Hokkaido Gas Co., Ltd. (9534) AI Stock Analysis

• Market Cap: ¥76.96B
• Dividend Yield: 2.88%
• Average Volume (3M): 96.14K
• Price to Earnings (P/E): 6.1
• Beta (1Y): 0.63
• Revenue Growth: 2.77%
• EPS Growth: 10.64%
• Country: JP
• Employees: 1,536
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Gas
• EPS (TTM): 9.98
• Shares Outstanding: 88,689,030
• 10 Day Avg. Volume: 73,430
• 30 Day Avg. Volume: 96,140
• PEG Ratio: -0.41
• Price to Book (P/B): 0.52
• Price to Sales (P/S): 0.26
• P/FCF Ratio: 3.03
• 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: 74 Outperform
• Price Target: ¥922.00 ▲(35.19% Upside)

The score is driven primarily by solid financial performance (improving profitability and reduced leverage, offset by volatile and weakening free-cash-flow trends), supported by strong technical uptrend signals and an attractive valuation (low P/E with a moderate dividend yield).

Positive Factors

Regulated local utility franchise

As a city gas utility with an established pipeline network and core retail customer base in Hokkaido, the company benefits from an essential-service, locally concentrated franchise. Regulation and infrastructure ownership create high barriers to entry, steady baseline demand, and durable revenue predictability over multi‑month horizons.

Healthy margin profile

Margins are robust for a regulated utility and have trended positively, indicating sustained operational efficiency and pricing power within the regulated framework. This margin durability supports capacity to fund maintenance, modest growth, and shareholder distributions even if volumes fluctuate moderately.

Improving leverage

A meaningful reduction in debt-to-equity from prior near‑1.0x levels to ~0.64 improves financial flexibility and lowers interest burden. That structural improvement enhances capacity to absorb shocks, fund necessary network maintenance, and pursue strategic investments without immediately needing incremental leverage.

Negative Factors

Volatile free cash flow

Free cash flow has been inconsistent and recently decelerated, with FCF covering only ~54% of net income and a prior year of negative FCF. This undermines the firm's ability to reliably self‑fund capex, service debt, or smooth dividends over time and raises refinancing or external funding risk if adverse shocks recur.

Inconsistent revenue growth

Top-line momentum has been patchy — a recent ~17% TTM uptick follows consecutive periods of slightly negative growth. Such inconsistency complicates multi‑period planning and forecasting, reflecting sensitivity to volume swings, fuel procurement dynamics, and tariff timing that can weaken persistent revenue visibility.

Absolute debt remains sizable

Despite ratio improvement, absolute indebtedness is still material and the company has a history of operating near 1.0x leverage. Sizeable debt constrains strategic flexibility, raises exposure to interest and refinancing risk, and could limit capital allocation if earnings or cash generation weaken.

Hokkaido Gas Co., Ltd. Business Overview & Revenue Model

Company Description

Hokkaido Gas Co., Ltd. engages in gas, and heat and power supply businesses in Japan. The company is also involved in the purification and sale of gas by-products; production and sale of gas appliances, as well as related construction works; and other related works. It offers its services in Sapporo, Otaru, Hakodate, Chitose, Ishikari, Kitahiroshima, Eniwa, Hokuto, and Kitami. Hokkaido Gas Co., Ltd. was founded in 1911 and is headquartered in Sapporo, Japan.

How the Company Makes Money

Hokkaido Gas Co., Ltd. generates revenue primarily through the sale and distribution of natural gas to residential, commercial, and industrial customers. The company charges customers for the volume of gas consumed, which is measured in cubic meters. In addition to gas sales, Hokkaido Gas also earns income from related services, such as installation and maintenance of gas appliances and infrastructure. Strategic partnerships with local governments and businesses enhance their market reach and customer base. The company's revenue is influenced by factors such as natural gas prices, regulatory changes, and demand fluctuations in the energy market.

Hokkaido Gas Co., Ltd. Financial Statement Overview

Summary

Fundamentals are solid for a regulated utility: improving profitability and strong recent revenue growth (~17% TTM) support the score, and leverage has improved (debt-to-equity ~0.64 TTM vs ~1.0x in prior years). The main constraint is cash-flow quality and consistency—free cash flow has been volatile (including a negative year historically) and recently decelerated, with only moderate cash conversion.

Income Statement

TTM (Trailing-Twelve-Months) results show solid profitability for a regulated utility profile, with gross margin ~31%, EBIT margin ~10%, and net margin ~7%. Revenue growth accelerated to ~17% in TTM after slightly negative growth in FY2025 and FY2024, indicating improving top-line momentum. The main weakness is that revenue growth has been inconsistent over the last several years, which can make earnings momentum less predictable even though margins have been trending better recently.

Balance Sheet

Leverage has improved meaningfully: debt-to-equity is ~0.64 in TTM versus ~0.98–1.03 in FY2024–FY2023, reflecting better balance-sheet flexibility. Return on equity is healthy for the sector at ~13.9% TTM. The key risk is that absolute debt remains sizable, and the company has a history of running near-1.0x debt-to-equity in prior years, so balance-sheet strength is improved but not structurally low-leverage.

Cash Flow

Cash generation is positive, with TTM operating cash flow of ~¥29.9B and free cash flow of ~¥16.1B, and free cash flow covering ~54% of net income. However, free cash flow growth is negative in TTM, and cash conversion is only moderate (operating cash flow is well below the level that would fully cover reported earnings on a one-for-one basis). Historical volatility is also notable, including a year with negative free cash flow (FY2023), which lowers confidence in consistency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	173.93B	170.29B	173.88B	174.84B	126.96B	118.16B
Gross Profit	54.64B	50.37B	49.09B	44.94B	37.00B	34.29B
EBITDA	33.31B	29.81B	30.28B	27.77B	21.25B	19.97B
Net Income	12.46B	10.40B	11.63B	9.96B	5.24B	4.29B
Balance Sheet
Total Assets	195.22B	195.43B	186.37B	183.80B	160.43B	151.22B
Cash, Cash Equivalents and Short-Term Investments	8.79B	11.32B	9.47B	2.72B	9.57B	6.14B
Total Debt	58.36B	62.60B	75.16B	67.78B	58.51B	73.66B
Total Liabilities	101.57B	106.94B	107.37B	115.80B	101.24B	96.99B
Stockholders Equity	91.39B	86.35B	76.89B	65.89B	57.12B	52.19B
Cash Flow
Free Cash Flow	16.09B	14.73B	15.86B	-14.60B	8.22B	11.66B
Operating Cash Flow	29.91B	29.83B	31.68B	6.70B	19.71B	22.40B
Investing Cash Flow	-15.93B	-20.06B	-16.75B	-22.56B	-11.11B	-10.25B
Financing Cash Flow	-8.13B	-7.92B	-8.17B	9.03B	-5.18B	-7.55B

Hokkaido Gas Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 682.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9534, the sentiment is Positive. The current price of 682 is below the 20-day moving average (MA) of 819.30, below the 50-day MA of 774.28, and above the 200-day MA of 656.01, indicating a bullish trend. The MACD of 21.77 indicates Negative momentum. The RSI at 72.04 is Negative, neither overbought nor oversold. The STOCH value of 86.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:9534.

Hokkaido Gas Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9536	76 Outperform	¥88.42B	8.78	9.07%	3.61%	9.39%	77.24%
9534	74 Outperform	¥76.96B	6.08	―	2.88%	2.77%	10.64%
9533	73 Outperform	¥518.19B	18.20	6.03%	1.81%	7.08%	43.50%
9543	70 Outperform	¥93.74B	9.38	8.29%	3.89%	1.08%	37.11%
9537	69 Neutral	¥18.46B	6.19	―	2.18%	6.66%	―
9539	68 Neutral	¥38.43B	11.76	―	1.81%	0.93%	1212.45%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%

Hokkaido Gas Co., Ltd. Corporate Events

Hokkaido Gas Lifts Full-Year Earnings Forecast on Stronger Demand and Efficiency Gains

Hokkaido Gas has raised its full-year consolidated and non-consolidated earnings forecasts for the fiscal year ending March 31, 2026, citing higher-than-expected gas sales volumes driven by temperature-related demand, steady growth in customer numbers, and ongoing efficiency gains. The company now projects consolidated net sales of ¥175.0 billion and profit attributable to owners of parent of ¥11.17 billion, both above prior guidance and last year’s results, signaling stronger profitability and underscoring the benefits of its proactive demand development initiatives for stakeholders, including shareholders and customers.

The most recent analyst rating on (JP:9534) stock is a Buy with a Yen925.00 price target. To see the full list of analyst forecasts on Hokkaido Gas Co., Ltd. stock, see the JP:9534 Stock Forecast page.

Hokkaido Gas Lifts Nine-Month Profit Over 50% and Raises Full-Year Forecast

Hokkaido Gas reported consolidated net sales of ¥114.8 billion for the nine months ended December 31, 2025, up 3.3% year on year, with operating profit surging 56.0% to ¥8.1 billion and profit attributable to owners of parent jumping 55.2% to ¥5.8 billion, reflecting a strong recovery in earnings and improved profitability versus the prior-year period. The company’s equity-to-asset ratio improved to 46.8% from 44.1% as net assets rose to ¥93.6 billion, while it maintained its dividend plan for the fiscal year ending March 31, 2026 at a total of ¥23.00 per share; at the same time, Hokkaido Gas revised its full-year forecast upward to net sales of ¥175.0 billion and profit attributable to owners of parent of ¥11.2 billion, signaling confidence in sustained earnings growth and a stronger financial footing for stakeholders.

The most recent analyst rating on (JP:9534) stock is a Buy with a Yen925.00 price target. To see the full list of analyst forecasts on Hokkaido Gas Co., Ltd. stock, see the JP:9534 Stock Forecast page.

Hokkaido Gas to Consolidate Ishikari Gas-Fired Power Business in Wholly Owned Subsidiary

Hokkaido Gas will transfer the assets, rights and obligations of its natural gas-fired thermal power generation business at the Kitagas Ishikari Power Plant to its wholly owned subsidiary Energy Solution Co., Ltd. via an absorption-type company split effective February 1, 2026. By consolidating gas-fired power generation operations under Energy Solution, which already has experience in power generation and cogeneration, the company aims to strengthen operational and technical know-how in a power source it views as having long-term competitiveness; the internal reorganization involves no change in share capital, no consideration or new securities issued, requires no general meeting approval, and is not expected to impair the financial soundness or obligation-fulfillment capacity of either entity, suggesting limited immediate impact on shareholders but clearer structural positioning for future power business development.

The most recent analyst rating on (JP:9534) stock is a Buy with a Yen823.00 price target. To see the full list of analyst forecasts on Hokkaido Gas Co., Ltd. stock, see the JP:9534 Stock Forecast page.

Hokkaido Gas Completes Adjusted Disposal of Treasury Shares for Employee Share Plan

Hokkaido Gas has completed payment procedures for the disposal of treasury shares under its restricted stock allotment system through the company’s Employee Shareholding Association, as previously approved by its board on July 31, 2025. Due to a partial forfeiture of rights tied to the final number of participating association members, the number of common shares disposed of was reduced from 36,200 to 25,420, lowering the total disposal value from 21,394,200 yen to 15,023,220 yen, while maintaining the disposal price at 591 yen per share; this adjustment fine-tunes the scale of the employee-focused equity incentive without altering its core structure.

The most recent analyst rating on (JP:9534) stock is a Buy with a Yen823.00 price target. To see the full list of analyst forecasts on Hokkaido Gas Co., Ltd. stock, see the JP:9534 Stock Forecast page.

Hokkaido Gas Reports Strong Financial Growth and Revised Dividend Policy

Hokkaido Gas Co., Ltd. reported a significant increase in its financial performance for the six months ending September 30, 2025, with net sales rising by 4.9% and operating profit increasing by 39.2% compared to the previous year. The company also announced a revision in its dividend policy, reflecting a positive outlook for the fiscal year ending March 31, 2026, with a forecasted slight increase in profits and stable earnings per share.

The most recent analyst rating on (JP:9534) stock is a Buy with a Yen795.00 price target. To see the full list of analyst forecasts on Hokkaido Gas Co., Ltd. stock, see the JP:9534 Stock Forecast page.