Japan Foundation Engineering Co Ltd

Japan Foundation Engineering Co Ltd maintains a strong liquidity position, with cash and equivalents amounting to ¥5.79 billion, representing 17.6% of total assets. The company's liquidity FPT (free cash flow to total liabilities) is robust, supported by an operating cash flow of ¥1.65 billion and a current ratio of 1.48, indicating a solid ability to meet short-term obligations. The debt-to-equity ratio of 0.15 suggests a conservative capital structure, with long-term debt at ¥3.32 billion and total equity at ¥21.94 billion.

Profitability metrics show a return on equity (ROE) of 2.09% and a return on assets (ROA) of 1.39%, both below the industry median for Construction & Engineering firms. The company's net income of ¥457.63 million is supported by an operating income of ¥404.18 million, with a gross profit margin of 18.3%. These figures suggest moderate profitability relative to peers, with room for improvement in asset utilization and cost control.

The company's revenue is concentrated in the Industrial & Commercial Services segment, with no disclosed geographic breakdown. Given the nature of the construction and engineering industry, the company is likely exposed to regional demand cycles and regulatory environments, though specific geographic concentrations are not detailed in the available data.

Looking ahead, the company's revenue is expected to grow, supported by a positive outlook in the construction and engineering sector. The company's capital expenditure of -¥1.17 billion (negative due to cash inflow from asset disposals) indicates a focus on maintaining operational efficiency rather than aggressive expansion. The company's operating cash flow of ¥1.65 billion supports this strategy, providing flexibility for future investments.

Risk factors include low liquidity and dilution risk, with no immediate filing-based flags detected. The company's conservative debt structure and strong cash reserves mitigate liquidity concerns, while the absence of dilution risk suggests a stable capital structure. The company's recent financial performance and operational cash flow indicate a resilient business model, though exposure to macroeconomic fluctuations in the construction sector remains a potential risk.

Recent events include the disclosure of financial results showing a net income of ¥457.63 million and an operating income of ¥404.18 million. The company's gross profit of ¥1.299 billion reflects its ability to maintain margins in a competitive industry. Analyst estimates align with the company's reported revenue of ¥7.097 billion, indicating a consistent performance relative to expectations.

Net income surged 54.3% year-over-year to JPY 1.44 billion in fiscal 2025, demonstrating strong profitability growth.

Operating income jumped 90.6% to JPY 1.88 billion in fiscal 2025, indicating significant operational efficiency improvements.

Cash conversion ratio of 3.61 ranks in the top quartile of the construction cohort, signaling robust cash generation.

Debt-to-equity ratio of 0.15 is well below the cohort median of 0.29, reflecting a conservative and stable capital structure.

Long-term debt increased to JPY 4.0 billion in fiscal 2025, continuing a rising trend from JPY 1.25 billion in 2021.

Revenue growth of 28.4% in fiscal 2025 may be unsustainable given the historical four-year CAGR of only 7.3%.

Revenue ¥7.66B, −10,9% YoY; Operating income +12,7% YoY.

• ▍Revenue ¥7.66B, −10,9% YoY
• ▍Operating income +12,7% YoY
• ▍Net income −6,2% YoY
• ▍Net margin 8.8%

Revenue ¥6.50B, −11,2% YoY; Operating income −7,8% YoY.

• ▍Revenue ¥6.50B, −11,2% YoY
• ▍Operating income −7,8% YoY
• ▍Net income +80,0% YoY
• ▍Net margin 6.9%

Revenue ¥6.62B, −7,0% YoY; Operating income −46,9% YoY.

• ▍Revenue ¥6.62B, −7,0% YoY
• ▍Operating income −46,9% YoY
• ▍Net income −63,1% YoY
• ▍Net margin 4.3%

Revenue ¥7.24B, +2,0% YoY; Operating income −42,2% YoY.

• ▍Revenue ¥7.24B, +2,0% YoY
• ▍Operating income −42,2% YoY
• ▍Net income −166,8% YoY
• ▍Net margin -4.2%

Revenue ¥8.60B; Operating income ¥472.7M.

• ▍Revenue ¥8.60B
• ▍Operating income ¥472.7M
• ▍Net margin 8.4%

Revenue ¥7.32B; Operating income ¥453.1M.

• ▍Revenue ¥7.32B
• ▍Operating income ¥453.1M
• ▍Net margin 3.4%

Revenue ¥7.11B; Operating income ¥725.1M.

• ▍Revenue ¥7.11B
• ▍Operating income ¥725.1M
• ▍Net margin 10.9%

Revenue ¥7.10B; Operating income ¥404.2M.

• ▍Revenue ¥7.10B
• ▍Operating income ¥404.2M
• ▍Net margin 6.4%

Revenue ¥30.28B, +28,4% YoY; Operating income +90,6% YoY.

• ▍Revenue ¥30.28B, +28,4% YoY
• ▍Operating income +90,6% YoY
• ▍Net income +54,3% YoY
• ▍Free cash flow −63,9% YoY
• ▍Net margin 4.8%

Revenue ¥23.58B, −1,4% YoY; Operating income +30,5% YoY.

• ▍Revenue ¥23.58B, −1,4% YoY
• ▍Operating income +30,5% YoY
• ▍Net income +77,0% YoY
• ▍Free cash flow +398,2% YoY
• ▍Net margin 4.0%

Revenue ¥23.91B, +8,1% YoY; Operating income +2,7% YoY.

• ▍Revenue ¥23.91B, +8,1% YoY
• ▍Operating income +2,7% YoY
• ▍Net income +5,8% YoY
• ▍Free cash flow +31,2% YoY
• ▍Net margin 2.2%

Revenue ¥22.11B, −3,2% YoY; Operating income +44,3% YoY.

• ▍Revenue ¥22.11B, −3,2% YoY
• ▍Operating income +44,3% YoY
• ▍Net income +133,5% YoY
• ▍Free cash flow +127,6% YoY
• ▍Net margin 2.3%