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Is Hokkaido Electric Power Company (TSE:9509) Cheap After Its Green Bond Issue?

Simply Wall St · 1d ago

Why Hokkaido Electric Power Company stock is in focus today

Hokkaido Electric Power Company (TSE:9509) has drawn fresh attention after announcing a ¥30b unsecured green bond issue, with straight bonds maturing in September 2036 priced at 100% of principal.

The green bond news arrives at a time when Hokkaido Electric Power Company’s share price has been positive in the short term, with a 30 day share price return of 11.54% and a 90 day share price return of 23.38%. However, the 1 year total shareholder return is slightly down 1.49%, even after longer term total shareholder returns of 86.93% over three years and 132.89% over five years. This indicates that recent momentum has improved but still reflects a mixed recent income and capital gains experience for long term holders at the latest share price of ¥1,140.5.

Scan other utilities and infrastructure stocks reacting to the ESG shift by reviewing our curated 39 power grid technology and infrastructure stocks for ideas that rhyme with Hokkaido Electric Power Company’s latest green bond move.

Hokkaido Electric Power Company is raising fresh capital through green bonds while its share price has already moved higher over 3 and 5 years. The key issue now is whether the stock still offers fair value.

Price to earnings of 8.8x, is it justified for Hokkaido Electric Power Company?

On earnings based measures, Hokkaido Electric Power Company trades on a P/E of 8.8x at the latest close of ¥1,140.5, which screens as inexpensive against several comparison points.

The P/E ratio compares the current share price with earnings per share. For a regulated utility such as Hokkaido Electric Power Company, it is a common way investors gauge how much they are paying for each unit of current profit.

Analysts flag that earnings are forecast to grow 16.89% per year, which is faster than the expected 8.8% per year for the broader JP market. At the same time, recent company data shows profit margins at 3.1%, lower than last year’s 6.9%, and earnings over the past year declined 57.3% compared with an industry decline of 17.1%. That mix of stronger forward earnings expectations and weaker recent profitability helps explain why the current P/E looks low compared with several benchmarks.

Against peers, the picture is mixed. The stock is described as good value versus the Asian Electric Utilities industry P/E of 13.8x and also sits below the estimated fair P/E of 13.8x. However, it is described as expensive relative to a narrower peer group average of 7.8x. That suggests the multiple could reasonably shift closer to the fair P/E level if the market places more weight on the broader sector and fair ratio comparisons than on the tighter peer set.

For investors who want a deeper breakdown of how that fair P/E is derived and monitored over time, check the Explore the SWS fair ratio for Hokkaido Electric Power Company.

Result: Price-to-earnings of 8.8x (UNDERVALUED).

However, investors still need to weigh risks such as recent earnings pressure and the possibility that Hokkaido Electric Power Company’s profit margins will remain below past levels.

Find out about the key risks to this Hokkaido Electric Power Company narrative.

Another view on Hokkaido Electric Power Company’s value

While the P/E of 8.8x suggests Hokkaido Electric Power Company looks inexpensive, the SWS DCF model points in the other direction. The latest estimate of future cash flow value is ¥996.98 per share, which is below the current price of ¥1,140.5, so the stock screens as overvalued on this approach. Which signal do you treat as more important?

Look into how the SWS DCF model arrives at its fair value.

9509 Discounted Cash Flow as at Sep 2026
9509 Discounted Cash Flow as at Sep 2026

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Hokkaido Electric Power Company for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 23 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With sentiment on Hokkaido Electric Power Company clearly mixed, this is a moment to review the facts yourself and decide where you stand. Given that the company shows both risks that some investors are cautious about and rewards that others are optimistic about, it is worth checking the 2 key rewards and 3 important warning signs.

Looking for more investment ideas beyond Hokkaido Electric Power Company?

If Hokkaido Electric Power Company has you thinking harder about value and risk, use the Simply Wall Street Screener to spot other stocks that fit your criteria.

Broaden your watchlist with ideas that complement or contrast your view on Hokkaido Electric Power Company, so you are not relying on a single stock for opportunity.

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.