Higashi Holdings (TSE:9029) reported a net profit margin of 4.4%, up from 3.4% the previous year. The company saw a 61% increase in earnings over the past twelve months and has achieved a five-year average growth rate of 21.8% per year. Investors will note that high-quality earnings and accelerating profits are in focus, especially as the Price-To-Earnings ratio of 9.9x is lower than both sector and peer averages. However, the share price of ¥1,772 is significantly higher than the company’s internally estimated fair value of ¥727.94. While dividend sustainability remains a risk, profit and revenue growth highlight the company’s current rewards profile.
See our full analysis for Higashi Holdings.
The next section will put these numbers side by side with the main narratives shaping investor sentiment, highlighting where the figures support expectations and where surprises might emerge.
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TSE:9029 Earnings & Revenue History as at Oct 2025
Net profit margin climbed to 4.4%, marking an improvement over last year’s 3.4% and standing alongside an average annual earnings growth rate of 21.8% over five years.
The sustained pace of profit expansion heavily supports a positive outlook for business quality and operational leverage.
Rapid compound annual growth, at 21.8%, signals that the business has maintained strong earnings momentum, not just a one-off spike.
The margin expansion, paired with robust growth, lends weight to the view that recent gains are not coming at the expense of long-term operating discipline.
Despite profit and revenue growth, the company highlights the risk that future dividends may not be fully supported by ongoing earnings performance (dividend sustainability flagged as a risk).
This introduces tension for bullish investors seeking both capital appreciation and reliable income.
Rapid earnings growth might suggest strong dividend potential, but a flagged sustainability risk tempers the case for uninterrupted payouts and underscores the need for caution.
Ongoing profit gains will need to translate into dividend coverage to truly resolve this risk from the bullish perspective.
Shares trade at ¥1,772, a notable premium to the DCF fair value estimate of ¥727.94, even as the Price-To-Earnings ratio of 9.9x sits below sector and peer averages of 12.9x and 11.2x.
The gap between market price and intrinsic value creates a focal point for investment debate.
Bulls may argue that margins and growth justify the premium, but the DCF fair value figure will weigh on the view that the stock represents a true bargain.
Investors weighing sector comparisons against DCF estimates must decide whether outperformance is already reflected in the share price or possibly overreflected in the current valuation.
Story Continues
Don’t just look at this quarter; the real story is in the long-term trend. We’ve done an in-depth analysis on Higashi Holdings’s growth and its valuation to see if today’s price is a bargain. Add the company to your watchlist or portfolio now so you don’t miss the next big move.
Despite strong earnings growth, the sharp premium to fair value raises doubts about whether Higashi Holdings offers true upside for new investors.
Searching for more attractive pricing? Check out these 877 undervalued stocks based on cash flows for companies where healthy fundamentals may not yet be fully reflected in the share price.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include 9029.T.
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