IR & Research Intelligence, Sessa Investment Research

Sessa Investment Research

IR & Research Intelligence

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<ul><li>Earnings Trends: 1Q FY24/5 results were solid, with steady sales and improved gross profit margins.</li><li>Profit growth was limited owing to higher SG&amp;A expenses in absolute terms stemming from hiring personnel, higher wages, and the inclusion of SG&amp;A expenses of Ohba Research and Land Surveys.</li><li>However, the company is likely to see more benefits from the steady accumulation of orders and continuous improvement in gross profit margin from 2Q onward, when it becomes easier to secure sales volume owing to the seasonality of its business.</li></ul>

Earnings Trends: 1Q FY24/5 results were solid, with steady sales and improved gross profit margins.Profit growth was limited owing to higher SG&amp;A expenses in absolute terms stemming from hiring personnel, higher wages, and the inclusion of SG&amp;A expenses of Ohba Research and Land Surveys.However, the company is likely to see more benefits from the steady accumulation of orders and continuous improvement in gross profit margin from 2Q onward, when it becomes easier to secure sales volume owing to the seasonality of its business.

Ohba |(9765 Jp) - Making Steady Progress in Building up Technical Capabilities and Human Capital

<div><div><div><div><ul><li>Since reporting its full-year results for FY23/5, OHBA shares have been rerated and its share price is up approximately 20% at the time of writing.</li><li>In its five-year medium-term management plan ending in FY28/5, the company has set ambitious earnings targets (sales CAGR of 5.0%, operating profit CAGR of 7.0%) and a policy committed to capital efficiency (ROE 12%, ROIC 12%).</li><li>In addition, the company has further strengthened its shareholder return policy (targeting a total return ratio of 60%), which has been one of the best among listed construction consulting companies, and this has likely driven the rerating to some extent.</li></ul></div></div></div></div>

Since reporting its full-year results for FY23/5, OHBA shares have been rerated and its share price is up approximately 20% at the time of writing.In its five-year medium-term management plan ending in FY28/5, the company has set ambitious earnings targets (sales CAGR of 5.0%, operating profit CAGR of 7.0%) and a policy committed to capital efficiency (ROE 12%, ROIC 12%).In addition, the company has further strengthened its shareholder return policy (targeting a total return ratio of 60%), which has been one of the best among listed construction consulting companies, and this has likely driven the rerating to some extent.

<div><div><div><div><ul><li>OHBA is a general construction consulting firm boasting a leading market share in the field of urban development, with potential to reap the benefits of the long- term shift to compact and smart cities in rural areas.</li><li>Since its establishment in 1922, the company has been involved in various stages of public works projects preceding the construction phase, such as urban planning, land readjustment, surveying, and land development, in Japan, where the separation of design and construction is mandatory</li><li>This commenced with the development of Togoshi New Town (1932), which OHBA undertook in partnership with Mitsui Gomei and Mitsui Trust.</li></ul></div></div></div></div>

OHBA is a general construction consulting firm boasting a leading market share in the field of urban development, with potential to reap the benefits of the long- term shift to compact and smart cities in rural areas.Since its establishment in 1922, the company has been involved in various stages of public works projects preceding the construction phase, such as urban planning, land readjustment, surveying, and land development, in Japan, where the separation of design and construction is mandatoryThis commenced with the development of Togoshi New Town (1932), which OHBA undertook in partnership with Mitsui Gomei and Mitsui Trust.

Japan

OHBA CO., LTD. is a civil engineering consultant company.  The Company's services include land and air surveying, designing of parks and roads, and development/redevelopment of urban land.

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Ohba Co Ltd (9765 JP)

Ohba |(9765 Jp) - Making Steady Progress in Building up Technical Capabilities and Human Capital

Profit growth was limited owing to higher SG&A expenses in absolute terms stemming from hiring personnel, higher wages, and the inclusion of SG&A...

Sessa Investment Research

4Q Follow-Up - Ohba (9765 JP)

Continued growth and enhanced shareholder returns are driving progress in rerating. New Medium-Term Management Plan includes policy committed to...

Sessa Investment Research

Initiation - OHBA (9765 JP)

Rapid improvement in cash flow generation over the past 10 years, with high expectations for the new medium-term management plan starting from FY24/5

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