| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 3415.82 | 226 |
| Intrinsic value (DCF) | 762.58 | -27 |
| Graham-Dodd Method | 2995.37 | 186 |
| Graham Formula | 927.41 | -12 |
Hokkaido Electric Power Company, Incorporated (HEPCO) is a leading Japanese utility company specializing in electricity generation, transmission, and distribution across Hokkaido. Founded in 1951 and headquartered in Sapporo, HEPCO operates a diversified energy portfolio, including thermal, hydroelectric, photovoltaic, and wind power generation. Beyond its core utility operations, the company engages in telecommunications, civil engineering, environmental conservation, and energy consulting, making it a key player in Japan's renewable utilities sector. HEPCO also provides ancillary services such as fuel sales, facility management, and information processing, enhancing its revenue streams. With a strong focus on sustainability, HEPCO is actively involved in renewable energy projects, aligning with Japan's push for carbon neutrality. The company's integrated business model ensures stable cash flows while positioning it for growth in Japan's evolving energy landscape.
Hokkaido Electric Power Company presents a stable investment opportunity with its regulated utility operations ensuring predictable revenue streams. The company's diversified energy mix, including renewables, aligns with Japan's decarbonization goals, offering long-term growth potential. However, high total debt (¥1.41 trillion) and capital-intensive operations pose financial risks. The low beta (0.168) suggests resilience to market volatility, making it a defensive play. Dividend yield is modest (¥20 per share), but operating cash flow (¥176.1 billion) supports sustainability. Investors should weigh regulatory risks and Japan's energy policy shifts against HEPCO's regional monopoly and infrastructure advantages.
HEPCO holds a regional monopoly in Hokkaido, giving it a stable customer base and pricing power. Its diversified energy portfolio, including renewables, provides a competitive edge as Japan transitions to cleaner energy. However, the company faces competition from other Japanese utilities expanding into renewables, such as Tokyo Electric Power (9501.T) and Kansai Electric Power (9503.T). HEPCO's ancillary businesses (telecom, engineering) add revenue diversification but are not core differentiators. The company's high debt load (¥1.41 trillion) limits financial flexibility compared to peers with stronger balance sheets. Regulatory oversight in Japan's utility sector caps profitability but ensures steady cash flows. HEPCO's focus on Hokkaido isolates it from direct competition in other regions but also limits growth opportunities outside its service area.