Sata Construction Co., Ltd. (1826) AI Stock Analysis

• Market Cap: ¥15.20B
• Dividend Yield: 5.36%
• Average Volume (3M): 21.42K
• Price to Earnings (P/E): 22.9
• Beta (1Y): 0.20
• Revenue Growth: -3.19%
• EPS Growth: 109.84%
• Country: JP
• Employees: 460
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 24.15
• Shares Outstanding: 13,386,233
• 10 Day Avg. Volume: 11,400
• 30 Day Avg. Volume: 21,423
• PEG Ratio: 0.04
• Price to Book (P/B): 1.08
• Price to Sales (P/S): 0.52
• P/FCF Ratio: 29.06
• 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: 59 Neutral
• Price Target: ¥1,340.00 ▲(14.33% Upside)
• Action: Reiterated Date: 10/01/25
• Date: Action: Reiterated 10/01/25

Sata Construction Co., Ltd. has a robust financial foundation with strong revenue growth and a stable balance sheet. However, the stock faces bearish technical indicators and a high P/E ratio, suggesting potential overvaluation. The attractive dividend yield partially offsets these concerns, providing a stable income stream for investors.

Positive Factors

Strong Balance Sheet

A 56.5% equity ratio and very low leverage give Sata durable financial flexibility to fund bidding, absorb contract delays, and invest in equipment or capex without heavy external financing. This conservative capital structure supports stability through construction cycles.

Robust Revenue Growth and Margin Improvement

Sustained 23.7% sales growth combined with a higher gross margin (9.24%) indicates expanding demand and better cost control. Over the medium term this underpins stronger project pipelines and the ability to convert scale into improved cash generation if execution is maintained.

Positive Free Cash Flow

Maintaining positive free cash flow despite lower operating cash flow shows capital discipline and prioritization of cash converting activities. Durable FCF supports debt service, selective capex and dividend continuity, reducing reliance on short-term financing.

Negative Factors

Declining Operating Cash Flow

A 55.2% drop in operating cash flow is a structural concern for a contractor: it reduces liquidity for mobilizing projects, paying suppliers and absorbing timing mismatches. If unresolved, it may force greater external financing or constrain project execution and growth.

Modest Return on Equity

ROE of 3.9% suggests limited efficiency in converting shareholder capital into profits. Persistently low ROE can hamper the company's ability to self-fund expansion, reduce reinvestment capacity and limit long-term shareholder value creation absent operational gains.

Compressed Operating Margins

Declining EBIT and EBITDA margins point to weakening operational efficiency or competitive pressure. In construction, margin erosion tends to persist across projects and quarters, pressuring profitability, cash conversion and the ability to invest in higher-return opportunities.

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

Company Description

Sata Construction Co., Ltd. engages in the contracting and investigation, planning and designing, and supervision of civil engineering and other construction works in Japan. It also offers civil engineering services for highways, bridges, tunnels, dams, residential land development projects, and disaster recovery works; and extension, renovation, and remodeling of buildings and condominiums. In addition, the company manufactures, sells, and rents construction materials, equipment, and machineries; owns and leases vehicles, ships, aircrafts, and other machineries; and produces and sells gravels and wood products. Further, it engages in the industrial waste recycling and treatment; building rental and tourism; insurance agency and recruitment of life insurance; and land house selling, mediation, and lending businesses, as well as regional development, urban development, and other projects. Additionally, the company generates, supplies, and sells electricity. Sata Construction Co., Ltd. was founded in 1918 and is headquartered in Maebashi, Japan.

How the Company Makes Money

Sata Construction Co., Ltd. generates revenue primarily through its construction and engineering services. The company secures contracts from both public and private sector clients for large-scale infrastructure and building projects. Revenue streams include income from project management, construction services, and maintenance contracts. Sata Construction Co., Ltd. may also engage in partnerships and joint ventures to expand its project portfolio and enhance its market presence. Additionally, the company could derive income from consultancy services and technical support provided to clients. Factors such as government infrastructure spending, urban development initiatives, and demand for commercial and residential spaces significantly contribute to the company's earnings.

Sata Construction Co., Ltd. Financial Statement Overview

Summary

Sata Construction Co., Ltd. demonstrates strong revenue growth and a stable balance sheet with a solid equity base. However, the company faces challenges with declining operating cash flow and modest profitability metrics, indicating a need for improved operational efficiencies.

Income Statement

Sata Construction Co., Ltd. shows a solid revenue growth of 23.7% from the previous year, with a steady increase in gross and net profit margins. Gross profit margin improved to 9.24%, indicating efficient cost management. However, the company's EBIT and EBITDA margins have slightly decreased, showcasing a need for operational efficiency improvements.

Balance Sheet

The company maintains a strong equity base with an equity ratio of 56.5%, reflecting financial stability. The debt-to-equity ratio is low at 0.09, indicating conservative leverage. Return on equity is modest at 3.9%, suggesting room for profitability enhancement.

Cash Flow

Although operating cash flow decreased by 55.2% from the previous year, the company managed to maintain a positive free cash flow. The free cash flow to net income ratio is healthy, but the declining operating cash flow poses a risk if not addressed.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	31.42B	32.26B	26.08B	30.12B	26.66B	31.69B
Gross Profit	3.02B	2.98B	1.72B	3.47B	2.22B	2.39B
EBITDA	1.08B	1.13B	357.00M	2.01B	864.00M	1.12B
Net Income	555.00M	611.00M	75.00M	1.32B	355.00M	651.00M
Balance Sheet
Total Assets	25.76B	27.49B	26.30B	26.78B	25.84B	25.20B
Cash, Cash Equivalents and Short-Term Investments	14.78B	14.10B	13.94B	12.39B	10.11B	9.60B
Total Debt	1.30B	1.33B	1.29B	1.27B	1.54B	1.55B
Total Liabilities	11.38B	11.96B	11.05B	11.21B	11.28B	10.80B
Stockholders Equity	14.38B	15.52B	15.24B	15.57B	14.55B	14.40B
Cash Flow
Free Cash Flow	0.00	579.00M	1.97B	2.72B	754.00M	185.00M
Operating Cash Flow	0.00	900.00M	2.01B	2.91B	1.32B	194.00M
Investing Cash Flow	0.00	-362.00M	-97.00M	-21.00M	-584.00M	-109.00M
Financing Cash Flow	0.00	-371.00M	-367.00M	-601.00M	-230.00M	-357.00M

Sata Construction Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1172.00
• 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:1826, the sentiment is Positive. The current price of 1172 is below the 20-day moving average (MA) of 1256.85, below the 50-day MA of 1209.64, and above the 200-day MA of 1167.52, indicating a bullish trend. The MACD of 17.95 indicates Positive momentum. The RSI at 58.10 is Neutral, neither overbought nor oversold. The STOCH value of 72.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1826.

Sata Construction Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1798	82 Outperform	¥15.54B	5.70	―	1.60%	22.31%	101.45%
1716	71 Outperform	¥18.33B	10.67	―	2.87%	-1.39%	-4.43%
1914	67 Neutral	¥16.36B	12.39	―	3.68%	5.82%	-22.14%
1850	66 Neutral	¥15.94B	8.28	―	1.01%	17.09%	43.01%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1826	59 Neutral	¥15.20B	22.90	―	5.36%	-3.19%	109.84%
1776	54 Neutral	¥15.34B	65.15	―	2.54%	5.89%	-30.27%