ESG
NCD shows relatively strong commitment to ESG initiatives. In October 2021, it established the Sustainability Promotion Committee. As illustrated below, the company has successfully identified the relevant SDGs to tackle and has taken measures to do so.
Environmental: The company advocates contributing to realising carbon neutrality. Its Parking System Business contributes to the reduction of carbon dioxide emissions through the increased utilisation of bicycles as transportation. Its promotion of digital transformation also facilitates digitalisation including going paperless. NCD is also environmentally conscious and goes paperless, uses forest-certified paper and collects eco-caps. Nevertheless, there seems to be a lack of quantification of environmental impact attained.
Social: The company performs well on social issues, and has put in place a comprehensive human resources strategy and targets to work on issues including diversity and inclusion and improvement of workplace environment. It had acquired gold authorisation with their approach to health and productivity management in September 2021. Additionally, it is also highly transparent about their performance regarding diversity and inclusion, and publishes the metrics such as ‘Percentage of female employees”, “Gender wage gap” and “Percentage of male employees taking childcare leave” in an Fact Book.
Governance: The company has put in place targets to improve the gender ratio of its leaders. For instance, targeting to reach 25% female managers in 2031, from 10.5% in 2022. While there is currently no female representation on its board of directors, it targets to have at least 2 in 2031. It also utilises a directors’ skill matrix and electronic voting platform, demonstrating a rigourous leadership selection process. It also has various committees committed to ensuring the sound corporate governance of the company, such as a compliance committee and risk management committee.
In all, NCD shows dedication towards ESG initiatives.
Risks and Mitigation
As the digital landscape experiences rapid changes, NCD risks obsolescence over time if it is unable to stay ahead of the trends. Digital transformation strategies are constantly evolving and companies are hence always on the lookout for better solutions. In ERP for instance, its future is to be characterized by continuous innovation and adaptation to meet the ever-changing needs of businesses, facilitated by emerging technologies such as artificial intelligence and machine learning. The company nevertheless aims to become a total solution provider and plans for significant R&D investment of ¥600 million from 2024 to 2026.
There are also data protection risks involved, especially for its bicycle parking business solution ECOPOOL where personal information is handled. For instance, data leakage and cybersecurity attacks on the cloud. As such, the company conducts training sessions for all parking lot staff to help them fully understand the Personal Information Protection Act before engaging in work.
Another risk is damage of infrastructure due to weather or natural disasters. Japan is especially earthquake prone and there might be damages caused by an earthquake to the bicycle racks. Nevertheless, the systems have a disaster-resistant operation system that would be able to continue providing services to users, minimizing financial losses.
Conclusion
In conclusion, Nippon Computer Dynamics Co Ltd is a strong buy, having demonstrated a sustainable business model and good competitive positioning. It also performs well on ESG measures with especially good corporate governance that will be able to take the company far. Trends such as digital transformation and an increasing emphasis on health and the reduction of carbon emissions will further drive NCD forward.
References:
https://5ly.co/blog/erp-trends/
https://finance.yahoo.com/quote/4783.T?p=4783.T
https://japannews.yomiuri.co.jp/society/general-news/20221229-80671/#:~:text=In%20September%2C%20Katsushika%20Ward%20in,parking%20lots%20in%20city%20centers.
https://markets.ft.com/data/equities/tearsheet/profile?s=4783:TYO
https://medium.com/@reecebednar/cycle-parking-racks-market-insight-market-trends-growth-forecasted-from-2023-to-2030-ae8e8b74057d
https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/ctryprem.html
https://quixy.com/blog/top-digital-transformation-statistics-trends-forecasts/
https://ssl4.eir-parts.net/doc/4783/ir_material_for_fiscal_ym3/142769/00.pdf
https://straitsresearch.com/report/project-management-software-market
https://tradingeconomics.com/japan/government-bond-yield
https://www.bridge-salon.jp/upload/tekiji_pdf/T~~47830~000000~4602~0~20230530~0800~20230529585471G.pdf
https://www.chinabikerack.com/news/the-future-of-bike-parking.html
https://www.fisco.co.jp/wordpress/wp-content/uploads/FISCO/ncd20230710_e.pdf
https://www.fisco.co.jp/wordpress/wp-content/uploads/ncd20210729_e.pdf
https://www.grandviewresearch.com/industry-analysis/project-management-software-market-report
https://www.ironpaper.com/webintel/the-intensifying-competitive-landscape-in-the-it-services-sector
https://www.ironpaper.com/webintel/the-intensifying-competitive-landscape-in-the-it-services-sector
https://www.marketsandmarkets.com/Market-Reports/digital-transformation-market-43010479.html
https://www.mordorintelligence.com/industry-reports/consumer-technical-support-services-market
https://www.mordorintelligence.com/industry-reports/enterprise-resource-planning-market
https://www.ncd.co.jp/business/system/system-solution/
https://www.statista.com/statistics/779759/japan-bicycle-sales-volume/
https://www.stellarmr.com/report/Japan-Bike-Sharing-Market/227
https://www.techtarget.com/searcherp/feature/ERP-trends-for-this-year-and-beyond
https://www.veritis.com/blog/10-key-digital-transformation-trends-2024/
*Do note that all of this is for information only and should not be taken as investment advice. If you should choose to invest in any of the stocks, you do so at your own risk.
如果你想了解有哪些前沿科技的投资机会，想学习真投资大佬们的投资秘籍，想投资自己的人生，那就快来购买《大赢家》漫画吧！漫画中采访了许多职业投资人和上市企业，通过有趣的故事传达投资理念，我们相信在阅读的过程，你一定会有所收获。https://product.dangdang.com/29564921.html#ddclick_reco_reco_relate
精彩评论