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

• Market Cap: ¥73.75B
• Dividend Yield: 4.67%
• Average Volume (3M): 291.51K
• Price to Earnings (P/E): 13.1
• Beta (1Y): 0.73
• Revenue Growth: 17.42%
• EPS Growth: -12.68%
• Country: JP
• Employees: 1,324
• Sector: Industrials
• Sector Strength: 90
• Industry: Engineering & Construction
• EPS (TTM): 77.27
• Shares Outstanding: 44,607,456
• 10 Day Avg. Volume: 140,030
• 30 Day Avg. Volume: 291,506
• PEG Ratio: -0.46
• Price to Book (P/B): 1.08
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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 ▲(10.11%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 Co., Ltd. displays strong revenue growth and a stable balance sheet, yet faces challenges in operational efficiency and cash flow management. The company's increasing leverage and inconsistent cash flow generation highlight areas for improvement. Overall, the financial health is solid but requires strategic focus on enhancing operational efficiency and cash flow stability.

Income Statement

Yahagi Construction shows strong revenue growth with a 7.1% increase year-over-year and a consistent upward trajectory in net income. The TTM data reflects a healthy gross profit margin of 11% and net profit margin of 2%. However, EBIT and EBITDA margins have seen a decline, indicating potential cost pressures. Overall, the revenue growth and profitability are commendable, but attention is needed on operational efficiency.

Balance Sheet

The company maintains a solid equity base, with an equity ratio of 47.4%, indicating financial stability. However, the debt-to-equity ratio has increased to 0.62 from the previous year, suggesting increased leverage. Return on equity stands at 3.8%, reflecting modest profitability on shareholders' capital. While the balance sheet is generally stable, rising debt levels warrant monitoring.

Cash Flow

Cash flow analysis shows potential concerns, with a lack of reported free cash flow and operating cash flow for the TTM period. Historically, the company has demonstrated variability in free cash flow generation, with a noticeable drop in operating cash flow compared to previous years. This inconsistency suggests potential liquidity risks that need addressing.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
126.11B	119.82B	111.11B	93.09B	106.61B	90.13B
	Gross Profit
13.89B	19.80B	16.59B	14.94B	15.70B	16.30B
	EBIT
3.79B	9.51B	7.21B	6.17B	7.36B	7.76B
	EBITDA
4.42B	10.57B	8.16B	7.03B	8.19B	8.56B
	Net Income Common Stockholders
2.52B	6.46B	4.51B	4.84B	3.29B	5.16B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
16.71B	19.99B	22.82B	22.01B	22.09B	13.78B
	Total Assets
138.68B	126.00B	129.99B	116.42B	129.84B	107.19B
	Total Debt
40.60B	22.40B	31.90B	30.40B	42.94B	26.06B
	Net Debt
23.89B	2.41B	9.08B	8.39B	20.85B	12.28B
	Total Liabilities
72.89B	59.46B	69.56B	58.89B	75.20B	55.14B
	Stockholders Equity
65.78B	66.53B	60.43B	57.53B	54.64B	52.04B
Cash Flow		Free Cash Flow
0.00	7.83B	1.47B	13.24B	-7.50B	-1.14B
	Operating Cash Flow
0.00	10.23B	4.15B	15.84B	-6.76B	631.00M
	Investing Cash Flow
0.00	-1.18B	-3.07B	-1.55B	-220.00M	-1.64B
	Financing Cash Flow
0.00	-11.86B	-253.00M	-14.35B	15.36B	918.00M

Yahagi Construction Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1712.00
• 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:1870, the sentiment is Positive. The current price of 1712 is above the 20-day moving average (MA) of 1672.80, above the 50-day MA of 1501.82, and above the 200-day MA of 1458.81, indicating a bullish trend. The MACD of 54.49 indicates Positive momentum. The RSI at 65.42 is Neutral, neither overbought nor oversold. The STOCH value of 59.22 is Neutral, 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	¥83.69B	10.18		4.02%	4.90%	62.07%
1870	78 Outperform	¥73.75B	13.05		4.67%	17.42%	-12.68%
1882	77 Outperform	¥75.44B	16.89		5.97%	7.21%	11.23%
1822	75 Outperform	¥72.35B	3.88		3.62%	-12.15%	―
1888	69 Neutral	¥52.16B	14.11		3.08%	-8.91%	-27.30%
1879	67 Neutral	¥93.83B	7.32		3.49%	10.43%	-0.74%
Sector *	66 Neutral	$4.50B	12.29	5.40%	248.66%	4.13%	-12.33%

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.