Toenec Corporation (1946) AI Stock Analysis

• Market Cap: ¥230.14B
• Dividend Yield: 3.09%
• Average Volume (3M): 107.85K
• Price to Earnings (P/E): 14.2
• Beta (1Y): 0.90
• Revenue Growth: 3.75%
• EPS Growth: 87.00%
• Country: JP
• Employees: 6,077
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 39.93
• Shares Outstanding: 96,649,950
• 10 Day Avg. Volume: 122,180
• 30 Day Avg. Volume: 107,850
• PEG Ratio: 0.53
• Price to Book (P/B): 0.66
• Price to Sales (P/S): 0.33
• P/FCF Ratio: 7.75
• 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: 77 Outperform
• Price Target: ¥2,722.00 ▲(40.38% Upside)
• Action: Reiterated Date: 11/28/25
• Date: Action: Reiterated 11/28/25

Toenec Corporation's stock is rated positively due to strong financial performance and bullish technical indicators. The stock's valuation is attractive, with a reasonable P/E ratio and a solid dividend yield. The absence of recent earnings call data and corporate events does not detract from the overall positive outlook.

Positive Factors

Stable Profitability & Margins

Consistently healthy gross and operating margins indicate durable cost control and pricing power in core engineering projects. Stable EBIT/EBITDA margins support predictable operating cash generation, enabling reinvestment and resilience against cyclical demand swings over months.

Solid Balance Sheet Foundation

A 44% equity ratio and moderate leverage provide financial flexibility for project financing and absorbing shocks. Improved ROE shows better capital use. This structural balance-sheet strength underpins sustainable operations and supports medium-term strategic investments or responses to industry cycles.

Strong Cash Conversion

OCF converting at 1.65x of net income signals reliable earnings quality and cash conversion. Positive free cash flow, despite a decline, provides capacity for capex, debt servicing and shareholder returns. This cash-generation ability is a durable pillar for capital allocation decisions.

Negative Factors

Declining Free Cash Flow

A drop in free cash flow points to tighter discretionary funding and less buffer for dividends, buybacks or opportunistic investments. If higher capex persists, it could constrain liquidity and slow deleveraging or strategic spending over the next several months without improved operating cash.

Mixed Revenue Trend

Conflicting indications on top-line momentum create forecasting uncertainty: a recent negative revenue-growth metric suggests demand softness or timing effects. Sustained or recurring top-line weakness would pressure margins and capex returns, complicating medium-term planning and investment.

Moderate Leverage Needs Monitoring

While leverage is moderate today, the balance-sheet note flags elevated debt that warrants vigilance. In a scenario of slower cash flow or higher rates, servicing and refinancing could limit flexibility. Continuous monitoring is needed to avoid longer-term strain on capital allocation.

Toenec Corporation Business Overview & Revenue Model

Company Description

Toenec Corporation, an integrated facility company, engages in the construction and improvement of social infrastructure in the energy, environment, and information technology fields in Japan. The company constructs electricity distribution routes; underground power lines; solar power and distribution routes; indoor electrical equipment that supports public and commercial facilities; and telecommunications networks, such as installation of base stations for mobile communications, laying optical cables and constructing network systems, and information and communication technology solutions. It also involved in air conditioning, ventilation, sanitation and water supply, and drainage equipment to public facilities and commercial facilities, including hospitals, schools, factories, and buildings etc.; installs air conditioning and ground water utilization services; pipe laying; road surfacing; waterworks; electrical and communication, steel-structure, electrical communication construction; and machinery and tool installation. In addition, the company engages in the fire-control system construction; scaffolding, earthworks, concrete, painting, waterproofing, and interior finishing works; and procurement, manufacture, sale, and leasing of control equipment, lighting equipment, wiring materials, electrical appliances, furniture, kitchen equipment, medical equipment, health and hygiene equipment, home-care devices and goods, fitness equipment, sporting goods, apparel, sundry items, building plant and equipment, air-conditioning equipment, compressors, electrical communication equipment, computer systems, data terminals, and related parts. Further, the company provides freight vehicles; sells, leases, and manages real estate; invests and finances in other companies; and dispatches manpower. The company was incorporated in 1944 and is headquartered in Nagoya, Japan. Toenec Corporation is a subsidiary of Chubu Electric Power Company, Incorporated.

How the Company Makes Money

Toenec Corporation generates revenue through multiple streams, primarily focusing on the sale of its manufactured products to various industries. The company earns significant income from long-term contracts with major automotive and aerospace manufacturers, which provide a steady demand for their specialized components. Additionally, Toenec offers custom engineering services, allowing clients to tailor solutions to their specific needs, thus enhancing customer loyalty and repeat business. Strategic partnerships with technology firms also contribute to revenue growth, enabling Toenec to integrate innovative technologies into its product offerings. Furthermore, the company invests in research and development to create new products and improve existing lines, ensuring a continuous pipeline of offerings that meet market demands and drive profitability.

Toenec Corporation Financial Statement Overview

Summary

Toenec Corporation exhibits strong financial health with consistent revenue and profit growth, stable margins, and a robust equity position. However, the decline in free cash flow growth suggests a need for strategic capital allocation.

Income Statement

Toenec Corporation has demonstrated consistent revenue growth, with a notable increase of 7.2% from 2024 to 2025. The gross profit margin has remained healthy at approximately 14.9% in 2025, indicating effective cost management. The net profit margin improved to 4.0% in 2025, reflecting enhanced profitability. EBIT and EBITDA margins were stable at 5.9% and 10.6% respectively, showcasing operational efficiency. Overall, the income statement reveals a strong upward trajectory in revenue and profitability.

Balance Sheet

The balance sheet of Toenec Corporation reflects robust equity, with an equity ratio of 44.0% as of 2025, highlighting financial stability. The debt-to-equity ratio of 0.67 indicates moderate leverage, suggesting prudent debt management. Return on equity improved to 7.88%, signaling effective utilization of equity to generate profits. While the company maintains a solid financial position, the relatively high debt level requires continuous monitoring to mitigate potential risks.

Cash Flow

Toenec Corporation's cash flow analysis shows a decline in operating cash flow, dropping to ¥17.77 billion in 2025, down from the previous year. Free cash flow decreased to ¥11.62 billion, reflecting higher capital expenditures. The operating cash flow to net income ratio remains healthy at 1.65, demonstrating strong cash generation relative to net income. While the cash flow position is stable, the reduction in free cash flow growth suggests a need for strategic capital allocation to sustain future growth.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	272.14B	270.97B	252.86B	232.05B	219.62B	215.68B
Gross Profit	41.73B	40.48B	37.41B	32.32B	34.90B	35.54B
EBITDA	29.53B	28.82B	27.40B	8.29B	23.36B	23.55B
Net Income	10.90B	10.77B	9.35B	-5.55B	8.28B	8.83B
Balance Sheet
Total Assets	292.95B	310.56B	304.93B	300.17B	301.60B	308.23B
Cash, Cash Equivalents and Short-Term Investments	40.20B	43.03B	39.78B	31.80B	30.52B	48.41B
Total Debt	81.40B	91.17B	93.02B	97.06B	98.98B	109.11B
Total Liabilities	157.46B	173.88B	173.79B	182.98B	175.00B	188.49B
Stockholders Equity	135.45B	136.63B	131.10B	117.16B	126.57B	119.72B
Cash Flow
Free Cash Flow	2.48B	11.62B	15.81B	10.26B	969.00M	19.29B
Operating Cash Flow	3.72B	19.01B	19.12B	12.64B	5.94B	24.11B
Investing Cash Flow	-806.00M	-3.08B	-2.06B	-2.12B	2.97B	-3.72B
Financing Cash Flow	-4.62B	-13.67B	-9.90B	-8.36B	-27.52B	-9.93B

Toenec Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1939.00
• 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:1946, the sentiment is Positive. The current price of 1939 is below the 20-day moving average (MA) of 2198.30, below the 50-day MA of 2100.88, and above the 200-day MA of 1592.25, indicating a bullish trend. The MACD of 64.57 indicates Negative momentum. The RSI at 70.67 is Negative, neither overbought nor oversold. The STOCH value of 87.27 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1946.

Toenec Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1926	82 Outperform	¥158.48B	15.45	―	3.22%	12.23%	43.29%
1965	82 Outperform	¥155.66B	14.05	―	1.55%	20.44%	106.45%
1946	77 Outperform	¥230.14B	14.23	―	3.09%	3.75%	87.00%
1941	76 Outperform	¥282.69B	16.21	9.20%	2.78%	1.31%	59.20%
1939	76 Outperform	¥101.86B	18.89	―	4.38%	-0.84%	-1.80%
1934	68 Neutral	¥221.53B	16.91	―	2.87%	6.66%	46.38%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Toenec Corporation Corporate Events

Toenec Confirms Reviewed Nine-Month Results as Profit Jumps Despite Lower Sales

Toenec Corporation reported consolidated financial results for the nine months ended December 31, 2025, under Japanese GAAP, confirming that its interim review by independent auditors has been completed with no changes to the figures previously disclosed on February 2, 2026. While net sales declined 3.1% year on year to ¥192.1 billion, operating profit rose 28.6% to ¥12.9 billion, ordinary profit increased 38.1% to ¥13.4 billion, and profit attributable to owners of parent surged 80.4% to ¥10.9 billion, boosting basic earnings per share to ¥117.68 and lifting the capital adequacy ratio to 47.8% alongside higher net assets.

The most recent analyst rating on (JP:1946) stock is a Hold with a Yen2411.00 price target. To see the full list of analyst forecasts on Toenec Corporation stock, see the JP:1946 Stock Forecast page.

Toenec Lifts Profit 80% on Higher Margins Despite Lower Sales

Toenec Corporation reported consolidated net sales of ¥192.1 billion for the nine months ended December 31, 2025, down 3.1% year on year, but delivered a sharp profit recovery with operating profit up 28.6% to ¥12.9 billion and profit attributable to owners of parent up 80.4% to ¥10.9 billion, reflecting improved margins despite lower revenue. The company’s financial position also strengthened, with total assets at ¥297.3 billion, a higher equity ratio of 47.8% and net assets per share rising, while it maintained its full-year forecast for modest sales growth and double-digit profit expansion, and signaled continued shareholder returns through a planned total annual dividend of ¥65 per share for the year ending March 31, 2026.

The most recent analyst rating on (JP:1946) stock is a Hold with a Yen2411.00 price target. To see the full list of analyst forecasts on Toenec Corporation stock, see the JP:1946 Stock Forecast page.