Kodensha Co Ltd

Kodensha maintains a strong liquidity position, with a current ratio of 2.23, indicating the company can cover its short-term liabilities more than twice over. The company's liquidity_fpt score is high, supported by JPY 1.45 billion in cash and equivalents, which provides a buffer against short-term obligations. The low debt-to-equity ratio of 0.03 suggests a conservative capital structure, with minimal reliance on long-term debt, which is consistent with the low liquidity risk assessment.

Profitability metrics show a return on equity (ROE) of 4.35% and a return on assets (ROA) of 2.73%, both below the industry median for construction and engineering firms. The operating margin of 10.8% is in line with the industry, but the net margin of 8.4% is slightly below the median, indicating some inefficiencies in cost management or tax optimization. The company's gross profit margin of 23.3% is also in line with the industry, suggesting competitive pricing and cost control in its core operations.

Kodensha's revenue is concentrated in a single business segment, with no disclosed geographic diversification. The company's revenue is entirely derived from its construction and engineering services, which exposes it to sector-specific risks such as regulatory changes, project delays, and material cost fluctuations. The lack of geographic diversification increases vulnerability to regional economic downturns or policy shifts in Japan.

The company's growth trajectory is modest, with no significant revenue growth reported in the latest financial period. The operating cash flow of JPY 191 million and capital expenditures of JPY -55 million suggest a focus on maintaining operations rather than aggressive expansion. The outlook for the current fiscal year indicates a stable revenue trend, with no material changes expected in the near term. The absence of a clear growth strategy or new market entry plans may limit long-term revenue potential.

Risk factors include the company's exposure to the cyclical construction industry, which is sensitive to macroeconomic conditions and government infrastructure spending. The low dilution risk is supported by the absence of recent equity issuances or convertible instruments, and the company's diluted shares are equal to its basic shares, indicating no near-term dilution pressure. However, the company's reliance on a single business model and geographic market increases its vulnerability to external shocks.

Recent events include the filing of its latest financial report, which disclosed stable operating performance and no material changes in business strategy. No significant regulatory actions or legal proceedings were reported in the latest filings, and the company's risk assessment indicates no immediate liquidity or dilution concerns.

Net income surged 204.6% year-over-year to JPY 2.7 billion in fiscal 2025, demonstrating exceptional profitability acceleration.

Free cash flow expanded 195.1% to JPY 2.0 billion in fiscal 2025, highlighting strong cash generation capabilities.

The company maintains a conservative debt-to-equity ratio of 0.03, well above the 75th percentile of its peer cohort.

Revenue grew 12.6% year-over-year to JPY 39.3 billion in fiscal 2025, indicating robust top-line expansion momentum.

Return on equity of 4.4% trails the 4.8% median for the Construction & Engineering cohort, suggesting lower capital efficiency.

Cash conversion ratio of 0.22 is below the 0.66 cohort median, indicating weaker cash generation relative to earnings.

Return on invested capital of 5.4% suggests moderate value creation relative to the capital employed in operations.

Revenue ¥11.06B, +12,0% YoY; Operating income +10,4% YoY.

• ▍Revenue ¥11.06B, +12,0% YoY
• ▍Operating income +10,4% YoY
• ▍Net income −14,0% YoY
• ▍Net margin 5.6%

Revenue ¥11.39B, +18,1% YoY; Operating income +31,5% YoY.

• ▍Revenue ¥11.39B, +18,1% YoY
• ▍Operating income +31,5% YoY
• ▍Net income +38,8% YoY
• ▍Net margin 5.6%

Revenue ¥8.56B, +11,7% YoY; Operating income −49,0% YoY.

• ▍Revenue ¥8.56B, +11,7% YoY
• ▍Operating income −49,0% YoY
• ▍Net income −4,4% YoY
• ▍Net margin 0.5%

Revenue ¥12.08B, +15,0% YoY; Operating income +48,2% YoY.

• ▍Revenue ¥12.08B, +15,0% YoY
• ▍Operating income +48,2% YoY
• ▍Net income +70,4% YoY
• ▍Net margin 12.5%

Revenue ¥9.88B; Operating income ¥804.0M.

• ▍Revenue ¥9.88B
• ▍Operating income ¥804.0M
• ▍Net margin 7.4%

Revenue ¥9.64B; Operating income ¥702.0M.

• ▍Revenue ¥9.64B
• ▍Operating income ¥702.0M
• ▍Net margin 4.7%

Revenue ¥7.66B; Operating income ¥153.0M.

• ▍Revenue ¥7.66B
• ▍Operating income ¥153.0M
• ▍Net margin 0.6%

Revenue ¥10.51B; Operating income ¥1.13B.

• ▍Revenue ¥10.51B
• ▍Operating income ¥1.13B
• ▍Net margin 8.4%

Revenue ¥39.26B, +12,6% YoY; Operating income +188,8% YoY.

• ▍Revenue ¥39.26B, +12,6% YoY
• ▍Operating income +188,8% YoY
• ▍Net income +204,6% YoY
• ▍Free cash flow +195,1% YoY
• ▍Net margin 7.0%

Revenue ¥34.87B, +3,9% YoY; Operating income +69,5% YoY.

• ▍Revenue ¥34.87B, +3,9% YoY
• ▍Operating income +69,5% YoY
• ▍Net income +61,4% YoY
• ▍Free cash flow +110,0% YoY
• ▍Net margin 2.6%

Revenue ¥33.56B, +15,1% YoY; Operating income +63,5% YoY.

• ▍Revenue ¥33.56B, +15,1% YoY
• ▍Operating income +63,5% YoY
• ▍Net income +78,5% YoY
• ▍Free cash flow +190,6% YoY
• ▍Net margin 1.7%

Revenue ¥29.16B, −10,1% YoY; Operating income −65,9% YoY.

• ▍Revenue ¥29.16B, −10,1% YoY
• ▍Operating income −65,9% YoY
• ▍Net income −64,8% YoY
• ▍Free cash flow −194,4% YoY
• ▍Net margin 1.1%