| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 877.04 | 138 |
| Intrinsic value (DCF) | 175.68 | -52 |
| Graham-Dodd Method | 938.77 | 155 |
| Graham Formula | 223.60 | -39 |
HIROSHIMA GAS Co., Ltd. is a leading Japanese energy company specializing in gas production, supply, and distribution, headquartered in Hiroshima. Operating across three core segments—Gas Business, LPG Business, and Others—the company provides essential energy solutions, including gas and LPG sales, equipment installation, and safety services. Founded in 1909, HIROSHIMA GAS has evolved from its origins as Hiroshima Gas Electric Railway Co., Ltd. into a key regional energy provider. The company serves residential, commercial, and industrial customers, ensuring reliable energy access while expanding into engineering, senior services, and digital infrastructure. With a market capitalization of approximately ¥23.7 billion, HIROSHIMA GAS plays a vital role in Japan's energy sector, emphasizing sustainability and regional development. Its diversified operations and long-standing presence in Hiroshima position it as a stable player in Japan's integrated oil and gas industry.
HIROSHIMA GAS presents a stable investment opportunity with its regional monopoly-like position in Hiroshima's gas market, supported by consistent revenue (¥90.7 billion in FY2024) and net income (¥2.3 billion). The company’s low beta (0.042) indicates resilience to market volatility, appealing to risk-averse investors. However, its growth prospects are limited by Japan’s stagnant population and energy demand, while high debt (¥47.6 billion) and significant capex (¥9.7 billion) pressure cash flows. The dividend yield (~1.5% at current share price) is modest but sustainable. Investors should weigh its defensive attributes against limited upside potential.
HIROSHIMA GAS’s competitive advantage lies in its entrenched regional presence and vertically integrated operations, from gas production to end-user services. As a localized provider, it benefits from infrastructure moats and customer loyalty, reducing churn. However, its scale is dwarfed by national giants like Tokyo Gas, limiting cost advantages in procurement and R&D. The company’s focus on safety and ancillary services (e.g., senior care) differentiates it but doesn’t offset exposure to Japan’s declining gas demand. Competitors with renewable energy investments (e.g., Osaka Gas) are better positioned for energy transition. HIROSHIMA GAS’s LPG segment faces stiff competition from cheaper alternatives like electricity, though its engineering division provides diversification. Regulatory support for gas as a transition fuel offers short-term stability, but long-term competitiveness hinges on pivoting to hydrogen or biogas.