Tokyu Construction Co., Ltd. (1720) AI Stock Analysis

• Market Cap: ¥173.15B
• Dividend Yield: 2.89%
• Average Volume (3M): 240.02K
• Price to Earnings (P/E): 14.4
• Beta (1Y): 0.69
• Revenue Growth: 20.38%
• EPS Growth: 128.85%
• Country: JP
• Employees: 2,877
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 36.38
• Shares Outstanding: 106,761,210
• 10 Day Avg. Volume: 210,860
• 30 Day Avg. Volume: 240,016
• PEG Ratio: -1.40
• Price to Book (P/B): 0.83
• Price to Sales (P/S): 0.29
• P/FCF Ratio: 2.19
• 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): 94.2
• Revenue Forecast (FY): ¥335.00B

• Rating: 68 Neutral
• Price Target: ¥1,740.00 ▲(32.93% Upside)
• Action: Reiterated Date: 02/11/26
• Date: Action: Reiterated 02/11/26

The score is driven primarily by improving financial performance and strong cash flow generation alongside a stable balance sheet. Valuation is reasonable with a moderate P/E and a solid dividend yield. Technicals are bullish but appear overextended (high RSI/Stoch), which tempers the overall score.

Positive Factors

Strong cash generation

Tokyu Construction's marked improvement in operating cash flow and a turnaround to positive free cash flow create durable financial flexibility. Reliable cash generation supports working capital for project cycles, funds capex and dividends, and reduces refinancing risk during construction payment timing swings.

Prudent leverage and solid equity position

A low debt-to-equity ratio and healthy equity base give the firm resilience to absorb project overruns and bid competitively on larger contracts. Prudent leverage sustains investment capacity in downturns, lowers interest burden and supports longer-term stability in a capital-intensive industry.

Improving margins and revenue recovery

The shift from prior EBIT weakness to positive operating results, along with rising gross and net margins and meaningful revenue growth, indicates stronger execution and pricing. This trend supports sustainable earnings power if the company maintains cost controls and project delivery discipline.

Negative Factors

Low net margin and moderate ROE

Absolute profitability remains modest: low net margins and a single-digit ROE constrain the company's ability to generate high shareholder returns and accumulate capital organically. This limits financial upside and leaves less buffer against margin compression or unexpected project losses.

High sensitivity to contract cost dynamics

Revenue and profit depend on tight management of materials, labor and subcontractor costs. Structural input-cost inflation, supply-chain tightness or subcontractor shortages can quickly erode margins on fixed-price contracts, making earnings vulnerable over multi-month horizons unless pricing or execution adjusts.

Modest scale by workforce

With a mid-sized workforce, the firm may lack the scale of larger national/international contractors to pursue very large or geographically diverse projects. Limited scale can constrain bargaining power with suppliers and subcontractors and slow diversification, affecting long-term competitive positioning.

Tokyu Construction Co., Ltd. Business Overview & Revenue Model

Company Description

Tokyu Construction Co., Ltd. engages in the civil engineering and building construction businesses in Japan. It constructs railways, roads, tunnels, bridges, and other construction, reconstruction work after earthquakes, etc.; and commercial facilities, hotels, offices, housing, factories, hospitals, and distribution centers, and wooden building, as well as offers renovation services. The company also engages in the acquisition of properties; and rental business, as well as PPP/concession and the paprika business. The company was founded in 1946 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Tokyu Construction generates revenue through several key streams, primarily from its construction projects in civil engineering and building construction. The company undertakes contracts for public and private sector projects, which include infrastructure development such as roads, bridges, and urban facilities. Additionally, Tokyu Construction earns income by providing specialized services such as project management, design, and consultation. Significant partnerships with government agencies, real estate developers, and other construction firms also contribute to its revenue, allowing the company to secure large-scale contracts and diversify its project portfolio. Moreover, the firm benefits from the increasing demand for infrastructure development in Japan, driven by urbanization and government investment in public works.

Tokyu Construction Co., Ltd. Financial Statement Overview

Summary

Solid fundamentals supported by improving profitability (gross margin 9.80%, net margin 2.26%) and recovery from prior EBIT weakness, plus strong cash generation (operating cash flow to net income 6.14) and improved free cash flow. Balance sheet leverage is prudent (debt-to-equity 0.27) with a healthy equity ratio (37.06%), though ROE is moderate (6.52%).

Income Statement

Tokyu Construction Co., Ltd. shows a positive trajectory in profitability with an improving gross profit margin and net profit margin over the past few years. The company achieved a gross profit margin of 9.80% and a net profit margin of 2.26% in the latest period. Despite a modest revenue growth, the stability in EBIT and EBITDA margins indicates efficient cost management. The company has recovered from a negative EBIT margin in 2022 to a positive one in 2025.

Balance Sheet

The balance sheet reflects a strong equity position with a favorable equity ratio of 37.06%. The debt-to-equity ratio is 0.27, indicating prudent leverage management. Return on equity stands at 6.52%, showing moderate profitability relative to shareholder equity. Overall, the balance sheet portrays a stable financial position with manageable debt levels.

Cash Flow

Tokyu Construction Co., Ltd. demonstrates robust cash flow management, with a significant improvement in free cash flow, which increased substantially from previous negative levels. The operating cash flow to net income ratio is 6.14, indicating strong cash generation relative to net income. The improvement in free cash flow and operating cash flow highlights effective operational efficiency and financial health.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	309.84B	293.14B	285.68B	288.87B	258.08B	231.48B
Gross Profit	32.03B	28.72B	26.08B	21.88B	9.72B	18.17B
EBITDA	15.26B	11.49B	11.42B	9.10B	-3.32B	6.17B
Net Income	8.15B	6.63B	7.27B	5.25B	-7.46B	2.65B
Balance Sheet
Total Assets	249.80B	274.31B	264.52B	249.16B	237.81B	226.57B
Cash, Cash Equivalents and Short-Term Investments	37.49B	39.67B	32.12B	58.72B	38.65B	34.17B
Total Debt	22.67B	27.20B	55.02B	22.21B	22.66B	26.92B
Total Liabilities	148.27B	171.64B	163.74B	153.15B	144.75B	123.06B
Stockholders Equity	100.49B	101.64B	99.97B	95.25B	92.49B	102.96B
Cash Flow
Free Cash Flow	0.00	38.53B	-55.69B	19.73B	10.24B	8.28B
Operating Cash Flow	0.00	41.20B	-54.02B	20.39B	12.20B	11.63B
Investing Cash Flow	0.00	-1.59B	-1.40B	2.40B	-476.00M	-3.75B
Financing Cash Flow	0.00	-31.88B	28.52B	-2.76B	-7.53B	-3.31B

Tokyu Construction Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1309.00
• 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:1720, the sentiment is Positive. The current price of 1309 is below the 20-day moving average (MA) of 1520.05, below the 50-day MA of 1407.74, and above the 200-day MA of 1158.13, indicating a bullish trend. The MACD of 62.71 indicates Negative momentum. The RSI at 71.42 is Negative, neither overbought nor oversold. The STOCH value of 69.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1720.

Tokyu Construction Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1926	82 Outperform	¥157.39B	15.45	―	3.22%	12.23%	43.29%
5911	79 Outperform	¥122.48B	10.64	―	3.81%	0.82%	30.84%
1835	76 Outperform	¥198.98B	15.51	―	3.44%	11.25%	36.92%
1871	75 Outperform	¥165.19B	17.26	―	3.13%	5.39%	33.02%
1720	68 Neutral	¥173.15B	14.38	―	2.89%	20.38%	128.85%
1762	64 Neutral	¥124.57B	14.15	―	2.13%	7.22%	21.92%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Tokyu Construction Co., Ltd. Corporate Events

Tokyu Construction Posts Sharp Profit Surge and Raises Full-Year Outlook

Tokyu Construction Co., Ltd. reported strong consolidated results for the nine months ended December 31, 2025, with net sales rising 21.7% year on year to ¥239.6 billion and operating profit surging 225% to ¥10.3 billion. Ordinary profit climbed 214.4% to ¥11.3 billion and profit attributable to owners of parent jumped 183.2% to ¥8.0 billion, translating into basic earnings per share of ¥75.13; comprehensive income also expanded significantly. Total assets increased to ¥301.0 billion while equity rose to ¥105.0 billion, although the equity ratio edged down to 34.9% due to balance-sheet expansion. The company maintained its interim dividend at ¥19 per share and forecasts a full-year dividend of ¥39, alongside an upwardly revised full-year earnings outlook calling for ¥336.0 billion in net sales and ¥10.3 billion in profit attributable to owners of parent, implying profit growth of more than 50%, underscoring improved profitability and a continued commitment to shareholder returns.

The most recent analyst rating on (JP:1720) stock is a Buy with a Yen1303.00 price target. To see the full list of analyst forecasts on Tokyu Construction Co., Ltd. stock, see the JP:1720 Stock Forecast page.

Tokyu Construction to Shift to Audit and Supervisory Committee Structure to Strengthen Governance

Tokyu Construction Co., Ltd. has resolved to shift its governance structure from a company with an Audit & Supervisory Board to a company with an Audit and Supervisory Committee, pending shareholder approval at its 23rd Annual General Meeting scheduled for late June 2026. By placing Audit and Supervisory Committee members, who audit directors’ execution of duties, on the Board of Directors, the company aims to reinforce the board’s oversight function and further enhance corporate governance effectiveness, supporting its long-term strategy to improve corporate value; detailed amendments to the Articles of Incorporation will be announced once finalized.

The most recent analyst rating on (JP:1720) stock is a Buy with a Yen1303.00 price target. To see the full list of analyst forecasts on Tokyu Construction Co., Ltd. stock, see the JP:1720 Stock Forecast page.

Tokyu Construction Overhauls Top Management Ahead of Governance Shift

Tokyu Construction Co., Ltd. has announced a broad reshuffle of its top management, including the appointment of Koji Hisada, currently Managing Executive Officer and General Manager of the Corporate Strategy Division, as Representative Director and President following the shareholders’ meeting scheduled for late June 2026. At the same time, current President Mitsuhiro Terada will move up to Representative Director and Chairman, while Tomoya Masuda, now Director and Senior Managing Executive Officer, will become Representative Director and Executive Vice President from April 1, 2026, with responsibility for value creation, safety and environment, technology, building construction, and real estate. The changes, which also include revised roles for directors overseeing civil engineering, international business, and business administration, are part of Tokyu Construction’s transition to a company with an Audit and Supervisory Committee and are aimed at strengthening governance and establishing a new management structure to sustainably enhance the group’s corporate value.

The most recent analyst rating on (JP:1720) stock is a Buy with a Yen1303.00 price target. To see the full list of analyst forecasts on Tokyu Construction Co., Ltd. stock, see the JP:1720 Stock Forecast page.

Tokyu Construction Boosts Investment in Guam Subsidiary

Tokyu Construction Co., Ltd. has announced an additional investment in its subsidiary, TC Pacific Construction, LLC, based in Guam. This move aims to stabilize the subsidiary’s financial and operational foundation, classifying it as a specified subsidiary due to the investment now representing 10% or more of Tokyu’s capital. The impact on Tokyu’s consolidated business results is expected to be minimal.

The most recent analyst rating on (JP:1720) stock is a Buy with a Yen1305.00 price target. To see the full list of analyst forecasts on Tokyu Construction Co., Ltd. stock, see the JP:1720 Stock Forecast page.

Tokyu Construction Boosts Profitability and Invests in Human Capital

Tokyu Construction Co., Ltd. has reported an improvement in profitability for its domestic construction business, leading to an upward revision of its full-year earnings forecast for FY03/2026. The company is actively involved in the redevelopment project around Shibuya Station, aiming to enhance the area’s value and strengthen its competitive advantage. Additionally, Tokyu Construction is focusing on strengthening its investment in human capital to transform its business portfolio and maximize the potential of its workforce.

The most recent analyst rating on (JP:1720) stock is a Hold with a Yen1126.00 price target. To see the full list of analyst forecasts on Tokyu Construction Co., Ltd. stock, see the JP:1720 Stock Forecast page.