MBS Co., Ltd. (1401) AI Stock Analysis

• Market Cap: ¥11.55B
• Dividend Yield: 0.99%
• Average Volume (3M): 34.17K
• Price to Earnings (P/E): 20.9
• Beta (1Y): 0.63
• Revenue Growth: 21.18%
• EPS Growth: 53.16%
• Country: JP
• Employees: 86
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): N/A
• Shares Outstanding: 7,732,000
• 10 Day Avg. Volume: 70,830
• 30 Day Avg. Volume: 34,173
• PEG Ratio: 0.63
• Price to Book (P/B): 1.62
• Price to Sales (P/S): 1.27
• P/FCF Ratio: 12.84
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: ¥1,631.00 ▲(14.22% Upside)
• Action: Reiterated Date: 10/18/25
• Date: Action: Reiterated 10/18/25

MBS Co., Ltd. has a solid financial foundation with strong revenue and profit growth, and minimal leverage. However, the technical indicators suggest a lack of strong market momentum, and the valuation is moderate. The absence of earnings call data and corporate events limits additional insights.

Positive Factors

Profitability and margin expansion

Sustained gross and operating margins (31.6% gross, 14.1% EBIT, 10% net) reflect durable cost control and pricing power in the engineering & construction business. These margins support internal reinvestment, buffer against cyclical revenue swings, and generate steady returns over the medium term.

Very low leverage / strong balance sheet

Extremely low debt levels materially reduce financial risk and interest burden, preserving cash flow in downturns and giving management strategic optionality. This capital structure supports resilience, easier access to financing if needed, and steady long-term operations without heavy leverage sensitivity.

Improving free cash flow and cash generation

Marked improvement in FCF and an FCF/net income ratio near parity indicate the business is converting profits to cash more reliably. Strong cash generation enables capex funding, dividend support, and strategic investments without depending on external financing, strengthening long-term financial flexibility.

Negative Factors

Conservative capital structure may limit growth

A very high equity ratio signals underuse of leverage, which reduces return-on-capital expansion potential. While low leverage lowers risk, it can also constrain faster scaling or larger project bidding where modest debt could amplify growth, potentially slowing expansion over the next several quarters.

Moderate cash conversion of earnings

OCF being roughly half of reported net income suggests some earnings are tied up in working capital or non-cash items. This gap can limit the firm's ability to self-fund growth and may necessitate careful working-capital management to sustain investment or distributions without external financing.

Modest recent revenue growth

A single-digit revenue increase (3.1%) implies slower top-line momentum relative to peers or long-term targets. Even with margin gains, modest revenue growth can limit scalability and compounding of profits, making future profitability more dependent on margin maintenance or accelerating sales execution.

MBS Co., Ltd. Business Overview & Revenue Model

Company Description

Mbs Inc provides renovation services in Japan. The company offers exterior and interior renovation services for houses and buildings. It also provides home makeup, a system that restores the aesthetic appearances, as well as protects buildings by providing resistance to various kinds of environments; skeleton disaster prevention coatings; Cannax, a system for new construction, extensions and renovations of interiors, plumbing, exteriors, etc.; and Mobapro Check, a camera-equipped mobile phone that photographs construction status of a building at each stage and sends it through e-mail to an internet server. In addition, the company undertakes construction works; develops and sells functional paints; and offers consulting services. Mbs Inc was founded in 1993 and is headquartered in Ube, Japan.

How the Company Makes Money

MBS Co., Ltd. generates revenue through multiple streams primarily focused on the sale of building materials to contractors and construction companies. The company's core revenue sources include direct sales of concrete, cement, and prefabricated components, which are utilized in residential, commercial, and industrial construction projects. Additionally, MBS Co., Ltd. establishes strategic partnerships with key players in the construction sector to enhance distribution and expand market reach, contributing to steady sales growth. The company also engages in project-based collaborations, providing tailored construction solutions that further diversify its revenue streams. Overall, MBS Co., Ltd.'s earnings are bolstered by its commitment to quality, customer service, and innovation in building materials.

MBS Co., Ltd. Financial Statement Overview

Summary

MBS Co., Ltd. shows strong financial health with consistent revenue and profit growth, minimal leverage, and improving cash flow metrics. The company is well-positioned for future growth, although its conservative balance sheet may limit aggressive expansion.

Income Statement

MBS Co., Ltd. has demonstrated strong revenue growth with a 3.1% increase in the latest year, supported by a solid gross profit margin of 31.6%. The net profit margin of 10% and EBIT margin of 14.1% indicate efficient cost management and profitability. The company has consistently improved its margins over the years, showcasing a positive trajectory in profitability.

Balance Sheet

The balance sheet is robust with a very low debt-to-equity ratio of 0.0029, indicating minimal leverage and financial risk. The return on equity of 12.8% reflects strong shareholder returns. However, the equity ratio of 75.8% suggests a conservative capital structure, which may limit growth opportunities.

Cash Flow

The cash flow statement shows a significant improvement in free cash flow, with a growth rate of 'Infinity' due to previous negative values. The operating cash flow to net income ratio of 0.49 indicates moderate cash generation relative to earnings. The free cash flow to net income ratio of 0.82 suggests healthy cash flow management, although there is room for improvement.

Breakdown	May 2025	May 2024	May 2023	May 2022	May 2021
Income Statement
Total Revenue	4.71B	4.36B	4.00B	4.03B	3.44B
Gross Profit	1.49B	1.34B	1.24B	1.20B	997.86M
EBITDA	694.96M	629.50M	507.82M	512.28M	457.09M
Net Income	472.29M	403.88M	322.67M	325.96M	287.10M
Balance Sheet
Total Assets	4.88B	4.41B	4.13B	3.84B	3.74B
Cash, Cash Equivalents and Short-Term Investments	1.94B	1.54B	1.42B	1.48B	1.40B
Total Debt	10.78M	12.86M	0.00	4.37M	7.05M
Total Liabilities	1.18B	936.00M	907.08M	858.22M	1.00B
Stockholders Equity	3.70B	3.47B	3.22B	2.98B	2.74B
Cash Flow
Free Cash Flow	467.14M	476.85M	31.81M	165.55M	-12.02M
Operating Cash Flow	567.89M	547.57M	54.04M	233.10M	-1.70M
Investing Cash Flow	-43.99M	-277.13M	-24.28M	-76.06M	227.20M
Financing Cash Flow	-233.69M	-155.82M	-90.02M	-76.73M	-85.65M

MBS Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1428.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1401, the sentiment is Neutral. The current price of 1428 is below the 20-day moving average (MA) of 1534.45, below the 50-day MA of 1470.20, and above the 200-day MA of 1313.69, indicating a neutral trend. The MACD of 8.14 indicates Positive momentum. The RSI at 48.58 is Neutral, neither overbought nor oversold. The STOCH value of 15.80 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:1401.

MBS Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1807	71 Outperform	¥12.43B	12.02	―	4.39%	2.65%	45.12%
1768	70 Outperform	¥11.92B	10.64	―	2.16%	24.11%	1644.12%
1853	68 Neutral	¥11.33B	13.42	―	4.35%	-7.40%	60.55%
1401	67 Neutral	¥11.55B	20.88	―	0.99%	21.18%	53.16%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1844	61 Neutral	¥10.45B	22.00	―	2.74%	4.36%	17.63%
1826	59 Neutral	¥15.20B	22.90	―	5.36%	-3.19%	109.84%