Wakachiku Construction Co., Ltd. (1888) AI Stock Analysis

• Market Cap: ¥61.59B
• Dividend Yield: 2.84%
• Average Volume (3M): 16.94K
• Price to Earnings (P/E): 15.2
• Beta (1Y): 0.61
• Revenue Growth: 15.45%
• EPS Growth: 43.95%
• Country: JP
• Employees: 873
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 130.83
• Shares Outstanding: 12,964,993
• 10 Day Avg. Volume: 13,890
• 30 Day Avg. Volume: 16,936
• PEG Ratio: -0.48
• Price to Book (P/B): 1.00
• Price to Sales (P/S): 0.56
• P/FCF Ratio: -4.26
• 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: 65 Neutral
• Price Target: ¥5,225.00 ▲(9.54% Upside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 02/14/26

The score is driven primarily by mixed financial performance: a strong equity base and stable gross margins are tempered by recent revenue weakness and negative free cash flow. Technicals add modest support (price above key longer-term averages with positive MACD), while valuation is reasonable with a moderate dividend yield.

Positive Factors

Balance sheet strength

A consistently high equity ratio provides durable financial stability in a cyclical construction sector. It cushions the company during downturns, supports access to bank financing and bonding capacity for large projects, and reduces bankruptcy risk over a 2–6 month horizon.

Stable gross margins

Stable gross margins indicate consistent cost control and pricing discipline in project execution. This margin stability underpins longer-term profitability even when revenues fluctuate, enabling the firm to sustain contractor margins and preserve project-level economics.

Resilient EBITDA margin

Resilient EBITDA margins reflect the company's ability to manage operating leverage and fixed costs. That sustained operating profitability supports cash generation capacity, allows continued investment in operations, and provides a buffer against near-term revenue volatility.

Negative Factors

Volatile revenue growth

Volatile and recently declining revenues reduce predictability of backlog and cash flow in a project-driven business. Over the medium term, this can impair utilization of resources, weaken negotiating leverage with suppliers, and make planning capex and hiring more difficult.

Negative free cash flow

Sustained negative free cash flow strains liquidity and forces reliance on external financing or asset sales. In construction, weak cash conversion can impair ability to fund working capital for contracts, raise bonding costs, and limit capacity to pursue new, larger projects.

Rising leverage

Increasing leverage reduces financial flexibility and raises interest and refinancing risk. Combined with revenue and cash-flow weakness, higher debt can elevate default risk on downturns, constrain bidding for new contracts, and limit strategic investment options over the coming months.

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

Company Description

Wakachiku Construction Co., Ltd. engages in the construction, construction consulting, management, and real estate businesses in Japan and internationally. It is also involved in the marine development, regional and urban development, and environmental maintenance and conservation businesses. The company was founded in 1890 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Wakachiku Construction Co., Ltd. generates revenue primarily through its construction projects, which include both public and private sector contracts. The company's revenue model is based on fixed-price contracts, cost-plus contracts, and time and materials contracts, allowing flexibility depending on project requirements. Key revenue streams include residential and commercial building projects, infrastructure development contracts, and specialized construction services. Additionally, Wakachiku Construction benefits from strategic partnerships with suppliers and subcontractors, which enhance its operational efficiency and cost-effectiveness. The company's longstanding reputation and expertise also attract repeat business and referrals, further bolstering its earnings.

Wakachiku Construction Co., Ltd. Financial Statement Overview

Summary

Financials are mixed: profitability is relatively stable (gross margin ~14–15%) and the balance sheet shows a strong equity ratio (above 50%). Offsetting this, revenue growth has been volatile with recent declines, net margin fell in the latest year, and recent negative free cash flow plus inconsistent cash conversion raise execution and liquidity risk.

Income Statement

Wakachiku Construction Co., Ltd. demonstrates a stable gross profit margin around 14-15% over the years, indicating consistent cost management. However, the net profit margin has been fluctuating due to variable net income, with a notable decline in the latest year. The revenue growth rate is volatile, with recent declines, highlighting a challenge in maintaining sales momentum. EBITDA margin has shown resilience despite revenue challenges.

Balance Sheet

The company shows a strong equity position with an equity ratio consistently above 50%, indicating financial stability. However, the debt-to-equity ratio has increased recently due to higher debt levels, which may pose a risk if not managed well. Return on Equity (ROE) has been moderate, reflecting steady but not exceptional profitability.

Cash Flow

Cash flow analysis reveals some concerns, particularly with negative free cash flow in recent years, indicating potential liquidity issues. The operating cash flow to net income ratio shows inconsistency, suggesting challenges in converting profits into cash. However, the company has had periods of strong free cash flow, hinting at potential for recovery.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	90.00B	86.46B	94.92B	84.00B	89.16B	89.82B
Gross Profit	12.92B	12.73B	14.10B	12.73B	12.97B	8.59B
EBITDA	6.33B	6.27B	7.82B	7.50B	7.66B	3.55B
Net Income	3.76B	3.69B	5.09B	5.44B	4.74B	1.81B
Balance Sheet
Total Assets	83.00B	91.89B	90.78B	88.33B	81.48B	91.47B
Cash, Cash Equivalents and Short-Term Investments	14.01B	13.22B	18.89B	27.32B	16.40B	14.38B
Total Debt	3.31B	12.70B	4.43B	4.43B	6.28B	18.21B
Total Liabilities	34.53B	42.03B	43.39B	45.63B	43.13B	57.63B
Stockholders Equity	46.93B	48.32B	45.93B	41.32B	37.09B	32.69B
Cash Flow
Free Cash Flow	0.00	-11.35B	-5.43B	14.24B	14.75B	-5.87B
Operating Cash Flow	0.00	-10.26B	-3.96B	15.14B	16.03B	-5.31B
Investing Cash Flow	0.00	-1.85B	-3.61B	-1.33B	-1.48B	-651.00M
Financing Cash Flow	0.00	6.40B	-1.38B	-2.97B	-12.75B	4.99B

Wakachiku Construction Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 4770.00
• 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:1888, the sentiment is Neutral. The current price of 4770 is below the 20-day moving average (MA) of 4933.25, below the 50-day MA of 4811.20, and below the 200-day MA of 4780.65, indicating a neutral trend. The MACD of 17.56 indicates Positive momentum. The RSI at 47.83 is Neutral, neither overbought nor oversold. The STOCH value of 46.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:1888.

Wakachiku Construction Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1810	79 Outperform	¥58.29B	11.75	―	3.97%	2.85%	317.62%
1929	75 Outperform	¥59.95B	15.67	―	3.78%	11.81%	52.35%
1899	67 Neutral	¥66.90B	11.72	―	2.56%	1.71%	14.20%
1888	65 Neutral	¥61.59B	15.24	―	2.84%	15.45%	43.95%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1822	63 Neutral	¥80.63B	19.06	―	3.84%	-8.79%	―
1811	60 Neutral	¥67.40B	16.41	―	1.57%	11.01%	231.83%

Wakachiku Construction Co., Ltd. Corporate Events

Wakachiku Seals Capital Alliance With Aso Group, Backs Tender Offer While Keeping Listing

Wakachiku Construction has entered into a capital and business alliance with Aso Corporation and ACVE Holdings to support sustainable growth and enhance corporate value, while its board has also backed a tender offer by ACVE Holdings for Wakachiku shares, leaving participation to shareholder discretion. The company emphasized that the tender offer is not intended to lead to delisting, and it expects its shares to remain on the Tokyo Stock Exchange Prime Market, aligning the alliance with its medium‑term plan to secure larger, more profitable projects amid labor shortages and rising costs.

By partnering with the diversified Aso Group, which operates across cement, healthcare and education among other sectors, Wakachiku aims to strengthen its position in social infrastructure and emerging fields such as offshore wind power generation. The collaboration is designed to help the construction firm improve productivity, deepen stakeholder coordination and advance human capital management, potentially reshaping its competitive standing in Japan’s construction and infrastructure markets.

The most recent analyst rating on (JP:1888) stock is a Hold with a Yen5288.00 price target. To see the full list of analyst forecasts on Wakachiku Construction Co., Ltd. stock, see the JP:1888 Stock Forecast page.

Wakachiku Backs Aso-Linked Tender Offer While Keeping TSE Listing

Wakachiku Construction Co., Ltd. said its board has endorsed a tender offer for its common shares to be launched by ACVE Holdings GK, an investment vehicle wholly owned by major shareholder Aso Corporation. The company will support the offer but leave the final decision on whether to tender to individual shareholders, emphasizing that the transaction is part of a broader capital and business alliance with Aso and ACVE.

Under the plan, ACVE will offer 4,455 yen per share, and Wakachiku expects its stock to remain listed on the Tokyo Stock Exchange Prime Market after the deal. Because ACVE is fully controlled by Aso, which already holds about 42.63% of Wakachiku’s shares, the move consolidates Aso’s influence as a related party while maintaining the company’s public listing, a key point for existing investors and market liquidity.

The most recent analyst rating on (JP:1888) stock is a Hold with a Yen5288.00 price target. To see the full list of analyst forecasts on Wakachiku Construction Co., Ltd. stock, see the JP:1888 Stock Forecast page.

Aso Group Unit Launches Tender Offer and Alliance Deal for Wakachiku Construction

Wakachiku Construction announced that ACVE Holdings, a wholly owned investment vehicle of Aso Corporation, will launch a tender offer to acquire common shares of Wakachiku and enter into a capital and business alliance with Aso and the company. ACVE currently holds no Wakachiku shares, while Aso already owns about 42.63% of the stock, and the new offer to purchase additional shares is expected to further consolidate Aso Group’s influence over Wakachiku’s governance and strategic direction.

The tender offer, conducted under Japan’s Financial Instruments and Exchange Act, targets 463,995 shares, equivalent to an ownership ratio of roughly 3.65% of Wakachiku’s outstanding shares after treasury stock. By tightening its equity and business ties with Aso and ACVE, Wakachiku is poised to deepen collaboration within the Aso Group, which may affect future capital policy, business development, and the balance of interests among existing shareholders and other stakeholders.

The most recent analyst rating on (JP:1888) stock is a Hold with a Yen5288.00 price target. To see the full list of analyst forecasts on Wakachiku Construction Co., Ltd. stock, see the JP:1888 Stock Forecast page.

Wakachiku Construction Backs Tender Offer and Alliance With Aso and ACVE Holdings

Wakachiku Construction has agreed to a tender offer for its shares by ACVE Holdings GK and to enter into a capital and business alliance with Aso Corporation and ACVE Holdings. Aso, which has been increasing its stake since 2019, signaled in September 2025 its intention to make Wakachiku a consolidated subsidiary, prompting the company to seek assurances on preserving listing status and management independence.

Following meetings in October 2025, the parties aligned on continued listing, limited board representation for Aso, and respect for Wakachiku’s operational autonomy, while enabling Aso to consolidate the company. In parallel, Aso secured positive indications from key shareholders to tender their shares and negotiated a tender offer price set at an 8% discount to a defined recent market price, culminating in the February 12, 2026 announcement of the offer and alliance, which will reshape Wakachiku’s ownership structure and deepen its strategic ties with Aso.

The most recent analyst rating on (JP:1888) stock is a Hold with a Yen5288.00 price target. To see the full list of analyst forecasts on Wakachiku Construction Co., Ltd. stock, see the JP:1888 Stock Forecast page.

Wakachiku Construction Lifts Earnings and Keeps Outlook Intact

Wakachiku Construction reported a strong rebound for the nine months ended December 31, 2025, with net sales rising 24.2% year on year to ¥75.06 billion and operating profit jumping 41.9% to ¥4.08 billion. Profit attributable to owners of the parent increased 21.7% to ¥2.6 billion, while basic earnings per share climbed to ¥204.59, supported by higher volumes after a weak prior-year period.

Total assets expanded to ¥109.59 billion and net assets to ¥51.53 billion, though the equity ratio slipped to 45.6% as the balance sheet grew. The company maintained its full-year forecast, targeting ¥100.6 billion in net sales and ¥3.7 billion in profit attributable to owners of the parent, and plans to lift the annual dividend to ¥131 per share, signaling confidence in earnings stability and offering a modestly improved return to shareholders.

The most recent analyst rating on (JP:1888) stock is a Hold with a Yen5288.00 price target. To see the full list of analyst forecasts on Wakachiku Construction Co., Ltd. stock, see the JP:1888 Stock Forecast page.

Wakachiku Construction Secures ¥8.5 Billion in New Funding Under Commitment Line

Wakachiku Construction Co., Ltd. has arranged new financing under existing commitment line agreements with a syndicate of 10 financial institutions, including trust, city and regional banks, to optimize its working capital structure. The company will refinance 13 billion yen of existing loans and raise an additional 8.5 billion yen under an unsecured syndication-type commitment line maturing on March 24, 2026, subject to financial covenants on net assets and ordinary profit, and it expects the impact on its business results to be immaterial, suggesting a primarily liquidity-management and balance-sheet-smoothing objective rather than a shift in business strategy.

The most recent analyst rating on (JP:1888) stock is a Hold with a Yen5055.00 price target. To see the full list of analyst forecasts on Wakachiku Construction Co., Ltd. stock, see the JP:1888 Stock Forecast page.

Wakachiku Construction Taps ¥13 Billion Syndicated Credit Line for Working Capital

Wakachiku Construction Co., Ltd. has decided to draw down funds under existing commitment line agreements with a syndicate of 10 financial institutions to efficiently secure working capital. The company will borrow 13 billion yen in total, using 11.5 billion yen to repay existing loans, under an unsecured syndication-type commitment line that includes financial covenants on net assets and ordinary profit, and it expects the impact of this financing move on its business results to be immaterial.

The most recent analyst rating on (JP:1888) stock is a Hold with a Yen5055.00 price target. To see the full list of analyst forecasts on Wakachiku Construction Co., Ltd. stock, see the JP:1888 Stock Forecast page.

Wakachiku Construction Taps Syndicated Commitment Line for Working Capital

Wakachiku Construction Co., Ltd. has arranged new borrowings under existing commitment line agreements with a syndicate of 10 trust, city and regional banks to secure working capital. The company will repay 13 billion yen of existing loans and draw 11.5 billion yen under a 13 billion yen unsecured syndication-type commitment line maturing on January 23, 2026, subject to financial covenants on net assets and ordinary profit, with management stating that the impact on business results will be immaterial.

The most recent analyst rating on (JP:1888) stock is a Hold with a Yen5194.00 price target. To see the full list of analyst forecasts on Wakachiku Construction Co., Ltd. stock, see the JP:1888 Stock Forecast page.

Wakachiku Construction Details Parent’s Interim Results and Shareholder Structure

Wakachiku Construction has disclosed that its unlisted parent company, ASO CORPORATION, has finalized its semi-annual financial results for the fiscal year ending March 31, 2026, and outlined the parent’s basic profile, including its healthcare and real estate focus, capital size, and governance structure. The notice also details Wakachiku’s shareholder composition and major shareholders, underscoring the influence of Aso-related entities and educational institutions within its ownership structure, which is relevant for investors assessing control, governance dynamics, and the broader corporate group relationships surrounding the construction firm.

The most recent analyst rating on (JP:1888) stock is a Hold with a Yen5194.00 price target. To see the full list of analyst forecasts on Wakachiku Construction Co., Ltd. stock, see the JP:1888 Stock Forecast page.

Wakachiku Construction Secures 13 Billion Yen Commitment Line for Operational Liquidity

Wakachiku Construction Co., Ltd. has announced the decision to borrow funds under commitment line agreements with 10 financial institutions. This strategic move aims to enhance its working capital through a syndication-type commitment line agreement valued at 13 billion yen, demonstrating financial agility and commitment to maintaining operational liquidity while adhering to financial covenants.

The most recent analyst rating on (JP:1888) stock is a Hold with a Yen5194.00 price target. To see the full list of analyst forecasts on Wakachiku Construction Co., Ltd. stock, see the JP:1888 Stock Forecast page.

Wakachiku Construction Secures New Borrowing Agreements

Wakachiku Construction Co., Ltd. has announced the implementation of borrowings under commitment line agreements with ten financial institutions to efficiently procure working capital. The company plans to repay existing loans and borrow additional funds, with the impact on business results expected to be minimal.

The most recent analyst rating on (JP:1888) stock is a Hold with a Yen5194.00 price target. To see the full list of analyst forecasts on Wakachiku Construction Co., Ltd. stock, see the JP:1888 Stock Forecast page.

Wakachiku Construction Secures Funds for Working Capital

Wakachiku Construction Co., Ltd. has announced a decision to secure funds through a commitment line agreement with ten financial institutions to efficiently manage its working capital. The company plans to repay existing loans and borrow additional funds, with the impact on business results expected to be minimal.

The most recent analyst rating on (JP:1888) stock is a Hold with a Yen5194.00 price target. To see the full list of analyst forecasts on Wakachiku Construction Co., Ltd. stock, see the JP:1888 Stock Forecast page.