MIKIKOGYO CO., LTD. (1718) AI Stock Analysis

• Market Cap: ¥8.00B
• Dividend Yield: 2.87%
• Average Volume (3M): 3.31K
• Price to Earnings (P/E): 7.6
• Beta (1Y): 0.57
• Revenue Growth: 19.10%
• EPS Growth: 78.61%
• Country: JP
• Employees: 571
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 281.73
• Shares Outstanding: 1,153,263
• 10 Day Avg. Volume: 2,920
• 30 Day Avg. Volume: 3,306
• PEG Ratio: 0.04
• Price to Book (P/B): 0.55
• Price to Sales (P/S): 0.26
• P/FCF Ratio: -3.52
• 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: 58 Neutral
• Price Target: ¥7,613.00 ▼(-11.68% Downside)
• Action: Reiterated Date: 03/24/26
• Date: Action: Reiterated 03/24/26

The score is driven primarily by mixed fundamentals: improved 2025 profitability is offset by negative/volatile operating and free cash flow and rising leverage. Technicals add pressure with a bearish trend and weak momentum. Valuation is the main support, with a low P/E and high dividend yield.

Positive Factors

Profitability rebound

A material profitability rebound and improved margins/ROE in 2025 indicate better project execution and pricing power. Sustained higher margins support reinvestment capacity and resilience to cost swings, improving long-term earnings quality if execution holds.

Top-line growth

Strong recent revenue growth suggests expanding demand or successful contract wins. Durable top-line expansion helps absorb fixed costs, supports scale benefits, and provides a platform for steady margin improvement if the company sustains win rates and backlog conversion.

Strengthening capital base

A steadily increasing equity base provides financial cushion and capital access for projects or inorganic moves. Improved equity supports solvency metrics and long-term financing flexibility, helping the firm withstand cyclical construction cash swings if leverage is managed.

Negative Factors

Negative/volatile cash flow

Repeated negative and volatile operating and free cash flows reduce confidence that reported earnings convert to cash. This undermines self-funding for capex, dividends, and debt service, increasing refinancing and liquidity risk over the medium term if volatility persists.

Rising leverage

An increase in debt relative to equity raises interest and covenant exposure, reducing financial flexibility. With higher leverage, the company faces greater strain during downturns or cash shortfalls, especially given inconsistent cash generation and cyclical revenue patterns.

Revenue and margin volatility

Historical swings in revenue and only modest industry-level margins make future earnings unpredictable. Cyclical project timing and variable margin recovery limit visibility for sustainable profitability, increasing execution and forecasting risk over the next several quarters.

MIKIKOGYO CO., LTD. Business Overview & Revenue Model

Company Description

Mikikogyo Co., Ltd. engages in construction business in Japan. The company undertakes construction works for public facilities, medical facilities, welfare facilities for the elderly, commercial facilities, condominiums, office buildings, and nursery schools; renewal works for existing structures, such as buildings, condominiums, and commercial facilities; civil engineering works, including construction of sewage mains, road, pavement, rivers and parks, residential land, etc.; pipeline construction works; facility construction works; and paving, plumbing, water supply, drainage, sanitary air conditioning equipment, and clean energy related technology construction works. It also engages in the construction and management of solar power generation facilities; sales and construction of housing equipment; rental and management of real estate properties; and non-life insurance agency business, as well as solar power generation business. In addition, the company engages in the builds and sells detached houses; sells and installs gas appliances; installation of gas equipment and housing equipment; and operates restaurant business. Mikikogyo Co., Ltd. was founded in 1952 and is headquartered in Himeji, Japan.

MIKIKOGYO CO., LTD. Financial Statement Overview

Summary

Strong 2025 earnings rebound and margin/ROE improvement are positive, but they are outweighed by weak cash conversion: operating and free cash flow were negative in 2025 with a history of volatility, and leverage increased (higher debt-to-equity), raising funding risk if conditions soften.

Income Statement

Profitability strengthened materially in 2025, with revenue up ~20% year over year and operating profit and net income rising sharply versus 2024. Margins also improved (net margin ~4.3% in 2025 vs ~2.4% in 2024), signaling better project execution and/or pricing. The main weakness is volatility in the top line over the cycle (declines in 2024, 2021, and 2020), and overall margins remain modest for the industry despite the 2025 step-up.

Balance Sheet

The company maintains a reasonable capital base, with equity steadily increasing over time, but leverage has moved higher recently. Debt-to-equity rose to ~0.62 in 2025 from ~0.46 in 2024, indicating greater reliance on debt funding. Returns improved (return on equity ~9.1% in 2025 vs ~4.2% in 2024), but the rising leverage combined with cash flow volatility increases balance sheet risk if operating conditions soften.

Cash Flow

Cash generation is the key concern: operating cash flow turned negative in 2025 (and was also negative in 2023), and free cash flow was negative in 2025 and 2023 (and in 2020). While 2024 showed positive operating and free cash flow, the pattern suggests meaningful working-capital or project timing swings, reducing confidence in earnings translating consistently into cash. This volatility limits financial flexibility, especially alongside higher debt in 2025.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	30.10B	36.15B	27.29B	32.20B	30.76B	26.37B
Gross Profit	6.91B	7.98B	6.18B	5.92B	5.80B	5.91B
EBITDA	2.88B	3.11B	1.63B	1.80B	1.66B	1.80B
Net Income	975.23M	1.57B	658.23M	839.53M	734.69M	731.37M
Balance Sheet
Total Assets	35.79B	38.88B	32.71B	30.24B	31.08B	30.64B
Cash, Cash Equivalents and Short-Term Investments	3.32B	3.04B	2.62B	1.92B	2.89B	2.91B
Total Debt	9.06B	10.68B	7.25B	6.13B	4.61B	5.49B
Total Liabilities	17.27B	19.35B	14.83B	12.84B	14.47B	14.75B
Stockholders Equity	16.33B	17.23B	15.74B	15.33B	14.61B	13.98B
Cash Flow
Free Cash Flow	0.00	-2.68B	461.11M	-2.30B	968.40M	2.92B
Operating Cash Flow	0.00	-2.12B	660.04M	-2.16B	1.20B	3.90B
Investing Cash Flow	0.00	-509.51M	-663.67M	-219.74M	-86.97M	-983.79M
Financing Cash Flow	0.00	3.06B	598.13M	1.31B	-1.13B	-1.31B

MIKIKOGYO CO., LTD. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8620.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1718, the sentiment is Negative. The current price of 8620 is above the 20-day moving average (MA) of 7985.00, above the 50-day MA of 8456.80, and above the 200-day MA of 7764.86, indicating a bearish trend. The MACD of -254.76 indicates Positive momentum. The RSI at 30.50 is Neutral, neither overbought nor oversold. The STOCH value of 6.92 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:1718.

MIKIKOGYO CO., LTD. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1960	73 Outperform	¥20.74B	8.25	―	2.97%	22.32%	5024.88%
1716	71 Outperform	¥16.73B	8.08	―	2.87%	-1.39%	-4.43%
1798	69 Neutral	¥13.13B	6.02	―	1.60%	22.31%	101.45%
5918	64 Neutral	¥15.37B	6.90	―	1.39%	2.98%	11.88%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1776	60 Neutral	¥18.21B	14.29	―	2.54%	5.89%	-30.27%
1718	58 Neutral	¥8.00B	7.65	―	2.87%	19.10%	78.61%