Fundamental Analyses, Contrarian Cashflows

Contrarian Cashflows

Fundamental Analyses

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Equity Bottom-Up

<ul><li>Toumei is a Yokkaichi-founded (1997) reseller of NTT’s fiber broadband and JEPX-sourced wholesale electricity to Japanese SMEs, sold almost entirely through outbound telemarketing to a customer database of 130,000+ small businesses built since 2015, plus a smaller IT-hardware and insurance-agency segment.</li><li>Net income compounded roughly 8.8x between FY2021 and FY2025 and ROE rose from 5.8% to 27.9%, but the stock has already re-rated about 43% above the level that made it look statistically cheap on a screen</li><li>On an equity basis it now trades at an ordinary ~9.7x P/E once the ¥6.36bn of net cash inflating the headline TEV multiple is backed out.</li></ul>

Toumei is a Yokkaichi-founded (1997) reseller of NTT’s fiber broadband and JEPX-sourced wholesale electricity to Japanese SMEs, sold almost entirely through outbound telemarketing to a customer database of 130,000+ small businesses built since 2015, plus a smaller IT-hardware and insurance-agency segment.Net income compounded roughly 8.8x between FY2021 and FY2025 and ROE rose from 5.8% to 27.9%, but the stock has already re-rated about 43% above the level that made it look statistically cheap on a screenOn an equity basis it now trades at an ordinary ~9.7x P/E once the ¥6.36bn of net cash inflating the headline TEV multiple is backed out.

Smartkarma AI Primers, Smartkarma

αSK Primers

Smartkarma AI Primers

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

<ul>
 <li>Toumei is a rapidly growing provider of essential office services, primarily targeting the underserved Small and Medium-sized Enterprise (SME) segment in Japan with a bundled offering of fiber optic internet, electricity, and IT solutions.</li>
 <li>The company's core growth driver is the 'Office Denki 119' (electricity) segment, which has demonstrated strong, double-digit revenue and profit growth. This is complemented by a resilient, though slower-growing, 'Office Solutions' business, which is benefiting from increased demand for cybersecurity products.</li>
 <li>While the company exhibits an impressive growth track record with a 3-year net income CAGR exceeding 100%, it faces significant risks from intense competition in Japan's liberalized utility and telecom markets, evidenced by a high customer churn rate and reliance on a sales agent network.</li>
</ul>This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.


  Toumei is a rapidly growing provider of essential office services, primarily targeting the underserved Small and Medium-sized Enterprise (SME) segment in Japan with a bundled offering of fiber optic internet, electricity, and IT solutions.
  The company's core growth driver is the 'Office Denki 119' (electricity) segment, which has demonstrated strong, double-digit revenue and profit growth. This is complemented by a resilient, though slower-growing, 'Office Solutions' business, which is benefiting from increased demand for cybersecurity products.
  While the company exhibits an impressive growth track record with a 3-year net income CAGR exceeding 100%, it faces significant risks from intense competition in Japan's liberalized utility and telecom markets, evidenced by a high customer churn rate and reliance on a sales agent network.
This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

Research Coverage of Japanese Listed Companies, Shared Research Inc

Shared Research

Research Coverage of Japanese Listed Companies

Shared Research Inc

Pioneering research coverage of Japanese listed companies. Now customizable and interactive for global institutional investors. Corporate access reimagined.

<ul><li>Toumei's Q3 FY08/26 revenue rose 7.4% YoY to JPY22.7bn, with record highs in revenue and profit items.</li><li>Office Denki 119 revenue increased 16.3% YoY, segment profit rose 19.1% YoY, with 69,477 in-force contracts.</li><li>Office Solutions revenue declined 17.9% YoY, while segment profit increased 14.1% YoY, driven by cybersecurity product demand.</li></ul>

Toumei's Q3 FY08/26 revenue rose 7.4% YoY to JPY22.7bn, with record highs in revenue and profit items.Office Denki 119 revenue increased 16.3% YoY, segment profit rose 19.1% YoY, with 69,477 in-force contracts.Office Solutions revenue declined 17.9% YoY, while segment profit increased 14.1% YoY, driven by cybersecurity product demand.

Toumei   (4439 JP): Q3 FY08/26 flash update 

Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

The Tokyo Stock Exchange (TSE) calculates Free-Float Weight (FFW) for each listed company and uses this value as a key component of TOPIX Index Calculation. For companies with "low liquidity" the FFW will be multiplied by a fixed liquidity factor of 0.75 to derive the final FFW used for index calculation. This affects both TSE-1 incumbents and new entrants (depending on the date of entry). Every April, the application of this liquidity factor is reviewed by the TSE for all TSE1 constituents. Last April, 71 constituents saw their liquidity factors removed causing an increase in their respective FFWs used for index calculation resulting in a TOPIX upweight.This situation opens up interesting opportunities for a basket trade. Below is a discussion regarding the key details of TSE's FFW Calculation Methodology and the candidate stocks which could potentially experience a change in the application of the liquidity factor (including some surprisingly big names).

The Tokyo Stock Exchange (TSE) calculates Free-Float Weight (FFW) for each listed company and uses this value as a key component of TOPIX Index Calculation. For companies with "low liquidity" the FFW will be multiplied by a fixed liquidity factor of 0.75 to derive the final FFW used for index calculation. This affects both TSE-1 incumbents and new entrants (depending on the date of entry). Every April, the application of this liquidity factor is reviewed by the TSE for all TSE1 constituents. Last April, 71 constituents saw their liquidity factors removed causing an increase in their respective FFWs used for index calculation resulting in a TOPIX upweight.This situation opens up interesting opportunities for a basket trade. Below is a discussion regarding the key details of TSE's FFW Calculation Methodology and the candidate stocks which could potentially experience a change in the application of the liquidity factor (including some surprisingly big names).   

TOPIX Index Upweights: The Big April Basket 2021

<ul><li>Toumei's 1H FY08/26 revenue was JPY14.9bn (+2.8% YoY), with operating profit at JPY1.7bn (-4.9% YoY).</li><li>Office Denki 119 segment revenue increased 6.7% YoY, with a 6.4% YoY rise in segment profit, supported by contract growth.</li><li>Office Solutions segment revenue declined 22.0% YoY, with segment profit decreasing 23.3% YoY, despite strong demand for security products.</li></ul>

Toumei's 1H FY08/26 revenue was JPY14.9bn (+2.8% YoY), with operating profit at JPY1.7bn (-4.9% YoY).Office Denki 119 segment revenue increased 6.7% YoY, with a 6.4% YoY rise in segment profit, supported by contract growth.Office Solutions segment revenue declined 22.0% YoY, with segment profit decreasing 23.3% YoY, despite strong demand for security products.

Toumei   (4439 JP): 1H FY08/26 flash update 

Japan

Toumei Co., Ltd. offers optical line services. The Company provides optical line internet connection, optical line internet supporting, and other services. Toumei also operates electric power sales agency, information terminal equipment sales, financial planning, and other services. Toumei serves customers in Japan.

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Toumei (4439 JP)

Monday Delight: 31/08/2026

Toumei is a Yokkaichi-founded (1997) reseller of NTT’s fiber broadband and JEPX-sourced wholesale electricity to Japanese SMEs, sold almost...

Contrarian Cashflows

Primer: Toumei (4439 JP) - Aug 2026

Toumei is a rapidly growing provider of essential office services, primarily targeting the underserved Small and Medium-sized Enterprise (SME)...

αSK Primers

Toumei (4439 JP): Q3 FY08/26 flash update

Toumei's Q3 FY08/26 revenue rose 7.4% YoY to JPY22.7bn, with record highs in revenue and profit items. Office Denki 119 revenue increased 16.3%...

Shared Research

TOPIX Index Upweights: The Big April Basket 2021

TOPIX does an annual exercise to adjust Liquidity Factor. The time for trades around that is upon us. This insight looks at the best trade around...

Janaghan Jeyakumar, CFA

Toumei (4439 JP): 1H FY08/26 flash update

Toumei's 1H FY08/26 revenue was JPY14.9bn (+2.8% YoY), with operating profit at JPY1.7bn (-4.9% YoY). Office Denki 119 segment revenue increased...

Shared Research

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