Kandenko Co., Ltd. (1942) AI Stock Analysis

• Market Cap: ¥662.77B
• Dividend Yield: 3.45%
• Average Volume (3M): 583.76K
• Price to Earnings (P/E): 15.6
• Beta (1Y): 0.54
• Revenue Growth: 12.28%
• EPS Growth: 54.97%
• Country: JP
• Employees: 10,442
• Sector: Industrials
• Sector Strength: 84
• Industry: Engineering & Construction
• EPS (TTM): 51.29
• Shares Outstanding: 205,288,330
• 10 Day Avg. Volume: 628,250
• 30 Day Avg. Volume: 583,756
• PEG Ratio: 2.16
• Price to Book (P/B): 0.64
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 95.76
• 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: ¥3,515.15
• Price Target Upside: 8.36% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 75 Outperform
• Price Target: ¥3,583.00 ▲(10.45%Upside)

Kandenko Co., Ltd. scores well due to its strong financial performance, particularly in revenue growth and profitability, supported by a solid balance sheet. While technical indicators are favorable, the overbought signals suggest caution. The valuation is reasonable with a competitive dividend yield, contributing to the overall positive outlook.

Kandenko Co., Ltd. Business Overview & Revenue Model

Company Description

Kandenko Co.,Ltd. operates as a general infrastructure company in Japan. It engages in the facility installation works, electrical equipment sale, real estate rental and leasing, and electric power sale, as well as electrical, plumbing, and other works. The company also undertakes works on electrical facilities and equipment inside various types of buildings and structures, building interiors, control equipment, and interior network; and environmental facilities and systems, and renovation works on air conditioning and sanitation systems, as well as water, heat, and disaster prevention systems. In addition, it is involved in the construction and maintenance of networks for cable TV and municipalities; and mobile communication base stations, as well as installation of optical fiber cables and related equipment for electric power providers and telecommunications providers. Further, the company undertakes the construction and maintenance of overhead power distribution lines facilities, including power poles with power cables; and underground distribution lines facilities, such as underground power cables. Additionally, it undertakes works on power stations and substations, and renewable energy power generation; overhead transmission lines; and underground transmission lines and civil engineering works, as well as designs and constructs solar and wind power plants; and inspects and maintains nuclear power plant facilities and equipment. Kandenko Co.,Ltd. was incorporated in 1944 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Kandenko Co., Ltd. generates revenue through its comprehensive range of electrical engineering services. The company's primary revenue streams include the design, construction, and maintenance of electrical systems for both public and private sectors. It undertakes large-scale projects in energy infrastructure, such as power plants and renewable energy facilities, and telecommunications networks. Kandenko often forms strategic partnerships with government bodies and private enterprises, leveraging these relationships to secure contracts and projects that drive its earnings. Additionally, the company may engage in collaborative ventures that expand its service offerings and market reach.

Kandenko Co., Ltd. Financial Statement Overview

Summary

Kandenko Co., Ltd. presents a robust financial performance with strong revenue growth and profitability margins in the income statement, underpinned by a solid balance sheet with low leverage and high equity ratio. The cash flow statement shows improvements in free cash flow, though there is room for enhancing cash conversion efficiency. The company is well-positioned in the construction industry, with a solid foundation for future growth and financial stability.

Income Statement

Kandenko Co., Ltd. has demonstrated a strong revenue growth trend, with a 12.26% increase from 2024 to 2025 and consistent growth over the past years. The gross profit margin for 2025 was 13.83%, indicating solid profitability in the construction industry. The net profit margin also improved to 6.31%, reflecting efficient cost management and operational performance. EBIT and EBITDA margins have also shown improvement, reaching 8.68% and 10.66% respectively. These figures highlight the company's ability to grow revenue while maintaining healthy profitability.

Balance Sheet

The balance sheet reflects a healthy financial structure with a debt-to-equity ratio of 0.07, indicating low leverage and a strong equity position. The company has a high equity ratio of 60.96%, which suggests a stable financial foundation with more assets financed by equity than debt. Return on equity improved to 11.52%, showcasing effective utilization of shareholder capital. While the balance sheet shows strong equity and low debt levels, the relatively modest ROE could suggest potential for further efficiency improvements.

Cash Flow

The cash flow statement indicates positive free cash flow growth with a 114.94% increase from 2024 to 2025, demonstrating significant improvement in cash generation. The operating cash flow to net income ratio of 0.43 suggests moderate cash conversion efficiency. The free cash flow to net income ratio is 0.08, indicating room for enhancement in free cash flow relative to net income. Overall, the cash flow position is improving but could benefit from further strengthening.

Breakdown
TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
650.56B	671.89B	598.43B	541.58B	495.57B	556.04B
	Gross Profit
90.17B	92.92B	71.19B	60.14B	56.72B	55.15B
	EBIT
57.94B	58.33B	40.93B	32.75B	30.64B	30.04B
	EBITDA
52.37B	71.61B	54.09B	40.78B	38.08B	37.29B
	Net Income Common Stockholders
39.19B	42.38B	27.34B	21.17B	20.32B	20.15B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
64.91B	60.99B	66.65B	65.23B	72.61B	63.48B
	Total Assets
560.48B	603.22B	567.27B	487.83B	470.97B	457.00B
	Total Debt
23.63B	27.11B	27.27B	15.78B	15.80B	16.63B
	Net Debt
-41.28B	-33.88B	-39.39B	-47.15B	-51.81B	-41.85B
	Total Liabilities
196.49B	222.27B	221.48B	179.37B	177.45B	177.54B
	Stockholders Equity
351.69B	367.86B	333.94B	298.40B	283.98B	270.42B
Cash Flow		Free Cash Flow
0.00	3.38B	1.57B	2.00B	19.91B	7.12B
	Operating Cash Flow
0.00	18.26B	19.84B	7.46B	27.15B	12.87B
	Investing Cash Flow
0.00	-10.17B	-19.08B	-6.63B	-9.22B	-972.00M
	Financing Cash Flow
0.00	-12.63B	567.00M	-7.32B	-7.79B	-26.32B

Kandenko Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3244.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1942, the sentiment is Positive. The current price of 3244 is above the 20-day moving average (MA) of 3050.32, above the 50-day MA of 2902.68, and above the 200-day MA of 2453.59, indicating a bullish trend. The MACD of 91.28 indicates Negative momentum. The RSI at 70.68 is Negative, neither overbought nor oversold. The STOCH value of 84.54 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1942.

Kandenko Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1976	82 Outperform	¥69.66B	8.48		3.51%	9.78%	38.18%
1942	75 Outperform	¥662.77B	15.65	12.02%	3.45%	12.28%	54.97%
Sector *	66 Neutral	$4.44B	12.06	5.34%	6.22%	4.17%	-11.81%
CKOCF		$1.28B	9.69	8.99%	3.43%	―	―
1934	76 Outperform	¥135.66B	11.66		4.54%	5.77%	62.13%
1946	72 Outperform	¥115.50B	10.40		4.99%	7.16%	15.78%
1959	71 Outperform	¥415.30B	14.36		2.56%	1.04%	3.13%

Kandenko Co., Ltd. Corporate Events

Kandenko Announces Board Reshuffle Ahead of AGM

Kandenko Co., Ltd. has announced changes in its board of directors and Audit & Supervisory Board members, with new appointments set to be confirmed at the upcoming Annual General Meeting of Shareholders. These changes, including the nomination of Mika Narahashi as an outside director, are expected to enhance the company’s governance and align with regulatory standards, potentially impacting its strategic direction and stakeholder relations.

Kandenko Subsidiary Surpasses Financial Forecasts for Fiscal Year 2025

Kandenko Co., Ltd.’s subsidiary, Kawasaki Setsubi Kogyo Co., Ltd., reported financial results for the fiscal year ending March 31, 2025, that exceeded previous forecasts. The subsidiary’s net sales, operating profit, ordinary profit, and net profit all surpassed expectations due to increased orders and effective cost management, highlighting strong operational performance and strategic execution.

Kandenko Co., Ltd. Strengthens Independence Amid Strong TEPCO Ties

Kandenko Co., Ltd. has a significant relationship with the TEPCO Group, with TEPCO Power Grid, Inc. holding a substantial portion of its voting rights. Despite this, Kandenko ensures its operational independence through a structured board decision-making process and the appointment of independent directors. The company’s transactions with TEPCO include substantial electrical work, highlighting its critical role in the power transmission and distribution sector.

Kandenko Co., Ltd. Revises Medium-Term Plan Amid Strong Performance

Kandenko Co., Ltd. has revised its Medium-Term Management Plan for FY2024-FY2026, achieving record-high performance by meeting fiscal 2026 targets two years early. The company anticipates continued strong demand for construction projects, leading to upward revisions in its financial targets. Additionally, Kandenko is enhancing its focus on capital costs and stock prices to drive sustainable growth and corporate value, with increased growth investment and a reduction in cross-shareholdings.

Kandenko Co., Ltd. Reports Strong Financial Growth and Increased Dividends

Kandenko Co., Ltd. reported a significant increase in its consolidated financial results for the fiscal year ended March 31, 2025, with net sales rising by 12.3% and profit attributable to owners of the parent increasing by 55.0%. The company also announced a substantial increase in annual dividends per share, reflecting its strong financial performance and commitment to returning value to shareholders.