Seikitokyu Kogyo Co., Ltd. (1898) AI Stock Analysis

• Market Cap: ¥62.00B
• Dividend Yield: 4.9%
• Average Volume (3M): 123.23K
• Price to Earnings (P/E): 15.2
• Beta (1Y): 0.63
• Revenue Growth: 4.91%
• EPS Growth: 57.89%
• Country: JP
• Employees: 1,149
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 40.50
• Shares Outstanding: 37,424,507
• 10 Day Avg. Volume: 107,930
• 30 Day Avg. Volume: 123,230
• PEG Ratio: 0.34
• Price to Book (P/B): 1.33
• Price to Sales (P/S): 0.56
• P/FCF Ratio: -23.95
• 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: ¥1,918.00 ▲(16.31% Upside)
• Action: Reiterated Date: 11/01/25
• Date: Action: Reiterated 11/01/25

Seikitokyu Kogyo Co., Ltd. scores well due to its strong financial performance and attractive valuation, with a solid dividend yield enhancing its appeal. However, technical indicators suggest a neutral to slightly bearish trend, which tempers the overall score. The lack of earnings call and corporate events data means these factors do not influence the score.

Positive Factors

Low leverage / strong capital structure

Very low debt (D/E 0.16) and a 50.5% equity ratio provide durable financial flexibility. This supports the company's ability to bid on multi-year public works, fund working capital during project seasonality, and absorb shocks without relying on expensive external financing.

Recent revenue growth and improving gross margin

Double-digit annual revenue growth alongside a rising gross margin indicates sustainable demand capture and better cost control on projects. This combination supports longer-term contract competitiveness and the capacity to scale contract volume without proportionate margin erosion.

Operational profitability and return on equity

Positive operating margins and a near-10% ROE show the business converts projects into shareholder returns and operating cash (before cash-flow issues). Consistent mid-single-digit margins and ROE support reinvestment into equipment and workforce, underpinning long-term execution capability.

Negative Factors

Weak cash conversion / negative FCF

Declining operating cash flow and negative free cash flow are structural risks for a project-driven firm. Poor cash conversion limits the company's ability to fund upfront project costs, maintain equipment, service working capital, and sustain dividends without tapping external liquidity.

Thin net profit margins

A sub-4% net margin leaves limited buffers against project overruns, input cost inflation, or tender pricing pressure. Thin profitability constrains internal capital accumulation, making the company more sensitive to cyclical downturns and reducing long-term capacity to increase strategic investments.

Revenue cyclicality and limited customer disclosure

Reliance on awarded contracts and public-works spending creates structural revenue volatility. The lack of disclosed major customers or segment breakdown reduces visibility into concentration risk and makes long-term cash and backlog forecasting less reliable for investors and lenders.

Seikitokyu Kogyo Co., Ltd. Business Overview & Revenue Model

Company Description

Seikitokyu Kogyo Co., Ltd. operates as an infrastructure building company in Japan. The company is involved in paving various roads, such as expressways and bridges. It also undertakes civil engineering, landscape projects, and other general construction works; and manufactures and sells pavement materials, such as asphalt mixtures. The company was incorporated in 1950 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Seikitokyu Kogyo generates revenue through multiple streams, primarily by producing and selling a diverse range of chemical products tailored for industrial applications. The company earns money from both domestic and international markets, leveraging its extensive distribution network and partnerships with key industry players. Revenue is driven by long-term contracts with large manufacturers in sectors such as automotive and electronics, allowing for stable cash flow. Additionally, the company invests in research and development to innovate and expand its product offerings, which contributes to its competitive advantage and growth in revenue. Strategic collaborations and joint ventures with other firms also play a significant role in enhancing its market presence and generating additional income.

Seikitokyu Kogyo Co., Ltd. Financial Statement Overview

Summary

Seikitokyu Kogyo Co., Ltd. demonstrates strong revenue growth and a solid balance sheet with low leverage. Profitability metrics suggest potential for improvement, particularly in net profit margins. Cash flow management appears to be a challenge, necessitating a focus on liquidity and cash generation strategies. Overall, the company is positioned well financially but must address cash flow concerns to sustain growth.

Income Statement

Seikitokyu Kogyo Co., Ltd. has shown strong revenue growth of 12.85% in the most recent year, reflecting its ability to capture market opportunities. The gross profit margin improved to 12.12%, indicating effective cost management. However, the net profit margin of 3.91% suggests room for enhancing profitability. The EBIT margin of 5.88% shows operational efficiency but also highlights potential for improvement. EBITDA margin at 7.59% is decent, reflecting healthy operating cash flow generation.

Balance Sheet

The company maintains a solid balance sheet with a debt-to-equity ratio of 0.16, indicating low leverage and financial stability. The return on equity (ROE) of 9.32% is moderate, showing effective use of equity. An equity ratio of 50.50% confirms a healthy capital structure, supporting long-term solvency.

Cash Flow

Operating cash flow has declined, resulting in negative free cash flow, raising concerns about liquidity. The operating cash flow to net income ratio has turned negative, highlighting challenges in converting earnings to cash. However, historical free cash flow trends indicate potential for recovery.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	99.11B	99.36B	88.04B	92.41B	85.13B	90.02B
Gross Profit	12.56B	12.03B	9.95B	8.80B	10.23B	14.11B
EBITDA	7.80B	7.54B	6.20B	4.82B	6.36B	10.31B
Net Income	4.19B	3.89B	2.74B	1.13B	3.30B	5.18B
Balance Sheet
Total Assets	77.58B	82.56B	76.04B	78.76B	78.30B	79.41B
Cash, Cash Equivalents and Short-Term Investments	15.06B	7.75B	13.44B	8.17B	12.81B	14.04B
Total Debt	6.78B	6.71B	6.81B	6.91B	7.01B	5.01B
Total Liabilities	37.13B	40.86B	35.51B	39.10B	37.80B	38.62B
Stockholders Equity	40.45B	41.69B	40.53B	39.66B	40.50B	40.79B
Cash Flow
Free Cash Flow	1.15B	-2.31B	8.02B	-2.67B	945.00M	-2.59B
Operating Cash Flow	1.44B	-971.00M	10.95B	2.38B	4.65B	1.14B
Investing Cash Flow	-304.00M	-1.34B	-2.87B	-5.03B	-3.67B	-3.62B
Financing Cash Flow	-795.00M	-3.38B	-2.82B	-2.02B	-2.23B	2.34B

Seikitokyu Kogyo Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1649.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1898, the sentiment is Positive. The current price of 1649 is below the 20-day moving average (MA) of 1691.50, below the 50-day MA of 1676.18, and above the 200-day MA of 1532.73, indicating a bullish trend. The MACD of 7.07 indicates Negative momentum. The RSI at 64.09 is Neutral, neither overbought nor oversold. The STOCH value of 87.04 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1898.

Seikitokyu Kogyo Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1929	75 Outperform	¥61.12B	15.67	―	3.78%	11.81%	52.35%
1898	73 Outperform	¥62.00B	15.22	―	4.90%	4.91%	57.89%
1813	68 Neutral	¥60.63B	15.72	―	2.26%	12.93%	98.16%
1899	67 Neutral	¥66.90B	11.72	―	2.56%	1.71%	14.20%
1888	65 Neutral	¥63.50B	15.24	―	2.84%	15.45%	43.95%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1811	60 Neutral	¥69.90B	16.41	―	1.57%	11.01%	231.83%

Seikitokyu Kogyo Co., Ltd. Corporate Events

Seikitokyu Kogyo Reshapes Governance With New Director Role and Audit Board Changes

Seikitokyu Kogyo announced changes to its leadership structure, including the reassignment of Director and Managing Executive Officer Takanori Kawano to serve as Deputy General Manager of the Corporate Division, while retaining oversight of the Finance Department and taking on responsibility for the AI Digital Promotion Department from April 1, 2026. This move signals an emphasis on integrating digital initiatives, particularly AI, into the company’s corporate management functions.

The company also reported that Outside Audit & Supervisory Board Member Yoichi Saito will retire in late June 2026 but is being nominated as a substitute Outside Audit & Supervisory Board Member, ensuring continuity in its oversight capabilities. Following the Annual General Meeting of Shareholders scheduled for late June 2026, Seikitokyu Kogyo’s board and audit structure will comprise a mix of internal and outside directors and auditors, reinforcing its governance and risk management framework for stakeholders.

The most recent analyst rating on (JP:1898) stock is a Buy with a Yen1870.00 price target. To see the full list of analyst forecasts on Seikitokyu Kogyo Co., Ltd. stock, see the JP:1898 Stock Forecast page.

Seikitokyu Kogyo Lifts Profit Despite Lower Sales, Cuts Dividend Outlook

Seikitokyu Kogyo reported consolidated results for the nine months ended 31 December 2025 showing net sales of ¥69.8 billion, down 5.2% year on year, but higher profitability, with operating profit up 9.5% to ¥4.5 billion and profit attributable to owners of parent rising 9.5% to ¥3.0 billion, lifting basic earnings per share to ¥81.56. The company maintained a solid financial position with an equity ratio of 50.9% and almost unchanged total assets, and it plans to pay a reduced full-year dividend of ¥70 per share for the year ending March 31, 2026 versus ¥90 previously, while keeping its full-year forecast unchanged, targeting modest sales growth to ¥101.3 billion and double-digit profit growth, underscoring a focus on earnings quality and balance sheet stability despite softer top-line momentum.

The most recent analyst rating on (JP:1898) stock is a Buy with a Yen1871.00 price target. To see the full list of analyst forecasts on Seikitokyu Kogyo Co., Ltd. stock, see the JP:1898 Stock Forecast page.