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

• Market Cap: ¥7.72B
• Dividend Yield: 0.38%
• Average Volume (3M): 740.00
• Price to Earnings (P/E): 21.7
• Beta (1Y): 0.25
• Revenue Growth: 9.49%
• EPS Growth: -28.90%
• Country: JP
• Employees: 214
• Sector: Consumer Cyclical
• Sector Strength: 59
• Industry: Travel Lodging
• EPS (TTM): 159.77
• Shares Outstanding: 1,181,448
• 10 Day Avg. Volume: 780
• 30 Day Avg. Volume: 740
• PEG Ratio: 0.11
• Price to Book (P/B): 1.67
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -16.37
• 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

• Rating: 68 Neutral
• Price Target: ¥6,987.00 ▲(6.83%Upside)

The overall stock score is primarily driven by strong technical indicators suggesting positive momentum and a bullish trend. Financial performance shows robust revenue growth and improved operational efficiency, but profitability and cash flow challenges pose risks. Valuation metrics indicate that the stock may be slightly overvalued, with a modest dividend yield offering limited income potential.

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

Company Description

HOTEL NEWGRAND CO., LTD. (9720) is a prominent hospitality company based in Japan, known for its luxury accommodation offerings. The company operates in the hospitality and tourism sector, providing high-end lodging services, dining experiences, and event hosting facilities. Its flagship property, Hotel New Grand, is a historic and iconic establishment in Yokohama, Japan, renowned for its elegant architecture and exceptional service, attracting both leisure and business travelers.

How the Company Makes Money

HOTEL NEWGRAND CO., LTD. generates revenue primarily through its hotel operations, which include room bookings, food and beverage services, and event hosting. The company capitalizes on its premium location and historical significance to attract a steady stream of guests, ranging from tourists to corporate clients. Additionally, the hotel may derive income from renting out its venues for weddings, conferences, and other events. The company's partnerships with travel agencies, corporate clients, and online travel platforms also play a significant role in maximizing occupancy rates and driving revenue.

HOTEL NEWGRAND CO., LTD. Financial Statement Overview

Summary

The company demonstrates robust revenue growth and improved operational efficiency, as evidenced by higher gross and EBITDA margins. However, challenges exist in profitability with declining net and EBIT margins. The balance sheet shows moderate leverage and an improved equity position, but declining ROE suggests reduced profitability. Cash flow analysis reveals significant pressure due to negative free cash flow, indicating potential liquidity constraints.

Income Statement

The company showed a positive revenue growth rate of 9% from 2023 to 2024, primarily driven by the travel and lodging sector's recovery. Gross profit margin improved to 75.6%, indicating efficient cost management. However, the net profit margin decreased to 5.2% from 7.3% the previous year, highlighting a challenge in converting revenue into profit. The EBIT margin also decreased slightly to 4.4%, while the EBITDA margin improved to 11.1%, reflecting better operational efficiency despite lower EBIT.

Balance Sheet

The debt-to-equity ratio stands at 0.76, suggesting a moderate level of leverage. Return on Equity (ROE) decreased to 8.6% from 12.1%, indicating a decline in profitability. The equity ratio improved to 41.7%, showcasing a stronger equity position relative to assets. The company's financial stability remains moderate, with manageable debt levels but declining profitability metrics.

Cash Flow

The free cash flow declined significantly, resulting in a negative trajectory, which could impact future investment capabilities. Operating cash flow to net income ratio decreased, highlighting potential challenges in converting income into cash. The free cash flow to net income ratio also turned negative, underlining cash flow management issues despite positive operating cash flow.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
5.69B	5.86B	5.37B	4.28B	3.20B	3.06B
	Gross Profit
4.23B	4.43B	3.76B	3.15B	2.19B	2.13B
	EBIT
384.91M	254.90M	283.65M	-385.38M	-742.14M	-885.09M
	EBITDA
568.17M	647.97M	577.25M	-40.11M	1.19B	-787.75M
	Net Income Common Stockholders
669.32M	303.42M	393.36M	-349.20M	1.32B	-1.10B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.99B	2.48B	2.42B	2.20B	2.72B	542.43M
	Total Assets
7.99B	8.47B	7.95B	7.74B	8.07B	7.88B
	Total Debt
2.28B	2.69B	2.34B	2.58B	2.80B	3.54B
	Net Debt
287.47M	216.99M	-84.57M	379.39M	84.37M	3.00B
	Total Liabilities
4.36B	4.94B	4.70B	4.89B	4.88B	6.01B
	Stockholders Equity
3.62B	3.54B	3.25B	2.85B	3.20B	1.87B
Cash Flow		Free Cash Flow
0.00	-581.18M	445.28M	-291.57M	-66.94M	-840.49M
	Operating Cash Flow
0.00	390.54M	609.28M	2.77M	-35.22M	-758.87M
	Investing Cash Flow
0.00	-656.73M	-141.25M	-294.34M	2.97B	-81.62M
	Financing Cash Flow
0.00	319.10M	-249.07M	-224.45M	-754.27M	1.00B

HOTEL NEWGRAND CO., LTD. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6540.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9720, the sentiment is Positive. The current price of 6540 is above the 20-day moving average (MA) of 6234.50, above the 50-day MA of 5976.60, and above the 200-day MA of 5991.79, indicating a bullish trend. The MACD of 161.75 indicates Negative momentum. The RSI at 66.51 is Neutral, neither overbought nor oversold. The STOCH value of 71.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
6565	75 Outperform	¥20.70B	8.14		1.36%	7.35%	9.94%
4691	73 Outperform	¥15.90B	7.79		1.52%	16.69%	144.28%
9720	68 Neutral	¥7.72B	21.74		0.38%	9.49%	-28.90%
Sector *	63 Neutral	$6.98B	11.41	2.80%	4.24%	2.68%	-24.94%
9723	60 Neutral	¥7.83B	10.15		0.46%	2.41%	-13.76%
9713	58 Neutral	¥13.53B	7.79		0.56%	21.75%	92.79%
9704	47 Neutral	¥14.98B	225.79	1.65%	―	12.51%	―