The Yokohama Rubber Company, Limited (5101.T) fair value

ACCE thesis

Yokohama Rubber makes tyres under the ADVAN performance brand and the GEOLANDAR and BluEarth lines, and it supplies rubber products such as conveyor belts and aerospace components. Its moat rests on a high-performance tyre franchise with strong pricing power, reflected in a 38.3% gross margin and a 24.9% operating margin, which are unusually high for a tyre maker. Revenue growth of 10.4% and a forward P/E of 12.6 against a trailing 7.5 suggest earnings expected to fall back toward a more normal level, so the multiple may be flattered by a strong recent year rather than cheap on a run-rate basis. The useful question for a deeper look is whether the margin structure holds through the replacement cycle and raw material swings, given the gap between trailing and forward earnings. With a 14.3% ROE and no index membership, the name sits outside most passive flows, which is worth checking against the liquidity and coverage picture.