Akatsuki Eazima Co. Ltd. (1997.TYO) provides construction and facility management services primarily in the field of energy conservation and renewal. The company designs, constructs, maintains and manages facilities, such as air conditioners, water supply and sewerage facilities, sanitary facilities, and others.[mepr-active membership=”1734″ ifallowed=”show” unauth=”message” unauth_message=”Please login or purchase a membership to view full text.”] Projects include geothermal air conditioning, photovoltaic power generation, high-efficiency air conditioning, energy conservation, and prevention of water pollution. The company is furthermore engaged in the purchase, sale, and leasing of real estate properties.
Akatsuki Eazima was founded in 1953 and is headquartered in Mito, Japan. The shares are listed on the JASDAQ Standard of Osaka’s stock exchange since 1994. Major shareholder is the company itself with around 10 percent ownership, followed by the Mito Shinkin Bank with about 8 percent ownership. 53 percent of the shares are in public hand.
With a workforce of just 126 employees, Akatsuki Eazima just reported revenues of 1.3bn JPY (12m USD) and profits before tax of 80m JPY (0.7m USD) over the first three months of its fiscal year 2017/18. This is a decrease of 23 and 20 percent respectively compared to the same period a year ago. In 2016/17, revenues and profits increased 4 and 28 percent respectively. The company’s revenues and profits rose for six consecutive years. Since 2011, sales have increased more than 30 percent and profits more than 400 percent. The operating margin of 12 percent is industry average. Akatsuki Eazima had cash reserves of 3.6bn JPY (33m USD) at the end of November 2017. The company shows a solid balance sheet with good profitability and financial strength. The equity ratio is at 46 percent and the gearing, defined here as total liabilities to total equity, at acceptable 116 percent.
Akatsuki Eazima’s shares are in an uptrend since March 2009 and gained more than 640 percent in value since, 58 percent alone in 2017. The company is priced at five times earnings only. The shares trade at 80 percent of book value and at three times cash flow. The latest dividend yielded around 2 percent.
Akatsuki Eazima comes with a low valuation combined with a healthy balance sheet and good profitability. Despite the slow down of revenues and profits during the first quarter, we are optimistic that the company will benefit from a favorable Japanese economy and will continue its growth path. We expect share prices to increase at least 25 percent over the next 12 months.
AIS Rating: ★★★★☆
| 2012/13 | 2013/14 | 2014/15 | 2015/16 | 2016/17 | 2017/18 Q1 only |
|
|---|---|---|---|---|---|---|
| EPS (JPY) | 74 | 119 | 206 | 231 | 324 | 25 |
| Change | 1% | 59% | 74% | 12% | 40% | -27% |
| P/E | P/E SECTOR |
P/B | P/CF | Equity Ratio* |
ROE | LIAB./ Equity** |
Div YLD |
|---|---|---|---|---|---|---|---|
| 5 | 26 | 0.8 | 3 | 46% | 19% | 116% | 2% |
* Equity / Total Assets, ** Total Liabilities / Equity
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