Isamu Paint (TYO 4624) - A $43m Double Net Net Automotive Paint Co Trading at 12x P/E with 30 Years of Consistent Profitability

In 30 years the company only reported a single QUARTER of operating losses with the full year being firmly profitable. Share price is ¥3,515 vs NCAV+Investments of ¥8,003.

Source: Isamu Paint Youtube

*Represents 49% of the rental real estate value which is owned by Isamu Paint

The company has access to a ¥2 billion revolver which is undrawn.

Founded in 1927, Isamu Paint (TYO 4624) is a 98-year-old manufacturer specializing in automotive refinish paint. They manufacture and sell professional grade paint to auto body shops and collision repair centers with most revenue (69%) coming from automotive repair paint.

The company operates entirely in Japan with a zero-debt and a massively over capitalized balance sheet.

30+ Years of Unbroken Profitability

Isamu Paint has never reported a net loss in over 30 years. The company is so consistently profitable that in 30 years it only had a single QUARTER where it reported an operating loss, the full year being profitable.

Investment Thesis

Isamu Paint is a classic deep value opportunity. At today’s price, you receive the NCAV, investment portfolio, and rental real estate (worth ¥8,530 per share), while getting the entire 98-year-old consistently profitable operating paint business completely for free. This is also totally ignored stock with minimal discussion on Yahoo Finance Japan / X. No one is looking at this.

Why the Discount Exists

• Poor shareholder returns: Flat dividend for 20+ years and no meaningful buybacks in 10+ years.

• Low ROE (3.2%): Conservative management with excess cash earning minimal returns.

• Illiquidity: Nano-cap with low trading volume. 47% of outstanding shares are owned by the founding family, making activism impossible. A further 10% is owned by friendly entities (business partner / shareholder associations).

• Shrinking core business: Management explicitly notes shrinking business due to Collisionavoidance / ADAS and future autonomous-driving tech reducing accident repair volumes. Less accidents = less business for Isamu.

Why the Discount is Excessive

• Double-net-net: Stock could DOUBLE and still be free. Even at ¥7,000, you’d still pay less than the value of liquid assets (current assets + investments). This excludes the rental real estate and you pay nothing for the paint business that generates ¥500M+ annually.

• Hidden rental real estate value: ¥1.25 billion unrealized gain on rental properties (FMV 2.6x book) not reflected in P/B. Isamu Paint owns 49% of the real estate subsidiary, so we only get to add back ¥625 million. We are ignoring the value of other operating real estate assets (factories/office).

• Proven survivor: 98 years of continuous operation, 30+ years without a loss through oil crises, bubbles, and pandemics. Koyfin has data as far back as 1995. Company began trading in 1984. I have not checked data between 1984-1994, but 30+ years of consistent profits is impressive as-is!

• Stable cash generation: ¥393M operating cash flow in H1 FY26 alone; Positive Free cash flow for 20+ years.

Key Risks:

Unfortunately there is no obvious catalyst to unlock value. Isamu Paint is certainly cheap, but may remain cheap for a long time. Things are changing in Japan though. The Tokyo Stock Exchange reforms aimed at improving governance has led to a record number of take privates and shareholder payouts this year.

While those reforms have yet to lead to any changes at Isamu Paint, I suspect the most likely outcome for Isamu Paint is an eventuable management buyout (MBO). In the meantime we collect our paltry 1.4% dividend.

Conclusion:

At ¥3,515, the market values NCAV + Investments + Rental Real Estate at 41 cents on the dollar and gives you the entire 98-year-old operating paint business for free. This is a double net-net. The stock could double and you’d still be paying less than the value of NCAV + Investments.

Management is ultra conservative. Despite zero debt, they park most their excess cash in corporate bonds (~80%) instead of stocks (20%). There’s a tiny (less than 2%) fair value impairment on the bonds. These aren’t long duration JGBs, so rising rates won’t hurt them. In fact, it’ll help as their bonds will earn more when rolled over.

Book value per share would be growing much quicker if the huge pile of investments were equities, but oh well. I bought an initial tracking position in Isamu earlier in the year and made it a basket sized position recently.

Disclosure: I own shares in Isamu Paint (TYO 4624). The security could be sold at any point in time without prior notice. This is a small position as part of a broader basket of cheap Japanese companies so I haven’t dug too deep into this name. If I missed anything important, feel free to share in the comments. None of this is investment advice. Everything in this post is my own opinion and I could be wrong. Do your own due diligence.

Appendix:

Asset breakdown (Per Share):

Data as of Q2 FY2026 (September 30, 2025). Liabilities are mostly trade payables, accrued taxes, and retirement liabilities

“Investments & Other Assets” are made up almost entirely of investment securities (¥7.2 billion), long term deposits (¥1.9 billion), insurance reserves (¥0.4 billion), and deferred tax assets (¥0.1 billion). Investment securities are primarily corporate bonds held to maturity with a small amount of equity securities (~¥1 billion). There’s a small fair value impairment of ¥0.1 billion in the ¥6.4 billion corporate bond portfolio.

Major Shareholders:

Nice to see Hikari Tsushin on the roster (Optical Communications). It’s a TINY position though, so largely meaningless.

Interview with the president of Isamu Paint (10 years old, but gives you an insight into the company). Youtube has auto transcribe / translation for subtitles. Thanks to @Japan_cap for sharing this video with me.

The company showed off some of their products at a Painting Equipment Exhibition last month. The youtube channel shows off some of their products.