KOSE R.E. Co., Ltd. (3246) AI Stock Analysis

• Market Cap: ¥6.48B
• Dividend Yield: 3.17%
• Average Volume (3M): 9.86K
• Price to Earnings (P/E): 9.7
• Beta (1Y): 0.68
• Revenue Growth: 5.99%
• EPS Growth: -35.12%
• Country: JP
• Employees: 80
• Sector: Real Estate
• Sector Strength: 53
• Industry: Real Estate - Diversified
• EPS (TTM): N/A
• Shares Outstanding: 10,368,000
• 10 Day Avg. Volume: 5,350
• 30 Day Avg. Volume: 9,856
• PEG Ratio: 0.09
• Price to Book (P/B): 0.63
• Price to Sales (P/S): 0.67
• P/FCF Ratio: -2.96
• 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: 50 Neutral
• Price Target: ¥651.00 ▼(-14.00% Downside)
• Action: Reiterated Date: 03/15/26
• Date: Action: Reiterated 03/15/26

The score is held back mainly by strained recent cash generation (negative operating and free cash flow in 2025–2026) and weak technical momentum (below key moving averages with negative MACD). A healthier leverage profile and a mid-level dividend yield provide partial support, but they do not offset the cash-flow and trend risks.

Positive Factors

Improved leverage

A materially lower debt-to-equity versus 2021 strengthens KOSE R.E.'s financial flexibility, reducing refinancing and solvency risk. This allows steadier funding of development cycles and provides more capacity to pursue projects or absorb shocks over the next several quarters.

Revenue rebound

A strong revenue recovery in 2026 demonstrates the company's ability to restore project deliveries and demand traction. Sustained top-line recovery supports margin recovery potential and better project economics as new supply converts to cash over subsequent quarters.

Positive reported net income

Reporting positive net income while navigating cash swings indicates core development margins still generate accounting profits. This profit base provides a platform to restore cash conversion through tighter working-capital and project execution improvements over the medium term.

Negative Factors

Negative cash generation

Persistently negative operating and free cash flow signals poor cash conversion from sales and higher working-capital or investment demands. In real estate this raises reliance on external financing, increasing refinancing risk and funding cost sensitivity over the coming 2–6 months.

Margin decline and volatility

A meaningful decline in net and operating margins shows profitability is cyclical and less resilient. Lower margins reduce the buffer for cost or sales shocks, constrain reinvestment capacity, and make earnings more sensitive to project timing and pricing trends going forward.

Recent rise in leverage

Although leverage improved vs. earlier years, the uptick since 2024 indicates renewed debt use to fund growth. Increasing leverage can magnify interest and refinancing exposure, limiting strategic flexibility and elevating funding risk if cash generation does not recover.

KOSE R.E. Co., Ltd. Business Overview & Revenue Model

Company Description

KOSE R.E. Co.,Ltd. engages in the planning, development, and sale of condominiums in Japan. The company develops residential, asset management, and second-hand apartment condominiums. It is also involved in the real estate rental management business. The company was founded in 1992 and is headquartered in Fukuoka, Japan.

How the Company Makes Money

KOSE R.E. primarily makes money through (1) sales revenue from developing and selling residential properties—especially condominiums—where earnings are generated from the margin between total project costs (land acquisition, construction, design, marketing, financing, and overhead) and the final selling price of completed units; and (2) revenue from related real estate activities connected to its developments (e.g., transactions and services associated with property sales). Specific breakdowns of revenue by segment, recurring income components (such as property leasing/management), and material partnerships (e.g., construction, brokerage, or financing alliances) are not available in the provided context and are therefore null.

KOSE R.E. Co., Ltd. Financial Statement Overview

Summary

Income statement and balance sheet are moderate (revenue rebound in 2026 and improved long-term leverage), but cash flow is a major drag: operating cash flow and free cash flow were negative in both 2025 and 2026 despite positive net income, indicating weak cash conversion and higher funding reliance risk.

Income Statement

Revenue rebounded sharply in 2026 (annual revenue growth +42.1%) after a softer 2025, showing demand can recover. Profitability, however, has been volatile: net margin fell to ~6.9% in 2026 from ~12.4% in 2024 and ~11.5% in 2023, and operating profitability also stepped down materially versus 2023–2024 levels. Overall, the business remains profitable, but the earnings profile looks cyclical and less consistent year to year.

Balance Sheet

Leverage improved meaningfully versus earlier years (debt-to-equity down from ~1.56 in 2021 to ~0.68 in 2026), which strengthens financial flexibility. Equity has remained relatively stable and assets have grown (2026 assets ~19.8B vs ~14.7B in 2024). The main watch-out is the recent rise in leverage from 2024 (~0.30) back up in 2025–2026, indicating debt has been used again to support growth.

Cash Flow

Cash generation is the weak spot: operating cash flow turned negative in 2025 and remained negative in 2026 (despite positive net income), and free cash flow was also negative in both years. This follows strong positive cash flow in 2022–2024, highlighting a high swing factor in working capital/investment needs typical of real-estate-related activity. If negative operating cash flow persists, it could increase reliance on external funding even when accounting profits are positive.

Breakdown	TTM	Jan 2026	Jan 2025	Jan 2024	Jan 2023	Jan 2022
Income Statement
Total Revenue	7.07B	10.05B	7.65B	10.16B	11.00B	11.29B
Gross Profit	1.71B	2.27B	1.91B	3.08B	3.06B	2.81B
EBITDA	132.57M	1.13B	354.00M	1.64B	1.65B	1.18B
Net Income	177.96M	695.71M	341.11M	1.26B	1.26B	880.01M
Balance Sheet
Total Assets	17.96B	19.77B	17.02B	14.68B	15.48B	17.42B
Cash, Cash Equivalents and Short-Term Investments	4.17B	4.88B	5.35B	5.64B	6.18B	6.52B
Total Debt	6.95B	7.25B	5.12B	3.05B	4.31B	7.33B
Total Liabilities	7.93B	9.11B	6.76B	4.39B	6.08B	9.03B
Stockholders Equity	9.98B	10.66B	10.21B	10.23B	9.34B	8.33B
Cash Flow
Free Cash Flow	0.00	-2.29B	-1.99B	1.13B	2.94B	6.22B
Operating Cash Flow	0.00	-1.26B	-1.14B	1.22B	2.95B	6.23B
Investing Cash Flow	0.00	-114.09M	-842.87M	897.42M	-497.27M	-2.46M
Financing Cash Flow	0.00	1.81B	1.72B	-1.65B	-3.28B	-4.71B

KOSE R.E. Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 757.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3246, the sentiment is Negative. The current price of 757 is above the 20-day moving average (MA) of 668.35, above the 50-day MA of 686.45, and above the 200-day MA of 666.26, indicating a bearish trend. The MACD of -8.55 indicates Positive momentum. The RSI at 39.54 is Neutral, neither overbought nor oversold. The STOCH value of 23.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3246.

KOSE R.E. Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8850	75 Outperform	¥237.36B	8.22	―	2.67%	2.29%	-4.12%
3242	68 Neutral	¥19.73B	20.76	―	3.69%	84.40%	142.34%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
3280	64 Neutral	¥6.23B	4.10	―	2.73%	62.88%	135.99%
8803	63 Neutral	¥154.51B	20.44	8.95%	3.39%	28.94%	109.35%
3475	57 Neutral	¥43.67B	-26.35	―	3.75%	-8.66%	-53.57%
3246	50 Neutral	¥6.48B	9.72	―	3.17%	5.99%	-35.12%