Yahagi Construction Co., Ltd. (1870) AI Stock Analysis

• Market Cap: ¥72.76B
• Dividend Yield: 1.18%
• Average Volume (3M): 280.55K
• Price to Earnings (P/E): 12.9
• Beta (1Y): 0.73
• Revenue Growth: 17.42%
• EPS Growth: -12.68%
• Country: JP
• Employees: 1,324
• Sector: Industrials
• Sector Strength: 87
• Industry: Engineering & Construction
• EPS (TTM): 77.27
• Shares Outstanding: 44,607,456
• 10 Day Avg. Volume: 148,220
• 30 Day Avg. Volume: 280,546
• PEG Ratio: -1.20
• Price to Book (P/B): 0.59
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 24.16
• 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

• Rating: 78 Outperform
• Price Target: ¥1,885.00 ▲(11.54%Upside)

Yahagi Construction's stock is rated as favorable due to its strong technical momentum and fair valuation, complemented by a high dividend yield. However, financial performance poses risks due to declining net profit margins and negative cash flow trends.

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

Company Description

Yahagi Construction Co., Ltd. (1870) is a prominent Japanese construction company involved in various sectors including civil engineering, building construction, and environmental projects. The company is known for its expertise in infrastructure development, providing comprehensive services from planning and design to execution and maintenance. Yahagi Construction is committed to delivering innovative and sustainable solutions in the construction industry.

How the Company Makes Money

Yahagi Construction Co., Ltd. generates revenue primarily through its construction services, which include civil engineering and building construction projects. The company undertakes a wide range of projects such as roads, bridges, tunnels, commercial buildings, and residential complexes. Revenue is earned through contracts awarded by government entities, private sector clients, and public-private partnerships. Additionally, Yahagi Construction may engage in environmental projects and other related services that contribute to its income. Key factors contributing to its earnings include its reputation for quality, strategic partnerships, and its ability to secure large-scale infrastructure projects.

Yahagi Construction Co., Ltd. Financial Statement Overview

Summary

Yahagi Construction shows strong revenue growth and stable gross profitability, indicating a robust business model. However, declining net profit margins and increased leverage highlight potential risks in operational efficiency and financial stability. Negative cash flow trends are concerning and may impact future investments and financial flexibility.

Income Statement

Yahagi Construction has demonstrated solid revenue growth, increasing from ¥93 billion in 2022 to ¥141 billion in 2025, reflecting a positive growth trajectory. Gross profit margin has remained stable, averaging around 14% over the years, indicating effective cost management. However, the decline in net profit margin from 5.5% in 2022 to 4.0% in 2025 suggests rising operational or interest costs. The EBIT and EBITDA margins have slightly decreased, pointing to potential efficiency issues in operating expenses.

Balance Sheet

The company maintains a balanced debt-to-equity ratio, which has increased to 0.56 in 2025, reflecting a moderate leverage level. The equity ratio of around 48% indicates a stable capital structure. However, the increase in total debt to ¥38.6 billion in 2025 signals potential risk if revenue growth does not keep pace. The return on equity (ROE) has been steady, suggesting effective use of shareholder funds, albeit with a slight decrease in recent years.

Cash Flow

Yahagi Construction's cash flow performance has been volatile, with negative free cash flow in recent years due to significant capital expenditures and reduced operating cash flow. The free cash flow to net income ratio turned negative in 2025, indicating challenges in converting profits into cash. The operating cash flow to net income ratio has also declined, suggesting potential inefficiencies in cash-generating activities.

Breakdown
TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
126.11B	140.70B	119.82B	111.11B	93.09B	106.61B
	Gross Profit
13.89B	19.42B	19.80B	16.59B	14.94B	15.70B
	EBIT
3.79B	8.65B	9.51B	7.21B	6.17B	7.36B
	EBITDA
4.42B	9.50B	10.57B	8.16B	7.03B	8.19B
	Net Income Common Stockholders
2.52B	5.64B	6.46B	4.51B	4.84B	3.29B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
16.71B	15.67B	19.99B	22.82B	22.01B	22.09B
	Total Assets
138.68B	144.22B	126.00B	129.99B	116.42B	129.84B
	Total Debt
40.60B	38.60B	22.40B	31.90B	30.40B	42.94B
	Net Debt
23.89B	22.93B	2.41B	9.08B	8.39B	20.85B
	Total Liabilities
72.89B	75.38B	59.46B	69.56B	58.89B	75.20B
	Stockholders Equity
65.78B	68.83B	66.53B	60.43B	57.53B	54.64B
Cash Flow		Free Cash Flow
0.00	-18.04B	7.83B	1.47B	13.24B	-7.50B
	Operating Cash Flow
0.00	-17.19B	10.23B	4.15B	15.84B	-6.76B
	Investing Cash Flow
0.00	-255.00M	-1.18B	-3.07B	-1.55B	-220.00M
	Financing Cash Flow
0.00	13.15B	-11.86B	-253.00M	-14.35B	15.36B

Yahagi Construction Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1690.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1870, the sentiment is Positive. The current price of 1690 is above the 20-day moving average (MA) of 1682.05, above the 50-day MA of 1533.46, and above the 200-day MA of 1463.57, indicating a neutral trend. The MACD of 40.22 indicates Positive momentum. The RSI at 60.17 is Neutral, neither overbought nor oversold. The STOCH value of 19.23 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1870.

Yahagi Construction Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1871	84 Outperform	¥85.10B	10.35		5.49%	4.90%	62.07%
1870	78 Outperform	¥72.76B	12.88		1.18%	17.42%	-12.68%
1882	77 Outperform	¥75.19B	16.83		5.99%	7.21%	11.23%
1822	75 Outperform	¥70.21B	3.77		0.58%	-12.15%	―
1888	69 Neutral	¥50.56B	13.68		3.18%	-8.91%	-27.30%
1879	67 Neutral	¥93.01B	7.26		0.38%	10.43%	-0.74%
Sector *	66 Neutral	$4.51B	12.22	5.40%	3.63%	4.14%	-12.01%

Yahagi Construction Co., Ltd. Corporate Events

Yahagi Construction Reports Increased Sales but Declining Profits

Yahagi Construction Co., Ltd. reported a significant 20.2% increase in net sales for the fiscal year ending March 31, 2025, driven by progress in constructing large-scale logistics facilities. However, profits declined across all levels due to the absence of the previous year’s gains from the sale of internally developed industrial land, impacting the company’s financial performance.

Yahagi Construction Reports Increased Sales but Declining Profits; Announces Dividend Hike

Yahagi Construction Co., Ltd. reported a significant increase in net sales for the fiscal year ending March 31, 2025, with a 17.4% rise compared to the previous year. However, the company experienced declines in operating profit, ordinary profit, and profit attributable to owners of the parent, with decreases of 9.0%, 10.1%, and 12.7% respectively. The company also announced an increase in annual dividends per share from 60 yen to 80 yen, indicating a commitment to returning value to shareholders despite the profit declines. The financial forecast for the fiscal year ending March 31, 2026, shows expected growth in net sales and profits, suggesting a positive outlook for the company’s future performance.

Yahagi Construction Co., Ltd. Revises Dividend Policy to Enhance Shareholder Returns

Yahagi Construction Co., Ltd. has announced a change in its dividend policy to enhance shareholder returns, transitioning to a dividend on equity (DOE) ratio of 5% or more and adopting a progressive dividend approach. This shift aims to provide stable returns to long-term shareholders and improve the company’s stock market rating by focusing on capital efficiency, with the new policy taking effect from the fiscal year ending March 31, 2026.

Yahagi Construction’s Strategic Role within Nagoya Railroad Group

Yahagi Construction Co., Ltd. has a significant relationship with Nagoya Railroad Co., Ltd., which holds a 19.3% voting rights stake. The construction company is a key player within the Nagoya Railroad Group, performing essential railway track maintenance and other construction projects. The company’s operations are closely tied to the Nagoya Railroad Group, yet it maintains contractual independence, ensuring standard terms and conditions. This relationship is crucial for Yahagi’s business, as it accounts for a substantial portion of its sales.

Yahagi Construction Announces Year-End Dividend Distribution

Yahagi Construction Co., Ltd. announced a resolution for the distribution of dividends from retained earnings, with a record date of March 31, 2025. The company will distribute a year-end dividend of 40.00 yen per share, which includes an ordinary dividend of 30.00 yen and a commemorative dividend of 10.00 yen, reflecting its commitment to consistent shareholder returns and enhancing corporate value.