Kyowanissei Co., Ltd. (1981) AI Stock Analysis

• Market Cap: ¥16.97B
• Dividend Yield: 2.42%
• Average Volume (3M): 570.00
• Price to Earnings (P/E): 11.2
• Beta (1Y): 0.31
• Revenue Growth: 7.88%
• EPS Growth: 55.16%
• Country: JP
• Employees: 1,046
• Sector: Industrials
• Sector Strength: 72
• Industry: Construction Materials
• EPS (TTM): 26.31
• Shares Outstanding: 10,746,300
• 10 Day Avg. Volume: 640
• 30 Day Avg. Volume: 570
• PEG Ratio: 1.43
• Price to Book (P/B): 0.78
• Price to Sales (P/S): 0.39
• P/FCF Ratio: 15.54
• 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: 79 Outperform
• Price Target: ¥1,862.00 ▲(18.60% Upside)

The score is driven primarily by strong financial performance, especially the very conservative balance sheet and improving TTM earnings/cash flow. Valuation is also supportive with a moderate P/E and dividend yield. Technicals are constructive (price above major moving averages) but momentum signals are mostly neutral, keeping the score from being higher.

Positive Factors

Conservative balance sheet

Extremely low leverage and steadily growing equity provide durable financial flexibility. This conservatism supports sustained R&D, capital investment, and downside protection in cyclical periods, reducing refinancing risk and enabling strategic actions without stressing cash flow.

Improving cash generation

Stronger TTM operating and free cash flow, with FCF roughly 83% of net income, indicate the business converts earnings into spendable cash. That sustained cash conversion supports reinvestment, dividends, and balance sheet strength over multiple quarters.

Positive revenue growth trend

Nearly 10% revenue growth and a sharp TTM increase show persistent demand for products. Continued top-line expansion gives scope to scale operations, dilute fixed costs, and fund new product development, which are durable drivers of profitability improvement.

Negative Factors

Thin margins

Low gross and net margins constrain the company's ability to absorb cost inflation or invest aggressively while preserving returns. Persistently thin margins limit reinvestment capacity and reduce the cushion for competitive or pricing pressure over the medium term.

Low OCF relative to revenue and FCF volatility

Low operating cash flow margins and year-to-year FCF swings make long-term planning harder, reducing predictability for capex, R&D, and shareholder returns. Volatility increases reliance on the conservative balance sheet during weaker periods.

Profitability below prior peak

Returns and profitability have not recovered to earlier peaks, suggesting structural pressures—pricing, mix, or cost base—that could limit ROE upside. Sustained underperformance versus prior highs signals potential competitive or operational headwinds.

Kyowanissei Co., Ltd. Business Overview & Revenue Model

Company Description

Kyowanissei Co.,Ltd. engages in the construction and civil engineering business in Japan. The company operates in four segments: Building Equipment Business, Gas Equipment Business, Gas Pipe Business, and Electrical Construction and Civil Engineering Business. Its businesses cover gas equipment construction; heating, hot water supply, and air conditioning equipment construction; solar cells, fuel cells, and storage battery systems construction; gas pipeline laying work; road paving work related to gas pipeline work; and maintenance services in the areas of commercial air conditioners, gas pipeline repair work, and gas leakage. The company is also involved in water supply/hot water supply, drainage, air-conditioning ventilation equipment, gas hot water systems, sprinkler and inert gas fire extinguishing equipment, and factory plant construction; air conditioning installation work; and water supply, hot water supply, drainage, aeration, and other maintenance of various facilities maintenance. In addition, it undertakes electric construction, installation, and maintenance works comprising general civil engineering works, such as water supply construction and road paving repair works; and irrigation works. Further, the company is involved in the floor heating work, gas equipment installation work, propane gas work, and exterior work; inspection of pipes; vehicle leasing; and non-life insurance agency businesses. Kyowanissei Co.,Ltd. was founded in 1887 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Kyowanissei Co., Ltd. generates revenue through multiple key streams. The primary source of income comes from the sales of its pharmaceutical products, which are distributed to hospitals, clinics, and pharmacies both domestically and internationally. Additionally, the company earns revenue from the sale of medical devices, which are often sold in conjunction with its pharmaceutical offerings. Strategic partnerships with healthcare providers and research institutions also contribute to revenue through collaborative projects and co-development of new products. Furthermore, the company invests in research and development to create innovative therapies, which can lead to new product launches and increased market share, thereby enhancing overall profitability.

Kyowanissei Co., Ltd. Financial Statement Overview

Summary

Strong overall financial quality led by an exceptionally low-debt balance sheet and improving TTM earnings and free cash flow. Main constraint is thin margins and profitability still below the stronger 2021 level, implying some longer-term margin compression.

Income Statement

TTM (Trailing-Twelve-Months) revenue rose sharply versus the latest annual period, and profitability also improved (higher EBIT and net income). Margins remain modest for the industry profile (TTM gross margin ~10% and net margin ~3.6%), but they have generally held in a relatively tight range over the past few years. A key watch-out is that profitability is still below the stronger 2021 level, indicating some longer-term margin compression even though the near-term trend is better.

Balance Sheet

The balance sheet is very conservatively financed, with extremely low leverage (debt is close to negligible relative to equity across all periods). Equity has grown steadily, supporting a stronger capital base. Returns on equity are positive and improving versus recent years (TTM ~7.7%), though still below the peak level seen earlier in the history provided, suggesting the company is strong on stability but not maximizing returns.

Cash Flow

Cash generation is solid: TTM operating cash flow and free cash flow are both higher than the latest annual period, and free cash flow shows a very strong TTM growth rate. Free cash flow is also well supported by earnings (TTM free cash flow is ~83% of net income). The main weakness is that operating cash flow remains low relative to revenue (low single-digit), and free cash flow has been volatile year-to-year (notably weaker in 2024 before rebounding).

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	40.03B	37.42B	35.89B	34.47B	34.24B	34.49B
Gross Profit	4.12B	3.63B	3.67B	3.50B	3.55B	3.94B
EBITDA	2.45B	1.95B	1.73B	1.53B	1.70B	2.72B
Net Income	1.50B	1.13B	1.06B	933.61M	1.08B	1.74B
Balance Sheet
Total Assets	29.11B	28.36B	28.65B	26.39B	26.26B	26.11B
Cash, Cash Equivalents and Short-Term Investments	6.58B	6.78B	7.93B	7.63B	8.16B	8.33B
Total Debt	30.58M	36.67M	39.89M	37.79M	159.11M	360.63M
Total Liabilities	9.99B	9.49B	9.85B	8.75B	8.64B	9.21B
Stockholders Equity	19.12B	18.87B	18.80B	17.64B	17.62B	16.89B
Cash Flow
Free Cash Flow	1.41B	944.45M	463.98M	590.56M	699.43M	830.67M
Operating Cash Flow	1.49B	1.11B	1.37B	1.11B	769.44M	1.15B
Investing Cash Flow	-582.74M	-1.04B	-713.13M	-575.07M	-142.26M	615.54M
Financing Cash Flow	-1.04B	-1.22B	-359.13M	-966.40M	-598.75M	-525.77M

Kyowanissei Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1570.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1981, the sentiment is Positive. The current price of 1570 is below the 20-day moving average (MA) of 1579.90, below the 50-day MA of 1591.18, and above the 200-day MA of 1518.60, indicating a bullish trend. The MACD of 11.06 indicates Negative momentum. The RSI at 61.62 is Neutral, neither overbought nor oversold. The STOCH value of 35.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1981.

Kyowanissei Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5288	80 Outperform	¥59.91B	10.07	―	3.25%	9.50%	77.72%
1981	79 Outperform	¥16.97B	11.22	―	2.42%	7.88%	55.16%
3157	77 Outperform	¥21.24B	8.85	―	3.07%	13.22%	28.90%
5268	69 Neutral	¥12.65B	53.63	―	1.24%	-2.82%	-44.93%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
5271	54 Neutral	¥3.30B	30.59	―	3.85%	0.29%	-45.50%
5269	49 Neutral	¥19.81B	-130.33	―	3.24%	-3.73%	-143.19%