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

• Market Cap: ¥8.27B
• Dividend Yield: 2.89%
• Average Volume (3M): 9.15K
• Price to Earnings (P/E): 8.8
• 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: 80 Outperform
• Price Target: ¥4,790.00 ▲(25.23% Upside)
• Action: Reiterated Date: 03/24/26
• Date: Action: Reiterated 03/24/26

The score is driven primarily by strong financial performance (improving profitability and very low leverage) and supportive valuation (low P/E and a meaningful dividend yield). Technicals are moderately positive with longer-term trend strength, though near-term momentum appears somewhat stretched.

Positive Factors

Conservative balance sheet

Very low debt-to-equity (~0.07) and a large equity base provide durable financial flexibility. This reduces refinancing and interest-rate risk, supports investment or dividend capacity during downturns, and gives the firm runway to pursue opportunistic projects without raising leverage.

Improving profitability

Margins have recovered to healthy levels (net ~9%, operating in mid-teens), indicating improved cost control and pricing power. Sustained margin expansion strengthens internal cash generation, enhances resilience through cycles, and supports reinvestment or shareholder distributions over the medium term.

Positive free cash flow conversion

Free cash flow roughly matching net income demonstrates strong cash conversion and internal funding ability. Reliable positive FCF supports capex, working capital needs and dividends without heavy external financing, increasing long-term financial independence and capital allocation optionality.

Negative Factors

Cyclicality and volatility

The business exhibits meaningful revenue and cash-flow cyclicality, including a weak 2023. Persistent project-driven swings make earnings and cash forecasts uncertain, require larger liquidity buffers, and can pressure margins and investment plans during industry downturns.

Declining FCF growth trend

Although FCF is positive, year-over-year FCF growth has declined, signaling recovery fragility. A slowing FCF growth trend limits the firm's ability to sustainably increase capex, pay higher dividends, or build reserves, and raises risk if another cyclical trough occurs.

Limited scale and liquidity

Small headcount and low trading volume imply limited scale relative to larger peers. This constrains bidding for very large contracts, reduces diversification of revenue streams, and can limit capital-market access and investor breadth, increasing sensitivity to single-project outcomes.

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.

Akatsuki Eazima Co., Ltd. Financial Statement Overview

Summary

Strong overall fundamentals: profitability improved into TTM with net margin around 9% and operating margin in the mid-teens, and the balance sheet is conservative with very low leverage (debt-to-equity ~0.07). The main detractor is cyclicality/volatility, particularly the historically uneven revenue and cash flow profile (including a weak 2023).

Income Statement

TTM (Trailing-Twelve-Months) results show solid profitability for an engineering & construction name, with net margin around 9% and operating margin in the mid-teens, both improved versus prior years. Revenue rebounded meaningfully from the 2023 trough and has continued to rise into the latest period. The main offset is some historical volatility (notably the 2023 decline and lower margins in 2023–2024 versus the latest run-rate), suggesting earnings power can be somewhat cyclical.

Balance Sheet

The balance sheet looks conservative, with very low leverage (debt-to-equity ~0.07 in TTM (Trailing-Twelve-Months), improving from ~0.14–0.16 in earlier years) and a large equity base. Returns on equity are healthy in the latest period (~11–12%), indicating the company is generating decent profits without relying on heavy borrowing. A minor watch item is that total assets dipped from the most recent annual level to TTM (Trailing-Twelve-Months), but overall financial risk appears low.

Cash Flow

Cash generation is generally supportive: TTM (Trailing-Twelve-Months) free cash flow is roughly in line with net income (about 1.0x), and free cash flow remains strongly positive. However, free cash flow growth is down year over year in the latest period, and cash flow has shown volatility historically (including a notably weak year in 2023 with negative operating and free cash flow). Overall, cash conversion is currently good, but consistency is the key drawback.

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	11.03B	10.32B	9.55B	9.49B	8.79B
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	3.48B	3.51B	3.21B	3.46B	3.09B
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: Negative
• 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:1997, the sentiment is Neutral. The current price of 3825 is below the 20-day moving average (MA) of 4141.00, below the 50-day MA of 4191.20, and above the 200-day MA of 3429.63, indicating a neutral trend. The MACD of 36.83 indicates Negative momentum. The RSI at 49.29 is Neutral, neither overbought nor oversold. The STOCH value of 58.64 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	80 Outperform	¥8.27B	8.77	―	2.89%	3.52%	42.80%
1905	80 Outperform	¥9.48B	4.52	―	4.09%	-8.48%	54.87%
2311	70 Outperform	¥6.92B	16.94	―	3.77%	11.25%	26.01%
4642	70 Outperform	¥8.00B	16.72	―	2.03%	16.10%	-10.63%
6171	69 Neutral	¥5.60B	12.28	―	2.86%	2.87%	55.82%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6085	49 Neutral	¥31.75B	-6.03	―	―	78.27%	72.99%