Hokkaido Gas (TSE:9534) Margin Improvement Reinforces Bullish Earnings Narrative In Q3 2026

Hokkaido Gas (TSE:9534) has posted its Q3 2026 numbers with total revenue of ¥43,385 million and basic EPS of ¥9.98, alongside trailing twelve month EPS of ¥141.26 that reflects earnings compounding across recent periods. The company has seen quarterly revenue move from ¥43,094 million in Q3 2025 to ¥43,385 million in Q3 2026, while EPS shifted from ¥2.72 to ¥9.98 over the same quarters, setting up this latest report against a backdrop of steadily building earnings power. With a 7.2% net profit margin over the last year and a 2.79% dividend yield, the results point to a business where profitability and income potential are central to how investors may interpret this update.

See our full analysis for Hokkaido Gas.

With the headline numbers on the table, the next step is to see how these results line up with the widely held narratives around Hokkaido Gas, and where the data may prompt investors to rethink parts of the story.

Curious how numbers become stories that shape markets? Explore Community Narratives

TSE:9534 Revenue & Expenses Breakdown as at Jan 2026 7.2% margin and earnings trend Over the last 12 months Hokkaido Gas earned ¥12,459 million of net income on ¥173,929 million of revenue, which works out to a 7.2% net margin compared with 6.2% the prior year. One year earnings growth of 18.9% sits a little below the five year average of 21.1% a year. What stands out for the bullish narrative is that multi year earnings growth of 21.1% a year and a 7.2% net margin line up with the idea of a long running, essential service business. At the same time, the latest year growing at 18.9% also shows that even a relatively steady gas utility can see growth rates shift around from year to year.
Supporters of the bullish view often point to that 21.1% multi year earnings compounding and the current 7.2% margin as evidence of a resilient earnings base tied to everyday gas and heat usage. The step down from 21.1% to 18.9% one year growth is also a reminder that even with essential services, earnings momentum is not a straight line and can cool compared with the longer run pace. P/E of 5.8x versus peers The shares trade on a trailing P/E of 5.8x against a peer average of 10.9x and an Asian gas utilities average of 14.3x. The current share price of ¥823 sits well below a DCF fair value of ¥3,734.65, and the trailing dividend yield sits at 2.79%. For investors leaning bullish, the gap between a 5.8x P/E and both peer and industry multiples, together with a DCF fair value of ¥3,734.65 versus a ¥823 share price, supports the idea that the stock is priced more cautiously than its earnings record and dividend of 2.79% might suggest.
Supporters can point to the combination of five year earnings growth of 21.1% a year and a low P/E relative to the 10.9x peer and 14.3x industry levels as evidence that the market is not paying up for that history. Others will note that the roughly 78% gap between the current price and the DCF fair value sits alongside an ongoing cash return through dividends, which together frame an argument that the current valuation is out of line with the trailing fundamentals.

Stronger margins and a low P/E have many investors asking what they might be missing in the bullish case for Hokkaido Gas, and whether the current discount to DCF fair value is justified or temporary. 🐂 Hokkaido Gas Bull Case

Quarterly profit swings inside steady TTM On a quarterly view, net income moved from a ¥187 million loss in Q2 2025 to a ¥240 million profit in Q3 2025 and ¥881 million in Q3 2026. Over the trailing 12 months, net income reached ¥12,459 million and basic EPS reached ¥141.26, showing that occasionally weak quarters like the Q2 2025 loss still sit inside a much larger full year profit picture. Investors taking a more cautious, quasi bearish stance often focus on that Q2 2025 loss and the fact that the latest year earnings growth of 18.9% is lower than the five year 21.1% pace. The trailing 12 month totals and 7.2% margin, however, show that occasional soft quarters have not prevented the business from reporting solid full year profitability so far.
Critics highlight the swings from a ¥187 million loss in Q2 2025 to a ¥4,303 million profit in Q1 2026 as evidence that quarterly results can be bumpy and that the recent 18.9% growth rate could be a sign of slower momentum compared with the longer term 21.1% trend. What balances that concern is that, over the same trailing period, the company still produced ¥12,459 million of net income at a 7.2% margin, which suggests that volatility in individual quarters has sat within a profitable 12 month run in the data
Next Steps

Don’t just look at this quarter; the real story is in the long-term trend. We’ve done an in-depth analysis on Hokkaido Gas’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.

See What Else Is Out There

The mix of quarterly profit swings, an 18.9% one year earnings growth rate below the 21.1% multi year pace, and valuation questions may leave you wanting steadier performers.

If you would rather focus on companies with more predictable earnings patterns and fewer bumps from one quarter to the next, check out our stable growth stocks screener (2167 results) to zero in on businesses that have a track record of consistent revenue and profit progress.

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.

Valuation is complex, but we’re here to simplify it.

Discover if Hokkaido Gas might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.

Access Free Analysis

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com