Daito Construction (1878) AI Stock Analysis

• Market Cap: ¥1.04T
• Dividend Yield: 5.16%
• Average Volume (3M): 1.10M
• Price to Earnings (P/E): 10.8
• 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: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: ¥3,420.00 ▲(12.69% 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 Trust Construction Co.,Ltd. designs and constructs apartments, condominiums, rental office buildings, factories, and warehouses in Japan. It operates through Construction, Real Estate, and Other segments. The company also constructs mid- to high-rise rental condominiums in metropolitan area; produces and constructs steel frames and sells exterior products; manages rental buildings and provides customer services; and offers rental building brokerage and tenant recruitment services. In addition, it offers agency guarantee and rental building real estate agency services; constructs LP gas plants and supplies LP gas to rental buildings; supplies and sells energy, such as electric power to rental buildings; and operates elderly day care centers and nurseries. Further, the company provides home care, in-home support planning, home visit nursing care, support for people with disabilities, housekeeper referrals, and nursing care personnel introduction services; operates hotels in Malaysia; and handles financing, such as construction funds. Additionally, it sells insurance to rental housing owners and tenants; offers payment services for credit card settlements and other payment methods; provides consulting services for trust businesses centered on real estate management trusts, as well as asset succession and asset management; and offers document shipping and shredding, printing, and clerical work services. The company also engages in flexible workspace business; and management of facility reservation portal sites. The company was incorporated in 1974 and is headquartered in Tokyo, Japan.

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: Positive
• Last Price: 3035.00
• 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 Positive. The current price of 3035 is above the 20-day moving average (MA) of 2990.90, above the 50-day MA of 2955.49, and below the 200-day MA of 3059.00, indicating a neutral trend. The MACD of 9.91 indicates Negative momentum. The RSI at 57.94 is Neutral, neither overbought nor oversold. The STOCH value of 60.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	¥1.06T	10.16	12.53%	2.88%	11.00%	88.70%
1878	73 Outperform	¥1.04T	10.83	19.43%	5.16%	5.16%	6.00%
8923	73 Outperform	¥173.53B	11.89	14.95%	2.95%	17.74%	19.41%
3288	72 Outperform	¥1.10T	10.87	19.60%	1.94%	3.13%	11.87%
8850	68 Neutral	¥238.35B	10.23	―	2.67%	2.29%	-4.12%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
8803	63 Neutral	¥170.92B	14.43	8.95%	3.39%	28.94%	109.35%

Daito Construction Corporate Events

Daito Trust Expands into Dubai Real Estate Market

Daito Trust Construction Co., Ltd. announced a significant investment in KME PROP REAL ESTATE L.L.C, a newly established entity in Dubai, marking a strategic move to expand its real estate development business in the region. This investment, which has resulted in KME becoming a specified subsidiary, is expected to have minimal impact on the company’s consolidated results for the current fiscal year.

The most recent analyst rating on (JP:1878) stock is a Buy with a Yen3420.00 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 Mixed Financial Results Amid Stock Split

Daito Trust Construction reported its consolidated financial results for the six months ending September 30, 2025, showing a 5.8% increase in net sales to ¥959,553 million. However, the company experienced declines in operating and ordinary profits by 2.4% and 3.3%, respectively, compared to the previous year. The company also announced a 5-for-1 stock split effective October 1, 2025, which impacts the calculation of earnings per share and dividends. Despite the profit decline, Daito Trust Construction maintains a solid equity-to-asset ratio, reflecting a stable financial position.

The most recent analyst rating on (JP:1878) stock is a Buy with a Yen3420.00 price target. To see the full list of analyst forecasts on Daito Construction stock, see the JP:1878 Stock Forecast page.