Kyushu Railway Company (9142) AI Stock Analysis

• Market Cap: ¥596.89B
• Dividend Yield: 2.81%
• Average Volume (3M): 452.44K
• Price to Earnings (P/E): 13.6
• Beta (1Y): 0.26
• Revenue Growth: 8.09%
• EPS Growth: 14.04%
• Country: JP
• Employees: 14,677
• Sector: Industrials
• Sector Strength: 90
• Industry: Railroads
• EPS (TTM): 40.15
• Shares Outstanding: 157,301,600
• 10 Day Avg. Volume: 386,210
• 30 Day Avg. Volume: 452,440
• PEG Ratio: 2.69
• Price to Book (P/B): 1.34
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -28.69
• 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: ¥5,325.20
• Price Target Upside: 41.29% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 76 Outperform
• Price Target: ¥4,384.00 ▲(16.32%Upside)

Kyushu Railway Company's stock is buoyed by strong technical momentum and solid financial performance despite challenges with leverage and free cash flow. Valuation metrics are stable but not exceptional, maintaining an overall positive outlook.

Kyushu Railway Company Business Overview & Revenue Model

Company Description

Kyushu Railway Company, commonly referred to as JR Kyushu, is a prominent rail transport operator in Japan, primarily serving the Kyushu region. It is one of the constituent companies of the Japan Railways Group (JR Group) that came into existence after the privatization of the Japanese National Railways. Beyond its core rail operations, JR Kyushu is involved in a diverse range of sectors including real estate, retail, hospitality, and construction, making it a multifaceted conglomerate in the region.

How the Company Makes Money

Kyushu Railway Company generates revenue through several key streams. The primary source is its railway operations, which include passenger services across its extensive network in Kyushu. Ticket sales, including commuter passes and long-distance travel fares, contribute significantly to its income. Additionally, JR Kyushu capitalizes on its real estate holdings by developing and leasing commercial and residential properties, often situated near its railway stations, thereby enhancing accessibility and attracting tenants. The company also operates retail outlets and hotels, providing shopping and accommodation services that cater to both commuters and tourists. Other ventures include its involvement in construction projects, both rail-related and general infrastructure, which further diversifies its revenue streams. Strategic partnerships and collaborations, especially those that enhance connectivity and tourism in the Kyushu region, also play a crucial role in driving the company's growth and profitability.

Kyushu Railway Company Financial Statement Overview

Summary

Kyushu Railway Company shows strong revenue growth and profitability, driven by effective cost management and operational efficiency. The balance sheet reflects a stable capital structure with a moderate debt burden. However, cash flow challenges persist, with ongoing negative free cash flow, necessitating careful management to ensure long-term financial health. Overall, the company is on a growth trajectory but must address cash flow issues to sustain its financial stability.

Income Statement

Kyushu Railway Company has demonstrated solid revenue growth with a TTM revenue increase of 6.9% compared to the previous year. The gross profit margin stands at 40.65%, indicating effective cost management. The net profit margin is 7.81%, showing healthy profitability, although it slightly decreased from the previous year. The EBIT margin is 11.93%, and the EBITDA margin is 16.99%, highlighting strong operational efficiency. However, the decline in net income compared to the previous year suggests potential challenges in maintaining profit levels.

Balance Sheet

The company maintains a moderate debt-to-equity ratio of 0.95, indicating balanced leverage. Return on Equity (ROE) is 7.79%, reflecting decent profitability relative to shareholder equity. The equity ratio is 40.05%, showing a stable capital structure. Despite the strong equity position, the increasing debt levels over recent years may pose a risk if not managed carefully.

Cash Flow

The free cash flow remains negative, but there has been a reduction in the deficit from the previous year. The operating cash flow to net income ratio is 0.55, suggesting a need to improve cash generation relative to profits. The free cash flow to net income ratio remains negative, indicating challenges in covering expenditures with generated cash. Despite these challenges, the company has managed to improve operating cash flow compared to the previous fiscal year.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
449.39B	420.40B	383.24B	329.53B	293.91B	432.64B
	Gross Profit
182.74B	165.30B	137.99B	96.96B	68.88B	159.24B
	EBIT
53.61B	47.09B	34.32B	3.94B	-22.87B	49.41B
	EBITDA
76.40B	85.00B	73.82B	37.17B	8.84B	71.14B
	Net Income Common Stockholders
35.12B	38.45B	31.17B	13.25B	-18.98B	31.50B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
80.09B	62.26B	52.30B	78.74B	65.02B	23.82B
	Total Assets
1.13T	1.09T	996.70B	951.98B	891.38B	828.59B
	Total Debt
426.38B	400.30B	362.06B	334.77B	262.46B	152.03B
	Net Debt
382.31B	366.36B	324.78B	295.06B	239.54B	128.21B
	Total Liabilities
673.52B	646.88B	589.85B	562.96B	495.97B	410.29B
	Stockholders Equity
450.68B	441.43B	406.05B	388.33B	390.19B	413.29B
Cash Flow		Free Cash Flow
-20.99B	-44.62B	-42.71B	-45.02B	-105.57B	-49.48B
	Operating Cash Flow
19.46B	89.03B	62.08B	56.46B	-10.36B	60.47B
	Investing Cash Flow
-37.51B	-111.89B	-97.58B	-95.73B	-53.91B	-76.94B
	Financing Cash Flow
18.22B	32.25B	8.96B	52.54B	105.87B	3.37B

Kyushu Railway Company Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 3769.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9142, the sentiment is Neutral. The current price of 3769 is below the 20-day moving average (MA) of 3850.40, above the 50-day MA of 3757.97, and below the 200-day MA of 3803.08, indicating a neutral trend. The MACD of 9.15 indicates Positive momentum. The RSI at 42.38 is Neutral, neither overbought nor oversold. The STOCH value of 9.04 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:9142.

Kyushu Railway Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9022	77 Outperform	$3.08T	6.72	10.31%	0.89%	7.10%	19.25%
9142	76 Outperform	¥596.89B	13.62	9.60%	2.81%	8.09%	14.04%
9020	72 Outperform	¥3.40T	15.18	7.93%	1.90%	5.77%	14.05%
9007	71 Outperform	¥592.55B	11.23	10.86%	2.26%	3.14%	-34.88%
9001	70 Outperform	¥504.45B	9.97	9.22%	2.25%	-0.71%	8.85%
9021	70 Neutral	¥1.49T	13.14	9.93%	2.58%	4.46%	18.61%
Sector *	66 Neutral	$4.50B	12.29	5.40%	248.66%	4.13%	-12.33%

Kyushu Railway Company Corporate Events

Kyushu Railway Company Finalizes Stock Acquisition Terms for Share Buyback

Kyushu Railway Company has finalized the terms for issuing its 1st Series of Stock Acquisition Rights through a third-party allotment, as part of an Accelerated Share Repurchase (ASR) program. This move, resolved at a recent Board of Directors meeting, aims to repurchase the company’s own shares, potentially impacting its share value and market positioning.

Kyushu Railway Completes Share Repurchase to Enhance Capital Efficiency

Kyushu Railway Company has completed the repurchase of 2,592,000 of its own shares, representing 1.66% of the total outstanding shares, through Off-Auction Own Share Repurchase Trading (ToSTNeT-3) on the Tokyo Stock Exchange. This move aligns with the company’s medium-term business plan to enhance capital efficiency and reduce capital costs, reflecting its commitment to providing stable shareholder returns.

Kyushu Railway Company Initiates Strategic Share Buyback

Kyushu Railway Company announced a strategic move to repurchase its own shares through an Accelerated Share Repurchase (ASR) program, aiming to enhance capital efficiency and reduce capital costs. This decision aligns with the company’s shareholder return policy under its Medium-Term Business Plan 2022–2024, which emphasizes stable returns and flexible share repurchases. The ASR, facilitated by Goldman Sachs, ensures the acquisition of shares equivalent to 10 billion yen, potentially improving the supply-demand balance for the company’s shares.

Kyushu Railway Company Announces Changes in Corporate Leadership

Kyushu Railway Company announced changes in its corporate officers, including a new candidate for director and the resignation of a current director. These changes are part of the company’s strategy to advance its Medium-Term Business Plan for 2025–2027, aiming to strengthen its management structure and enhance operational efficiency.

Kyushu Railway Company Announces Dividend from Surplus

Kyushu Railway Company has announced a resolution to issue dividends from surplus, with a record date of March 31, 2025, and a year-end dividend set at ¥51.50 per share. This decision aligns with the company’s policy of maintaining a consolidated dividend payout ratio of 35% and reflects its commitment to returning profits to shareholders.

Kyushu Railway Company Reports Strong Financial Growth and Positive Outlook

Kyushu Railway Company reported an increase in its consolidated financial results for the year ended March 31, 2025, with operating revenues rising by 8.1% and net income attributable to owners of the parent increasing by 13.6%. The company also announced a forecast for continued growth in the fiscal year ending March 31, 2026, with expected increases in operating revenues and net income. These results and projections indicate a positive trajectory for the company, potentially enhancing its market position and providing favorable implications for stakeholders.

JR Kyushu Unveils Medium-Term Business Plan for 2025-2027

JR Kyushu has announced the implementation of its Medium-Term Business Plan for 2025-2027, following a resolution at a Board of Directors meeting. This plan outlines the company’s strategic direction and operational goals for the next three years, potentially affecting its market positioning and stakeholder interests.

Kyushu Railway Company Enhances Corporate Governance and Workforce Diversity

Kyushu Railway Company has outlined its corporate governance policies, emphasizing the importance of safety, customer focus, and transparency. The company is actively working to reduce unnecessary cross-shareholdings and improve diversity within its workforce by promoting female and foreign employees to managerial positions. These initiatives aim to enhance corporate value and foster sustainable growth.