Kyushu Railway (9142): 1Q results: Results in line with expectations, need to assess impact of Kumamoto earthquake

研报英文原文证据摘录

Kyushu Railway (9142): 1Q results: Results in line with expectations, need to assess impact of Kumamoto earthquake

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

Ryota Himeno AC 04 August 2026 J P M O R G A N

(81-3) 6736-8639

ryota.himeno@jpmorgan.com

Investment Thesis, Valuation and Risks

Kyushu Railway (9142) (Overweight; Price Target: ¥4,650)

Investment Thesis

The shareholder returns policy in the three-year MTP spanning FY2025–27 targets a

consolidated dividend payout ratio of at least 35%, and share buybacks when appropriate.

In May 2026, management raised its operating profit target in the FY2027 medium-term

plan from ¥71 billion to ¥81 billion, but its outlook operating cash flow remains unchanged

at ¥250 billion due to higher inventories and corporate tax payments. Although the Hakata

Station Sky City project was cancelled, the company did not change its budget for ¥230

billion in growth investments, including strategic investments, to pursue new development

projects. As a result, its shareholder return allocation and policy are unchanged. Planned

investment for the three years spanning FY2025–27 is ¥360 billion (¥230 billion for growth,

¥130 billion for maintenance/renewal). Although fares were revised in April 2025, we

believe another revision is possible, given the business environment and content of its latest

application to raise fares. However, this would likely happen after the current medium-term

plan ends. Like other JR companies, Kyushu Railway plans to request policy changes from

the government, including more flexible pricing to reflect inflation and a shift to a

notification-based system for limited express fares.

Valuation

Our price target of ¥4,650 is based on our FY2026 BPS estimate of ¥3,429 and a theoretical