Daito Construction (1878) AI Stock Analysis

• Market Cap: ¥1.02T
• Dividend Yield: 5.16%
• Average Volume (3M): 1.10M
• Price to Earnings (P/E): 10.6
• Beta (1Y): 0.38
• Revenue Growth: 5.16%
• EPS Growth: 6.00%
• Country: JP
• Employees: 18,814
• Sector: Real Estate
• Sector Strength: 53
• Industry: Real Estate - Diversified
• EPS (TTM): 77.69
• Shares Outstanding: 344,594,900
• 10 Day Avg. Volume: 922,440
• 30 Day Avg. Volume: 1,101,263
• PEG Ratio: 0.38
• Price to Book (P/B): 2.16
• Price to Sales (P/S): 0.55
• P/FCF Ratio: 16.45
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: ¥3,420.00 ▲(14.75% Upside)

Daito Construction's strong financial performance, particularly in revenue growth and profitability, is a key strength. The stock's valuation is attractive, with a low P/E ratio and high dividend yield. However, technical indicators suggest a bearish trend, and cash flow management remains a concern.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a strong market position and effective business strategies, supporting long-term expansion and stability.

Profitability

Sustained profitability margins reflect efficient operations and cost management, enhancing the company's ability to reinvest and grow.

Balance Sheet Health

A solid balance sheet with moderate leverage provides financial stability and flexibility for future investments and growth opportunities.

Negative Factors

Cash Flow Management

Declining free cash flow growth can limit the company's ability to fund operations and investments, potentially impacting long-term sustainability.

EBIT and EBITDA Margins

Decreasing EBIT and EBITDA margins suggest rising cost pressures, which could affect profitability if not addressed.

Operating Cash Flow

Limited operating cash flow generation may constrain the company's ability to cover expenses and invest in growth, affecting financial health.

Daito Construction Business Overview & Revenue Model

Company Description

Daito Construction, established in 1878, is a leading construction firm based in Japan, specializing in a wide range of sectors including residential, commercial, and civil engineering projects. The company is known for its expertise in building high-quality structures, infrastructure development, and innovative construction solutions. Daito Construction focuses on sustainable practices and employs advanced technologies to enhance efficiency and safety in its projects, catering primarily to the Japanese market but also engaging in international ventures.

How the Company Makes Money

Daito Construction generates revenue through several key streams, primarily from contract work in the construction of residential buildings, commercial properties, and infrastructure projects. The company earns money by securing contracts through competitive bidding processes, often partnering with government agencies and private developers. Additional revenue comes from maintenance and renovation services offered to existing clients, as well as from real estate development projects where they manage the entire lifecycle from planning to execution. Strategic partnerships with suppliers and subcontractors also help optimize costs and improve profit margins. Furthermore, Daito Construction invests in technological advancements and sustainable building practices, which can lead to cost savings and enhanced project appeal, thereby contributing to its overall profitability.

Daito Construction Financial Statement Overview

Summary

Daito Construction shows a strong financial profile with consistent revenue growth, solid profitability, and a stable balance sheet. The income statement is particularly strong with healthy profit margins and operational efficiency. However, the cash flow statement indicates some challenges, particularly in free cash flow growth.

Income Statement

Daito Construction demonstrates a strong income statement with consistent revenue growth and healthy profit margins. The TTM data shows a gross profit margin of 17.14% and a net profit margin of 5.09%, indicating effective cost management and profitability. Revenue growth is steady, with a 1.80% increase in the latest TTM period. The EBIT and EBITDA margins are also solid, reflecting operational efficiency.

Balance Sheet

The balance sheet is robust, with a manageable debt-to-equity ratio of 0.27, indicating a balanced approach to leveraging. The return on equity is impressive at 21.19%, showcasing effective use of shareholder funds. The equity ratio stands at 37.47%, suggesting a stable financial structure with a good proportion of assets financed by equity.

Cash Flow

Cash flow analysis reveals some challenges, with a decline in free cash flow growth by 19.45% in the TTM period. However, the operating cash flow to net income ratio is 0.79, indicating that the company generates sufficient cash from operations to cover its net income. The free cash flow to net income ratio is also strong at 0.80, reflecting good cash conversion.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.88T	1.84T	1.73T	1.66T	1.58T	1.49T
Gross Profit	319.81B	315.86B	284.78B	258.45B	260.14B	238.87B
EBITDA	139.24B	149.00B	128.99B	119.68B	120.72B	107.22B
Net Income	93.68B	93.86B	74.69B	70.36B	69.58B	62.28B
Balance Sheet
Total Assets	1.23T	1.22T	1.08T	1.06T	1.01T	919.45B
Cash, Cash Equivalents and Short-Term Investments	235.46B	238.90B	249.56B	271.13B	262.24B	200.50B
Total Debt	182.31B	124.47B	80.02B	91.87B	95.28B	97.30B
Total Liabilities	767.57B	755.35B	674.27B	656.98B	640.09B	611.25B
Stockholders Equity	459.41B	466.44B	402.67B	401.53B	361.78B	304.12B
Cash Flow
Free Cash Flow	54.91B	61.29B	71.27B	54.18B	95.13B	85.01B
Operating Cash Flow	74.16B	85.61B	90.88B	82.10B	112.48B	98.46B
Investing Cash Flow	-34.59B	-46.51B	-13.11B	-57.09B	-19.51B	-24.74B
Financing Cash Flow	5.62B	-45.84B	-96.79B	-40.06B	-34.09B	-34.31B

Daito Construction Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2980.50
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1878, the sentiment is Neutral. The current price of 2980.5 is above the 20-day moving average (MA) of 2950.88, above the 50-day MA of 2971.67, and below the 200-day MA of 3056.80, indicating a neutral trend. The MACD of 5.73 indicates Negative momentum. The RSI at 52.38 is Neutral, neither overbought nor oversold. The STOCH value of 55.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:1878.

Daito Construction Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3289	78 Outperform	¥1.03T	9.85	12.53%	2.89%	11.00%	88.70%
1878	73 Outperform	¥1.02T	10.65	19.43%	5.16%	5.16%	6.00%
8923	73 Outperform	¥164.59B	11.11	14.95%	2.95%	17.74%	19.41%
3288	72 Outperform	¥1.06T	10.50	19.60%	1.94%	3.13%	11.87%
8850	68 Neutral	¥240.59B	10.24	―	2.68%	2.29%	-4.12%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
8803	63 Neutral	¥167.52B	14.17	8.95%	3.42%	28.94%	109.35%

Daito Construction Corporate Events

Daito Trust Construction Secures JPY 140 Billion Syndicated Loan for Expansion

Daito Trust Construction Co., Ltd has announced the execution of a syndicated loan agreement with financial covenants to refinance a previous loan and support its real estate development expansion. The total facility amounting to JPY 140 billion is arranged by Sumitomo Mitsui Banking Corporation and co-arranged by MUFG Bank, Ltd. and Mizuho Bank, Ltd., highlighting the company’s strategic financial planning to bolster its market position.

The most recent analyst rating on (JP:1878) stock is a Buy with a Yen17798.00 price target. To see the full list of analyst forecasts on Daito Construction stock, see the JP:1878 Stock Forecast page.

Daito Trust Construction Announces Treasury Share Disposal for Executive Compensation

Daito Trust Construction Co., Ltd announced the disposal of 13,400 treasury shares as part of a stock compensation plan for its executives. This move is intended to align the interests of its executives with shareholders and enhance corporate value. The shares will be disposed of to The Master Trust Bank of Japan, Ltd., and the impact on the stock market is expected to be minimal due to the small scale of dilution.

The most recent analyst rating on (JP:1878) stock is a Buy with a Yen17338.00 price target. To see the full list of analyst forecasts on Daito Construction stock, see the JP:1878 Stock Forecast page.

Daito Trust Construction Announces Treasury Shares Disposal for Employee Incentive Plan

Daito Trust Construction Co., Ltd has announced a disposal of treasury shares through a third-party allotment to Custody Bank of Japan, Ltd., as part of its Share Delivery Trust (J-ESOP) plan. This move aims to allocate shares to employees and directors as compensation for their contributions, aligning with the company’s strategy to incentivize its workforce. The disposal involves 110,000 shares, representing a minor dilution of 0.16% of the total shares issued, and is considered a reasonable step to support the company’s long-term employee incentive program.

The most recent analyst rating on (JP:1878) stock is a Buy with a Yen17338.00 price target. To see the full list of analyst forecasts on Daito Construction stock, see the JP:1878 Stock Forecast page.

Daito Trust Construction Reports Stable First Quarter Financial Results

Daito Trust Construction Co., Ltd. has completed the interim review of its consolidated financial results for the first quarter ending June 30, 2025, with no changes to the previously announced figures. The company reported a slight increase in net sales by 7.4% compared to the previous year, while operating profit saw a marginal rise of 0.7%. However, ordinary profit and profit attributable to owners of the parent experienced slight declines. The financial results indicate stable performance with minor fluctuations, reflecting the company’s steady position in the market.

The most recent analyst rating on (JP:1878) stock is a Buy with a Yen19600.00 price target. To see the full list of analyst forecasts on Daito Construction stock, see the JP:1878 Stock Forecast page.

Daito Trust Construction Reports Q1 2025 Financial Results with Planned Stock Split

Daito Trust Construction reported a modest increase in net sales by 7.4% for the three months ended June 30, 2025, compared to the previous year. Despite the rise in sales, the company experienced a slight decline in ordinary profit and profit attributable to owners, indicating challenges in maintaining profitability. The company is also planning a 5-for-1 stock split effective October 1, 2025, which may impact shareholder value and market perception.

The most recent analyst rating on (JP:1878) stock is a Hold with a Yen17700.00 price target. To see the full list of analyst forecasts on Daito Construction stock, see the JP:1878 Stock Forecast page.