Kitano Construction Corp. (1866) AI Stock Analysis

• Market Cap: ¥29.11B
• Dividend Yield: 9.34%
• Average Volume (3M): 13.91K
• Price to Earnings (P/E): 8.8
• Beta (1Y): 0.58
• Revenue Growth: 2.38%
• EPS Growth: -22.00%
• Country: JP
• Employees: 1,094
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 19.78
• Shares Outstanding: 25,347,412
• 10 Day Avg. Volume: 9,770
• 30 Day Avg. Volume: 13,906
• PEG Ratio: -0.44
• Price to Book (P/B): 0.53
• Price to Sales (P/S): 0.31
• P/FCF Ratio: -3.79
• 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: ¥4,528.00
• Price Target Upside: 284.38% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 69 Neutral
• Price Target: ¥4,528.00 ▲(284.38% Upside)

The overall stock score of 68.5 reflects a combination of stable financial performance with challenges in revenue growth and cash flow, neutral technical indicators, and attractive valuation metrics. The low P/E ratio and solid dividend yield are significant positives, while the need for improved cash flow management and growth revitalization are key areas for improvement.

Kitano Construction Corp. Business Overview & Revenue Model

Company Description

Kitano Construction Corp., a general contractor, engages in the planning, designing, management, and consulting of construction works in Japan and internationally. The company is also involved in the regional and urban development; development of resort projects; and renewable energy business. In addition, it manages golf courses, hotels, and theater and sports facilities; and provides advertising agency services. The company was formerly known as Kitano Kenchiku Kogyo Corp. and changed its name to Kitano Construction Corp. in 1948. Kitano Construction Corp. was founded in 1946 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Kitano Construction Corp. generates revenue primarily through its construction contracts, which include both fixed-price and time-and-materials agreements. The company bids on projects through competitive tendering, securing contracts from private developers, government entities, and non-profit organizations. Key revenue streams include residential construction, commercial building projects, and public infrastructure contracts, such as roads and bridges. Moreover, the company often collaborates with subcontractors and suppliers, forming strategic partnerships that enhance its service offerings and efficiency. These partnerships can lead to cost savings and improved project delivery, ultimately contributing to the company’s profitability. Additionally, Kitano Construction Corp. may engage in project management and consulting services, further diversifying its revenue sources.

Kitano Construction Corp. Financial Statement Overview

Summary

Kitano Construction Corp. demonstrates a stable financial position with strong equity and low debt, but faces challenges in maintaining revenue growth and positive cash flow. While profitability remains moderate, the recent declines in revenue and net income, coupled with negative cash flows, highlight areas for improvement. The company needs to focus on revitalizing growth and enhancing cash flow management to achieve sustainable financial performance.

Income Statement

Kitano Construction Corp. has shown a mixed performance on its income statement. The gross profit margin has been stable, but there was a decline in total revenue and net income over the past year, indicating potential challenges in sustaining growth. The EBIT and EBITDA margins remain moderate, reflecting operational efficiency but room for improvement in cost management. Overall, while the company maintains reasonable profitability, recent decreases in revenue and net income suggest challenges in growth.

Balance Sheet

The company's balance sheet is robust with a strong equity base and low debt levels, resulting in a favorable debt-to-equity ratio. Return on Equity (ROE) has been satisfactory, though there is scope for enhancement. The equity ratio is healthy, indicating a good balance between equity and total assets. Kitano Construction Corp. displays financial stability with minimal leverage risk, though improving asset efficiency could boost returns further.

Cash Flow

Cash flow management presents a challenge for Kitano Construction Corp. The operating cash flow has turned negative, impacting the free cash flow and indicating potential liquidity concerns. While previous periods showed positive free cash flow, the current downturn suggests a need to improve cash management strategies. The ratios of operating and free cash flow to net income highlight a disconnect that the company needs to address to enhance liquidity and financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	83.37B	80.85B	84.96B	85.28B	60.10B	75.27B
Gross Profit	10.30B	9.90B	10.49B	9.53B	6.67B	7.26B
EBITDA	5.13B	5.17B	5.99B	4.23B	3.23B	3.71B
Net Income	3.25B	3.38B	3.90B	1.99B	1.74B	1.80B
Balance Sheet
Total Assets	74.83B	75.59B	77.83B	74.76B	65.50B	69.65B
Cash, Cash Equivalents and Short-Term Investments	16.62B	18.77B	26.33B	26.16B	14.91B	13.01B
Total Debt	0.00	276.00M	12.00M	29.00M	4.00B	4.00B
Total Liabilities	27.92B	28.36B	34.14B	35.90B	28.00B	33.25B
Stockholders Equity	46.34B	46.66B	43.13B	38.32B	36.98B	35.90B
Cash Flow
Free Cash Flow	0.00	-6.53B	1.26B	16.06B	1.99B	274.00M
Operating Cash Flow	0.00	-6.17B	1.92B	16.52B	2.32B	4.00B
Investing Cash Flow	0.00	-849.00M	-254.00M	-236.00M	-345.00M	-3.62B
Financing Cash Flow	0.00	-1.24B	-1.31B	-5.24B	-715.00M	3.35B

Kitano Construction Corp. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1178.00
• 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:1866, the sentiment is Positive. The current price of 1178 is below the 20-day moving average (MA) of 1211.19, above the 50-day MA of 1139.48, and above the 200-day MA of 1046.64, indicating a bullish trend. The MACD of 18.85 indicates Positive momentum. The RSI at 60.94 is Neutral, neither overbought nor oversold. The STOCH value of 64.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1866.

Kitano Construction Corp. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1780	80 Outperform	¥27.08B	9.00	―	2.05%	3.21%	4.85%
1828	74 Outperform	¥25.59B	9.58	―	3.63%	-5.11%	30.22%
1827	73 Outperform	¥30.45B	12.02	―	2.48%	>-0.01%	-11.62%
1811	72 Outperform	¥48.35B	10.23	―	1.78%	5.57%	506.81%
1866	69 Neutral	¥29.11B	8.79	―	9.34%	2.38%	-22.00%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1826	59 Neutral	¥17.05B	30.36	―	5.43%	4.96%	152.04%