| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 6811.03 | 480 |
| Intrinsic value (DCF) | 1494.09 | 27 |
| Graham-Dodd Method | 8766.17 | 646 |
| Graham Formula | 391.07 | -67 |
Keiyo Gas Co., Ltd. (9539.T) is a leading Japanese gas utility company specializing in the production, supply, and sale of gas in the northwest region of Chiba Prefecture. Established in 1926 and headquartered in Ichikawa, Japan, the company serves residential, commercial, industrial, and other customers with reliable gas distribution services. Beyond gas supply, Keiyo Gas also engages in the sale of gas equipment and provides gas fitting services, ensuring comprehensive energy solutions for its clientele. Operating in the regulated gas sector, the company benefits from stable demand and government-backed pricing structures, making it a resilient player in Japan's utilities industry. With a market capitalization of approximately ¥40.9 billion, Keiyo Gas maintains a strong regional presence, supported by consistent revenue streams and a commitment to infrastructure investment. Its low beta of 0.21 reflects its defensive positioning, appealing to investors seeking stability in volatile markets.
Keiyo Gas presents a conservative investment opportunity with steady cash flows and a low-risk profile, typical of regulated utilities. The company's revenue of ¥115.6 billion and net income of ¥1.6 billion in the latest fiscal year underscore its operational stability. However, its modest EPS of ¥151.43 and dividend yield (implied by a ¥20 dividend per share) may limit growth-oriented returns. The negative capital expenditures (-¥16.2 billion) indicate ongoing infrastructure investments, which could pressure short-term liquidity but enhance long-term reliability. With ¥20.1 billion in cash and ¥24.6 billion in total debt, Keiyo Gas maintains a manageable leverage ratio. Investors should weigh its defensive attributes against limited upside potential, given Japan's mature gas market and demographic challenges.
Keiyo Gas operates in a highly regulated and regionalized market, where its competitive advantage stems from its entrenched position in northwest Chiba Prefecture. As a local monopoly, the company benefits from predictable demand and government-mandated returns on infrastructure investments. However, its growth is constrained by geographic limitations and Japan's stagnant population. Unlike diversified global utilities, Keiyo Gas lacks exposure to renewable energy transitions, which could pose long-term risks as Japan shifts toward decarbonization. Its competitive positioning relies on operational efficiency and customer retention rather than innovation or expansion. The company's low beta indicates minimal correlation with broader market volatility, appealing to risk-averse investors. Nevertheless, its reliance on traditional gas distribution leaves it vulnerable to regulatory changes or energy policy shifts favoring alternatives like LNG or hydrogen. Keiyo Gas's regional focus differentiates it from larger national players but also caps its scalability.