HotLand Co., Ltd. (3196) AI Stock Analysis

• Market Cap: ¥41.84B
• Dividend Yield: 0.62%
• Average Volume (3M): 37.40K
• Price to Earnings (P/E): 101.3
• Beta (1Y): 0.36
• Revenue Growth: 13.05%
• EPS Growth: -29.04%
• Country: JP
• Employees: 895
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 6.55
• Shares Outstanding: 21,655,600
• 10 Day Avg. Volume: 38,860
• 30 Day Avg. Volume: 37,400
• PEG Ratio: -1.34
• Price to Book (P/B): 3.75
• Price to Sales (P/S): 0.83
• P/FCF Ratio: -32.40
• 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): 38.1
• Revenue Forecast (FY): ¥54.80B

• Rating: 46 Neutral
• Price Target: ¥1,887.00 ▼(-9.54% Downside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is primarily held back by weakened FY2025 fundamentals (margin compression, higher leverage, and negative free cash flow). Technicals also reflect a bearish trend with weak momentum, while valuation is a major drag due to the very high P/E and low dividend yield.

Positive Factors

Strong brand & quick-service model

Gindaco is a recognizable consumer brand with a quick-service, takeout-oriented format that fits structural consumer preferences for convenience. Brand strength supports repeat traffic, pricing power in core items and scalable unit economics that persist beyond short-term cycles.

Consistent revenue growth with stable gross margins

Mid-to-high single-digit revenue growth over 2021–2025 together with a stable ~56% gross margin indicates enduring demand and controlled food-costs or pricing. Stable gross margin points to sustainable core product economics even if operating costs fluctuate.

Franchising and product diversification

A mixed operating/franchise model plus packaged/prepared-food sales provide diversified, recurring revenue streams. Franchising reduces capital intensity per unit and generates royalty income, helping scalability and margin resiliency over the medium term.

Negative Factors

Sharp profitability compression in FY2025

A large drop in net margin signals rising SG&A or promotional spend and/or margin pressure below gross profit. Persistent operating-cost inflation or ineffective cost control can erode returns and jeopardize reinvestment capacity if not reversed within several quarters.

Material increase in leverage

The notable step-up in leverage reduces financial flexibility and raises refinancing and interest-rate vulnerability. With higher debt, the company has less room to absorb shocks or invest in growth without adding further leverage or diluting equity.

Negative free cash flow and weaker cash generation

A switch to negative free cash flow and lower operating cash coverage of debt signals constrained internal funding for capex, franchises or working-capital needs. Continued negative FCF would force external financing and increase execution risk over the medium term.

HotLand Co., Ltd. Business Overview & Revenue Model

Company Description

HOTLAND Co.,Ltd. operates restaurants in Japan and internationally. The company is also involved in the development of Takoyaki shops and specialty stores, and bars; and operation of coffee bean and tea leaf shops, and baristas. In addition, it manufactures and sells ice creams and desserts. The company was founded in 1988 and is headquartered in Tokyo, Japan.

How the Company Makes Money

HotLand Co., Ltd. generates revenue primarily through the operation of its food courts and restaurants, with key revenue streams coming from direct sales of food and beverages to customers. The company also benefits from franchise fees and royalties from its franchised locations. Additionally, partnerships with suppliers and other food service businesses contribute to its earnings by ensuring a consistent supply of quality ingredients and products. Seasonal promotions, marketing campaigns, and an emphasis on customer experience further enhance sales and profitability.

HotLand Co., Ltd. Financial Statement Overview

Summary

Revenue has grown steadily and gross margin is stable (~56%), but FY2025 profitability deteriorated sharply (net margin ~0.8% vs ~4.0% in FY2024). Leverage increased materially (debt-to-equity ~1.04 vs ~0.64), and cash generation weakened with free cash flow turning negative (~-¥1.3B), raising execution and balance-sheet risk.

Income Statement

Revenue has grown steadily from 2021–2025 (mid-to-high single digit most recently), indicating continued demand recovery/expansion. However, profitability has deteriorated sharply in 2025: net profit margin fell to ~0.8% (from ~4.0% in 2024) and operating profitability also compressed, suggesting meaningful cost pressure (labor, food inputs, promotions, or overhead). Gross margin has stayed relatively stable (~56%), so the weakness appears below gross profit (SG&A/other expenses).

Balance Sheet

The balance sheet shows rising leverage in the most recent year: debt-to-equity increased to ~1.04 in 2025 (from ~0.64 in 2024), reflecting a notable step-up in debt. Equity remains sizable relative to assets, but the trend is unfavorable and reduces flexibility if earnings remain pressured. Prior years showed healthier leverage and decent equity returns, but the latest shift raises risk.

Cash Flow

Cash generation weakened in 2025: operating cash flow declined and free cash flow turned negative (about -¥1.3B) after being positive in 2024. Operating cash flow covers only ~23% of total debt in 2025 (down from ~38% in 2024), and free cash flow did not support earnings, pointing to higher investment needs and/or working-capital drag. While 2024 cash flow was solid, the recent reversal is a key watch item.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	48.72B	51.04B	46.13B	38.71B	32.16B	29.68B
Gross Profit	27.30B	28.64B	25.87B	22.16B	18.56B	18.07B
EBITDA	3.21B	3.77B	4.28B	3.10B	3.29B	4.40B
Net Income	582.14M	405.40M	1.85B	1.02B	1.36B	2.08B
Balance Sheet
Total Assets	29.36B	33.46B	28.52B	23.71B	22.06B	21.31B
Cash, Cash Equivalents and Short-Term Investments	4.16B	4.81B	3.73B	2.86B	3.34B	3.16B
Total Debt	9.09B	11.78B	7.61B	6.16B	4.87B	5.39B
Total Liabilities	17.37B	21.27B	15.98B	12.96B	11.38B	12.19B
Stockholders Equity	11.25B	11.34B	11.84B	10.28B	10.20B	8.68B
Cash Flow
Free Cash Flow	0.00	-1.31B	1.08B	709.68M	1.23B	3.63B
Operating Cash Flow	0.00	2.60B	3.95B	2.94B	2.90B	5.15B
Investing Cash Flow	0.00	-5.01B	-3.76B	-2.68B	-1.84B	-2.40B
Financing Cash Flow	0.00	3.50B	645.82M	-740.75M	-909.35M	-1.82B

HotLand Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2086.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3196, the sentiment is Neutral. The current price of 2086 is above the 20-day moving average (MA) of 1942.85, above the 50-day MA of 1972.93, and above the 200-day MA of 2033.89, indicating a bearish trend. The MACD of -11.27 indicates Negative momentum. The RSI at 48.55 is Neutral, neither overbought nor oversold. The STOCH value of 51.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:3196.

HotLand Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9828	72 Outperform	¥51.50B	10.87	―	2.41%	6.49%	4.27%
2705	66 Neutral	¥51.99B	42.99	―	0.17%	15.53%	-26.93%
3561	66 Neutral	¥46.28B	24.23	18.06%	1.37%	4.01%	3.32%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
3198	60 Neutral	¥52.49B	46.07	―	1.30%	2.90%	-26.37%
3547	60 Neutral	¥22.30B	25.43	―	0.75%	25.41%	77.18%
3196	46 Neutral	¥41.84B	101.33	―	0.62%	13.05%	-29.04%