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Kyushu Railway Co 9142

Morningstar Rating
JPY 3,384.00 +60.00 (1.81%)
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Company Report

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.

Price vs Fair Value

9142 is trading at a 435% premium.
Price
JPY 3,384.00
Fair Value
JPY 6,616.00
Uncertainty
Medium
1-Star Price
JPY 5,743.00
5-Star Price
JPY 9,469.00
Economic Moat
Vhbk
Capital Allocation
Hddqhqvfr

Bulls Say, Bears Say

Bulls

JR Kyushu’s train station land has enabled development of prime real estate in key locations such as Nagasaki and Fukuoka City.

Bears

Rail segment returns are at risk from Japan’s population decline.

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Trading Information

Previous Close Price
JPY 3,324.00
Day Range
JPY 3,339.003,387.00
52-Week Range
JPY 2,972.003,641.00
Bid/Ask
JPY 3,382.00 / JPY 3,385.00
Market Cap
JPY 531.71 Bil
Volume/Avg
656,200 / 807,322

Key Statistics

Price/Earnings (Normalized)
8.39
Price/Sales
1.26
Dividend Yield (Trailing)
2.80%
Dividend Yield (Forward)
2.80%
Total Yield
2.80%

Company Profile

Kyushu Railway, or JR Kyushu, is one of seven Japanese railway companies formed when the government privatized Japan Rail in 1987. The rail company services the island of Kyushu, which is just off the South of Japan mainland. Kyushu is colloquially referred to as the 10:10:10 region—covering about 10% of Japan’s landmass, housing about 10% of Japan’s population and producing about 10% of Japan’s gross domestic product. JR Kyushu operates three businesses: rail transportation; real estate and hotels; and construction, retail, restaurants, and business services.
Sector
Industrials
Industry
Railroads
Stock Style Box
Mid Core
Total Number of Employees
18,235

Competitors

Valuation

Metric
9142
9022
9021
Price/Earnings (Normalized)
8.399.866.67
Price/Book Value
1.200.831.40
Price/Sales
1.262.020.95
Price/Cash Flow
5.894.995.23
Price/Earnings
9142
9022
9021

Financial Strength

Metric
9142
9022
9021
Quick Ratio
0.541.500.62
Current Ratio
1.043.971.04
Interest Coverage
33.367.379.36
Quick Ratio
9142
9022
9021

Profitability

Metric
9142
9022
9021
Return on Assets (Normalized)
5.68%5.33%4.76%
Return on Equity (Normalized)
13.70%13.13%16.44%
Return on Invested Capital (Normalized)
7.42%6.70%6.94%
Return on Assets
9142
9022
9021
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