Mitsui Fudosan (MTSFY) AI Stock Analysis

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Mitsui Fudosan

(OTC:MTSFY)

75Outperform

Mitsui Fudosan showcases robust financial health with consistent revenue growth and improved profitability margins, although high leverage is a point of vigilance. Technical analysis indicates a neutral stance, and valuation metrics suggest the stock is fairly valued. The latest earnings call underlines strong performance and future prospects, though some financial challenges remain. Overall, the stock presents a solid investment case with a balanced risk-reward profile.

Mitsui Fudosan (MTSFY) vs. S&P 500 (SPY)

Market Cap

$26.73B

Dividend Yield1.49%

Average Volume (3M)1.94K

Price to Earnings (P/E)20.2

Beta (1Y)0.49

Revenue Growth-6.74%

EPS Growth-13.89%

CountryUS

Employees25,593

SectorReal Estate

Sector Strength75

IndustryReal Estate - Diversified

Share Statistics

EPS (TTM)1.43

Shares Outstanding927,396,550

10 Day Avg. Volume5,805

30 Day Avg. Volume1,935

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.08

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Mitsui Fudosan Business Overview & Revenue Model

Company DescriptionMitsui Fudosan Co., Ltd. (MTSFY) is a leading real estate company based in Japan, engaged in a wide array of real estate-related businesses. The company operates through several segments, including leasing, property sales, management, and other services. Mitsui Fudosan is known for its development and management of a diverse portfolio of properties, including office buildings, retail facilities, residential properties, and hotels. Additionally, the company is involved in logistics facilities, mixed-use developments, and real estate investment trust (REIT) management.

How the Company Makes MoneyMitsui Fudosan generates revenue through multiple streams, primarily from its leasing and property sales activities. The leasing segment involves renting out office spaces, commercial facilities, and residential units, providing a stable and recurring revenue flow. Property sales include the sale of condominiums, detached houses, and other residential properties, contributing to significant one-time revenue. The management segment adds revenue by offering property management, brokerage, and consulting services. Additionally, Mitsui Fudosan earns from its interests in real estate investment trusts and through its involvement in urban redevelopment projects. Strategic partnerships and joint ventures, particularly in international markets, also play a critical role in its business expansion and revenue generation.

Mitsui Fudosan Financial Statement Overview

Summary

Mitsui Fudosan demonstrates strong financial health characterized by consistent revenue growth, improving profitability margins, and effective cash flow management. While the company maintains a high level of debt typical in the real estate sector, its increasing equity and positive cash flow trends provide a foundation for stability and potential growth. The financial statements reflect a well-managed company with a positive outlook, albeit the high leverage warrants careful monitoring.

Income Statement

Very Positive

Mitsui Fudosan shows a strong income statement with consistent revenue growth over the years. The gross profit margin improved from 23.2% in 2023 to 24.9% in 2024, and the net profit margin stood at 9.4% in 2024, up from 8.7% in 2023. EBIT and EBITDA margins have also shown improvement, indicating efficient operations. The revenue growth rate was 5.0% from 2023 to 2024, showing a positive growth trajectory.

Balance Sheet

Positive

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 1.42 in 2024, which is relatively high but manageable for the real estate industry. Return on equity (ROE) improved to 7.2% in 2024 from 6.8% in 2023. The equity ratio also increased to 32.8% in 2024, showing a strong equity base. While leverage is high, the company’s equity position is solid, providing stability.

Cash Flow

Positive

Cash flow analysis indicates a significant improvement in free cash flow, which turned positive in 2024 at ¥20.9 billion from a negative ¥65.0 billion in 2023. The operating cash flow to net income ratio is 1.08 in 2024, suggesting effective conversion of net income into cash. Free cash flow growth is robust, showcasing effective cash management and reduced capital expenditure compared to prior years.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
2.45T	2.38T	2.27T	2.10T	2.01T	1.91T
	Gross Profit
622.30B	593.13B	526.68B	450.44B	397.92B	469.74B
	EBIT
430.38B	339.69B	305.40B	244.98B	203.77B	280.62B
	EBITDA
469.06B	473.42B	476.69B	405.51B	301.97B	372.05B
	Net Income Common Stockholders
203.81B	224.65B	197.00B	176.99B	129.58B	183.97B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
288.97B	189.81B	144.26B	156.23B	199.64B	190.31B
	Total Assets
9.66T	9.49T	8.84T	8.21T	7.74T	7.40T
	Total Debt
4.74T	4.43T	4.05T	3.67T	3.62T	3.48T
	Net Debt
4.46T	4.25T	3.91T	3.52T	3.43T	3.30T
	Total Liabilities
6.47T	6.25T	5.81T	5.29T	5.09T	4.91T
	Stockholders Equity
3.07T	3.11T	2.90T	2.80T	2.56T	2.41T
Cash Flow		Free Cash Flow
134.85B	20.86B	-65.04B	29.90B	-88.47B	-386.72B
	Operating Cash Flow
134.85B	241.70B	297.71B	271.47B	187.86B	87.09B
	Investing Cash Flow
0.00	-286.99B	-422.03B	-210.06B	-131.03B	-532.81B
	Financing Cash Flow
0.00	59.99B	111.45B	-139.60B	-66.56B	467.75B

Mitsui Fudosan Technical Analysis

Technical Analysis Sentiment

Positive

Last Price29.21

Price Trends

50DMA

26.82

Positive

100DMA

25.78

Positive

200DMA

27.16

Positive

Market Momentum

MACD

0.62

Negative

RSI

61.71

Neutral

STOCH

95.76

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MTSFY, the sentiment is Positive. The current price of 29.21 is above the 20-day moving average (MA) of 27.79, above the 50-day MA of 26.82, and above the 200-day MA of 27.16, indicating a bullish trend. The MACD of 0.62 indicates Negative momentum. The RSI at 61.71 is Neutral, neither overbought nor oversold. The STOCH value of 95.76 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MTSFY.

Mitsui Fudosan Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AVB	78 Outperform	$28.54B	26.40	9.10%	3.42%	4.85%	16.04%
MTSFY	75 Outperform	$26.73B	20.22	6.51%	1.49%	-6.74%	-13.89%
EQR	72 Outperform	$26.22B	24.67	9.36%	4.05%	3.80%	24.08%
ESS	71 Outperform	$18.20B	23.69	13.53%	3.63%	6.29%	82.88%
UDR	71 Outperform	$13.60B	159.99	2.41%	4.14%	2.72%	-80.72%
MAA	61 Neutral	$19.01B	35.32	8.73%	3.82%	1.98%	-4.78%
Sector *	60 Neutral	$3.00B	12.40	0.61%	9872.56%	7.62%	-2.59%

* Real Estate Sector Average

Performance Comparison

MTSFY

Mitsui Fudosan

29.21

-2.11

-6.74%

AVB

AvalonBay

200.06

23.74

13.46%

EQR

Equity Residential

67.05

8.32

14.17%

MAA

Mid-America Apartment

153.82

34.06

28.44%

ESS

Essex Property

271.90

45.84

20.28%

UDR

40.87

6.53

19.02%

Mitsui Fudosan Earnings Call Summary

Earnings Call Date: Feb 7, 2025 | % Change Since: 5.80% | Next Earnings Date: May 9, 2025

Earnings Call Sentiment Positive

The earnings call highlighted significant achievements, including record financial performance and upward revisions of forecasts, indicating strong business momentum. However, challenges such as increased interest burden and losses in nonoperating income and property sales to investors present potential headwinds.

Highlights

Record Highs in Financial Performance

Achieved new record highs for 9-month third quarter in sales, operating income, ordinary income, and profit attributable to owners of parent. Second consecutive record high for operating income and third consecutive record high for net profit.

Upward Revision of Full Year Forecast

Full year forecast for ordinary income revised up from JPY 255 billion to JPY 265 billion, and profit attributable to owners of parent from JPY 215 billion to JPY 220 billion.

Dividend Increase

Full year dividend per share guidance increased by JPY 2 to JPY 72, reflecting the upward revision of the earnings forecast.

Growth in Leasing Segment

Leasing segment revenue increased JPY 47.1 billion and operating income increased JPY 15.2 billion year-on-year, with improvements in office vacancy rates.

Strong Overseas Profit Growth

Overseas profits increased by JPY 20.4 billion year-on-year, with significant contributions from property disposals in the U.S.

Lowlights

Interest Burden Increase

Interest burden under net interest income and expense increased JPY 17.6 billion year-on-year, primarily due to rising U.S. interest rates.

Decline in Property Sales to Investors

Operating revenue for property sales to investors and overseas individuals fell JPY 35.8 billion and operating income decreased by JPY 12.1 billion year-on-year.

Widening Nonoperating Income and Expense Losses

Overall nonoperating income and expenses was a negative JPY 45.5 billion, a JPY 18.4 billion widening of losses.

Company Guidance

In the third quarter earnings call for Mitsui Fudosan, Executive Manager Atsuro Uchida highlighted several key metrics that underscored the company's financial performance and future outlook. The company achieved record highs in sales, operating income, ordinary income, and profit attributable to owners of parent for the nine-month period, with operating income reaching JPY 245.2 billion, a 15% increase year-on-year. Ordinary income rose by 7.3% to JPY 199.7 billion, while profit attributable to owners of parent surged by 13.1% to JPY 166.4 billion. The full year forecast for ordinary income was revised upwards by JPY 10 billion to JPY 265 billion, and profit attributable to owners of parent was also increased by JPY 5 billion to JPY 220 billion, setting a new record high. In response to these strong results, the company raised its full year dividend per share guidance to JPY 72, up from the previously announced JPY 70, reflecting their confidence in sustained growth. Additionally, the Leasing segment reported significant gains with operating revenues of JPY 606.1 billion, driven by key projects like 50 Hudson Yards in New York, while the Property Sales segment saw mixed results with a decline in operating revenue but stable contract rates. The Management and Facility Operations segments also showed positive momentum, with the latter benefiting from increased ADRs and spectator numbers at Tokyo Dome. Overall, Mitsui Fudosan demonstrated robust financial health and strategic adjustments to capitalize on market conditions.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.