Tokai Lease Co., Ltd. (9761) AI Stock Analysis

• Market Cap: ¥9.32B
• Dividend Yield: 5.03%
• Average Volume (3M): 8.55K
• Price to Earnings (P/E): 7.4
• Beta (1Y): 0.44
• Revenue Growth: 12.91%
• EPS Growth: 59.12%
• Country: JP
• Employees: 568
• Sector: Real Estate
• Sector Strength: 53
• Industry: Real Estate - Services
• EPS (TTM): 20.19
• Shares Outstanding: 3,494,322
• 10 Day Avg. Volume: 8,330
• 30 Day Avg. Volume: 8,546
• PEG Ratio: 0.12
• Price to Book (P/B): 0.43
• Price to Sales (P/S): 0.40
• P/FCF Ratio: -6.43
• 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: 71 Outperform
• Price Target: ¥2,984.00 ▲(20.61% Upside)
• Action: Reiterated Date: 10/30/25
• Date: Action: Reiterated 10/30/25

Tokai Lease Co., Ltd. shows strong financial performance and attractive valuation, with a low P/E ratio and high dividend yield. However, technical indicators suggest short-term bearish momentum, which slightly offsets the positive financial and valuation aspects.

Positive Factors

Revenue & margin improvement

Consistent revenue growth and rising gross and net margins indicate durable improvements in pricing, cost control and operational efficiency. For a leasing firm, this suggests stable contract economics and improved utilization that can sustain profitability across multiple reporting periods.

Manageable leverage and stable equity ratio

A moderate debt-to-equity ratio and near-half equity funding show a balanced capital structure that supports growth while limiting solvency risk. Improved ROE signals better capital deployment, helping long-term funding access and resilience versus purely equity- or debt-heavy peers.

Positive operating cash generation

Operating cash flow roughly matches reported earnings, indicating core leasing operations convert profits into cash. For asset-light returns and dividend capacity, strong OCF underpins ongoing maintenance, service delivery and reinvestment even when upfront asset spend is lumpy.

Negative Factors

Negative free cash flow due to high capex

Persistent negative free cash flow from elevated capex limits financial flexibility and forces reliance on external funding or retained earnings to replace and expand rental assets. Over months this can constrain dividends, share buybacks or slower organic growth if capex remains high.

Reliance on debt financing

Dependence on debt to fund asset base increases interest expense and refinancing risk. In a rising-rate or stressed macro environment, leverage near 0.83 may raise servicing costs and reduce strategic optionality, pressuring margins and capital allocation over the medium term.

Exposure to cyclical end markets

Concentration in construction, infrastructure and event rentals links utilization and pricing to macro cycles. This structural exposure can cause durable swings in utilization, revenue and returns, making performance sensitive to project activity and economic downturns over several months.

Tokai Lease Co., Ltd. Business Overview & Revenue Model

Company Description

Tokai Lease Co., Ltd. manufactures, sells, and leases temporary buildings, and fixtures and fittings in Japan. The company's solutions cover flat houses, such as convenience stores, schools, support centers, factories, post offices, fire and disaster management agencies, emergency temporary housing, government buildings, police boxes, dining rooms, offices, and toilet buildings; and unit houses comprising schools, vote counting facilities, and offices. Its solutions also cover TU suspended ceiling and partition, steel lumber, kitchen capsule, Tokai system basics, steel eaves and waist, steel steps, and air conditioner panels; and office equipment and fixtures, such as desk chairs, storage furniture, air conditioners, home appliances, outdoor and educational equipment, and others. Tokai Lease Co., Ltd. was founded in 1963 and is headquartered in Osaka, Japan.

How the Company Makes Money

Tokai Lease Co., Ltd. generates revenue primarily through its leasing activities. The company earns income from lease payments made by clients over the term of the lease agreements. These payments typically include principal and interest components, contributing to consistent cash flow. Additionally, Tokai Lease may engage in residual value management, where it profits from the sale or further leasing of assets at the end of their lease term. The company may also offer ancillary services such as maintenance, insurance, and asset management, which provide additional revenue streams. Strategic partnerships with manufacturers and service providers enhance its offerings and market reach, further bolstering revenue generation.

Tokai Lease Co., Ltd. Financial Statement Overview

Summary

Tokai Lease Co., Ltd. demonstrates strong financial performance with consistent revenue and profit growth. The company exhibits solid profitability metrics and a stable balance sheet structure. However, reliance on debt financing and negative free cash flow highlight areas for further improvement.

Income Statement

Tokai Lease has demonstrated strong revenue growth, with a 7.1% increase in the latest year. The gross profit margin improved to 21.5% from the previous year's 19.2%, showcasing efficient cost management. Net profit margin also increased to 5.8%, indicating enhanced profitability. The EBIT and EBITDA margins have strengthened, reflecting effective operational performance. Overall, the income statement highlights a positive growth trajectory and improving profitability metrics.

Balance Sheet

The company's debt-to-equity ratio stands at 0.83, indicating manageable leverage. The return on equity has improved significantly to 6.3%, showcasing the company's ability to generate returns for its shareholders. The equity ratio of 46.2% suggests a stable financial structure with a good proportion of equity financing. While the balance sheet shows stability, the relatively high debt level remains a point of caution.

Cash Flow

Operating cash flow remains positive, but the free cash flow is negative due to high capital expenditures. The operating cash flow to net income ratio of 0.96 indicates strong cash generation relative to reported profits. However, the free cash flow to net income ratio is negative, reflecting the impact of investment activities. Cash flow management appears stable, but the negative free cash flow warrants attention for future capital allocation.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	18.97B	18.40B	17.18B	15.74B	16.42B	15.10B
Gross Profit	4.16B	3.95B	3.30B	2.30B	2.79B	2.79B
EBITDA	3.44B	3.28B	2.74B	2.02B	2.32B	2.30B
Net Income	1.13B	1.07B	675.33M	148.51M	324.00M	345.08M
Balance Sheet
Total Assets	36.61B	36.66B	34.55B	31.29B	31.78B	36.59B
Cash, Cash Equivalents and Short-Term Investments	2.52B	2.55B	2.38B	2.58B	2.49B	2.72B
Total Debt	14.98B	13.95B	12.41B	11.34B	11.52B	16.36B
Total Liabilities	19.66B	19.58B	18.32B	15.89B	16.25B	21.17B
Stockholders Equity	16.80B	16.92B	16.08B	15.26B	15.39B	15.20B
Cash Flow
Free Cash Flow	0.00	-1.14B	-1.83B	664.30M	348.17M	161.63M
Operating Cash Flow	0.00	1.03B	1.19B	2.40B	2.42B	2.10B
Investing Cash Flow	0.00	-1.82B	-3.59B	-1.93B	-1.02B	-1.97B
Financing Cash Flow	0.00	958.49M	1.59B	-388.62M	-624.12M	-362.42M

Tokai Lease Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2474.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9761, the sentiment is Positive. The current price of 2474 is below the 20-day moving average (MA) of 2647.50, below the 50-day MA of 2577.76, and above the 200-day MA of 2299.10, indicating a bullish trend. The MACD of 30.89 indicates Negative momentum. The RSI at 60.71 is Neutral, neither overbought nor oversold. The STOCH value of 90.65 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:9761.

Tokai Lease Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4262	83 Outperform	¥9.30B	13.06	―	3.66%	23.91%	19.62%
5533	74 Outperform	¥7.29B	10.46	―	3.61%	9.43%	6.79%
8891	74 Outperform	¥8.13B	5.70	―	2.98%	-0.96%	-7.88%
9761	71 Outperform	¥9.32B	7.42	―	5.03%	12.91%	59.12%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
8938	46 Neutral	¥2.76B	-7.38	―	0.46%	7.33%	-282.83%
8894	39 Underperform	¥7.06B	-0.32	―	―	521.07%	-3637.52%