Japan's national resilience budget requests have topped ¥8 trillion. We looked for companies built on that work that the market still leaves cheap. Katana kept 87 cheap, financially sound companies with growing sales, and AI read each annual report and supported 4.
According to the Nikkan Kensetsu Kogyo Shimbun, the Cabinet Secretariat's national resilience office in September compiled budget requests of ¥8.18 trillion for fiscal 2027, 1.53 times the initial budget for the year before. The infrastructure ministry's share, ¥5.07 trillion, goes to basin-wide flood control, aging roads, and making water and sewer systems more disaster-proof and renewing them. Underneath sits a five-year plan for fiscal 2026 to 2030 with a project scale of a little over ¥20 trillion.
Disasters and aging advance even now. In August, Kumamoto Prefecture passed a ¥42.2 billion supplementary budget for repairs to roads and bridges and other work after the 2026 Kumamoto earthquake. In sewers, a national survey by the infrastructure ministry found that 748 km of old pipes 2 meters or wider need work.
The work already shows in Japanese earnings. Ueki, a Niigata builder, grew completed civil works for government clients 37%, from ¥14.0 billion to ¥19.2 billion. E-J Holdings, an engineering consultant, cites the five-year resilience plan in its annual report and expects steady business.
National resilience comes with five years of planned spending. Aging bridges and sewer pipes only grow in number. Demand for this work is easy to see ahead.
But share prices are not set by demand alone. Well-known, heavily traded companies get bought and rated higher. Regional builders and engineering consultants are small, thinly traded and rarely followed by analysts. Even doing the same government work, they should be left cheap for lack of attention.
So we used Katana's financial data and annual reports to find cheap, financially sound, growing companies whose core business is national resilience work.
“Among cheap, financially sound companies with growing sales, we want those whose core business is construction work, products, or services for public infrastructure in Japan, such as roads, bridges, rivers and levees, ports, or water supply and sewerage, and whose orders or sales for this work are increasing.”
In Katana's screen, we set five financial conditions for value, balance sheet strength and steady growth, which left 87 companies. We then turned this profile into three questions entered in English and had the AI read each report, question by question.
Katana computes its metrics for every company.
AI reads each annual report and judges support and counterevidence.
The questions were entered in English and judged in order.
read the filings and supported 4.
Of 87 companies, 4 were supported, 4 need review and 79 had counterevidence. Below are the 6, in order: builders, engineering consultants, then a pump maker.
Lists a deeper-than-expected cut in public works as a risk to earnings.Filing ↗
Its civil engineering covers flood and erosion control, water and sewer, land preparation, ports and airports, and roads.Filing ↗
Says orders stayed strong, supported by public investment from continued national resilience policy and steady private investment.Filing ↗
Expects steady business for engineering consultants under the five-year, roughly ¥20 trillion national resilience plan.Filing ↗
Expects demand to stay high in disaster prevention, national resilience and defense base work.Filing ↗
Orders rose to ¥27.0 billion as the public sector and domestic private sector both grew.Filing ↗
Note: among the supported companies, we dropped Sonec. Its civil engineering arm does public river, road and sewer work, but civil is only 5.4% of completed construction, and most of its government work is buildings such as schools. Among those needing review, we added Moriya, Kyowa Consultants and Dengyosha Machine Works, whose orders or backlog for public infrastructure grew. Fujii Sangyo, a trading company for construction materials and other goods, stays as needing review because its public infrastructure share is not given.
View detailed resultsThese results are from October 22, 2026. Qualitative judgments use the filings available at that time, while quantitative screening uses the latest financial data.
The six trade at 0.58 to 0.86 times book and 4.8 to 9.5 times earnings. Kajima, Taisei, Obayashi and Shimizu, which do the same public civil works, trade at 1.9 to 2.8 times book and about 15 times earnings. Five-year revenue growth is similar: 5 to 7% a year for the six, 7 to 10% for the big four.
The gap follows company size. Splitting Japan's 145 listed construction companies into five groups by market cap, the median P/B steps up at around ¥60 billion.
| Market cap | Median P/B | Below 1x book |
|---|---|---|
| ¥0.6–9.2bn | 0.88x | 15 of 29 |
| ¥9.3–25.7bn | 0.72x | 19 of 29 |
| ¥27.5–63.9bn | 0.91x | 18 of 29 |
| ¥64.3–225.7bn | 1.33x | 4 of 29 |
| ¥225.8bn+ | 1.90x | 1 of 29 |
Of the 87 companies worth ¥64 billion or less, 52 trade below book; of the 58 larger ones, only 5 do. Well-known, heavily traded companies get bought and rated higher. Regional builders and engineering consultants draw little attention even doing the same government work, and stay cheap. All six here are worth less than ¥30 billion.
Still, a company whose profit swings widely deserves a low price. Engineering consultants swing less. E-J Holdings earned ¥4.3 to ¥4.7 billion in operating income over the last five years, and CTI Engineering ¥7.0 to ¥10.0 billion. Big general contractors fix prices when they win a job, so rising material and labor costs eat into profit; Shimizu posted an operating loss for the year ended March 2024.
The resilience budget is set for five years. What we looked for are companies built on that work and left cheap because few are watching.
Complex theses, your own selection rules. Katana narrows companies with its own metrics, and AI reads annual reports to judge qualitative conditions. The selection you used to do one company at a time, AI now runs across the Japanese market.
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