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

• Market Cap: ¥6.91B
• Dividend Yield: 0.39%
• Average Volume (3M): 826.00
• Price to Earnings (P/E): 34.3
• Beta (1Y): 0.13
• 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: ¥6,222.00 ▲(0.68% Upside)

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

Moderate leverage / balance-sheet resilience

Sustained sub-1.0 debt-to-equity and rebuilt equity since 2020 provide structural financial flexibility. This allows the firm to fund cyclical investments, absorb downturns without immediate distress, and pursue strategic upkeep of premium assets essential to a luxury hotel operator.

Revenue recovery and growth trend

A multi-year revenue rebound into 2025 signals regained demand and pricing traction for the hotel portfolio. Durable topline recovery underpins longer-term cash flow potential and supports operating leverage, helping stabilize earnings as travel normalizes and corporate/group bookings return.

Diversified hotel revenue streams

Multiple revenue pillars—rooms, F&B, events and corporate contracts—reduce reliance on any single demand channel. This structural diversification lowers seasonal volatility, supports cross-selling, and preserves occupancy and ADR stability over the medium term in urban luxury hospitality markets.

Negative Factors

Sustained margin compression

Meaningful margin decline over consecutive years erodes the company's ability to convert revenue into durable profits. For a fixed-cost hotel business, sustained margin pressure reduces reinvestment capacity, weakens return on capital, and constrains the balance sheet's ability to absorb future shocks.

Uneven and weak free-cash-flow conversion

Inconsistent FCF and low conversion relative to earnings indicate capital intensity and working-capital swings. This undermines sustainable funding for capex, renovations, or dividends, increases reliance on external financing in downcycles, and raises long-term operational funding risk.

Volatile returns and historical downside sensitivity

A history of sharp ROE swings and past losses highlights sensitivity to demand shocks and operational leverage in hospitality. This volatility complicates long-range planning, increases capital allocation risk, and suggests earnings and return recovery may be slow or uneven during industry downturns.

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

HOTEL NEWGRAND generates revenue primarily through its hotel operations, which include room bookings, food and beverage sales, and event hosting services. The company earns significant income from both short-term stays by leisure travelers and long-term business contracts with corporate clients. Additional revenue streams may include partnerships with travel agencies and online booking platforms, which help increase visibility and attract a larger customer base. Seasonal promotions, loyalty programs, and special events also play a crucial role in driving occupancy rates and enhancing overall earnings.

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	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	6.35B	6.53B	5.86B	5.37B	4.28B	3.20B
Gross Profit	4.69B	4.56B	4.43B	4.05B	3.15B	2.19B
EBITDA	603.60M	567.92M	647.97M	577.25M	-40.11M	1.19B
Net Income	336.01M	201.37M	303.42M	393.36M	-349.20M	1.32B
Balance Sheet
Total Assets	8.71B	8.86B	8.47B	7.95B	7.74B	8.07B
Cash, Cash Equivalents and Short-Term Investments	2.37B	2.35B	2.48B	2.42B	2.20B	2.72B
Total Debt	2.57B	2.42B	2.69B	2.34B	2.58B	2.80B
Total Liabilities	4.96B	5.13B	4.94B	4.70B	4.89B	4.88B
Stockholders Equity	3.75B	3.72B	3.54B	3.25B	2.85B	3.20B
Cash Flow
Free Cash Flow	170.59M	192.09M	-581.18M	445.28M	-291.57M	-66.94M
Operating Cash Flow	351.28M	682.43M	390.54M	609.28M	2.77M	-35.22M
Investing Cash Flow	-190.88M	-505.39M	-656.73M	-141.25M	-294.34M	2.97B
Financing Cash Flow	-104.55M	-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: Positive
• 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 6038.50, below the 50-day MA of 6267.40, and below the 200-day MA of 6493.47, indicating a bearish trend. The MACD of -99.31 indicates Positive momentum. The RSI at 26.41 is Positive, neither overbought nor oversold. The STOCH value of >-0.01 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	80 Outperform	¥23.45B	7.74	―	1.27%	12.08%	17.87%
4691	69 Neutral	¥15.41B	5.17	―	1.47%	19.31%	202.53%
9723	69 Neutral	¥7.64B	9.97	―	0.48%	4.02%	-9.38%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
9713	58 Neutral	¥14.02B	5.38	―	0.55%	35.22%	413.40%
9704	55 Neutral	¥12.95B	9.03	32.34%	―	20.16%	1467.54%
9720	53 Neutral	¥6.91B	34.30	―	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.