Acquiring electricity as new-power operators collapse under soaring procurement costs (2022)

In a crisis, retreat or pick up

The core of this decision is that, in a scene where the whole industry was taking losses and pulling out, Hikari Tsushin turned instead to the side that acquires the very same electricity business. The collapse of the new-power operators drove home that even if you gather customers by selling power, the business cannot stand unless it can absorb swings in procurement prices. Many companies pulled out of electricity here. Hikari Tsushin did the reverse, taking on — customers and all — a business whose value had wasted away in the crisis, and absorbing the market others had vacated. This move to pick up cheaply released assets is connected, at the root, to the thinking of “net investment,” which holds undervalued excellent shares for the long term at a disciplined yield.

That said, a decision to pick up in a crisis can also become a burden if the crisis continues where you picked up. Had the surge in wholesale prices dragged on further, the electricity business it absorbed could have turned straight into a source of losses. Hikari Tsushin could hold onto power without letting go because it had the financial strength to withstand procurement risk and the multi-product stance to keep overall profitability with goods other than electricity. Only a company with a structure in which other lines support the weakness of one can stand on the side that picks up, rather than retreats, in a crisis market. The power crisis tested Hikari Tsushin on both the strength and the danger of that structure.