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

• Market Cap: ¥1.16T
• Dividend Yield: 2%
• Average Volume (3M): 856.03K
• Price to Earnings (P/E): 22.6
• Beta (1Y): 0.63
• Revenue Growth: 16.43%
• EPS Growth: 53.76%
• Country: JP
• Employees: 10,442
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 67.27
• Shares Outstanding: 205,288,330
• 10 Day Avg. Volume: 1,145,720
• 30 Day Avg. Volume: 856,033
• PEG Ratio: 0.24
• Price to Book (P/B): 1.49
• Price to Sales (P/S): 0.81
• P/FCF Ratio: 162.24
• 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: 69 Neutral
• Price Target: ¥6,238.00 ▲(24.07% Upside)

Kandenko Co., Ltd. scores well due to strong financial performance, with robust revenue growth and profitability. However, technical indicators suggest overbought conditions, and valuation metrics indicate potential overvaluation. The lack of earnings call and corporate events data limits further insights.

Positive Factors

Revenue Growth Trend

Sustained double-digit revenue growth signals durable end-market demand for Kandenko's electrical construction and maintenance services. Over months this supports scale benefits, steadier project pipelines, and the ability to invest in capabilities that reinforce competitive positioning and margin resilience.

Low Leverage / Strong Equity Base

Very low leverage and a high equity ratio provide financial flexibility to weather project timing swings, fund capex or strategic bids without high debt costs, and preserve credit capacity. This structural balance-sheet strength reduces refinancing risk and supports long-term operational continuity.

Improving Free Cash Flow

A large increase in free cash flow indicates improving cash generation from operations, enabling reinvestment, potential shareholder returns, and buffer against project payment volatility. Sustained FCF growth enhances strategic optionality and reduces dependence on external financing over time.

Negative Factors

Weak Cash Conversion Efficiency

Despite improving headline FCF, low conversion ratios show earnings are not consistently translating into cash. For a project-driven contractor, this heightens exposure to working-capital swings, payment delays and procurement timing, constraining durable liquidity and reinvestment capacity.

Modest Return on Equity

An ROE around mid-teens or lower suggests limited capital efficiency for a capital-light engineering firm. Unless asset utilization or margin expansion improves, shareholder returns may lag peers, reducing long-term attractiveness for investors seeking higher profitability per equity unit.

Project Concentration & Execution Risk

Reliance on winning and executing construction contracts creates structural revenue and margin volatility. Project delays, cost overruns, labor or procurement issues can materially affect profitability over months. Long-term stability depends on consistent bidding success and disciplined project execution.

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 multiple streams, primarily from contracts in electrical installation and engineering services. The company engages in large-scale infrastructure projects, providing electrical systems for buildings, transportation, and public utilities. Key revenue streams include the installation of power generation systems, maintenance services, and the integration of ICT solutions. Additionally, Kandenko collaborates with various partners in the construction and technology sectors, which helps expand its market reach and enhance service offerings. The company's focus on energy efficiency and sustainable solutions also aligns with growing market demands, contributing to its overall financial performance.

Kandenko Co., Ltd. Financial Statement Overview

Summary

Kandenko Co., Ltd. demonstrates strong financial performance with robust revenue growth and profitability margins. The income statement shows a 12.26% revenue increase and solid profit margins. The balance sheet is healthy with low leverage and a high equity ratio, though ROE suggests room for efficiency improvements. Cash flow is improving, with significant free cash flow growth, but cash conversion efficiency could be enhanced.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	708.59B	671.89B	598.43B	541.58B	495.57B	556.04B
Gross Profit	100.56B	92.92B	71.19B	60.14B	56.72B	55.15B
EBITDA	92.16B	71.61B	54.09B	40.78B	38.60B	37.70B
Net Income	47.65B	42.38B	27.34B	21.17B	20.32B	20.15B
Balance Sheet
Total Assets	578.88B	603.22B	567.27B	487.83B	470.97B	457.00B
Cash, Cash Equivalents and Short-Term Investments	69.14B	60.99B	66.65B	65.23B	72.61B	63.48B
Total Debt	13.31B	27.11B	27.27B	15.78B	15.80B	16.63B
Total Liabilities	192.10B	222.27B	221.48B	179.37B	177.45B	177.54B
Stockholders Equity	373.26B	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: 5028.00
• 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 5028 is below the 20-day moving average (MA) of 5302.15, below the 50-day MA of 5028.08, and above the 200-day MA of 3861.75, indicating a bullish trend. The MACD of 226.33 indicates Negative momentum. The RSI at 84.39 is Negative, neither overbought nor oversold. The STOCH value of 92.24 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	80 Outperform	¥84.60B	11.60	―	3.46%	-3.62%	9.37%
1959	79 Outperform	¥592.91B	19.31	―	2.15%	-5.20%	-1.20%
1946	77 Outperform	¥203.83B	13.04	―	3.09%	3.75%	87.00%
1941	76 Outperform	¥257.11B	11.94	9.20%	2.78%	1.31%	59.20%
1942	69 Neutral	¥1.16T	22.60	14.15%	2.00%	16.43%	53.76%
1934	68 Neutral	¥200.03B	16.45	―	2.87%	6.66%	46.38%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Kandenko Co., Ltd. Corporate Events

Kandenko Co., Ltd. Reports Strong Financial Growth for H1 2025

Kandenko Co., Ltd. reported a significant increase in its financial performance for the six months ended September 30, 2025, with net sales rising by 18.8% and profit attributable to owners of the parent increasing by 53% compared to the previous year. This robust growth is indicative of the company’s strong market positioning and operational efficiency, which may positively impact stakeholders and enhance its competitive edge in the industry.

The most recent analyst rating on (JP:1942) stock is a Hold with a Yen5349.00 price target. To see the full list of analyst forecasts on Kandenko Co., Ltd. stock, see the JP:1942 Stock Forecast page.