Kintetsu Department Store Co., Ltd. operates department stores in Japan. The company was founded in 1920 and is based in Osaka, Japan. Kintetsu Department Store Co., Ltd. operates as a subsidiary of Kintetsu Group Holdings Co., Ltd.

Japan

Kintetsu Department Store Co., Ltd.

Consumer Cyclical

The company tries to pay dividends regularly but only sometimes does so. It has paid dividends in roughly half the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has been low and below its peers. On average, the company pays dividends annually. 

8244.T reported revenue of JPY 115 107mn in the last 12 months, up 1% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 19% from FY24 to JPY 87.74.

Over the past six months, the stock has consistently fallen, resulting in a 7% total decrease. When measured against its worldwide peers from the same industry (as shown above), the stock has been weaker, underperforming by 8ppts. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported modest EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 10.1% in the last 12 months, up from 7.6% in FY24. 

Historically, 8244.T has reported weak net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 3.0%, a growth from 2.6% in FY24. 

In the last 12 months, the return on capital employed (RoCE) grew to 8.4%, below the peers. 

Kintetsu Department Store Co., Ltd. reported a return on equity (RoE) of 9.3% in the last 12 months, up from 8.3% in FY24. 

Another important profitability metric, return on assets (RoA), amounted to 3.0% in the last 12 months, an increase from 2.5% in FY24. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 2.7 in the past several years. This ratio implies a strong shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

8244.T has below average trading liquidity. The average private investor can sell his common position in the stock in a single trading day under normal market conditions. Liquidity is usually quite stable and is unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note strong debt servicing capacity, adequate interest coverage, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, bleak profitability, and poor working capital management.

In highly turbulent market conditions, 8244.T is not overly volatile. In other words, the stock will fall less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be low. 

In normal market circumstances, 8244.T is not overly volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will remain relatively stable. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to negligible. 

Based on key historical and expected multiples, the stock is fairly valued relative to its peers. In particular, the stock is reasonably priced on P/E, of fair value on EV/EBITD. 

Kintetsu Department Store Co., Ltd.

¥ 1904

5

Kintetsu Department Store Co., Ltd.

¥ 1904

5

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

¥ 1904

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