Daiichi Cutter Kogyo K.K. (1716) AI Stock Analysis

• Market Cap: ¥17.35B
• Dividend Yield: 2.87%
• Average Volume (3M): 27.60K
• Price to Earnings (P/E): 8.1
• Beta (1Y): 0.39
• Revenue Growth: -1.39%
• EPS Growth: -4.43%
• Country: JP
• Employees: 629
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): N/A
• Shares Outstanding: 12,000,000
• 10 Day Avg. Volume: 29,570
• 30 Day Avg. Volume: 27,603
• PEG Ratio: -0.33
• Price to Book (P/B): 0.75
• Price to Sales (P/S): 0.71
• P/FCF Ratio: 15.08
• 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: 71 Outperform
• Price Target: ¥1,684.00 ▲(20.11% Upside)
• Action: Reiterated Date: 10/30/25
• Date: Action: Reiterated 10/30/25

Daiichi Cutter Kogyo K.K. shows strong financial stability and an attractive valuation, which are significant strengths. However, technical indicators suggest a bearish trend, and challenges in revenue growth and cash flow volatility present risks. The lack of earnings call data and corporate events limits further insights.

Positive Factors

Strong balance sheet

Conservative leverage and a healthy equity ratio provide lasting financial flexibility, lowering refinancing and insolvency risk. A solid capital structure supports continued investment in specialized equipment and ability to win large public-sector contracts without pressuring cash reserves.

Sustained operational margins

Consistently positive gross and EBITDA margins indicate durable operational efficiency in cutting and civil services. Reliable margins support reinvestment in equipment, maintain competitive pricing, and buffer the business through cyclical demand swings in infrastructure activity.

Strong operating cash generation

Robust operating cash relative to reported earnings signals real cash conversion from projects, underpinning working capital needs and equipment funding. This cash-generative profile supports steady operations and reduces reliance on external financing for recurring capital outlays.

Negative Factors

Negative revenue trend

Recent negative revenue growth points to weakening top-line momentum that may persist absent new contract wins or market expansion. For a services-based contractor, sustained revenue decline undermines fixed-cost absorption and long-term returns unless business development reverses the trend.

Volatile free cash flow

Highly variable free cash flow reduces predictability of funding for capex and dividends and complicates planning for equipment replacement. Erratic FCF increases risk during demand downturns and can force opportunistic financing that raises long-term cost of capital.

Demand tied to public/private infrastructure cycles

Heavy reliance on public works and private construction makes revenue sensitive to government budgets and construction cycles. Structural shifts or delays in infrastructure spending can materially reduce project flow and utilization of specialized crews and equipment over multiple quarters.

Daiichi Cutter Kogyo K.K. Business Overview & Revenue Model

Company Description

Dai-Ichi Cutter Kogyo k.k. engages in the construction and civil engineering activities in Japan. The company offers flat sawing, core drilling, wall and wire sawing, grooving, various dry cutting/perforating, and various metal cutting/perforating services; concrete chipping, concrete surface treatment, coating removal treatment, metal cutting, and plant equipment cleaning decontamination services; shot and vacuum blast and decontamination services; and various cleaning, polishing, mechanical cutting, peeling, and mirror floor polishing services. It also provides building maintenance services comprising drain pipe and water tank cleaning, common floor and mechanical pit cleaning, firefighting equipment inspection, pest control, sewage layer, miscellaneous drainage tank repair, and water supply equipment inspection services; and anchor construction, industrial waste collection and transportation, and intermediate treatment services. The company was founded in 1967 and is headquartered in Chigasaki, Japan.

How the Company Makes Money

Daiichi Cutter Kogyo primarily earns revenue by providing contracted field services for infrastructure and construction projects. Its core revenue stream is service fees from pavement and concrete cutting work (e.g., road surface cutting for repairs, utility installation, or reconstruction) and related civil engineering tasks that are billed per project based on scope, labor, equipment usage, and materials. Revenue is generated through (1) public-sector and quasi-public infrastructure maintenance work (e.g., road and civil works ordered by government bodies or their contractors), and (2) private-sector projects tied to building construction, redevelopment, and utility/telecom/waterworks-related works that require precise cutting and restoration. If the company sells or rents specialized equipment, materials, or other ancillary services as part of projects, those would contribute as additional project-related revenue; specific breakdowns, major named partnerships, and segment-level contribution details are null.

Daiichi Cutter Kogyo K.K. Financial Statement Overview

Summary

Daiichi Cutter Kogyo K.K. demonstrates financial stability with strong profitability and a solid balance sheet. However, challenges in revenue growth and cash flow volatility could pose risks. The company should focus on revitalizing sales growth and stabilizing cash flows to enhance financial performance further.

Income Statement

Daiichi Cutter Kogyo K.K. shows a stable gross profit margin and a decent net profit margin, although both have slightly declined over the years. The revenue growth rate has been negative recently, indicating a potential challenge in maintaining sales momentum. However, the company maintains healthy EBIT and EBITDA margins, reflecting operational efficiency.

Balance Sheet

The company maintains a strong balance sheet with a low debt-to-equity ratio, indicating conservative leverage. The return on equity is solid, suggesting effective use of shareholder funds. The equity ratio is also healthy, showing a strong capital structure with a significant portion of assets financed by equity.

Cash Flow

Cash flow analysis reveals a mixed picture. While the operating cash flow to net income ratio is strong, indicating good cash generation relative to profits, the free cash flow growth rate has been volatile. The free cash flow to net income ratio is reasonable, but the recent 'infinity' growth rate suggests erratic cash flow trends.

Breakdown	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	20.23B	20.92B	22.16B	20.95B	19.34B
Gross Profit	5.83B	6.65B	7.05B	6.67B	6.31B
EBITDA	2.50B	3.26B	3.35B	3.20B	3.39B
Net Income	1.33B	1.97B	1.95B	1.58B	1.74B
Balance Sheet
Total Assets	22.41B	21.92B	21.64B	19.48B	18.13B
Cash, Cash Equivalents and Short-Term Investments	9.93B	9.48B	9.44B	7.77B	6.64B
Total Debt	331.48M	338.38M	467.47M	285.43M	246.56M
Total Liabilities	3.05B	3.63B	4.41B	3.62B	3.81B
Stockholders Equity	19.23B	18.16B	16.62B	15.02B	13.63B
Cash Flow
Free Cash Flow	950.54M	1.23B	1.93B	1.33B	131.74M
Operating Cash Flow	1.70B	2.17B	2.74B	2.24B	1.96B
Investing Cash Flow	-2.44B	-1.65B	-561.38M	-847.24M	-1.59B
Financing Cash Flow	-515.67M	-481.83M	-506.39M	-289.41M	-69.14M

Daiichi Cutter Kogyo K.K. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1402.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1716, the sentiment is Neutral. The current price of 1402 is below the 20-day moving average (MA) of 1570.50, below the 50-day MA of 1483.12, and above the 200-day MA of 1366.74, indicating a neutral trend. The MACD of 15.66 indicates Positive momentum. The RSI at 47.79 is Neutral, neither overbought nor oversold. The STOCH value of 56.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:1716.

Daiichi Cutter Kogyo K.K. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1799	74 Outperform	¥80.84B	12.33	―	3.55%	8.02%	64.54%
1828	73 Outperform	¥28.67B	9.70	―	3.44%	-5.43%	34.48%
1716	71 Outperform	¥17.35B	8.08	―	2.87%	-1.39%	-4.43%
5918	70 Outperform	¥15.44B	6.90	―	1.39%	2.98%	11.88%
5959	69 Neutral	¥41.24B	13.42	―	3.05%	-0.26%	89.66%
1914	67 Neutral	¥15.23B	4.49	―	3.68%	5.82%	-22.14%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%