Sala Corporation (2734) AI Stock Analysis

• Market Cap: ¥69.95B
• Dividend Yield: 2.91%
• Average Volume (3M): 75.29K
• Price to Earnings (P/E): 12.0
• Beta (1Y): 0.57
• Revenue Growth: 5.82%
• EPS Growth: 21.40%
• Country: JP
• Employees: 3,963
• Sector: Industrials
• Sector Strength: 72
• Industry: Conglomerates
• EPS (TTM): 13.00
• Shares Outstanding: 66,041,145
• 10 Day Avg. Volume: 75,580
• 30 Day Avg. Volume: 75,290
• PEG Ratio: 1.03
• Price to Book (P/B): 0.77
• Price to Sales (P/S): 0.28
• P/FCF Ratio: 10.23
• 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: 67 Neutral
• Price Target: ¥1,178.00 ▲(3.88% Upside)

The score is driven primarily by constructive financial performance (strong recent revenue growth and improving leverage, offset by thin margins and uneven cash-flow conversion). Valuation is a positive contributor with a modest P/E and solid dividend yield, while technicals are mixed with near-term weakness versus short moving averages despite being above longer-term averages.

Positive Factors

Re-accelerating revenue growth

A ~21% top-line reacceleration indicates durable demand and traction across product lines. Sustained revenue growth supports scale economies, funds strategic investments, and strengthens contract credibility with large construction clients over a multi-quarter horizon.

Improving leverage and balance-sheet resilience

Material reduction in debt-to-equity improves financial flexibility and reduces interest burden risk. A stronger capital structure enhances the company's ability to fund capex, pursue partnerships, and weather construction-cycle volatility over the next several quarters.

Diversified revenue mix and long-term contracts

Multiple revenue streams (product sales, long-term contracts, services) and strategic partnerships reduce concentration risk and cyclicality. Value-added services and sustainable offerings increase customer stickiness and align with longer-term infrastructure and green-building trends.

Negative Factors

Thin net margins

Persistently thin net margins limit earnings buffer against input-cost inflation or contract pricing pressure. Low margin structure constrains retained earnings for reinvestment and reduces flexibility to absorb cyclical downturns without cutting investment or increasing leverage.

Volatile free cash flow and weak conversion

Inconsistent FCF and only moderate earnings-to-cash conversion reduce the firm's ability to reliably fund dividends, capex, or debt reduction. Over several quarters this increases refinancing and liquidity risk and complicates longer-term capital allocation planning.

Sizable absolute debt and moderate returns on equity

Although leverage metrics improved, large absolute debt levels and only moderate ROE indicate constrained capital efficiency. This raises sensitivity to adverse cycles and may limit capacity for M&A or aggressive growth without further deleveraging.

Sala Corporation Business Overview & Revenue Model

Company Description

SALA Corporation, through its subsidiaries, engages in the energy supply and solution business in Japan. It provides natural gas, and LP gas/petroleum products; sells electricity; and generates biomass power. The company also engages in the transportation of gas and petroleum for private homes; and water delivery, renovation, and cultural lectures and cooking classes businesses. In addition, it develops social infrastructure facilities, including office buildings, hospitals, schools, condominiums, parks, roads, bridges, and harbor facilities; offers infrastructure maintenance services to urban functions, such as gas, water supply/sewage, civil engineering, paving, and harbor construction; and provides integrated services comprising electric, air conditioning, and plumbing design, as well as construction and maintenance. Further, the company engages in the system development business for various industries, including factories and universities; develops houses; operates automobile dealerships; provides automobile inspection and maintenance services; and sells animal pharmaceuticals, as well as provides dietetic treatment for obese animals. Additionally, it operates restaurants under the SHISEN HANTEN and XIÈ XIÈ names; and hotels and sport clubs, as well as offers real estate brokerage services. The company also provides various insurance/financing products and credit cards; and manufactures electronic equipment for automobiles and motorcycles. SALA Corporation was founded in 1909 and is headquartered in Toyohashi, Japan.

How the Company Makes Money

Sala Corporation generates revenue through multiple key streams, primarily from the sale of construction materials and products. Its revenue model is built on direct sales to construction companies, contractors, and retail clients, both domestically and internationally. The company also benefits from long-term contracts with large construction firms, ensuring a steady income flow. Furthermore, Sala Corporation has established strategic partnerships with various industry players, enhancing its market reach and distribution capabilities. Additional revenue is derived from value-added services such as technical support, logistics, and consulting, which help clients optimize their use of Sala's products. The growing demand for sustainable building solutions and infrastructure projects also significantly contributes to the company's earnings.

Sala Corporation Financial Statement Overview

Summary

Income statement is solid (re-accelerating sales growth and steady margins), leverage is improving with manageable debt-to-equity, but net margins remain thin and free cash flow has been volatile with only moderate earnings-to-cash conversion.

Income Statement

Sales growth re-accelerated in the latest annual period (about +21%) after a flat/soft prior year, and operating profitability remains steady with gross margin in the mid‑20% range and operating margin around the mid‑3% range. Net margin is consistently positive but thin (roughly ~2–3%), and profitability has not shown a clear upward step-change, which limits the score despite solid top-line momentum.

Balance Sheet

Leverage looks manageable for the profile, with debt-to-equity improving meaningfully from above 1.0x (2020) to roughly ~0.67x in the latest annual period, alongside rising equity over time. That said, debt remains sizable in absolute terms, and returns on equity (where provided) are moderate rather than standout, suggesting balance-sheet strength is improving but not conservative.

Cash Flow

Cash generation is positive, with operating cash flow improving versus the weaker 2023 level and free cash flow turning meaningfully positive again in the latest annual period. However, free cash flow has been volatile (including negative in 2023), and free cash flow relative to net income is only moderate in the latest year, indicating earnings-to-cash conversion is not consistently strong.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	251.53B	240.50B	242.06B	234.85B	227.94B
Gross Profit	61.26B	57.23B	55.83B	57.60B	58.37B
EBITDA	16.31B	14.58B	16.19B	15.55B	15.25B
Net Income	5.87B	5.25B	6.10B	5.68B	5.26B
Balance Sheet
Total Assets	218.34B	202.28B	189.27B	188.42B	187.48B
Cash, Cash Equivalents and Short-Term Investments	31.88B	28.19B	22.97B	24.19B	24.75B
Total Debt	61.34B	55.64B	53.94B	53.37B	58.31B
Total Liabilities	124.77B	116.66B	110.62B	115.06B	120.78B
Stockholders Equity	91.72B	83.98B	77.18B	72.01B	65.42B
Cash Flow
Free Cash Flow	6.89B	2.79B	-1.20B	4.33B	10.15B
Operating Cash Flow	16.16B	14.24B	5.76B	9.93B	15.82B
Investing Cash Flow	-12.43B	-10.33B	-5.62B	-3.86B	-4.40B
Financing Cash Flow	1.75B	-431.00M	-1.37B	-6.52B	-8.79B

Sala Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1134.00
• 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:2734, the sentiment is Positive. The current price of 1134 is above the 20-day moving average (MA) of 1097.05, above the 50-day MA of 1102.62, and above the 200-day MA of 1007.02, indicating a bullish trend. The MACD of -0.74 indicates Negative momentum. The RSI at 53.56 is Neutral, neither overbought nor oversold. The STOCH value of 71.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2734.

Sala Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8081	78 Outperform	¥43.93B	11.93	―	3.48%	18.42%	51.06%
8157	75 Outperform	¥61.07B	10.60	―	2.82%	-5.63%	52.73%
3232	74 Outperform	¥54.62B	9.24	―	2.97%	-2.75%	-3.17%
7130	72 Outperform	¥76.69B	10.02	―	2.78%	17.27%	-16.85%
2676	69 Neutral	¥37.53B	23.77	―	3.89%	9.48%	17.63%
2734	67 Neutral	¥69.95B	12.02	―	2.91%	5.82%	21.40%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Sala Corporation Corporate Events

SALA Corporation Overhauls Top Management to Bolster Strategy and Governance

SALA Corporation has announced a leadership reshuffle effective 20 February 2026, elevating Managing Director Takayuki Watarai to Representative Managing Director while he continues to head the Management Strategy Division, signaling continuity in its group-wide strategic and innovation agenda. The company is also strengthening segment governance by appointing Shingo Akama—already President and Representative Director of SALA Real Estate Inc.—as a Board Director and Executive Officer in charge of the Properties Segment, while long‑serving engineering head Takahisa Kurebayashi retires from the Board to become an advisor at Chubu Engineering Corporation, and seasoned finance and governance professional Miyuki Tani joins as an outside director and Audit and Supervisory Committee member; together these appointments suggest a deliberate balancing of internal continuity and external expertise aimed at bolstering oversight and execution across key business segments.

The most recent analyst rating on (JP:2734) stock is a Hold with a Yen1141.00 price target. To see the full list of analyst forecasts on Sala Corporation stock, see the JP:2734 Stock Forecast page.

SALA Corporation Sets Five-Year Plan to Lift Profitability and Build “X (Cross) 120” Growth Model

SALA Corporation has unveiled its 6th Medium-Term Management Plan covering the five years from the fiscal year ending November 30, 2026 to the fiscal year ending November 30, 2030, built around the basic policy “X (Cross) 120,” which emphasizes creating new value through intersection, collaboration, co-creation, and transformation as the group heads toward its 2030 Vision. The plan outlines five key strategies: establishing business models under the “SALA in Life” and “SALA in Business” concepts, creating new value to drive business development, improving profitability and transforming management in existing operations, strengthening recruitment, development, retention and engagement of human resources amid labor shortages and rising wages, and accelerating digital transformation to boost productivity and customer value. Numerically, SALA targets an increase in net sales from ¥251.5 billion in the fiscal year ended November 30, 2025 to ¥300.0 billion by the fiscal year ending November 30, 2030, lifting operating profit from ¥7.3 billion to ¥12.0 billion, profit from ¥5.8 billion to ¥8.4 billion, and improving its operating margin from 2.9% to 4.0%, ROE from 6.7% to 10.0%, and ROIC from 3.8% to 6.0%, underscoring a drive to enhance capital efficiency and earnings power while reinforcing its position as a trusted community brand.

The most recent analyst rating on (JP:2734) stock is a Hold with a Yen1141.00 price target. To see the full list of analyst forecasts on Sala Corporation stock, see the JP:2734 Stock Forecast page.

SALA Corporation Books ¥1.9 Billion Derivative Valuation Gain, Affirms Dividend Policy

SALA Corporation recorded ¥1.892 billion in non-operating income for the fiscal year ended November 30, 2025, stemming from a gain on valuation of forward exchange contracts used to hedge foreign currency exposure on imported biomass fuel for its power generation business. The company explained that these derivative gains and losses are non-cash, arise from fair value reassessments of unsettled forward contracts, and will net to zero over the life of the hedges through 2039 as contracts mature; it also reiterated a dividend policy targeting a consolidated payout ratio of at least 40% when excluding the impact of such derivative valuation effects, signaling an intention to provide stable shareholder returns while insulating payout decisions from volatility in reported non-operating items.

The most recent analyst rating on (JP:2734) stock is a Hold with a Yen1141.00 price target. To see the full list of analyst forecasts on Sala Corporation stock, see the JP:2734 Stock Forecast page.

Sala Corporation Posts Strong FY2025 Profit Growth and Plans Higher Investment Amid Modest FY2026 Outlook

Sala Corporation reported consolidated net sales of ¥251.5 billion for the fiscal year ended November 30, 2025, up 4.6% year on year, with operating profit rising 17.0% to ¥7.4 billion and ordinary profit climbing to ¥9.9 billion, while profit attributable to owners of parent increased to ¥5.9 billion. Growth was driven particularly by strong performances in the Energy & Solutions, Engineering & Maintenance and Housing segments, which posted double‑digit operating profit gains, even as the Car Life Support and Animal Health Care businesses remained loss-making in terms of operating income. For the 2026 fiscal year, the company forecasts further top-line growth to ¥260.0 billion and a modest increase in operating profit to ¥7.5 billion, but it expects ordinary profit and net profit to decline due to factors such as financial and non-operating items, while also planning to step up capital investment from ¥12.2 billion to ¥14.7 billion, a signal that Sala is prioritizing medium-term expansion and infrastructure reinforcement despite pressure on bottom-line profitability.

The most recent analyst rating on (JP:2734) stock is a Hold with a Yen1141.00 price target. To see the full list of analyst forecasts on Sala Corporation stock, see the JP:2734 Stock Forecast page.

SALA Corporation Lifts FY2025 Earnings and Dividend, Projects Moderate Growth with Profit Pressure in FY2026

SALA Corporation reported consolidated net sales of ¥251.5 billion for the fiscal year ended November 30, 2025, up 4.6% year on year, with operating profit rising 17.0% to ¥7.4 billion and profit attributable to owners of parent increasing 11.8% to ¥5.9 billion. Profitability indicators improved modestly, as return on equity edged up to 6.7% and the equity-to-asset ratio rose to 42.0%, while cash and cash equivalents at period-end increased to ¥31.5 billion on the back of strong operating cash flows. The company raised its annual dividend to ¥32 per share for FY2025 and plans a further increase to ¥33 in FY2026, maintaining a payout ratio in the mid-30% range, signaling confidence in earnings sustainability and a continued focus on shareholder returns. For the fiscal year ending November 30, 2026, SALA forecasts net sales growth to ¥260.0 billion and a slight gain in operating profit to ¥7.5 billion, but expects ordinary profit and net profit to decline, implying some pressure on non-operating income or costs even as the core business continues to expand.

The most recent analyst rating on (JP:2734) stock is a Hold with a Yen1141.00 price target. To see the full list of analyst forecasts on Sala Corporation stock, see the JP:2734 Stock Forecast page.

SALA Corporation Transfers Shinkyo Giken Shares to SUZUKI Subsidiary

SALA Corporation announced a strategic decision to transfer a portion of its shares in Shinkyo Giken Co., Ltd., a subsidiary manufacturing motorcycle parts, to Snic Co., Ltd., a subsidiary of SUZUKI MOTOR CORPORATION. This move aims to facilitate joint management with SUZUKI, ensuring the smooth continuation of Shinkyo Giken’s operations while leveraging its technological expertise. The transfer reflects the company’s response to significant transformations in the automotive industry, allowing it to focus on more synergistic opportunities.

The most recent analyst rating on (JP:2734) stock is a Hold with a Yen1141.00 price target. To see the full list of analyst forecasts on Sala Corporation stock, see the JP:2734 Stock Forecast page.