Choei Inc. (2993) AI Stock Analysis

• Market Cap: ¥11.08B
• Dividend Yield: 4.08%
• Average Volume (3M): 1.45K
• Price to Earnings (P/E): 7.9
• Beta (1Y): 0.34
• Revenue Growth: 7.75%
• EPS Growth: 56.88%
• Country: JP
• Employees: 250
• Sector: Real Estate
• Sector Strength: 53
• Industry: Real Estate - Services
• EPS (TTM): 71.51
• Shares Outstanding: 4,473,400
• 10 Day Avg. Volume: 830
• 30 Day Avg. Volume: 1,450
• PEG Ratio: 0.07
• Price to Book (P/B): 0.77
• Price to Sales (P/S): 0.92
• P/FCF Ratio: -1.82
• 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: 74 Outperform
• Price Target: ¥2,899.00 ▲(28.84% Upside)
• Action: Upgraded Date: 10/03/25
• Date: Action: Upgraded 10/03/25

Choei Inc. is supported by strong valuation metrics, including a low P/E ratio and attractive dividend yield, which are significant positives. The technical analysis indicates a stable upward trend. However, financial performance is hindered by high leverage and negative cash flow growth, which are areas of concern.

Positive Factors

Revenue Growth Trend

Sustained mid-single-digit revenue growth reflects steady demand and execution in Choei's services business. Over a 2–6 month horizon this trend supports predictable top-line expansion, enhances operating leverage potential, and reduces execution risk versus cyclical peers.

Margin Sustainability / Operational Efficiency

Robust gross and EBITDA margins indicate durable cost control and pricing discipline in the company's service offerings. High operating margins provide buffer against revenue variability and support reinvestment or debt servicing, sustaining competitive positioning across cycles.

Capital Efficiency (ROE)

A double-digit ROE signals effective use of shareholder capital and strong profitability relative to equity. This enduring capital efficiency implies management can generate attractive returns from invested equity, aiding long-term shareholder value when preserved.

Negative Factors

High Financial Leverage

Very high leverage materially elevates refinancing, interest rate and solvency risk for a services firm. Over the next several months leverage limits strategic flexibility, increases sensitivity to cyclical downturns, and raises the probability of distress if cash flows weaken.

Negative Free Cash Flow Growth

Negative FCF growth indicates the business is not generating surplus cash after investment, forcing reliance on external financing or asset sales. This constrains capital allocation, limits debt reduction and dividend sustainability, and increases vulnerability to funding shocks.

Operating Cash Conversion Weakness

OCF covering only ~91% of net income suggests earnings are not fully converting to cash, likely due to working capital or non-cash items. Persisting weak cash conversion undermines liquidity and heightens refinancing risk given the company's elevated debt load.

Choei Inc. Business Overview & Revenue Model

Company Description

Choei Inc. provides condominium management services in Japan. It offers rental real estate management, real estate leasing, real estate sales and rental brokerage, real estate development, home remodeling, monthly apartment, and rental services. The company was founded in 1980 and is headquartered in Kyoto, Japan.

How the Company Makes Money

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Choei Inc. Financial Statement Overview

Summary

Choei Inc. shows strong revenue growth and operational efficiency with healthy margins. However, high leverage and negative free cash flow growth pose financial risks. Improvement in cash flow management and debt reduction is needed.

Income Statement

Choei Inc. has demonstrated a solid revenue growth trajectory, with a notable increase of 6.94% in the latest year. The Gross Profit Margin stands at 33.48%, indicating efficient cost management. However, the Net Profit Margin of 20.63% suggests room for improvement in profitability. The EBIT and EBITDA margins are strong at 17.98% and 33.76%, respectively, reflecting robust operational performance.

Balance Sheet

The company's Debt-to-Equity Ratio is high at 4.10, indicating significant leverage, which could pose financial risks. However, the Return on Equity (ROE) is impressive at 17.32%, showcasing effective use of equity capital. The Equity Ratio is relatively low at 17.90%, suggesting a reliance on debt financing.

Cash Flow

Choei Inc. faces challenges with negative Free Cash Flow growth, indicating potential liquidity issues. The Operating Cash Flow to Net Income Ratio is 0.91, suggesting that cash flows are not fully covering net income. The Free Cash Flow to Net Income Ratio is negative, highlighting cash flow constraints.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	10.18B	10.02B	9.37B	9.16B	8.48B	8.03B
Gross Profit	3.45B	3.35B	3.51B	3.54B	3.13B	2.86B
EBITDA	3.40B	3.38B	3.81B	3.64B	3.24B	3.19B
Net Income	2.05B	2.07B	1.26B	1.37B	1.56B	982.30M
Balance Sheet
Total Assets	66.66B	66.69B	60.65B	56.85B	53.57B	52.24B
Cash, Cash Equivalents and Short-Term Investments	11.00B	11.86B	10.10B	7.44B	8.42B	6.95B
Total Debt	49.23B	48.90B	44.24B	42.22B	38.86B	42.70B
Total Liabilities	55.00B	54.75B	50.39B	47.37B	44.79B	45.97B
Stockholders Equity	11.66B	11.93B	10.26B	9.48B	8.78B	6.27B
Cash Flow
Free Cash Flow	0.00	-5.08B	-1.91B	-3.65B	2.09B	-969.36M
Operating Cash Flow	0.00	1.88B	3.22B	2.02B	3.70B	2.21B
Investing Cash Flow	0.00	-4.24B	-2.02B	-5.66B	656.52M	-3.13B
Financing Cash Flow	0.00	4.11B	1.46B	2.66B	-2.90B	1.07B

Choei Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2250.00
• 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:2993, the sentiment is Positive. The current price of 2250 is below the 20-day moving average (MA) of 2580.10, below the 50-day MA of 2476.56, and above the 200-day MA of 2227.36, indicating a bullish trend. The MACD of 25.50 indicates Positive momentum. The RSI at 55.73 is Neutral, neither overbought nor oversold. The STOCH value of 75.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2993.

Choei Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4262	83 Outperform	¥9.10B	11.12	―	3.66%	23.91%	19.62%
8898	82 Outperform	¥11.95B	11.85	―	4.98%	3.29%	-1.74%
2993	74 Outperform	¥11.08B	7.85	―	4.08%	7.75%	56.88%
3277	72 Outperform	¥11.95B	-8.27	―	3.18%	-4.65%	77.74%
2991	67 Neutral	¥14.04B	6.93	―	1.47%	20.82%	9.86%
8945	66 Neutral	¥11.67B	15.34	―	3.69%	1.88%	-82.78%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%