Watanabe Sato Co., Ltd. (1807) AI Stock Analysis

• Market Cap: ¥10.11B
• Dividend Yield: 4.76%
• Average Volume (3M): 2.53K
• Price to Earnings (P/E): 11.9
• Beta (1Y): 0.58
• Revenue Growth: 5.27%
• EPS Growth: -26.42%
• Country: JP
• Employees: 497
• Sector: Industrials
• Sector Strength: 86
• Industry: Engineering & Construction
• EPS (TTM): 117.83
• Shares Outstanding: 6,391,400
• 10 Day Avg. Volume: 3,730
• 30 Day Avg. Volume: 2,533
• PEG Ratio: 0.56
• Price to Book (P/B): 0.48
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ¥1,985.00
• Price Target Upside: 16.70% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 75 Outperform
• Price Target: ¥1,881.00 ▲(10.58%Upside)

Watanabe Sato Co., Ltd. is supported by a strong balance sheet and attractive valuation metrics, including a low P/E ratio and high dividend yield. However, challenges in revenue growth and cash flow generation, along with moderate technical indicators, slightly temper the overall outlook.

Watanabe Sato Co., Ltd. Business Overview & Revenue Model

Company Description

Watanabe Sato Co., Ltd. (1807) is a prominent Japanese company that operates primarily in the textile and chemical sectors. Founded in the late 19th century, the company has evolved to manufacture a wide range of products, including high-quality fabrics, synthetic fibers, and chemical products utilized in various industries such as fashion, automotive, and construction. With a commitment to innovation and sustainability, Watanabe Sato has established itself as a key player in the materials market, providing solutions that cater to both domestic and international clients.

How the Company Makes Money

Watanabe Sato Co., Ltd. generates revenue through multiple key streams. The primary source of income comes from the sale of its textile products, including fabrics and synthetic fibers, which are sold to various industries including apparel and automotive. Additionally, the company profits from its chemical products, which are used in manufacturing processes across different sectors. Strategic partnerships with major brands and manufacturers enhance its market reach and drive sales. The company also invests in research and development to innovate its offerings, which creates new revenue opportunities. Exporting its products internationally further diversifies its income sources, allowing Watanabe Sato to capture a larger market share.

Watanabe Sato Co., Ltd. Financial Statement Overview

Summary

The company shows strong revenue growth and maintains a solid balance sheet with low leverage. However, declining profit margins and negative cash flows present risks that need to be addressed.

Income Statement

The company demonstrates a solid financial performance with a consistent revenue growth trajectory. Revenue increased from ¥38.46 billion in 2024 to ¥40.42 billion in 2025, marking a growth rate of 5.27%. The gross profit margin slightly decreased from 10.56% in 2024 to 8.55% in 2025, and the net profit margin contracted from 3.13% to 2.21%, indicating pressure on profitability. However, EBITDA margin remains healthy at 4.90%.

Balance Sheet

The company maintains a strong balance sheet with a low debt-to-equity ratio of 0.13 and a solid equity ratio of 60.21% as of 2025. The return on equity declined to 4.18% from 5.71% in the previous year, reflecting the impact of reduced net income. Overall, the company exhibits financial stability with a high level of stockholders' equity and low leverage.

Cash Flow

The cash flow situation presents challenges with negative operating cash flow of ¥3.96 billion and free cash flow of ¥-4.49 billion in 2025. The free cash flow to net income ratio is negative, highlighting potential liquidity issues. Despite robust past performance, recent cash flow trends pose a risk.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	40.42B	38.40B	34.66B	37.45B	39.92B
Gross Profit	3.46B	4.06B	2.77B	4.56B	4.71B
EBITDA	1.98B	2.45B	1.31B	3.10B	3.33B
Net Income	891.64M	1.20B	446.67M	1.73B	1.84B
Balance Sheet
Total Assets	35.43B	35.13B	32.28B	32.63B	32.38B
Cash, Cash Equivalents and Short-Term Investments	5.03B	7.62B	4.80B	6.00B	4.19B
Total Debt	2.80B	40.87M	160.30M	233.74M	277.29M
Total Liabilities	14.01B	13.99B	12.92B	13.53B	14.43B
Stockholders Equity	21.34B	21.06B	19.28B	19.03B	17.87B
Cash Flow
Free Cash Flow	-4.49B	3.03B	-271.32M	2.61B	1.75B
Operating Cash Flow	-3.96B	3.48B	187.68M	3.28B	2.06B
Investing Cash Flow	-625.68M	-437.98M	-929.69M	-799.90M	-382.50M
Financing Cash Flow	2.00B	-412.42M	-455.77M	-679.72M	-1.33B

Watanabe Sato Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1701.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1807, the sentiment is Positive. The current price of 1701 is above the 20-day moving average (MA) of 1668.20, above the 50-day MA of 1666.22, and above the 200-day MA of 1616.74, indicating a bullish trend. The MACD of 6.36 indicates Negative momentum. The RSI at 64.31 is Neutral, neither overbought nor oversold. The STOCH value of 51.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1807.

Watanabe Sato Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1798	82 Outperform	¥8.78B	5.27		0.25%	15.97%	3.62%
1850	80 Outperform	¥10.46B	5.50		0.28%	23.15%	46.68%
1966	77 Outperform	¥11.68B	4.40		4.37%	11.12%	29.82%
1807	75 Outperform	¥10.11B	11.88		4.76%	5.27%	-26.42%
1853	72 Outperform	¥10.22B	11.09		4.62%	6.79%	34.45%
Sector *	65 Neutral	$10.84B	16.29	5.52%	2.09%	3.14%	-29.96%
1848	63 Neutral	¥9.32B	4.26		2.48%	18.22%	430.92%