Keikyu (9006) Follow-up on Shinagawa Station West Exit development project

Research evidence excerpt

Keikyu (9006) Follow-up on Shinagawa Station West Exit development project

JPMorgan Securities Japan Co., Ltd. Asia Pacific Equity Research

Ryota Himeno AC 11 June 2026 J P M O R G A N

(81-3) 6736-8639

ryota.himeno@jpmorgan.com

Investment Thesis, Valuation and Risks

Keikyu (9006) (Underweight; Price Target: ¥1,500)

Investment Thesis

Keikyu targets FY2026 ROE of 8%, ROE above 8% from FY2027, and at least 10% over

the long term, while advancing a real estate turnover business model. This includes real

estate turnover, liquidating over ¥100 billion by FY2030. Preparations involve grade

separation projects, airport track expansion (boosting service from 10 to 13-14 trains per

hour by 2030), and station efficiency improvements. FY2025-FY2029 cash inflows are

expected at ¥300 billion from operations, ¥150-200 billion from asset sales (including ¥130

billion from real estate and existing assets, plus strategic shareholdings), and debt financing

(with it controlling net interest-bearing debt/EBITDA and keeping the equity ratio at 25-

30%). Cash outflows include ¥160 billion for maintenance, ¥510 billion for growth, and a

40% dividend payout ratio. Growth investments include ¥320 billion for Takanawa 3-

chome (total ¥350 billion), funded by asset sales and debt, with post-completion liquidation

as an option. Shinagawa Station development is expected to be similar to Takanawa 3-

chome, starting in the 2030s.

Valuation

Our December 2026 ¥1,500 price target is based on our FY2026 BPS estimate of ¥1,401 and

a target P/B of 1.07x (derived from our FY2026-28 average ROE estimate of 7.5% and cost

of equity of 7.0%).

Risks to Rating and Price Target

Upside Scenario to Target Price/Rating

• Expand/establish market share on the Haneda Airport route

• Greater-than-expected cost cuts