Chiyoda Corporation6366

Why the market may be pricing it low

• Majority-owned by Mitsubishi Corp, the firm looks run as a captive subsidiary rather than for minority shareholders.

  三菱商事株式会社 60.2%Shareholders

• Profits are directed entirely to preferred-share redemption, leaving common shareholders with no dividend for now.

  分配可能額の全額を優先株式償還に充当するため、当期の普通株式の配当につきましては、誠に遺憾ながら無配とさせていただきます。Dividend policy

• The 2019 corporate crisis and unpredictable large-project outcomes have left the market wary of earnings volatility.

  大型プロジェクト中心の受注計画が思い通りに進まなかったり、大型プロジェクトの遂行過程における予測不能な事態が発生したりすることなどによって、会社業績が大きく左右されるボラティリティの高い当社の収益構造を克服すべき課題として改めて強く認識するに至りました。Management policy

What could close the gap

• Full redemption of preferred shares by June 2028 would clear the path to resuming common dividends.

  2028年6月末までにA種優先株式の全株式について償還を目指すことを念頭に優先株主と協議を行いDividend policy

• Progress toward the plan's goal of a stable, diversified profit base could change how volatility is priced in.

  10年後には、純利益300億円、内Non-EPC事業の比率20%という安定・高収益企業になることを目指します。Management policy

• Securing execution of the GPX and NFE mega-projects toward completion could ease concerns about project risk.

  これにより、Train1～3の全系列を通して工事を遂行する体制を確立しました。MD&A

How a buyer could still lose (value trap)

• The current profit surge stems mainly from a one-time cost/margin revision on the GPX project, not necessarily recurring.

  完成工事総利益は、GPXプロジェクトの採算見直しや国内外で遂行中の主要案件の順調な進捗により前連結会計年度の完成工事総利益423億19百万円に対し、1,005億19百万円となりました。MD&A

• Ordinary profit swung from a loss to a huge surge over five years, and revenue is highly concentrated among a few large clients.

  Based on the figures below

Financial quality (Piotroski F-score)

• ✓Profitable (ROA > 0)
• ✓Positive operating cash flow
• ✓ROA up on last year
• ✗Cash flow exceeds net profit
• ✓Leverage down on last year
• ✓Current ratio up on last year
• ✓No new shares issued
• –Gross margin up on last yearno data
• ✓Asset turnover up on last year

Scored out of the checks with data, scaled to 9. Compares the latest year with the year before.

Figures

Sales

¥493.9bn

Operating profit

¥82.1bn

Net profit

¥84.7bn

Operating cash flow

¥26.1bn

Cash

¥145.2bn

Debt

¥22.4bn

Equity

¥115.9bn

Annual report for the year to 2026-03-31