Shin Maint Holdings [TSE:6086] is one of those conservative, under the radar small cap stocks which many investors outside Japan remain blissfully unaware of. The company provides maintenance services to a broad range of corporate clients, but still has less than 300 people on its payroll, and a market cap of JPY 16.8bn.
Japanese small caps have been attracting more attention from overseas fund managers this year, partly because of the quality of some of the opportunities and also because they are still considered so cheap. The problem investors do sometimes face however are conservative management teams that run the business more as a personal fiefdom than a high growth listed enterprise. It is important to be able to distinguish between the two.
Shin Maint stock has been on a solid growth track this year: shares moved from around JPY 128 at the start of the year, to hit nearly JPY 150 at time of writing. The PE ratio is creeping up, currently at x19, which is threatening to take Shin Maint out of the Japanese small caps value bracket. The stock is also flirting with its five year high, having roared away from JPY 104 in the immediate aftermath of the pandemic.
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