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

• Market Cap: ¥8.81B
• Dividend Yield: 5.03%
• Average Volume (3M): 8.55K
• Price to Earnings (P/E): 30.6
• Beta (1Y): 0.45
• 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: ¥2,821.00 ▲(14.03% 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 expanding gross and net margins indicate improving operational efficiency and pricing power in its leasing business. For an asset-rental model, margin expansion signals durable cost control and service mix improvements that support sustained profitability and reinvestment ability over the next several months.

Manageable leverage and equity base

A moderate debt-to-equity ratio and roughly 46% equity ratio point to a stable capital structure for an asset-heavy lessor. Improved ROE shows the company is generating better returns on equity. This balance reduces near-term refinancing stress and supports steady access to debt markets for fleet funding over the medium term.

Positive operating cash generation

Operating cash flow that nearly matches reported profits reflects quality earnings and reliable cash generation from leasing operations. For a rental business that must service assets and fund operations, stable OCF provides a durable foundation to support maintenance capex, contractual obligations, and near-term liquidity despite investment needs.

Negative Factors

Negative free cash flow

Persistent negative free cash flow driven by high capex to maintain or expand the rental fleet constrains internal funding capacity. Over a multi-month horizon this limits flexibility for debt reduction, dividend increases, or opportunistic investments and may necessitate continued external financing or tighter capex prioritization.

Reliance on debt financing

Material leverage to fund an asset-intensive fleet increases interest and refinancing exposure. If market rates or credit availability shift, servicing or rolling debt could raise costs and pressure margins. This structural financing dependence elevates risk during prolonged capex cycles or macro stress over the coming months.

Cyclicality and utilization dependency

Revenue and returns are materially tied to utilization across construction, events and infrastructure projects. These end markets are cyclical and can generate pronounced swings in asset use and pricing. That structural exposure can drive revenue volatility and underutilization risk through sector slowdowns in the 2–6 month horizon.

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 primarily makes money by renting and leasing temporary facilities and related equipment to corporate and institutional customers. Key revenue streams typically include: (1) Rental/lease fees for temporary buildings (e.g., prefabricated units, temporary offices, site facilities) charged over the contract period; (2) Rental/lease fees for associated equipment and fixtures supplied alongside those facilities; (3) Service revenue tied to the lifecycle of a rental deployment, such as delivery/transport, installation/assembly, setup, maintenance during the rental term, and dismantling/removal at contract end (where contracted as part of the package); and (4) Sales or disposal proceeds from used assets (e.g., when leased units/equipment are sold after utilization), where applicable. Earnings are influenced by utilization rates of the company’s owned rental assets, contract duration and pricing, and demand cycles in sectors such as construction, infrastructure projects, and events that rely on temporary on-site space and equipment. Specific material partnerships or customer concentrations: null.

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 2648.25, below the 50-day MA of 2625.96, and above the 200-day MA of 2338.59, indicating a neutral trend. The MACD of 5.19 indicates Positive momentum. The RSI at 50.24 is Neutral, neither overbought nor oversold. The STOCH value of 58.55 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
3276	73 Outperform	¥20.97B	15.65	―	4.36%	1.52%	16.04%
7187	72 Outperform	¥22.27B	10.94	―	3.29%	29.97%	19.33%
9761	71 Outperform	¥8.81B	30.59	―	5.03%	12.91%	59.12%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
3482	65 Neutral	¥47.93B	4.67	―	2.38%	33.64%	-0.28%
2980	64 Neutral	¥41.20B	9.84	―	0.45%	-8.33%	-36.89%
3252	62 Neutral	¥68.48B	8.53	―	2.89%	-3.09%	-35.66%