HOTEL NEWGRAND CO., LTD. (9720) AI Stock Analysis

• Market Cap: ¥6.50B
• Dividend Yield: 0.39%
• Average Volume (3M): 826.00
• Price to Earnings (P/E): 37.8
• Beta (1Y): 0.17
• Revenue Growth: 10.52%
• EPS Growth: -31.01%
• Country: JP
• Employees: 214
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Travel Lodging
• EPS (TTM): -24.53
• Shares Outstanding: 1,181,448
• 10 Day Avg. Volume: 1,830
• 30 Day Avg. Volume: 826
• PEG Ratio: -1.12
• Price to Book (P/B): 2.05
• Price to Sales (P/S): 1.17
• P/FCF Ratio: 39.64
• 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: 53 Neutral
• Price Target: ¥5,583.00 ▼(-9.66% Downside)
• Action: Reiterated Date: 01/16/26
• Date: Action: Reiterated 01/16/26

The score is driven primarily by middling financial performance: recovery and moderate leverage are offset by 2025 margin compression and volatile/weak free-cash-flow conversion. Technicals are notably weak with the stock trading below key moving averages and bearish momentum signals, while valuation offers limited support given a high P/E and low dividend yield.

Positive Factors

Revenue recovery and growth

Sustained revenue recovery through 2023–2025 indicates demand normalization for the hotel’s services. Durable top-line improvement helps absorb fixed costs in a full-service hotel, underpins room and banquet revenue stability, and supports steady operational planning and modest reinvestment over months.

Moderate leverage and rebuilt equity

Leverage at ~0.65 and rebuilt equity since 2020 provide balance-sheet resilience. Lower relative debt reduces refinancing and liquidity risk, offering the company durable financial flexibility to fund maintenance capex, navigate revenue swings, and pursue targeted investments without immediate external financing.

Improving cash generation (FCF turned positive)

A return to positive free cash flow in 2025 signals recovering cash conversion and operational recovery. Improved cash generation strengthens liquidity and allows internal funding for maintenance, modest growth initiatives, or debt reduction, supporting financial stability over the coming months despite conversion remaining below earnings.

Negative Factors

Margin compression and lower ROE

Steady margin erosion and declining ROE reflect weakening earnings power. Persistent margin pressure reduces retained earnings and limits capacity to rebuild reserves or invest in service upgrades, making profitability more vulnerable to cost inflation, wage pressure, or slower demand over the next several months.

Weak and volatile free-cash-flow conversion

Recurrent negative FCF years and low conversion versus net income signal structural cash volatility from capital intensity or working-capital swings. This undermines the company’s ability to self-fund capex or smooth dividends, increasing dependence on external funding in adverse scenarios.

Earnings volatility and concentration risk

Historical losses and volatile results highlight vulnerability to travel demand shocks. As an operator of a single full-service hotel, revenue concentration and limited geographic or brand diversification amplify exposure to local downturns, reducing predictability of earnings and cash flow over the medium term.

HOTEL NEWGRAND CO., LTD. Business Overview & Revenue Model

Company Description

Hotel Newgrand Co.,Ltd. opeates hotels and resorts in Japan. It operates the Hotel New Grand in Yokohama. The company was incorporated in 1926 and is based in Yokohama, Japan.

How the Company Makes Money

The company primarily makes money by operating its hotel business. Key revenue streams typically include: (1) Room revenue from selling accommodations (e.g., daily room sales to leisure and business travelers, including group bookings), (2) Food & beverage revenue from restaurants, bars, and in-hotel dining services, and (3) Banquet and event revenue from renting function spaces and providing catering and related services for weddings, corporate events, and social gatherings. Additional income may come from ancillary hotel services (e.g., service charges and other guest-related services); specific amounts or segment breakdowns are null. Information on any significant partnerships contributing to earnings is null.

HOTEL NEWGRAND CO., LTD. Financial Statement Overview

Summary

Revenue has recovered with positive profitability in 2023–2025, and leverage is moderate with debt-to-equity below 1.0. However, net margin compressed to ~3% in 2025 (from ~5% in 2024 and ~7% in 2023), ROE cooled to ~5%, and cash flow quality is uneven with weak free-cash-flow conversion and multiple years of negative FCF.

Income Statement

Revenue has recovered and grown over the last several years, with 2025 showing modest growth. Profitability is positive and stable in 2023–2025, but margins have compressed meaningfully versus 2023–2024 (net margin fell to ~3% in 2025 from ~5% in 2024 and ~7% in 2023). Results also show historical volatility, including losses in 2020 and 2022, which highlights sensitivity to the operating environment.

Balance Sheet

Leverage looks moderate for the sector, with debt-to-equity improving versus 2020 and remaining below 1.0 in recent years (about 0.65 in 2025). Equity has been rebuilt since 2020, supporting balance-sheet resilience. However, returns on equity have cooled alongside profitability (down to ~5% in 2025 from ~9% in 2024 and ~12% in 2023), and the business has a track record of stress-period drawdowns (very weak ROE in 2020 and negative ROE in 2022).

Cash Flow

Cash generation is improving but remains uneven. Operating cash flow rebounded strongly in 2025 versus 2024, and free cash flow turned positive in 2025 after a large deficit in 2024. Still, free cash flow conversion relative to earnings is low in 2025 (free cash flow is well below net income), and the multi-year pattern includes several periods of negative free cash flow (notably 2020, 2022, and 2024), suggesting ongoing capital intensity and/or working-capital swings.

Breakdown	Nov 2025	Nov 2024	Nov 2023	Nov 2022	Nov 2021
Income Statement
Total Revenue	6.53B	5.86B	5.37B	4.28B	3.20B
Gross Profit	4.56B	4.43B	4.05B	3.15B	2.19B
EBITDA	567.92M	647.97M	577.25M	-40.11M	1.19B
Net Income	201.37M	303.42M	393.36M	-349.20M	1.32B
Balance Sheet
Total Assets	8.88B	8.48B	7.96B	7.74B	8.07B
Cash, Cash Equivalents and Short-Term Investments	2.35B	2.48B	2.42B	2.20B	2.72B
Total Debt	2.42B	2.69B	2.34B	2.58B	2.80B
Total Liabilities	5.15B	4.95B	4.71B	4.89B	4.88B
Stockholders Equity	3.72B	3.54B	3.25B	2.85B	3.20B
Cash Flow
Free Cash Flow	192.09M	-581.18M	445.28M	-291.57M	-66.94M
Operating Cash Flow	682.43M	390.54M	609.28M	2.77M	-35.22M
Investing Cash Flow	-505.39M	-656.73M	-141.25M	-294.34M	2.97B
Financing Cash Flow	-304.43M	319.10M	-249.07M	-224.45M	-754.27M

HOTEL NEWGRAND CO., LTD. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6180.00
• 50DMA: Negative
• 100DMA: Negative
• 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:9720, the sentiment is Negative. The current price of 6180 is above the 20-day moving average (MA) of 5724.00, above the 50-day MA of 5881.60, and below the 200-day MA of 6477.54, indicating a bearish trend. The MACD of -107.99 indicates Positive momentum. The RSI at 34.64 is Neutral, neither overbought nor oversold. The STOCH value of 14.76 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:9720.

HOTEL NEWGRAND CO., LTD. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4691	75 Outperform	¥16.37B	2.93	―	1.47%	19.31%	202.53%
9708	63 Neutral	¥178.68B	15.25	―	0.49%	-1.00%	5.32%
9722	63 Neutral	¥120.23B	17.02	―	0.30%	10.26%	6.31%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
9704	61 Neutral	¥10.67B	10.59	32.34%	―	20.16%	1467.54%
9713	58 Neutral	¥14.57B	2.42	―	0.55%	35.22%	413.40%
9720	53 Neutral	¥6.50B	37.82	―	0.39%	10.52%	-31.01%

HOTEL NEWGRAND CO., LTD. Corporate Events

Hotel New Grand Boosts Sales and Operating Profit but Full-Year Net Profit Declines

Hotel New Grand Co., Ltd. reported higher sales and operating profitability for the fiscal year ended November 30, 2025, with net sales rising 11.5% year on year to ¥6,529 million and operating profit up 19.1% to ¥303 million, reflecting improved operating efficiency and demand in its hotel business. Ordinary profit also increased 10.8% to ¥270 million, while profit attributable to shareholders declined 33.6% to ¥201 million, leading to lower basic earnings per share of ¥170.56; nonetheless, the company strengthened its financial position with total assets expanding to ¥8,855 million, net assets up to ¥3,721 million, and a slightly higher capital adequacy ratio of 42.0%, supported by stronger operating cash flow despite continued investment outflows and reduced financing cash inflows.

The most recent analyst rating on (JP:9720) stock is a Hold with a Yen6956.00 price target. To see the full list of analyst forecasts on HOTEL NEWGRAND CO., LTD. stock, see the JP:9720 Stock Forecast page.