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

• Market Cap: ¥9.11B
• 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: ¥2,915.00 ▲(17.83% 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

Recurring leasing revenue model

The company's core model—rental and leasing of temporary buildings, equipment and related services—creates recurring contract revenue and repeated service relationships. This supports predictable medium-term cash flows and utilization-driven profitability across multiple end markets.

Improving revenue and margins

Sustained revenue growth with rising gross and net margins indicates improving cost management and pricing power. Margin expansion suggests operational leverage in the leasing business, increasing the company's ability to convert revenue into durable profits and fund future reinvestment or debt service.

Positive operating cash generation

Consistent positive operating cash flow demonstrates the company's ability to convert earnings into cash, supporting working capital, servicing debt and funding operations. Reliable OCF underpins medium-term financial stability even while investment intensity is high.

Negative Factors

Negative free cash flow from capex

Sustained negative free cash flow driven by heavy capex reduces internal funding capacity and leaves the company dependent on external financing for growth or shareholder returns. Over several quarters this can constrain strategic flexibility and increase refinancing needs.

Elevated leverage

A near-0.8 debt/equity ratio represents meaningful leverage for a leasing operator. Combined with negative free cash flow, this level of debt can increase interest costs, limit capacity to absorb demand shocks and raise refinancing risk during downturns, pressuring long-term resilience.

Exposure to cyclical end markets

Dependence on construction, infrastructure and event activity creates structural revenue cyclicality. Utilization and contract-length variability make revenue and asset returns sensitive to economic cycles, reducing visibility and increasing the chance of underused assets in prolonged slowdowns.

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	¥21.62B	12.03	―	4.36%	1.52%	16.04%
7187	72 Outperform	¥22.94B	10.94	―	3.29%	29.97%	19.33%
9761	71 Outperform	¥9.11B	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	¥50.52B	4.67	―	2.38%	33.64%	-0.28%
2980	64 Neutral	¥43.28B	9.84	―	0.45%	-8.33%	-36.89%
3252	62 Neutral	¥71.40B	8.53	―	2.89%	-3.09%	-35.66%