Kyushu Railway Earnings: Strong Demand Recovery but Unlikely to Continue in the Medium Term
No-moat Kyushu Railway’s full-year results were slightly stronger than we expected, reporting EBIT of JPY 47 billion, up 37% year on year. All segments reported positive performances for the fiscal year ending March 31, 2024 (fiscal 2024). In particular, the transportation, real estate and hotels, and retail and restaurant segments enjoyed robust demand recovery. Management expects to meet its medium-term business plan targets, increasing EBIT by 22% to JPY 57 billion, in fiscal 2025. In line with management's guidance, we lowered our fiscal 2025 EBIT forecast by 10%; however, our longer-term estimates are unchanged.