Kyokuto Kaihatsu Kogyo Co., Ltd. (7226) AI Stock Analysis

• Market Cap: ¥123.09B
• Dividend Yield: 5.07%
• Average Volume (3M): 134.11K
• Price to Earnings (P/E): 100.1
• Beta (1Y): 0.72
• Revenue Growth: 13.71%
• EPS Growth: -77.02%
• Country: JP
• Employees: 3,237
• Sector: Industrials
• Sector Strength: 72
• Industry: Agricultural - Machinery
• EPS (TTM): 91.09
• Shares Outstanding: 40,150,000
• 10 Day Avg. Volume: 110,030
• 30 Day Avg. Volume: 134,110
• PEG Ratio: 0.24
• Price to Book (P/B): 0.78
• Price to Sales (P/S): 0.65
• P/FCF Ratio: -34.32
• 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: ¥3,618.00 ▲(15.59% Upside)

The score is driven primarily by solid financial stability and good top-line growth, supported by strong technical momentum. These positives are tempered by weak free cash flow and an expensive valuation (very high P/E), despite an attractive dividend yield.

Positive Factors

Conservative balance sheet

A high equity ratio and very low leverage provide durable financial resilience, lowering default and liquidity risk. This conservative capital structure supports capex, working capital needs, or opportunistic M&A without immediate refinancing pressure, enhancing long-term flexibility.

Sustained revenue growth

Consistent top-line growth near double digits signals durable demand for the company's components and successful commercial execution. Persistent sales growth improves scale economics, supports reinvestment in product development, and enhances resilience over the medium term.

OEM-focused, critical product portfolio

Providing essential safety and driveline components to major OEMs creates sticky customer relationships and contract visibility. Customization and quality requirements raise switching costs and support stable order backlogs, underpinning long-term market position in automotive supply chains.

Negative Factors

Negative free cash flow

Sustained negative FCF, largely from heavy capex, weakens internal funding for dividends and growth, forcing dependence on existing balance sheet or external financing. Over months, continued negative FCF can constrain strategic options and elevate refinancing or liquidity risk.

Modest margins

Relatively low net and EBIT margins limit the company's ability to absorb input cost inflation and invest in R&D or capex while maintaining returns. Persistent margin compression would reduce free cash flow and slow deleveraging or shareholder return capacity over the medium term.

Earnings volatility / EPS decline

A steep negative EPS growth rate indicates notable earnings volatility or one-off shocks. Continued swings in profitability undermine forecasting, increase perceived operational risk, and can hinder long-term strategic planning and stakeholder confidence in capital allocation decisions.

Kyokuto Kaihatsu Kogyo Co., Ltd. Business Overview & Revenue Model

Company Description

Kyokuto Kaihatsu Kogyo Co.,Ltd. manufactures and sells special purpose vehicles, environmental equipment and systems, and car parking systems in Japan. It operates through Specialty Truck, Environmental Equipment and Systems, and Real Estate Rental segments. The company offers piston, squeeze, high pressure and large capacity piston, and stationary squeeze concrete pumps; minicrete; and dump, sprinkler, and mixer trucks for the construction sector. It also provides tailgate lifters, pneumatic bulk and single car carriers, and steel cargo bodies, as well as tank, refuse, and detachable body trucks for the logistics and environmental sectors. In addition, it offers environmental equipment and systems, such as pulverizers for crushing of various domestic and industrial waste; and reuse, derived, and fuel system that is used as heat energy for hot-water supply, heating and cooling, and power generation applications. Further, the company provides multistory parking systems, such as loading and unloading pit type, loading and unloading transverse pit type, and loading and unloading transverse ground type parking systems; and real estate rental services. The company was formerly known as Kyokuto Kaihatsu Kikai Kogyo Co., Ltd. and changed its name to Kyokuto Kaihatsu Kogyo Co.,Ltd. in April 1971. Kyokuto Kaihatsu Kogyo Co.,Ltd. was founded in 1955 and is headquartered in Nishinomiya, Japan.

How the Company Makes Money

Kyokuto Kaihatsu Kogyo Co., Ltd. generates revenue primarily through the sale of automotive parts and systems to various automotive manufacturers. The company's revenue model is based on direct sales of its products, which are often customized to meet the specific needs of their clients. Key revenue streams include the sale of braking systems, steering mechanisms, and suspension components, which are critical for vehicle safety and performance. Additionally, the company may engage in long-term supply contracts with automotive manufacturers, ensuring a steady income stream. Strategic partnerships with leading automotive firms also enhance the company's market presence and contribute to its earnings by expanding its customer base and enabling collaborative innovation in product development.

Kyokuto Kaihatsu Kogyo Co., Ltd. Financial Statement Overview

Summary

Strong revenue growth (9.7%) and a very solid balance sheet (61.8% equity ratio, low 0.25 debt-to-equity) support the score. Profitability is only moderate (4.1% net margin; 4.7% EBIT margin) and cash flow is a key weakness due to negative free cash flow and only average cash conversion (operating cash flow to net income of 0.9).

Income Statement

Kyokuto Kaihatsu Kogyo Co., Ltd. has shown a commendable revenue growth rate of 9.7% in the recent fiscal year, indicative of strong sales performance in the agricultural machinery sector. Gross profit margin stands at 17.6%, while net profit margin has improved to 4.1%, reflecting enhanced operational efficiency. However, the EBIT margin of 4.7% and EBITDA margin of 9.4% suggest room for improvement in managing operating expenses.

Balance Sheet

The company maintains a robust equity position with an equity ratio of 61.8%, showcasing strong financial stability. The debt-to-equity ratio is manageable at 0.25, indicating conservative leverage usage. Return on equity at 5.0% is modest, suggesting potential for better utilization of equity to generate profits.

Cash Flow

Kyokuto Kaihatsu Kogyo Co., Ltd. experienced a negative free cash flow in the most recent period, primarily due to significant capital expenditures. The operating cash flow to net income ratio is 0.9, highlighting a need for improved cash generation from core operations. Despite challenges, the company has managed to maintain positive operating cash flow, which is crucial for sustaining business operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	145.28B	140.45B	128.03B	113.09B	116.91B	117.17B
Gross Profit	25.63B	24.75B	20.70B	16.01B	21.17B	23.16B
EBITDA	5.77B	13.22B	8.56B	8.27B	23.71B	12.02B
Net Income	17.00M	5.82B	3.50B	3.58B	14.27B	6.77B
Balance Sheet
Total Assets	180.43B	187.75B	170.40B	158.16B	154.35B	142.74B
Cash, Cash Equivalents and Short-Term Investments	16.89B	20.29B	19.44B	33.63B	37.31B	21.90B
Total Debt	29.88B	29.55B	11.83B	11.07B	1.23B	1.04B
Total Liabilities	72.10B	70.47B	52.75B	46.19B	41.34B	42.16B
Stockholders Equity	107.24B	116.11B	117.00B	111.54B	112.69B	100.28B
Cash Flow
Free Cash Flow	0.00	-2.65B	-12.66B	-14.84B	1.23B	4.91B
Operating Cash Flow	0.00	5.22B	-1.84B	-3.42B	6.87B	8.26B
Investing Cash Flow	0.00	-15.47B	-9.48B	-6.82B	10.66B	-4.30B
Financing Cash Flow	0.00	11.20B	-1.50B	5.12B	-1.55B	-2.77B

Kyokuto Kaihatsu Kogyo Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3130.00
• 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:7226, the sentiment is Positive. The current price of 3130 is below the 20-day moving average (MA) of 3298.00, above the 50-day MA of 3054.26, and above the 200-day MA of 2685.06, indicating a bullish trend. The MACD of 72.29 indicates Positive momentum. The RSI at 60.01 is Neutral, neither overbought nor oversold. The STOCH value of 30.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7226.

Kyokuto Kaihatsu Kogyo Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6306	74 Outperform	¥31.16B	17.22	―	4.26%	-4.23%	-1.63%
6345	70 Outperform	¥88.00B	15.38	―	4.79%	1.68%	18.85%
6358	70 Outperform	¥19.17B	33.20	―	5.14%	-13.63%	-74.53%
7226	67 Neutral	¥123.09B	100.15	―	5.07%	13.71%	-77.02%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6395	62 Neutral	¥144.40B	13.13	5.59%	2.86%	10.49%	-5.19%
6390	43 Neutral	¥16.03B	-6.03	―	5.40%	-2.22%	18.80%

Kyokuto Kaihatsu Kogyo Co., Ltd. Corporate Events

Kyokuto Kaihatsu Kogyo Challenges JFTC Surcharge Order Over Truck Body Sales

Kyokuto Kaihatsu Kogyo Co., Ltd. and its subsidiary Nippon Trex Co., Ltd. have decided to file a lawsuit seeking cancellation and reduction of a surcharge payment order issued by the Japan Fair Trade Commission in connection with alleged violations of the Antimonopoly Act over the sale of truck “upper bodies.” While the group has expressed deep remorse, apologized to stakeholders, and pledged to reinforce compliance and internal controls to prevent recurrence, it disputes aspects of the fact-finding and legal interpretation behind the surcharge, which totals approximately ¥5.93 billion after a 30% reduction and is due by April 27, 2026, and will now pursue a fair judicial ruling that could affect its financial burden and its standing in Japan’s heavily regulated commercial vehicle components market.

The most recent analyst rating on (JP:7226) stock is a Hold with a Yen2713.00 price target. To see the full list of analyst forecasts on Kyokuto Kaihatsu Kogyo Co., Ltd. stock, see the JP:7226 Stock Forecast page.

Kyokuto Kaihatsu Kogyo Co., Ltd. Announces Strategic Merger with Subsidiary

Kyokuto Kaihatsu Kogyo Co., Ltd. announced a merger with its wholly-owned subsidiary, Kyokuto Kaihatsu Parking Co., Ltd., to enhance competitiveness and efficiency in the parking equipment and coin-operated parking business. This strategic move, executed as a simplified absorption-type merger, aims to consolidate management resources and streamline operations, potentially strengthening the company’s market position and operational effectiveness.

The most recent analyst rating on (JP:7226) stock is a Hold with a Yen2713.00 price target. To see the full list of analyst forecasts on Kyokuto Kaihatsu Kogyo Co., Ltd. stock, see the JP:7226 Stock Forecast page.

Kyokuto Kaihatsu Kogyo Co., Ltd. Announces Employee Share Incentive Plan

Kyokuto Kaihatsu Kogyo Co., Ltd. has announced a decision to implement a transfer-restricted share incentive plan for its employee shareholding association, aiming to dispose of 68,200 treasury shares through a third-party allotment. This initiative is designed to promote employee welfare and align their interests with shareholders by providing them with incentives to improve corporate value and share in the company’s success.

The most recent analyst rating on (JP:7226) stock is a Hold with a Yen2713.00 price target. To see the full list of analyst forecasts on Kyokuto Kaihatsu Kogyo Co., Ltd. stock, see the JP:7226 Stock Forecast page.

Kyokuto Kaihatsu Kogyo Reports Strong Sales Growth Amidst Profit Challenges

Kyokuto Kaihatsu Kogyo Co., Ltd. reported a significant increase in net sales and operating profit for the six months ended September 30, 2025, despite a loss attributable to owners of the parent. The company anticipates continued growth in net sales and profits for the fiscal year ending March 31, 2026, reflecting a positive outlook for its operations and market positioning.

The most recent analyst rating on (JP:7226) stock is a Hold with a Yen2713.00 price target. To see the full list of analyst forecasts on Kyokuto Kaihatsu Kogyo Co., Ltd. stock, see the JP:7226 Stock Forecast page.