Asahi Kogyosha Co., Ltd. (1975) AI Stock Analysis

• Market Cap: ¥128.84B
• Dividend Yield: 4.2%
• Average Volume (3M): 106.80K
• Price to Earnings (P/E): 15.9
• Beta (1Y): 0.86
• Revenue Growth: 3.00%
• EPS Growth: 58.58%
• Country: JP
• Employees: 987
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 64.13
• Shares Outstanding: 27,200,000
• 10 Day Avg. Volume: 157,130
• 30 Day Avg. Volume: 106,803
• PEG Ratio: 0.12
• Price to Book (P/B): 1.19
• Price to Sales (P/S): 0.54
• P/FCF Ratio: -515.47
• 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: 78 Outperform
• Price Target: ¥4,902.00 ▲(41.68% Upside)
• Action: Reiterated Date: 02/13/26
• Date: Action: Reiterated 02/13/26

The score is driven primarily by strong financial performance (profitability, low leverage, improving ROE), tempered by weaker cash-flow conversion and negative free cash flow in 2025. Technically, the uptrend is intact but overbought indicators add near-term risk. Valuation is supportive with a moderate P/E and an attractive dividend yield.

Positive Factors

Improving profitability and margins

Sustained margin expansion indicates stronger operational efficiency and pricing power. Higher gross, EBIT and net margins provide durable earnings resilience across cycles, allowing the firm to fund investments, support returns to shareholders, and absorb input cost shocks without immediate profit erosion.

Low leverage and stable capital structure

Very low leverage gives the company structural financial flexibility: it can invest, withstand downturns, and access debt markets cheaply if needed. A stable equity ratio reduces refinancing and solvency risk and supports sustained capital allocation to operations and strategic projects.

Multi-year revenue growth

Material top-line growth over several years suggests durable market demand and effective commercial execution. A growing revenue base creates scale benefits for margins and R&D, supports long-term cash generation potential, and provides a foundation for further market share gains.

Negative Factors

Negative free cash flow in 2025

A negative free cash flow year signals that cash from operations did not cover capex or working capital needs, constraining internal funding for growth, reductions in leverage or shareholder returns. If persistent, it forces reliance on external financing or asset sales, reducing strategic optionality.

Declining cash conversion

Weaker conversion of reported earnings into cash points to possible accrual buildup or working capital pressure, reducing the reliability of profits as cash available for reinvestment. Over time this can magnify earnings volatility and limit the company's ability to sustainably fund capex or dividends from operations.

Declining total assets over time

A shrinking asset base may reflect divestments, underinvestment or contraction in capacity, which can cap future revenue growth and competitive positioning. If structural rather than tactical, it could signal reduced scale or slower market participation, requiring management clarity on strategy.

Asahi Kogyosha Co., Ltd. Business Overview & Revenue Model

Company Description

Asahi Kogyosha Co., Ltd. primarily engages in the air-conditioning and sanitation installation works in Japan. It also designs and develops precision environmental control equipment for industries involved in manufacturing semiconductors and liquid crystal panels. Asahi Kogyosha Co., Ltd. was founded in 1925 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Asahi Kogyosha Co., Ltd. generates revenue through multiple streams, primarily by selling its specialized chemical products to various industries. The company's revenue model is centered around the production and distribution of high-margin products, which allows for significant profit margins. Key revenue streams include the sale of electronic materials used in semiconductor manufacturing, specialty chemicals for the automotive sector, and functional resins utilized in construction applications. Additionally, the company benefits from long-term contracts with major clients, ensuring a steady flow of income. Strategic partnerships with other firms in the chemical and technology sectors further enhance its market reach and contribute to its earnings. Research and development investments also enable Asahi Kogyosha to innovate and expand its product offerings, driving additional revenue growth.

Asahi Kogyosha Co., Ltd. Financial Statement Overview

Summary

Strong profitability and improving margins alongside low leverage (debt-to-equity 0.10) and improved ROE (14.82%). The main offset is weaker cash flow quality, including negative free cash flow in 2025 and a declining operating cash flow to net income ratio, plus declining total assets.

Income Statement

Asahi Kogyosha Co., Ltd. shows strong revenue growth, with a 31.17% increase in revenue from 2022 to 2025. The company has improved its gross and net profit margins significantly over the years, demonstrating enhanced operational efficiency. The EBIT and EBITDA margins have also grown, indicating robust profitability. However, the revenue growth rate has slowed recently, which could be a potential concern.

Balance Sheet

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.10 in 2025, suggesting prudent leverage management. The return on equity has improved to 14.82%, showing effective use of equity to generate profit. The equity ratio remains stable, indicating a strong capital structure. Potential risk lies in the declining total assets over the years.

Cash Flow

Cash flow statements reveal fluctuating free cash flow, with a notable negative free cash flow in 2025. The operating cash flow to net income ratio has declined, indicating potential challenges in converting earnings into cash flow. However, the company has maintained a positive operating cash flow over the years, which is a positive sign.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	91.15B	91.95B	91.68B	80.17B	68.82B	70.44B
Gross Profit	16.72B	15.36B	11.65B	9.05B	8.46B	8.41B
EBITDA	9.77B	9.29B	5.77B	4.37B	3.52B	3.18B
Net Income	6.91B	6.23B	3.71B	2.48B	1.86B	1.82B
Balance Sheet
Total Assets	70.56B	80.86B	84.01B	78.94B	72.08B	71.50B
Cash, Cash Equivalents and Short-Term Investments	13.12B	18.53B	18.77B	17.67B	19.51B	16.03B
Total Debt	4.70B	3.99B	3.55B	3.36B	3.88B	4.51B
Total Liabilities	29.48B	38.83B	45.26B	43.56B	37.72B	37.84B
Stockholders Equity	41.08B	42.03B	38.76B	35.38B	34.36B	33.66B
Cash Flow
Free Cash Flow	0.00	-97.00M	1.72B	-1.38B	4.45B	-1.75B
Operating Cash Flow	0.00	1.28B	2.01B	-34.00M	4.65B	-1.46B
Investing Cash Flow	0.00	612.00M	-304.00M	-481.00M	89.00M	-170.00M
Financing Cash Flow	0.00	-1.53B	-1.29B	-1.35B	-1.30B	-1.45B

Asahi Kogyosha Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3460.00
• 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:1975, the sentiment is Positive. The current price of 3460 is below the 20-day moving average (MA) of 4357.00, below the 50-day MA of 3931.20, and above the 200-day MA of 3104.19, indicating a bullish trend. The MACD of 258.94 indicates Negative momentum. The RSI at 84.21 is Negative, neither overbought nor oversold. The STOCH value of 90.70 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1975.

Asahi Kogyosha Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6371	81 Outperform	¥277.17B	11.68	8.83%	3.85%	1.48%	8.86%
5192	78 Outperform	¥118.22B	18.89	―	4.64%	3.99%	-28.28%
1975	78 Outperform	¥128.84B	15.85	―	4.20%	3.00%	58.58%
5195	77 Outperform	¥99.71B	22.23	―	3.82%	3.68%	-46.19%
6490	76 Outperform	¥203.34B	22.58	―	2.50%	-2.46%	-10.72%
7995	67 Neutral	¥94.61B	17.28	―	3.77%	-5.87%	24.10%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Asahi Kogyosha Co., Ltd. Corporate Events

Asahi Kogyosha Lifts Profit Outlook and Hikes Dividend on Strong Construction Gains

Asahi Kogyosha has sharply raised its full-year forecasts for the fiscal year ending March 2026, projecting consolidated net sales of 103 billion yen and profit attributable to owners of parent of 8 billion yen, driven by better-than-expected progress and profitability in construction projects. Orders are also set to exceed prior estimates, with nonconsolidated orders now expected to reach 100 billion yen, underpinned by increased demand for production and environmental facility installations.

In line with the stronger earnings outlook and its policy of maintaining a minimum 40% consolidated payout ratio, the company plans to lift its year-end dividend forecast by 35 yen to 85 yen per share, bringing the annual dividend to 135 yen and implying a payout ratio of 43.5%. The move signals management’s confidence in sustained profit growth and provides a tangible boost to shareholder returns ahead of the June 2026 shareholders’ meeting, strengthening Asahi Kogyosha’s appeal to income-focused investors.

The most recent analyst rating on (JP:1975) stock is a Buy with a Yen4651.00 price target. To see the full list of analyst forecasts on Asahi Kogyosha Co., Ltd. stock, see the JP:1975 Stock Forecast page.

Asahi Kogyosha Lifts Forecast and Dividends on Surging Nine-Month Profit

Asahi Kogyosha Co., Ltd. is a Japan-based construction and engineering company listed on the Tokyo Stock Exchange, specializing in building equipment, facilities construction, and related services. The group operates primarily in the domestic market, delivering integrated engineering solutions that support infrastructure and building projects for a broad range of corporate and institutional clients.

In the nine months to December 31, 2025, Asahi Kogyosha posted strong consolidated results, with net sales up 9.4% year-on-year to ¥68.57 billion and profit attributable to owners of parent surging 46.4% to ¥4.87 billion, driven by higher operating and ordinary profit margins. The company raised its full-year forecast, now projecting double-digit growth in sales and profit and a 28.4% rise in full-year earnings, and it also revised its dividend plan upward, signaling confidence in earnings momentum and an improving balance sheet, with shareholders’ equity ratio climbing to 55.8%.

The most recent analyst rating on (JP:1975) stock is a Buy with a Yen4651.00 price target. To see the full list of analyst forecasts on Asahi Kogyosha Co., Ltd. stock, see the JP:1975 Stock Forecast page.