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

• Market Cap: ¥9.20B
• Dividend Yield: 5.03%
• Average Volume (3M): 8.55K
• Price to Earnings (P/E): 30.6
• 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: ¥2,866.00 ▲(15.84% 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

Sustained revenue growth with expanding gross and net margins indicates improving operational efficiency and pricing discipline. For a leasing business, margin expansion suggests better asset utilization and cost management, supporting durable profitability and reinvestment capacity over coming quarters.

Stable Balance Sheet & Manageable Leverage

A moderate debt-to-equity and near-50% equity ratio provide structural financial stability for an asset-heavy lessor. Improved ROE shows the company is extracting better returns from capital, enabling continued fleet investment and cushioning cyclical swings without excessive leverage buildup.

Solid Operating Cash Generation

Operating cash flow nearly matches reported profits, reflecting high quality earnings and reliable cash generation from rental operations. This durable cash conversion supports servicing debt, funding maintenance capex, and sustaining dividend programs even if free cash flow is temporarily impacted by investment cycles.

Negative Factors

Negative Free Cash Flow from High Capex

Persistent negative free cash flow from heavy capital spending can erode financial flexibility and necessitate external funding or slower dividend growth. For a leasing firm, prolonged elevated capex without commensurate utilization improvements risks pressuring liquidity and constraining strategic options.

Reliance on Debt Financing

Dependence on external debt to finance asset base increases refinancing and interest-rate vulnerability over time. If market funding conditions tighten or utilization dips, servicing and rolling leases could become more costly, reducing financial flexibility and magnifying downside in weaker cycles.

Demand Cyclicality & Utilization Risk

Revenue and asset utilization depend on cyclical end-markets (construction, events, infrastructure). Prolonged slowdowns or seasonality reduce utilization and resale opportunities for used assets, leading to revenue volatility and potential margin pressure in an asset-intensive leasing model.

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: Positive
• RSI: Neutral
• STOCH: Neutral

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 2654.95, below the 50-day MA of 2597.62, and above the 200-day MA of 2311.50, indicating a bullish trend. The MACD of 19.82 indicates Positive momentum. The RSI at 53.51 is Neutral, neither overbought nor oversold. The STOCH value of 46.42 is Neutral, 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	¥9.38B	11.12	―	3.66%	23.91%	19.62%
5533	74 Outperform	¥6.99B	35.30	―	3.61%	9.43%	6.79%
8891	74 Outperform	¥7.92B	2.99	―	2.98%	-0.96%	-7.88%
9761	71 Outperform	¥9.20B	30.59	―	5.03%	12.91%	59.12%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
8938	46 Neutral	¥2.75B	-26.88	―	0.46%	7.33%	-282.83%
8894	41 Neutral	¥7.94B	-3.94	―	―	521.07%	-3637.52%