Imperial Hotel Ltd (9708) AI Stock Analysis

• Market Cap: ¥163.72B
• Dividend Yield: 0.49%
• Average Volume (3M): 78.63K
• Price to Earnings (P/E): 53.6
• Beta (1Y): 0.41
• Revenue Growth: -1.00%
• EPS Growth: 5.32%
• Country: JP
• Employees: 1,758
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Travel Lodging
• EPS (TTM): 19.71
• Shares Outstanding: 118,800,000
• 10 Day Avg. Volume: 68,590
• 30 Day Avg. Volume: 78,633
• PEG Ratio: -1.75
• Price to Book (P/B): 2.34
• Price to Sales (P/S): 2.02
• P/FCF Ratio: -13.80
• 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: 63 Neutral
• Price Target: ¥1,486.00 ▲(21.50% Upside)

The score is driven primarily by recovering profitability and a very low-risk, debt-free balance sheet, partially offset by weak/volatile cash flow with negative FY2025 free cash flow and a slight revenue decline. Technicals are supportive (uptrend with positive momentum), but the high P/E and low dividend yield weigh on the overall attractiveness.

Positive Factors

Balance Sheet Strength

A zero-debt balance sheet with substantial equity materially lowers financial risk and provides durable strategic optionality. This capital conservatism supports financing renovations, smoothing cyclical tourism swings, and pursuing opportunistic investments without relying on external leverage.

Gross Margin Durability

Very high and consistent gross margins indicate structural pricing power or favorable cost mix in the core lodging operation. This margin cushion supports operating profitability through demand volatility and helps sustain long-term earnings even if top-line growth slows.

Profitability Recovery

Return to positive EBIT and net income after pandemic losses shows operational resilience and management execution. Restored profitability improves internal funding capacity, reduces restructuring risk, and strengthens the base for reinvestment and steady earnings growth over the medium term.

Negative Factors

Free Cash Flow Volatility

A sharp swing to negative FCF undermines the company’s ability to self-fund capex, dividends, or strategic initiatives. Even with no debt, inconsistent cash conversion raises financing and execution risk, complicating multi-quarter planning and increasing reliance on reserves or asset monetization.

Modest Margins & Softening Revenue

Modest net margins and a recent revenue dip limit the firm’s earnings leverage and resiliency to cost inflation or weaker demand. Structural margin constraints reduce free cash generation and slow balance-sheet accumulation, making sustained profitability gains harder without revenue reacceleration.

Moderate ROE and Cyclicality

Moderate ROE signals limited capital efficiency versus peers, while past deep losses highlight sensitivity to tourism cycles. Even with conservative leverage, earning volatility hampers long-term compounding and raises the bar for consistent shareholder returns absent structural improvements to margin or revenue growth.

Imperial Hotel Ltd Business Overview & Revenue Model

Company Description

Imperial Hotel, Ltd. operates hotels in Japan. The company manages the Imperial Hotel Tokyo, the Imperial Hotel Osaka, and the Kamikochi Imperial Hotel. Its hotels offer accommodation, dining, banquet, and other facilities. The company was founded in 1890 and is based in Tokyo, Japan.

How the Company Makes Money

Imperial Hotel Ltd generates revenue primarily through room bookings, which constitute the largest portion of its income. The company also makes money from food and beverage sales in its restaurants and bars, catering to both hotel guests and outside customers. Additionally, the hotel offers event spaces for conferences, weddings, and other gatherings, contributing to its income through rental fees and event services. The wellness facilities, such as spas and fitness centers, provide another revenue stream by offering memberships and individual services. Partnerships with travel agencies and online booking platforms enhance the hotel's visibility and accessibility, driving more bookings and, consequently, revenue.

Imperial Hotel Ltd Financial Statement Overview

Summary

Operations have recovered to positive EBIT and net income post FY2021–FY2022, supported by consistently strong gross margins (~76–80%). However, profitability is modest (FY2025 net margin ~4.9%) and revenue dipped slightly in FY2025 vs FY2024, while free cash flow turned meaningfully negative in FY2025 (~-¥7.7B), raising concerns about cash conversion and near-term momentum despite a very strong, debt-free balance sheet.

Income Statement

Profitability has largely normalized after the sharp losses in FY2021–FY2022, with FY2023–FY2025 returning to positive EBIT and net income. Gross profit margins remain consistently strong (~76–80%), but operating and net margins are modest (FY2025 net margin ~4.9%) and below FY2024 levels. Revenue rebounded strongly in FY2023–FY2024, but FY2025 shows a slight revenue decline versus FY2024, signaling a slowing near-term growth trajectory.

Balance Sheet

The balance sheet is conservatively positioned with zero reported debt across all periods, which materially lowers financial risk and provides flexibility through cycles. Equity remains substantial (roughly ¥38–61B over the period), supporting a stable capital base. The main weakness is that returns on equity are moderate in profitable years (~5–8%) and were deeply negative during FY2021–FY2022, highlighting sensitivity to downturns even with low leverage.

Cash Flow

Operating cash flow turned solidly positive in recent years (FY2025 ~¥7.1B), but cash generation has been uneven versus earnings across the cycle. Free cash flow is volatile—positive in FY2023–FY2024, then meaningfully negative in FY2025 (~-¥7.7B), suggesting heavier investment/spend or weaker cash conversion in the latest year. Overall cash flow quality is improving from the pandemic period but remains inconsistent, which increases forecasting risk.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	52.87B	52.61B	53.34B	43.77B	28.62B	22.05B
Gross Profit	39.73B	39.92B	42.30B	34.22B	22.14B	17.71B
EBITDA	4.09B	4.61B	5.36B	3.06B	-8.15B	-9.12B
Net Income	2.73B	2.58B	3.38B	1.95B	-7.89B	-14.36B
Balance Sheet
Total Assets	68.39B	69.03B	65.71B	61.74B	59.11B	65.42B
Cash, Cash Equivalents and Short-Term Investments	22.93B	23.18B	30.34B	30.24B	28.12B	31.95B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	22.66B	23.68B	22.67B	21.74B	21.14B	19.35B
Stockholders Equity	45.73B	45.35B	43.03B	40.00B	37.97B	46.07B
Cash Flow
Free Cash Flow	0.00	-7.69B	636.00M	2.13B	-3.13B	-9.60B
Operating Cash Flow	0.00	7.06B	4.20B	3.94B	-1.72B	-8.32B
Investing Cash Flow	0.00	-14.14B	-3.07B	-1.58B	-1.43B	217.00M
Financing Cash Flow	0.00	-724.00M	-718.00M	-240.00M	-282.00M	-474.00M

Imperial Hotel Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1223.00
• 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:9708, the sentiment is Positive. The current price of 1223 is below the 20-day moving average (MA) of 1340.80, below the 50-day MA of 1250.90, and above the 200-day MA of 1057.41, indicating a bullish trend. The MACD of 41.93 indicates Positive momentum. The RSI at 68.21 is Neutral, neither overbought nor oversold. The STOCH value of 73.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:9708.

Imperial Hotel Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6565	80 Outperform	¥23.45B	7.74	―	1.27%	12.08%	17.87%
9722	76 Outperform	¥145.90B	15.20	―	0.30%	10.26%	6.31%
6547	72 Outperform	¥29.01B	5.49	―	1.46%	19.32%	11.35%
9708	63 Neutral	¥163.72B	53.57	―	0.49%	-1.00%	5.32%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
9616	61 Neutral	¥244.20B	14.08	―	1.58%	9.38%	-0.16%

Imperial Hotel Ltd Corporate Events

Imperial Hotel Lifts Nine-Month Earnings but Flags Weaker Full-Year Profit

Imperial Hotel reported consolidated net sales of ¥41.97 billion for the nine months ended December 31, 2025, up 6.6% year on year, with operating profit jumping 62.7% to ¥2.56 billion and profit attributable to owners of parent rising 19.3% to ¥2.87 billion, reflecting improved profitability and a 27.8% increase in EBITDA. Total assets expanded to ¥80.19 billion while net assets climbed to ¥47.26 billion, although the equity-to-asset ratio declined to 58.9%, and the company maintained its dividend plan of ¥6 per share for the fiscal year; despite revising its full-year forecast, it now projects only modest growth in sales and profits and a 20.7% decline in full-year net profit, suggesting that recent profit strength may not fully carry through to year-end and signaling a more cautious outlook for shareholders and other stakeholders.

The most recent analyst rating on (JP:9708) stock is a Hold with a Yen1447.00 price target. To see the full list of analyst forecasts on Imperial Hotel Ltd stock, see the JP:9708 Stock Forecast page.