With a market capitalization of approximately ¥12.4 billion, NARUMIYA INTERNATIONAL continues to leverage its operational efficiency and brand equity to drive growth in a challenging retail environment.

Investment Summary

NARUMIYA INTERNATIONAL presents a mixed investment profile. On the positive side, the company operates in a stable niche within Japan’s apparel market, supported by a diversified brand portfolio and omnichannel distribution. Its negative beta (-0.222) suggests low correlation with broader market movements, potentially offering defensive characteristics. However, the company faces risks from Japan’s aging population and stagnant consumer spending, which could pressure long-term growth. Financial metrics show modest profitability (net income of ¥1.4 billion on ¥39.2 billion revenue) and solid cash flow generation (¥1.3 billion operating cash flow), but high capital expenditures (¥1.05 billion) and moderate debt (¥2.27 billion) could limit flexibility. The dividend yield (~1.3% based on a ¥53 per share payout) is conservative. Investors should weigh its stable operations against sector headwinds and limited international exposure.

Competitive Analysis

NARUMIYA INTERNATIONAL’s competitive advantage lies in its vertically integrated model, combining manufacturing, retail, and logistics under one umbrella. This allows for cost control and faster inventory turnover, critical in the fast-fashion segment. The company’s focus on children’s and family apparel differentiates it from generalist competitors, catering to a loyal customer base. However, its reliance on the domestic market (100% of revenue) exposes it to Japan’s demographic challenges, unlike global peers with diversified geographic footprints. While its subsidiary status under World Co., Ltd. provides stability, it may limit aggressive expansion. The company’s store footprint (658 locations) is a strength but also a liability in an increasingly digital retail landscape. Competitively, it lacks the scale of fast-fashion giants like Uniqlo but outperforms smaller local players in brand recognition and supply chain efficiency. Its photography and logistics services add ancillary revenue streams but are not significant differentiators. To sustain growth, NARUMIYA INTERNATIONAL must enhance its digital capabilities and explore niche international markets.

Major Competitors

• Fast Retailing Co., Ltd. (9983.T): Fast Retailing, the parent company of Uniqlo, dominates Japan’s apparel sector with global scale (¥2.3 trillion market cap) and a strong international presence. Its strengths include economies of scale, innovative fabric technologies, and a vertically integrated supply chain. However, its mass-market focus contrasts with NARUMIYA’s family-oriented niche. Fast Retailing’s higher growth potential comes with greater exposure to global economic volatility.
• G.U. Co., Ltd. (2681.T): A subsidiary of Fast Retailing, G.U. competes directly in the affordable fashion segment. Its strengths lie in pricing power and shared parent resources, but it lacks NARUMIYA’s specialization in children’s apparel. G.U.’s younger demographic targeting may limit overlap with NARUMIYA’s family customer base.
• Aoyama Trading Co., Ltd. (8219.T): Aoyama Trading focuses on business attire and menswear, differing from NARUMIYA’s family-centric model. Its strengths include a strong corporate client base and high-margin tailoring services. However, it faces declining demand due to Japan’s casualization trend, a risk less relevant to NARUMIYA’s casual and children’s segments.
• Nitori Holdings Co., Ltd. (9843.T): Primarily a furniture retailer, Nitori has expanded into home apparel, posing indirect competition. Its strengths are brand trust and cross-selling opportunities, but apparel remains a minor segment. NARUMIYA’s deeper fashion expertise gives it an edge in clothing-specific markets.