Akatsuki Eazima Co., Ltd. (1997) AI Stock Analysis

Akatsuki Eazima Co., Ltd.

(TSE/TYO:1997)

Select Model

Rating:80Outperform

Price Target:JPY 4,934.00▲(19.47% Upside)

Action:upgraded

Date:10/10/26

Akatsuki Eazima scores well on the strength of its financials: three years of revenue growth, margins and ROE at multi-year highs, and a conservatively financed balance sheet with virtually no debt. This is reinforced by an inexpensive 9.7x P/E and a 3.15% dividend yield, plus a constructive price trend with the shares above all major moving averages and positive MACD momentum. The main caution points are the cyclical, project-based nature of the business and operating cash flow that has slipped for two straight years even as profits rose, suggesting working capital is tying up cash. Momentum indicators also sit in the upper range, implying the recent rally may be due for consolidation.

Positive Factors

Improving profitabilityThe latest-year rebound in revenue and margins indicates stronger operating performance and improved earnings capacity. If maintained, higher profitability can support internal reinvestment, strengthen resilience, and provide a more durable base for results over the next several quarters.

Negative Factors

Volatile cash flowThe sharp swings in operating and free cash flow indicate that cash conversion is not consistently predictable across the cycle. Even with a strong recent rebound, uneven cash generation can complicate investment planning, shareholder distributions, and the timing of internally funded growth.

Akatsuki Eazima Co., Ltd. (1997) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 8.35B
Dividend Yield: 3.75%
Average Volume (3M): 1,973
Price to Earnings (P/E): 7.8
Beta (1Y): 0.25
Revenue Growth: 10.88%
EPS Growth: 34.41%
Country: Japan
Employees: 144
Sector: Industrials
Sector Strength: 63
Industry: Engineering & Construction

Akatsuki Eazima Co., Ltd. Business Overview & Revenue Model

Company Description

Akatsuki Eazima Co., Ltd. is a Japanese firm dedicated to energy efficiency and building renewal. Their services encompass the assessment, planning, and execution of renovation projects, alongside comprehensive building diagnostics. The company also...

Akatsuki Eazima Co., Ltd. Financial Statement Overview

Summary

Strong and improving fundamentals. Revenue has grown for three straight years to ¥10.13 billion (+11%), with gross margin widening to 22.2%, operating margin doubling to 14.2% and net income more than tripling to ¥1.07 billion. The balance sheet is a standout: debt-to-equity of just 0.07, equity funding 69% of assets, and ROE up to 12.4%. Cash flow is solid — ¥1.04 billion of free cash flow fully covering net income — but has declined for two consecutive years as working capital absorbs cash, and the project-driven model has produced past revenue declines and even negative cash flow in 2023.

Income Statement

79Positive

Balance Sheet

86Very Positive

Cash Flow

72Positive

Financial statement breakdown
Breakdown	TTM	Aug 2026	Aug 2025	Aug 2024	Aug 2023	Aug 2022
Income Statement
Total Revenue	10.13B	10.13B	9.14B	8.83B	6.64B	7.33B
Gross Profit	2.25B	2.25B	1.84B	1.40B	1.04B	1.27B
EBITDA	1.59B	1.55B	1.28B	923.66M	562.54M	779.32M
Net Income	1.07B	1.07B	796.70M	559.33M	313.55M	491.16M
Balance Sheet
Total Assets	12.47B	12.47B	11.03B	10.32B	9.55B	9.49B
Cash, Cash Equivalents and Short-Term Investments	6.44B	6.44B	5.71B	5.14B	4.15B	4.71B
Total Debt	565.48M	565.48M	587.39M	620.71M	888.18M	974.04M
Total Liabilities	3.85B	3.85B	3.48B	3.51B	3.21B	3.46B
Stockholders Equity	8.62B	8.62B	7.55B	6.81B	6.34B	6.02B
Cash Flow
Free Cash Flow	1.04B	1.04B	1.17B	1.55B	-401.73M	364.04M
Operating Cash Flow	1.04B	1.04B	1.20B	1.56B	-23.43M	372.93M
Investing Cash Flow	-65.07M	-65.07M	-446.04M	-270.02M	-338.81M	290.96M
Financing Cash Flow	-245.31M	-245.31M	-185.85M	-396.93M	-195.05M	48.67M

Akatsuki Eazima Co., Ltd. Technical Analysis

Technical Analysis SentimentPositive

Last Price4130.00

Price Trends

50DMA4093.44Positive

100DMA3950.20Positive

200DMA3920.73Positive

Market Momentum

MACD16.54Positive

RSI47.69Neutral

STOCH20.43Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1997, the sentiment is Positive. The current price of 4130.00 is below the 20-day moving average (MA) of 4224.00, above the 50-day MA of 4093.44, and above the 200-day MA of 3920.73, indicating a neutral trend. The MACD of 16.54 indicates Positive momentum. The RSI at 47.69 is Neutral, neither overbought nor oversold. The STOCH value of 20.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1997.

Akatsuki Eazima Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

JP:1997 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:1997	80Outperform	JPY 8.20B	7.80	―	3.75%	10.88%	34.41%
JP:6171	72Outperform	JPY 5.07B	10.27	―	3.36%	8.08%	38.63%
JP:4642	71Outperform	JPY 7.72B	13.74	―	2.47%	23.05%	8.64%
JP:2311	70Outperform	JPY 6.93B	17.53	―	4.63%	2.96%	-15.14%
JP:1905	66Neutral	JPY 9.19B	14.16	―	4.54%	-9.05%	-34.62%
Sector *	63Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
JP:6085	43Neutral	JPY 7.93B	-10.68	―	―	-9.88%	-12.16%

* Industrials Sector Average

Performance Comparison

JP:1997 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:1997	Akatsuki Eazima Co., Ltd.	4130.00	556.26	15.57%
JP:1905	Tenox Corporation	1442.00	132.01	10.08%
JP:2311	EPCO Co.,Ltd.	778.00	1.25	0.16%
JP:4642	Original Engineering Consultants Co., Ltd.	1400.00	-190.28	-11.97%
JP:6085	Architects Studio Japan, Inc.	68.00	40.20	144.60%
JP:6171	C.E.Management Integrated Laboratory Co., Ltd.	357.00	-71.96	-16.77%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Oct 10, 2026

Akatsuki Eazima Co., Ltd. AI Stock Analysis