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Sotetsu Holdings, Inc. (JP:9003)
:9003
Japanese Market
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Sotetsu Holdings, Inc. (9003) AI Stock Analysis

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JP:9003

Sotetsu Holdings, Inc.

(9003)

Rating:73Outperform
Price Target:
¥2,454.00
▲(4.12%Upside)
The overall stock score reflects the company's solid financial performance and attractive valuation. Despite high leverage and cash flow volatility, the stable technical indicators and undervalued stock price contribute positively. The absence of significant earnings call data and corporate events does not affect the score.

Sotetsu Holdings, Inc. (9003) vs. iShares MSCI Japan ETF (EWJ)

Sotetsu Holdings, Inc. Business Overview & Revenue Model

Company DescriptionSotetsu Holdings, Inc. provides transportation services in Japan. It offers railroad and bus transport services. The company also operates supermarkets, convenience stores, and station stalls; sells and leases real estate properties; develops and operates hotels; develops and manages buildings; provides and heat supply services. In addition, it offers building management and maintenance services; operates non-life insurance agency; provides district heating and cooling services; rents optical fiber infrastructure; develops residential properties and condominiums; and offers real estate consulting services. In addition, the company provides water purification systems for residential and commercial facilities. The company was formerly known as Sotetsu Junbi K.K. and changed its name to Sotetsu Holdings, Inc. in 2009. Sotetsu Holdings, Inc. was founded in 1917 and is headquartered in Yokohama, Japan.
How the Company Makes MoneySotetsu Holdings, Inc. generates revenue through multiple streams, predominantly from its railway operations, which include passenger fares and freight charges. The transportation segment is the backbone of its revenue, with the company operating several railway lines that serve the Kanagawa Prefecture and the Tokyo Metropolitan area. Additionally, the company earns income from its real estate division through the development, leasing, and management of residential and commercial properties. The retail segment contributes to revenue through the operation of shops and department stores located in and around its railway stations. Leisure activities such as hotel management and other related services also add to the company's earnings. Strategic partnerships and collaborations with local governments and other transportation entities further enhance its revenue-generating capabilities.

Sotetsu Holdings, Inc. Financial Statement Overview

Summary
Sotetsu Holdings shows strong revenue growth and operational improvements. However, high leverage and fluctuating free cash flow pose challenges. Debt reduction and cash flow stability are crucial for long-term growth.
Income Statement
75
Positive
Sotetsu Holdings has shown consistent revenue growth over the years, with an impressive increase from 216,684 million yen in 2022 to 292,178 million yen in 2025. The gross profit margin has improved, reflecting enhanced cost management and efficiency. EBIT and EBITDA margins have also shown positive trends, indicating better operational performance. However, the net profit margin, while improved, still suggests room for further enhancement in profitability.
Balance Sheet
68
Positive
The company's debt-to-equity ratio is relatively high, indicating significant leverage, which could pose financial risk if not managed carefully. However, the return on equity has shown improvement, which is a positive signal for shareholders. The equity ratio suggests a moderate level of financial stability, but the company should focus on reducing its debt burden to strengthen its balance sheet further.
Cash Flow
65
Positive
While operating cash flow has been strong, the company has experienced volatility in free cash flow, mainly due to substantial capital expenditures. The operating cash flow to net income ratio is healthy, indicating good cash generation relative to reported earnings. However, the negative free cash flow to net income ratio in recent years highlights the impact of large capital investments, suggesting a need for cautious cash management.
BreakdownMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue292.18B270.04B249.67B216.68B221.14B
Gross Profit108.52B94.58B73.83B56.13B51.89B
EBITDA58.58B51.79B36.81B25.84B11.85B
Net Income22.41B16.08B6.98B1.85B-13.06B
Balance Sheet
Total Assets757.26B715.38B646.95B623.41B619.41B
Cash, Cash Equivalents and Short-Term Investments31.58B27.55B20.16B22.04B23.68B
Total Debt432.92B416.87B373.32B366.88B358.88B
Total Liabilities575.18B550.65B501.16B483.71B480.10B
Stockholders Equity181.99B164.65B145.69B139.63B139.23B
Cash Flow
Free Cash Flow-7.54B-37.71B4.39B-23.32B-42.58B
Operating Cash Flow34.21B20.55B36.35B23.75B11.84B
Investing Cash Flow-44.66B-58.04B-33.57B-29.42B-24.75B
Financing Cash Flow8.60B34.92B-4.92B3.89B12.53B

Sotetsu Holdings, Inc. Technical Analysis

Technical Analysis Sentiment
Positive
Last Price2357.00
Price Trends
50DMA
2229.12
Positive
100DMA
2216.20
Positive
200DMA
2307.44
Positive
Market Momentum
MACD
30.31
Negative
RSI
77.42
Negative
STOCH
86.18
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9003, the sentiment is Positive. The current price of 2357 is above the 20-day moving average (MA) of 2298.12, above the 50-day MA of 2229.12, and above the 200-day MA of 2307.44, indicating a bullish trend. The MACD of 30.31 indicates Negative momentum. The RSI at 77.42 is Negative, neither overbought nor oversold. The STOCH value of 86.18 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:9003.

Sotetsu Holdings, Inc. Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
¥230.94B10.30
2.33%8.20%39.32%
65
Neutral
$11.16B15.865.39%1.92%3.11%-24.90%
$2.11B11.959.19%1.27%
$3.65B11.848.66%0.09%
$2.67B10.0710.45%0.03%
74
Outperform
¥323.29B8.56
2.28%14.91%54.74%
66
Neutral
¥109.65B21.47
1.40%3.02%11.73%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:9003
Sotetsu Holdings, Inc.
2,357.00
-3.94
-0.17%
KHNRF
Keihan Holdings Co
21.08
1.67
8.60%
KINUF
Kintetsu Group Holdings Co
19.20
-2.76
-12.57%
KTERF
Keio
23.38
-0.35
-1.47%
JP:9010
Fuji Kyuko Co., Ltd.
2,070.00
-1,022.27
-33.06%
JP:9048
Nagoya Railroad Co., Ltd.
1,644.00
-137.71
-7.73%

Sotetsu Holdings, Inc. Corporate Events

Sotetsu Holdings Completes Treasury Share Repurchase
May 28, 2025

Sotetsu Holdings, Inc. has completed the repurchase of 407,400 common shares at a total cost of 889,354,950 yen, as part of a resolution to acquire up to 2 million shares. This strategic move, executed through the Tokyo Stock Exchange, aims to optimize the company’s capital structure and potentially enhance shareholder value.

Sotetsu Holdings Proposes Amendments to Articles of Incorporation
May 23, 2025

Sotetsu Holdings, Inc. announced a proposal to amend its Articles of Incorporation, which will be presented at the upcoming General Meeting of Shareholders. The amendment aims to update the company’s corporate objectives to better align with its current business operations and clarify its enterprise content, potentially impacting its strategic direction and stakeholder interests.

Sotetsu Holdings Announces Executive Leadership Changes
May 23, 2025

Sotetsu Holdings, Inc. announced significant changes in its executive leadership, including the appointment of Takamasa Kato as the new Representative Director and President. These changes align with the company’s Seventh Medium-Term Management Plan, aiming to enhance growth and prepare for major developments such as the remodeling of Yokohama Station’s west exit. The restructuring reflects Sotetsu’s strategy to strengthen its group management system and pursue its long-term growth roadmap.

Sotetsu Holdings Clarifies Executive Personnel Report
May 23, 2025

Sotetsu Holdings Inc. addressed a report in the Kanagawa Shimbun regarding its executive personnel, clarifying that the information was not officially announced by the company. The Board of Directors is set to deliberate on executive personnel decisions, and the company plans to disclose outcomes promptly, highlighting its commitment to transparency.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 07, 2025