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

• Market Cap: ¥58.60B
• Dividend Yield: 2.84%
• Average Volume (3M): 16.94K
• Price to Earnings (P/E): 13.3
• Beta (1Y): 0.58
• Revenue Growth: 15.45%
• EPS Growth: 43.95%
• Country: JP
• Employees: 873
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 65.55
• 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: 59 Neutral
• Price Target: ¥5,309.00 ▲(11.30% Upside)

The overall stock score reflects stable financial performance and reasonable valuation, but is weighed down by weak technical indicators. The company's strong equity position and dividend yield are positives, but challenges in revenue growth and cash flow management, along with bearish market momentum, are significant concerns.

Positive Factors

Strong equity base

A sustained equity ratio above 50% provides a durable capital buffer against project overruns and construction cycles. This strengthens solvency, supports access to credit on better terms, and underpins the firm's ability to pursue larger public and infrastructure contracts over the medium term.

Consistent gross margins

Maintaining gross margins near 14-15% despite revenue volatility indicates disciplined cost control and project pricing. Margin stability supports operating resilience, funds reinvestment in project management and innovation, and helps preserve profitability through industry cycles.

Diversified revenue model

A mix of contract types and exposure to both public and private sectors reduces concentration risk and smooths revenue across cycles. Fixed-price scales business, while cost-plus/time-and-materials protect margin on complex work; supplier partnerships further support delivery reliability and repeat business.

Negative Factors

Weak cash conversion

Persistent negative free cash flow and inconsistent operating-cash-to-net-income conversion signal difficulty converting profits into cash. This limits self-financing of capex and bond/bid capacity, increases reliance on external funding, and heightens medium-term liquidity and execution risk.

Volatile revenue growth

Volatile and recently declining revenues reduce predictability of backlog and margins, impairing capacity utilization and bargaining power with subcontractors. For a construction firm, sustained top-line weakness can limit scale benefits and constrain strategic investments over the coming quarters.

Rising leverage

An increase in debt relative to equity raises interest and refinancing exposure, reducing financial flexibility. In construction, higher leverage can constrain bidding ability (bonding limits), elevate vulnerability to rate shocks, and pressure margins if cashflows weaken.

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

Wakachiku Construction Co., Ltd. shows stable profitability with a strong equity base. However, challenges in revenue growth and cash flow management, including recent declines in sales and negative free cash flow, are concerning. The company needs to enhance operational efficiency and cash flow generation.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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: Negative
• Last Price: 4770.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1888, the sentiment is Negative. The current price of 4770 is below the 20-day moving average (MA) of 4796.25, above the 50-day MA of 4624.50, and above the 200-day MA of 4679.53, indicating a bearish trend. The MACD of 0.10 indicates Positive momentum. The RSI at 41.05 is Neutral, neither overbought nor oversold. The STOCH value of 8.99 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
1921	80 Outperform	¥80.27B	33.73	―	0.79%	-8.53%	-83.61%
1929	75 Outperform	¥54.43B	16.22	―	3.78%	11.81%	52.35%
1898	73 Outperform	¥60.06B	13.71	―	4.90%	4.91%	57.89%
1786	70 Outperform	¥54.32B	14.82	―	3.53%	-2.95%	-35.66%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1888	59 Neutral	¥58.60B	13.29	―	2.84%	15.45%	43.95%

Wakachiku Construction Co., Ltd. Corporate Events

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.

Wakachiku Construction Reports Strong Financial Growth for H1 2025

Wakachiku Construction Co., Ltd. reported a strong financial performance for the six months ending September 30, 2025, with a notable increase in net sales and profits compared to the previous year. The company’s net sales increased by 29.1%, and profit attributable to owners rose by 300.9%, indicating a robust recovery and growth trajectory. This financial upturn positions Wakachiku favorably within the construction industry, potentially enhancing its market competitiveness and stakeholder confidence.

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 for Working Capital

Wakachiku Construction Co., Ltd. announced its decision to borrow funds through commitment line agreements with ten financial institutions to efficiently raise working capital. The borrowing involves a syndication type commitment line agreement totaling 13,000 million yen, with 8,000 million yen being borrowed after repaying 2,500 million yen of existing loans. The impact on business results is expected to be immaterial.

The most recent analyst rating on (JP:1888) stock is a Hold with a Yen5172.00 price target. To see the full list of analyst forecasts on Wakachiku Construction Co., Ltd. stock, see the JP:1888 Stock Forecast page.