Akatsuki Eazima Co., Ltd. (1997) AI Stock Analysis

• Market Cap: ¥8.35B
• Dividend Yield: 2.89%
• Average Volume (3M): 9.15K
• Price to Earnings (P/E): 9.9
• Beta (1Y): 0.36
• Revenue Growth: 3.52%
• EPS Growth: 42.80%
• Country: JP
• Employees: 117
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 100.92
• Shares Outstanding: 2,200,000
• 10 Day Avg. Volume: 12,100
• 30 Day Avg. Volume: 9,146
• PEG Ratio: 0.17
• Price to Book (P/B): 0.79
• Price to Sales (P/S): 0.65
• P/FCF Ratio: 5.07
• 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: ¥4,731.00 ▲(23.69% Upside)
• Action: Reiterated Date: 01/09/26
• Date: Action: Reiterated 01/09/26

The score is driven primarily by improved financial performance (strong TTM growth and margin expansion) and a conservatively financed balance sheet. Technicals also support the rating with a clear uptrend, though the elevated RSI suggests the move may be overheated near-term. Valuation adds support given the low P/E and dividend yield, while cash-flow volatility remains the key risk tempering the overall score.

Positive Factors

Revenue & Margin Improvement

A large TTM revenue increase alongside materially higher gross and operating margins indicates the company improved pricing, product mix, or operational efficiency. These shifts strengthen sustainable earnings power and support reinvestment capacity if the improved mix persists across projects.

Conservative Capital Structure

Very low leverage and a growing equity base give the company financial flexibility to fund capex, R&D, or absorb downturns without stressing creditors. This conservative balance sheet lowers refinancing risk and supports strategic investments over the medium term.

Cash Conversion Potential

When operations normalize, the company has demonstrated the ability to convert earnings into cash roughly one-for-one. Reliable cash conversion underpins dividend and capex funding, reduces external financing needs, and improves long-term financial resilience.

Negative Factors

Cash-Flow Volatility

Marked swings in operating and free cash flow, and OCF covering less than half of reported earnings, signal that earnings are sensitive to timing and working capital. This unpredictability complicates capital planning and raises the risk of financing needs during downturns.

Choppy Historical Results

A history of negative growth and margin deterioration tied to project mix and timing suggests earnings are not yet fully stabilized. This project-dependent volatility limits visibility into sustainable margins and complicates long-term forecasting and strategic planning.

Limited Scale

A small workforce and company scale can constrain capacity to pursue large OEM programs, expand R&D, or absorb operational disruptions. Limited scale raises execution risk on multi-project pipelines and may slow market-share gains against larger competitors.

Akatsuki Eazima Co., Ltd. Business Overview & Revenue Model

Company Description

Akatsuki Eazima Co., Ltd. engages in the energy conservation and renewal businesses in Japan. It is involved in the survey, design, and construction of renewal work/comprehensive building diagnosis. In addition, it is involved in maintenance/management of building equipment; inspection of various building equipment, such as cooling equipment, refrigerator application products, water supply and drainage equipment; on-site maintenance service for building equipment; and operates civil engineering project. Akatsuki Eazima Co., Ltd. was founded in 1952 and is based in Mito, Japan.

How the Company Makes Money

Akatsuki Eazima Co., Ltd. generates revenue through multiple streams, primarily from the sale of electronic components and systems to OEMs (Original Equipment Manufacturers) in various sectors. The company has established long-term contracts with key clients, which provide a steady flow of income. Additionally, Akatsuki Eazima Co., Ltd. offers consulting services for technology integration and product development, creating another revenue stream. The company also invests in research and development to innovate new products that meet market demands, which can lead to increased sales and partnerships with other firms in the tech industry. Strategic collaborations with suppliers and distributors further enhance its market reach and profitability.

Akatsuki Eazima Co., Ltd. Financial Statement Overview

Summary

Income statement strength is clear with sharply higher TTM revenue (+~204%) and improved profitability (gross margin ~21%, net margin ~9.3%, EBIT margin ~13.5%). Balance sheet is a standout with very low leverage (debt-to-equity ~0.07) and improving ROE (~11.7% TTM). The main drag is cash-flow reliability: operating/free cash flow has been volatile (negative in 2023) and TTM operating cash flow coverage of earnings is moderate (~0.44), with TTM free cash flow down ~11% despite higher earnings.

Income Statement

TTM (Trailing-Twelve-Months) revenue is up strongly (about +204%), with profitability improving versus prior years: gross margin rose from ~16% (2023–2024) to ~21% TTM, and net margin improved to ~9.3% TTM (vs ~4.7% in 2023). EBIT margin also strengthened to ~13.5% TTM. The main offset is that results have been choppy historically, with negative revenue growth in 2021–2023 and materially lower margins in 2023, suggesting earnings power can fluctuate with project mix and timing.

Balance Sheet

Leverage is conservative, with low debt relative to equity (debt-to-equity ~0.07 TTM, improving from ~0.14–0.16 in 2021–2023). Equity has built over time, supporting a solid capital base. Returns on equity improved to ~11.7% TTM (from ~4.9% in 2023), indicating better profitability on the balance sheet. A watch item is that total assets were higher in 2025 annual vs 2024, but dipped slightly in the TTM snapshot, implying some balance sheet movement that may reflect working-capital swings typical for contractors.

Cash Flow

Cash conversion is generally strong when operations normalize: free cash flow is roughly in line with net income in TTM (~1.0x) and was similarly strong in 2024–2025 annual periods. However, cash flow volatility is notable—operating and free cash flow were negative in 2023, and TTM free cash flow declined about 11% versus the prior period despite higher earnings. Operating cash flow relative to reported earnings is moderate (TTM coverage ~0.44), suggesting working-capital timing can materially affect near-term cash generation.

Breakdown	TTM	Aug 2025	Aug 2024	Aug 2023	Aug 2022	Aug 2021
Income Statement
Total Revenue	9.32B	9.14B	8.83B	6.64B	7.33B	7.41B
Gross Profit	1.95B	1.84B	1.40B	1.04B	1.27B	1.54B
EBITDA	1.37B	1.28B	923.66M	562.54M	779.32M	1.08B
Net Income	862.38M	796.70M	559.33M	313.55M	491.16M	669.07M
Balance Sheet
Total Assets	10.55B	10.97B	10.31B	9.55B	9.49B	8.77B
Cash, Cash Equivalents and Short-Term Investments	5.13B	5.71B	5.14B	4.15B	4.71B	4.30B
Total Debt	541.99M	587.39M	620.71M	888.18M	974.04M	795.77M
Total Liabilities	2.97B	3.42B	3.50B	3.21B	3.46B	3.08B
Stockholders Equity	7.58B	7.55B	6.81B	6.34B	6.02B	5.70B
Cash Flow
Free Cash Flow	1.07B	1.17B	1.55B	-401.73M	364.04M	287.68M
Operating Cash Flow	1.07B	1.20B	1.56B	-23.43M	372.93M	301.52M
Investing Cash Flow	-445.69M	-446.04M	-270.02M	-338.81M	290.96M	-306.78M
Financing Cash Flow	-258.07M	-185.85M	-396.93M	-195.05M	48.67M	-396.71M

Akatsuki Eazima Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 3825.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1997, the sentiment is Neutral. The current price of 3825 is below the 20-day moving average (MA) of 4239.25, below the 50-day MA of 4094.00, and above the 200-day MA of 3257.71, indicating a neutral trend. The MACD of 50.97 indicates Positive momentum. The RSI at 49.87 is Neutral, neither overbought nor oversold. The STOCH value of 45.12 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:1997.

Akatsuki Eazima Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1997	78 Outperform	¥8.35B	9.86	―	2.89%	3.52%	42.80%
1905	77 Outperform	¥9.31B	10.84	―	4.09%	-8.48%	54.87%
2311	70 Outperform	¥7.24B	17.11	―	3.77%	11.25%	26.01%
4642	70 Outperform	¥8.40B	16.87	―	2.03%	16.10%	-10.63%
6171	69 Neutral	¥6.48B	13.40	―	2.86%	2.87%	55.82%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6085	47 Neutral	¥17.43B	-56.95	―	―	78.27%	72.99%