Relatively High LeverageAlthough the equity ratio is solid, the balance sheet still carries relatively high leverage. Elevated debt levels reduce financial flexibility, raise refinancing and interest-rate sensitivity, and can constrain capital allocation during downturns or large infrastructure spending cycles.
Moderate FCF ConversionDespite improved free cash flow, conversion of reported income into free cash remains only moderate. This limits the pace at which the company can deleverage, accelerate property investments, or expand dividends without relying on operational improvements or external financing.
Concentration On Ridership-Sensitive RevenuesA large portion of revenue is tied to Tokaido Shinkansen fares and ridership patterns. This concentration exposes earnings to structural or cyclical shifts in travel demand, business travel and tourism trends, making top-line resilience sensitive to changes in mobility behavior or macroeconomic shocks.