K&O Energy Group, Inc. (1663) AI Stock Analysis

• Market Cap: ¥132.64B
• Dividend Yield: 1.22%
• Average Volume (3M): 101.94K
• Price to Earnings (P/E): 16.9
• Beta (1Y): 1.05
• Revenue Growth: -3.37%
• EPS Growth: 19.40%
• Country: JP
• Employees: 663
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Gas
• EPS (TTM): 56.76
• Shares Outstanding: 28,336,061
• 10 Day Avg. Volume: 148,960
• 30 Day Avg. Volume: 101,936
• PEG Ratio: 0.34
• Price to Book (P/B): 0.97
• Price to Sales (P/S): 1.12
• P/FCF Ratio: 13.22
• 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): 176.3
• Revenue Forecast (FY): ¥94.00B

• Rating: 81 Outperform
• Price Target: ¥5,613.00 ▲(46.94% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by strong financial performance (notably the very low leverage and improved profitability) and a strong technical uptrend with positive momentum. These positives are tempered by the material revenue volatility (including the sharp 2025 decline) and only moderate shareholder yield despite a reasonable P/E.

Positive Factors

Conservative Balance Sheet

Very low leverage and steadily growing equity provide durable financial flexibility across commodity cycles. This structural strength supports capital allocation choices (capex, repairs, contracts) and reduces refinancing risk, improving resilience through multi-quarter downturns.

Improving Profitability and Margins

Sustained improvement in operating and net margins indicates better cost control, higher operational efficiency, or improved tariff mix. Higher structural margins increase cash generation potential per barrel/unit and support longer-term reinvestment and returns even if top-line growth is intermittent.

Positive Free Cash Flow

Consistent positive free cash flow and operating cash covering net income show underlying cash-generative operations. This persistent FCF capability underpins sustainable funding for maintenance capex, midstream contracts, and disciplined shareholder returns without relying on new debt issuance.

Negative Factors

Severe Revenue Volatility

An 83.5% reported revenue collapse in 2025 reveals material top-line cyclicality or one-off impairments. Persistent revenue volatility undermines planning, makes margin sustainability uncertain, and increases execution risk for long-cycle investments and contractual commitments over the next several quarters.

Moderate and Variable FCF Conversion

While FCF is positive, only a moderate share of earnings converts to free cash and conversion has swung materially. Structural variability in conversion weakens the predictability of funds available for growth, distributions, or debt reduction during weaker revenue periods.

Modest Capital Efficiency

Mid-single-digit ROE despite equity growth signals only moderate returns on invested capital. With low leverage cushioning risk, the trade-off is slower shareholder value creation; sustained modest ROE may limit long-term total return potential absent higher capital efficiency or stronger top-line recovery.

K&O Energy Group, Inc. Business Overview & Revenue Model

Company Description

K&O Energy Group Inc. engages in the development, production, supply, and sale of natural gas in Japan and internationally. The company is also involved in the manufacture and sale of iodine; and sale of city gas and LP gas. In addition, it undertakes construction, civil engineering, and piping works; sells gas equipment; and offers geothermal wells drilling, geology, and water quality research services. The company was founded in 2014 and is headquartered in Mobara, Japan.

How the Company Makes Money

K&O Energy Group, Inc. generates revenue primarily through the sale of crude oil and natural gas produced from its exploration and production operations. The company earns significant income from its midstream activities, which include the transportation and storage of oil and gas, often through long-term contracts with other energy producers. Additionally, K&O may benefit from strategic partnerships with other energy firms and joint ventures that enhance its operational capabilities and market reach. Fluctuations in global energy prices, regulatory changes, and advancements in extraction technologies also impact the company’s financial performance.

K&O Energy Group, Inc. Financial Statement Overview

Summary

Strong financial strength overall: very conservative balance sheet with minimal leverage and steadily growing equity, improving profitability with higher net and EBIT margins, and generally supportive operating/free cash flow. The key risk is revenue volatility, including a very steep reported decline in 2025, which could challenge the durability of recent margin gains.

Income Statement

Profitability has improved meaningfully over time, with net margin rising from ~4–5% (2020–2022) to ~9.2% (2025) and operating profitability also stepping up (2025 EBIT margin ~11.6%). However, the top line has been inconsistent and recently weak: revenue declined in 2023–2025, including a sharp drop in 2025 (reported growth rate -83.5%), which raises questions around demand/pricing normalization and the durability of earnings if volumes or tariffs soften.

Balance Sheet

The balance sheet is very conservative: debt is low relative to equity (debt-to-equity ~0.8–1.4% across the period) and equity has steadily grown, supporting financial flexibility and resilience. Return on equity has been moderate (roughly mid-single digits in recent years where provided), suggesting solid but not exceptional capital efficiency for the sector.

Cash Flow

Cash generation is solid, with operating cash flow covering net income in recent years (about 1.0x in 2024 and 1.29x in 2025). Free cash flow is consistently positive, but conversion is only moderate (free cash flow running at ~39–57% of net income from 2022–2025) and free cash flow growth has been volatile (strong rebound in 2024 following a weak 2023).

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	92.12B	91.35B	92.42B	96.30B	106.20B	66.07B
Gross Profit	20.90B	21.79B	20.16B	19.85B	17.03B	13.46B
EBITDA	17.54B	16.89B	14.62B	15.89B	13.19B	9.65B
Net Income	7.96B	8.38B	6.17B	6.46B	4.77B	2.85B
Balance Sheet
Total Assets	122.26B	127.77B	119.45B	111.44B	109.82B	99.10B
Cash, Cash Equivalents and Short-Term Investments	36.80B	38.90B	34.05B	28.68B	24.57B	23.59B
Total Debt	1.89B	877.00M	913.00M	926.00M	953.00M	1.00B
Total Liabilities	17.68B	18.88B	20.04B	18.52B	23.44B	16.98B
Stockholders Equity	101.42B	105.44B	96.45B	90.36B	84.28B	78.61B
Cash Flow
Free Cash Flow	0.00	7.71B	7.96B	4.67B	6.21B	1.23B
Operating Cash Flow	0.00	15.91B	13.84B	11.83B	12.17B	6.44B
Investing Cash Flow	0.00	-13.26B	-6.03B	-8.98B	-9.67B	-7.07B
Financing Cash Flow	0.00	-1.62B	-1.49B	-1.26B	-1.87B	-961.00M

K&O Energy Group, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3820.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1663, the sentiment is Positive. The current price of 3820 is below the 20-day moving average (MA) of 4896.50, below the 50-day MA of 4346.19, and above the 200-day MA of 3447.38, indicating a bullish trend. The MACD of 290.48 indicates Negative momentum. The RSI at 73.51 is Negative, neither overbought nor oversold. The STOCH value of 80.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1663.

K&O Energy Group, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1663	81 Outperform	¥132.64B	16.94	―	1.22%	-3.37%	19.40%
9536	76 Outperform	¥97.19B	9.60	9.07%	3.61%	9.39%	77.24%
9543	75 Outperform	¥113.23B	11.41	8.29%	3.89%	1.08%	37.11%
9534	74 Outperform	¥80.24B	6.47	―	2.88%	2.77%	10.64%
9533	73 Outperform	¥538.32B	19.60	6.03%	1.81%	7.08%	43.50%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
9539	62 Neutral	¥45.27B	13.92	―	1.81%	0.93%	1212.45%

K&O Energy Group, Inc. Corporate Events

K&O Energy Group Raises Dividend Forecast on Strong FY2025 Results

K&O Energy Group has revised its dividend forecast for the fiscal year ended December 31, 2025, reflecting its policy of stable and progressively increasing shareholder returns under its MTP 2027 plan. The board has approved raising the planned year-end dividend by ¥4 per share to ¥30, lifting the total annual dividend to ¥54, compared with ¥42 in the previous fiscal year.

The decision takes into account the company’s latest financial results and its target of achieving a 1.5% dividend on equity ratio by the final year of the medium-term plan. The higher payout underscores management’s confidence in cash generation and signals a stronger commitment to shareholder returns, with the proposed year-end dividend to be put to a shareholder vote at the upcoming annual general meeting in late March 2026.

The most recent analyst rating on (JP:1663) stock is a Hold with a Yen4692.00 price target. To see the full list of analyst forecasts on K&O Energy Group, Inc. stock, see the JP:1663 Stock Forecast page.

K & O Energy Group Lifts Profit and Dividend Despite Modest Revenue Decline

K & O Energy Group posted fiscal 2025 consolidated net sales of ¥91.35 billion, down 1.2% year on year, but boosted operating profit 20.1% to ¥10.59 billion and lifted profit attributable to owners of the parent 35.9% to ¥8.38 billion, reflecting improved margins and higher profitability. Total assets rose to ¥127.77 billion, net assets climbed to ¥108.89 billion with an equity ratio of 82.4%, and cash and cash equivalents increased to ¥29.86 billion, underscoring a solid balance sheet.

The company raised its annual dividend for 2025 to ¥54 per share, including an upgraded year-end dividend of ¥30, and is guiding a further increase to ¥60 per share in 2026 despite forecasting lower sales and profit for the year. The 2026 outlook calls for full-year net sales of ¥87.0 billion and profit attributable to owners of the parent of ¥6.3 billion, signaling expectations of a earnings pullback but continued commitment to shareholder returns.

The most recent analyst rating on (JP:1663) stock is a Hold with a Yen4692.00 price target. To see the full list of analyst forecasts on K&O Energy Group, Inc. stock, see the JP:1663 Stock Forecast page.