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

• Market Cap: ¥94.39B
• Dividend Yield: 4.2%
• Average Volume (3M): 106.80K
• Price to Earnings (P/E): 13.5
• Beta (1Y): 1.00
• 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: ¥4,013.00 ▲(15.98% 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

Improved profitability and margins

Asahi Kogyosha has materially improved gross, net, EBIT and EBITDA margins, indicating better pricing, cost control, or mix. Higher and expanding margins are durable fundamentals that support sustainable operating cash generation, stronger return on capital, and resilience across business cycles.

Conservative balance sheet & low leverage

A debt-to-equity of 0.10 and a stable equity ratio point to conservative financial policy. Low leverage provides lasting financial flexibility to fund capex, weather downturns, or pursue strategic moves without stressing interest coverage, supporting long-term capital allocation optionality.

Multi-year revenue growth and positive operating cash flow

Triple-year revenue expansion (31.17% from 2022–2025) alongside consistently positive operating cash flow demonstrates durable demand and core cash-generating ability. This combination underpins reinvestment capacity and supports margins and returns over the medium term.

Negative Factors

Negative free cash flow in 2025

A negative free cash flow reading in 2025 is a material structural concern: it reduces internal funding for capex, dividends, or deleveraging and may force external financing if persistent. Over a 2–6 month horizon, sustained negative FCF can limit strategic flexibility and buffer capacity.

Weaker cash conversion (OCF to net income)

Declining conversion of net income into operating cash flow signals lower earnings quality and potential working-capital strain. If profits do not reliably convert to cash, the company faces greater financing risk for growth or shareholder returns, a durable headwind to financial resilience.

Slowing revenue growth & declining total assets

Although multi-year growth was strong, recent slowing of revenue growth combined with a decline in total assets suggests a potential compression of scale or reduced reinvestment. This can impair long-term growth runway and limit the company’s ability to sustain margin expansion or scale advantage.

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

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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	45.25B	43.56B	37.72B	37.83B
Stockholders Equity	41.08B	42.03B	38.76B	35.38B	34.36B	33.67B
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: Negative
• Last Price: 3460.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1975, the sentiment is Negative. The current price of 3460 is below the 20-day moving average (MA) of 4121.00, below the 50-day MA of 4050.70, and above the 200-day MA of 3237.49, indicating a neutral trend. The MACD of -148.22 indicates Positive momentum. The RSI at 32.40 is Neutral, neither overbought nor oversold. The STOCH value of 12.43 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	¥239.71B	9.64	8.91%	3.85%	1.48%	8.86%
5192	78 Outperform	¥108.69B	15.71	―	4.64%	3.99%	-28.28%
1975	78 Outperform	¥94.39B	13.49	―	4.20%	3.00%	58.58%
5195	77 Outperform	¥83.43B	8.96	―	3.82%	3.68%	-46.19%
6490	76 Outperform	¥166.93B	11.03	―	2.50%	-2.46%	-10.72%
7995	67 Neutral	¥80.28B	17.07	―	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.