ES-CON JAPAN Ltd. (8892) AI Stock Analysis

• Market Cap: ¥113.58B
• Dividend Yield: 4.2%
• Average Volume (3M): 165.48K
• Price to Earnings (P/E): 12.9
• Beta (1Y): 0.58
• Revenue Growth: 27.02%
• EPS Growth: 45.62%
• Country: JP
• Employees: 442
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Residential Construction
• EPS (TTM): 30.93
• Shares Outstanding: 98,580,890
• 10 Day Avg. Volume: 176,440
• 30 Day Avg. Volume: 165,476
• PEG Ratio: 0.21
• Price to Book (P/B): 1.18
• Price to Sales (P/S): 0.82
• P/FCF Ratio: -3.15
• 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: 66 Neutral
• Price Target: ¥1,288.00 ▲(8.42% Upside)

ES-CON JAPAN Ltd. has a solid valuation with a low P/E ratio and high dividend yield, which are significant strengths. However, financial performance is hindered by high leverage and negative cash flow, posing risks. Technical indicators suggest weak momentum, contributing to a moderate overall score.

Positive Factors

Operational margins

Sustained high EBIT and EBITDA margins reflect structural cost control and project pricing power in development. Durable operational efficiency supports cash generation potential, funds reinvestment into new projects, and makes returns less vulnerable to short-term sales volatility.

High gross margin and ROE

A 32% gross margin and strong multi-year revenue growth indicate product differentiation and effective cost structure in residential projects. Combined with a 14.1% ROE, this signals efficient capital deployment and sustainable project-level profitability supporting long-term shareholder returns.

Diversified revenue streams

Mix of development sales, recurring property management fees and investment-property income reduces reliance on one revenue source. This structural diversification smooths cash flows across cycles, supports steady fee income, and cushions the business during slower new-sales periods.

Negative Factors

High leverage

Significant leverage increases refinancing, interest-rate and covenants risk, limiting financial flexibility. In a cyclical real estate sector, high gearing magnifies downturn impacts on liquidity and profitability and constrains the company’s ability to fund projects without raising costly debt or diluting equity.

Negative free cash flow

Large negative FCF from aggressive capital outlays suggests expansion is not yet cash-accretive. Persistent negative cash conversion limits ability to pay down debt, fund operations internally, or maintain dividends without external financing, increasing long-term financing and liquidity risk.

Moderate net margin sensitivity

A sizable gap between gross (32.1%) and net margins (9.9%) implies financing, SG&A, or other costs materially erode profits. With high leverage, interest and overhead pressure make net income sensitive to cost increases or revenue slowdowns, limiting sustainable bottom-line resilience.

ES-CON JAPAN Ltd. Business Overview & Revenue Model

Company Description

ES-CON JAPAN Ltd. engages in the real estate development business in Japan. It develops and sells condominiums and detached houses; commercial and logistics facility/large-scale/mixed-use developments; and hotels. The company also offers real estate investment advisory, real estate leasing and planning, brokerage, consulting, and renovation services. In addition, it provides commercial facility/property management and condominium management/operation/residence services. ES-CON JAPAN Ltd. was incorporated in 1995 and is headquartered in Tokyo, Japan.

How the Company Makes Money

ES-CON JAPAN generates revenue primarily through the sale of residential properties, including condominiums and houses, which account for a significant portion of its income. The company also earns money through property management services, which involve overseeing and maintaining properties for clients. In addition to these core activities, ES-CON JAPAN engages in real estate investment, acquiring properties to lease or sell at a profit. Key revenue streams include the sale of developed properties, management fees from property services, and income generated from investment properties. The company may also benefit from strategic partnerships with construction firms, financial institutions, and local governments, which can enhance its project capabilities and provide additional funding sources.

ES-CON JAPAN Ltd. Financial Statement Overview

Summary

ES-CON JAPAN Ltd. shows strong revenue growth and operational efficiency, with robust EBIT and EBITDA margins. However, high leverage and negative cash flow indicate financial vulnerabilities. The company needs to focus on margin improvement and cash flow stabilization for long-term sustainability.

Income Statement

ES-CON JAPAN Ltd. shows a solid gross profit margin of 32.1% for 2025, indicating efficient cost management. The company has demonstrated a robust revenue growth rate of 19.5% from 2023 to 2025. However, the net profit margin is moderate at 9.9%, suggesting room for improvement in bottom-line profitability. The EBIT margin of 18.8% and EBITDA margin of 21.1% reflect strong operational performance. Overall, the income statement indicates healthy revenue growth and operational efficiency, though margin optimization is needed.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 4.25, pointing to significant leverage which could pose a risk if not managed properly. The equity ratio stands at 17.2%, suggesting that a substantial portion of the assets is financed through debt. Return on equity is strong at 14.1%, indicating effective use of equity to generate profits. While the company's returns are attractive, the high leverage remains a concern.

Cash Flow

Cash flow analysis shows negative free cash flow of -29.6 billion yen in 2025, reflecting significant capital outlay and potentially aggressive expansion strategies. The operating cash flow to net income ratio is negative, highlighting challenges in converting profits into cash. The free cash flow to net income ratio is also negative. The cash flow position suggests potential liquidity challenges that need addressing.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	112.09B	113.60B	95.09B	99.43B	79.02B	77.31B
Gross Profit	35.00B	36.46B	27.95B	26.61B	20.59B	19.68B
EBITDA	23.46B	24.02B	19.18B	13.96B	11.51B	12.71B
Net Income	10.33B	11.19B	9.83B	5.64B	5.96B	7.66B
Balance Sheet
Total Assets	471.15B	459.85B	370.27B	263.73B	252.77B	149.42B
Cash, Cash Equivalents and Short-Term Investments	35.88B	46.80B	37.60B	35.72B	33.67B	23.87B
Total Debt	359.85B	336.39B	262.86B	169.06B	163.04B	98.50B
Total Liabilities	396.95B	381.16B	299.80B	199.59B	190.15B	110.80B
Stockholders Equity	74.80B	79.14B	72.13B	65.91B	62.78B	38.59B
Cash Flow
Free Cash Flow	0.00	-29.57B	-49.24B	-532.00M	-10.17B	-2.31B
Operating Cash Flow	0.00	-24.77B	-49.24B	1.50B	-10.81B	119.00M
Investing Cash Flow	0.00	-15.83B	-32.21B	-1.62B	-29.72B	-9.73B
Financing Cash Flow	0.00	38.01B	83.19B	2.14B	50.29B	11.01B

ES-CON JAPAN Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1188.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:8892, the sentiment is Positive. The current price of 1188 is below the 20-day moving average (MA) of 1219.15, above the 50-day MA of 1130.84, and above the 200-day MA of 1043.22, indicating a neutral trend. The MACD of 17.06 indicates Positive momentum. The RSI at 51.50 is Neutral, neither overbought nor oversold. The STOCH value of 18.60 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8892.

ES-CON JAPAN Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3284	67 Neutral	¥53.53B	10.33	―	5.45%	21.56%	12.28%
8892	66 Neutral	¥113.58B	12.89	―	4.20%	27.02%	45.62%
1420	64 Neutral	¥8.21B	7.52	―	3.58%	10.75%	117.39%
1873	62 Neutral	¥12.96B	57.12	―	3.44%	―	―
8917	62 Neutral	¥16.26B	11.19	―	3.75%	19.17%	-42.56%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
1419	56 Neutral	¥108.87B	44.22	―	5.49%	-16.48%	-77.63%

ES-CON JAPAN Ltd. Corporate Events

ES-CON JAPAN Outlines Nine-Month Results and Long-Term Urban Development Strategy

ES-CON JAPAN released its financial results for the nine months ended December 31, 2025, outlining performance by business segment, balance sheet conditions, progress on its investment plan, and planned full-year results, along with policies on shareholder returns. The company also highlighted ongoing urban development projects in Hokkaido, Aichi, and other regions, sustainability initiatives, and detailed its 5th Medium-term Management Plan and Long-term Vision 2030, including management targets, financial goals, and an increased focus on cost of capital and stock price, signaling a strategic effort to strengthen its financial base, enhance capital efficiency, and reinforce its positioning in the Japanese real estate and urban development market.

The most recent analyst rating on (JP:8892) stock is a Hold with a Yen1232.00 price target. To see the full list of analyst forecasts on ES-CON JAPAN Ltd. stock, see the JP:8892 Stock Forecast page.

ES-CON JAPAN Nine-Month Profit Falls but Full-Year Forecast and Dividend Plan Intact

For the nine months ended December 31, 2025, ES-CON JAPAN reported a year-on-year decline in performance, with net sales down 21.8% to ¥62.9 billion, operating income down 23.3% to ¥10.5 billion, ordinary income down 38.7% to ¥6.9 billion, and profit attributable to owners of the parent falling 32.5% to ¥4.8 billion, while total assets rose to ¥480.0 billion and the equity ratio slipped to 16.4%. Despite weaker interim earnings, the company maintained its full-year forecast for the fiscal year ending March 31, 2026, projecting net sales of ¥133.0 billion and profit attributable to owners of the parent of ¥11.5 billion and keeping its planned annual dividend at ¥48 per share, signaling confidence in its earnings outlook and cash flow generation, supported in part by the addition of Shiba Real Estate Inc. to the scope of consolidation.

The most recent analyst rating on (JP:8892) stock is a Hold with a Yen1232.00 price target. To see the full list of analyst forecasts on ES-CON JAPAN Ltd. stock, see the JP:8892 Stock Forecast page.