ENVALITH
京王電鉄株式会社 logo

Keio Corporation

9008・Prime Market・Land Transportation

Official website
京王電鉄株式会社 logo
Keio Corporation9008

Business

Keio Corporation, founded in 1910, is a comprehensive life service group centered on the Keio Line and Inokashira Line (84.7km of operating distance) in western Tokyo. Building on its transportation business foundation of railway, bus, and taxi operations, the group also develops real estate leasing and sales, hotels, life services such as department stores and supermarkets, and the construction & equipment business. Comprising 49 consolidated subsidiaries and 8 affiliated companies, its main customers are residents along the railway line stretching from Shinjuku to the Tama and Hashimoto areas, as well as inbound foreign visitors. Consolidated operating revenue for FY2026 (ending March 2026) reached a record high of ¥496,939 million, with revenue growth achieved across all five segments.

Business Model

Starting from the stable passenger demand generated by railway infrastructure, the company develops real estate leasing and condominium sales utilizing land and facilities along its railway lines, the Hotel Business including Keio Plaza Hotel, and life services such as Keio Department Store and Keio Store. Each business has a "community-development-type" revenue structure in which the businesses mutually enhance the value of the areas along the railway lines, and revenue diversification is achieved by combining the stable earnings of the Transportation Business with the growth earnings of real estate and hotels.

Company Strengths

The company owns the Keio Line and Inokashira Line, with a combined operating distance of 84.7km, and passenger volume in FY2026 (ending March 2026) reached 605,755 thousand passengers (up 2.1% year on year). Both commuter and non-commuter passenger numbers continue to show an increasing trend, with passenger transportation revenue reaching ¥83,248 million. Railway infrastructure serving urban areas, which is difficult to substitute, forms a stable earnings base.

In FY2026 (ending March 2026), the Real Estate Business posted an operating margin of 14.2% and the Hotel Business an operating margin of 16.9%, giving the company multiple high-profitability segments. Operating revenue from the Real Estate Business expanded significantly, up 31.9% year on year to ¥120,712 million. A multi-layered earnings structure that does not rely solely on the railway business enhances the stability of overall performance.

The company generates cash through the sale of properties to Real Estate Private Placement Funds, and formed three new funds in FY2026 (ending March 2026). It has also begun considering the formation of a private placement REIT. In addition, in February 2026 it established a ¥8.0 billion CVC fund, the "Keio Rail Fund," to promote open innovation through co-creation with startups.

ENVALITH's Perspective

In FY2026 (ending March 2026), operating revenue set a new record high, while operating profit declined to ¥52,322 million (down 3.4% year on year) and ordinary profit fell to ¥51,172 million (down 3.9% year on year), marking a turn to profit decline. The main causes were an increase in depreciation expenses associated with new rolling stock (up 5.5% year on year), higher personnel expenses due to improved treatment of employees, and expanded investment in railway safety. The FY2027 (ending March 2027) forecast also anticipates a continued decline in profit, with operating profit of ¥51,000 million (down 2.5%) and ordinary profit of ¥47,800 million (down 6.6%), raising concerns about prolonged cost-increase pressure.

At the end of the current period, an additional ¥7,300 million was recorded due to a change in the estimate of asset retirement obligations related to the Shinjuku Station southwest exit area development plan, among others (there was no impact on current period profit or loss since this was recognized at period-end). In the FY2027 (ending March 2027) forecast, the recognition of asset retirement obligations associated with the Shinjuku redevelopment and an increase in depreciation expenses due to guest room renovations (expected to rise 14.9% year on year to ¥39.5 billion) are projected to significantly weigh on ordinary profit. Interest-bearing debt also stands at a level of ¥469,055 million, and leverage management ahead of the full-scale rollout of large-scale investments in the 2030s remains a key point of focus.

Profit attributable to owners of parent for FY2026 (ending March 2026) reached a record high of ¥42,929 million (up 0.2% year on year), but this included a gain on sale of investment securities of ¥10,261 million within extraordinary income (a substantial increase from ¥272 million in the previous period), which offset the decline on an ordinary profit basis. Externally, the buoyant lodging market (driven by inbound demand) and strong real estate market conditions have supported earnings, but the sustainability of these factors and the level of net profit once the sale of cross-shareholdings has run its course will be key points for future evaluation.

Growth Strategy

Under HIRAKU2030, the company is preparing for large-scale investment in the 2030s through the dual pillars of community development along its rail lines and improved capital efficiency

The company is advancing large-scale redevelopment centered on the Shinjuku Station Southwest Exit District Development Plan and the Keio Line Shinjuku Station improvement works. At the end of the current period, an additional ¥7,300 million in asset retirement obligations was recognized, and preparations are underway for the full-scale launch of investment in the 2030s. Expenditures for acquisition of property, plant and equipment expanded to ¥67,551 million (+38.2% year on year).

The company is expanding sales of condominiums in central Tokyo through Rebita Inc. and Sunwood Corporation, while promoting the sale of properties to real estate funds. Operating revenue from the Real Estate Business in FY2026 (ending March 2026) reached ¥120,712 million (+31.9% year on year), a substantial increase, while proceeds from sales of investment securities and fixed assets also expanded to ¥17,544 million.

Guest room renovations are being carried out at Keio Plaza Hotel (Shinjuku) and Keio Presso Inn, aiming to raise average room rates amid a robust accommodation market. Operating revenue from the Hotel Business in FY2026 (ending March 2026) increased to ¥60,033 million (+6.3% year on year). In FY2027 (ending March 2026), profit is expected to be pressured by higher depreciation expenses associated with guest room renovations (operating profit forecast: -12.8%).

A 1-for-5 stock split was implemented effective April 1, 2026, aiming to expand the individual investor base, and 12,490,500 shares (2.09% of total shares issued) were cancelled on April 30, 2026. The dividend was increased by ¥10 year on year to ¥110 per share (pre-split basis), raising the dividend payout ratio to 30.1%.

Owing to an increase in completed construction value and improved gross margin in the Construction & Civil Engineering Business, operating profit from the Construction & Equipment Business in FY2026 (ending March 2026) rose substantially to ¥7,434 million (+32.3% year on year). Expansion of internal demand driven by community development and redevelopment-related construction along the rail line within the group is boosting results, and operating profit is expected to increase a further +9.5% in FY2027 (ending March 2026).

Last updated: July 19, 2026