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

• Market Cap: ¥7.51B
• Dividend Yield: 0.39%
• Average Volume (3M): 760.00
• Price to Earnings (P/E): 26.2
• Beta (1Y): 0.22
• Revenue Growth: 9.47%
• EPS Growth: -57.17%
• Country: JP
• Employees: 214
• Sector: Consumer Cyclical
• Sector Strength: 64
• Industry: Travel Lodging
• EPS (TTM): 154.97
• Shares Outstanding: 1,181,448
• 10 Day Avg. Volume: 530
• 30 Day Avg. Volume: 760
• PEG Ratio: 1.29
• Price to Book (P/B): 2.13
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: ¥6,987.00
• Price Target Upside: 9.86% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 59 Neutral
• Price Target: ¥6,646.00 ▲(4.50%Upside)

The overall stock score of 59 is primarily driven by solid revenue growth and improved operational efficiency, offset by challenges in profitability and cash flow management. Technical indicators show a bearish trend, while valuation metrics suggest a potential overvaluation. The absence of earnings call insights and corporate events leaves the financial performance as the most significant factor in the score.

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

Company Description

HOTEL NEWGRAND CO., LTD. (9720) is a hospitality company operating in the hotel and accommodation sector. The company is known for providing luxurious lodging services, offering a range of amenities and experiences tailored to both leisure and business travelers. With its flagship property located in a prime area, it caters to guests seeking premium accommodations with a blend of historical charm and modern convenience.

How the Company Makes Money

HOTEL NEWGRAND CO., LTD. primarily generates revenue through its hotel operations, which include room bookings, food and beverage services, and event hosting. The company earns money from room rates paid by guests, which vary based on the type of accommodation and seasonality. Additionally, the hotel offers dining experiences in its restaurants and cafes, contributing to its revenue. Hosting events such as weddings, conferences, and meetings also represents a significant income stream. Partnerships with travel agencies and online booking platforms enhance its market reach and occupancy rates, thereby supporting its financial performance.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.86B	5.37B	4.28B	3.20B	3.06B
Gross Profit	4.43B	3.76B	3.15B	2.19B	2.13B
EBITDA	647.97M	577.25M	-40.11M	1.19B	-787.75M
Net Income	303.42M	393.36M	-349.20M	1.32B	-1.10B
Balance Sheet
Total Assets	8.47B	7.95B	7.74B	8.07B	7.88B
Cash, Cash Equivalents and Short-Term Investments	2.48B	2.42B	2.20B	2.72B	542.43M
Total Debt	2.69B	2.34B	2.58B	2.80B	3.54B
Total Liabilities	4.94B	4.70B	4.89B	4.88B	6.01B
Stockholders Equity	3.54B	3.25B	2.85B	3.20B	1.87B
Cash Flow
Free Cash Flow	-581.18M	445.28M	-291.57M	-66.94M	-840.49M
Operating Cash Flow	390.54M	609.28M	2.77M	-35.22M	-758.87M
Investing Cash Flow	-656.73M	-141.25M	-294.34M	2.97B	-81.62M
Financing Cash Flow	319.10M	-249.07M	-224.45M	-754.27M	1.00B

HOTEL NEWGRAND CO., LTD. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6360.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• 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 6360 is below the 20-day moving average (MA) of 6517.50, below the 50-day MA of 6440.60, and above the 200-day MA of 6113.42, indicating a neutral trend. The MACD of -23.10 indicates Positive momentum. The RSI at 41.77 is Neutral, neither overbought nor oversold. The STOCH value of 9.40 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
6565	76 Outperform	¥20.34B	8.00		1.39%	7.35%	9.94%
Sector *	67 Neutral	¥265.52B	13.57	6.45%	2.58%	5.22%	-11.96%
4691	66 Neutral	¥15.06B	7.47		1.60%	16.69%	141.13%
9713	61 Neutral	¥13.64B	8.18		0.56%	21.75%	92.79%
9723	60 Neutral	¥7.53B	10.29		0.48%	2.41%	-13.76%
9720	59 Neutral	¥7.51B	26.20		0.39%	9.47%	-57.17%
9704	49 Neutral	€15.49B	233.45	1.65%	―	12.51%	―

HOTEL NEWGRAND CO., LTD. Corporate Events

HOTEL NEWGRAND Reports Strong Q2 Financial Performance

HOTEL NEWGRAND CO., LTD. reported a 12.7% increase in net sales and a 40.8% increase in operating profit for the second quarter of 2025 compared to the same period in 2024. Despite a slight decrease in profit, the company’s financial position has strengthened with an increase in total assets and net assets, indicating a positive outlook for stakeholders.