Sanyo Engineering & Construction Inc. (1960) AI Stock Analysis

• Market Cap: ¥22.12B
• Dividend Yield: 2.97%
• Average Volume (3M): 62.61K
• Price to Earnings (P/E): 8.2
• Beta (1Y): 0.66
• Revenue Growth: 22.32%
• EPS Growth: 5024.88%
• Country: JP
• Employees: 1,356
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 40.13
• Shares Outstanding: 16,000,000
• 10 Day Avg. Volume: 18,720
• 30 Day Avg. Volume: 62,610
• PEG Ratio: -0.02
• Price to Book (P/B): 0.41
• Price to Sales (P/S): 0.18
• P/FCF Ratio: -6.35
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: ¥1,859.00 ▲(40.20% Upside)
• Action: Reiterated Date: 10/30/25
• Date: Action: Reiterated 10/30/25

The stock is supported by strong technical momentum and a solid financial foundation, despite cash flow challenges. The reasonable valuation further enhances its attractiveness.

Positive Factors

Low Leverage

Low leverage and an equity ratio near 51.6% provide durable financial flexibility, lowering refinancing and solvency risk. This balance-sheet strength supports bidding on multi-period engineering projects, funding working capital, and absorbing cyclical downturns without forcing asset sales.

Improving Operational Margins

A healthy gross margin (~11.5%) together with a recovery in EBIT/EBITDA margins signals improving cost control and operational recovery. Sustained margin improvement enhances durable earnings power, increases resilience to price pressure, and supports reinvestment once cash generation normalizes.

Strong Cash Position

Maintained cash reserves provide a tangible liquidity buffer that mitigates near-term funding stress from negative operating cash flow. This runway allows the company to meet obligations, support project execution, and implement operational fixes without immediate reliance on external financing.

Negative Factors

Negative Operating & Free Cash Flow

Persistent negative operating and free cash flow indicate structural cash-generation weaknesses that can impair the company's ability to fund capex, working capital, and debt service from internal sources. Over months this pressures liquidity and may force asset sales or external funding.

Low Net Profit Margin

A net margin near 2.6% provides a thin buffer against cost inflation, project overruns, or lower revenue. Low bottom-line profitability constrains retained earnings and reduces flexibility for strategic investment or weathering cyclical downturns without eroding equity.

Steep Reported Revenue Decline

A reported revenue decline of roughly -82.6% indicates pronounced top-line stress that can undermine scale economics and fixed-cost coverage. If sustained, such a contraction would pressure margins, cash flow and competitive position, requiring clear recovery in orders or execution.

Sanyo Engineering & Construction Inc. Business Overview & Revenue Model

Company Description

Sanyo Engineering & Construction Inc. engages in the electric facility construction business in Japan and internationally. The company designs and constructs electrical equipment, such as security and disaster prevention systems, and electrical installation work in a range of fields, including public facilities, office buildings, commercial facilities, medical and welfare facilities, and various production facilities; and air conditioning ventilation and fire extinguishing equipment, as well as water supply and drainage sanitation equipment in office buildings, commercial facilities, housing, medical and welfare facilities, and various production facilities. It also designs and manufactures systems, such as plant equipment, environment processing facilities, and leisure equipment, etc.; and high and low voltage distribution boards, power boards, control boards, and safety grounding tools for overhead electric circuits, as well as designs and constructs power distribution facilities, including overhead and underground power transmission facilities. In addition, the company engages in indoor electric facility, interior finish, painting, power generation and substation facility, and distribution wiring facility works. Further, it is involved in the leasing and management of real estate properties; and construction consultancy business related to power generation and electric power selling. The company was founded in 1937 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Sanyo Engineering & Construction Inc. generates revenue primarily through its construction and engineering services. The company bids on and secures contracts for large-scale infrastructure projects, industrial facilities, and commercial buildings, which are a significant source of income. Key revenue streams include project execution fees, design and consulting services, and maintenance contracts. Additionally, Sanyo often collaborates with government entities and private corporations, forming strategic partnerships that enhance its project portfolio and provide access to larger contracts. The company also benefits from repeat business and long-term relationships with clients, which contribute to steady revenue generation.

Sanyo Engineering & Construction Inc. Financial Statement Overview

Summary

Strong revenue growth and a solid balance sheet with low leverage are positive indicators. However, modest net profit margins and negative cash flow present challenges that need addressing.

Income Statement

The company has experienced strong revenue growth, with a significant increase from the previous year. Gross profit margin is healthy at approximately 11.5%, indicating efficient cost management. However, net profit margin is modest at around 2.6%, reflecting room for improvement in profitability. Notably, EBIT and EBITDA margins have improved from negative figures in previous years, showcasing operational recovery.

Balance Sheet

The balance sheet reflects a solid equity position with an equity ratio of approximately 51.6%, indicating financial stability. The debt-to-equity ratio is low at around 0.10, suggesting low leverage and reduced financial risk. Return on Equity (ROE) stands at about 5.7%, highlighting moderate profitability from shareholders' equity.

Cash Flow

The cash flow statement shows challenges with negative operating cash flow and free cash flow, indicating potential liquidity issues. However, the company has maintained a strong cash position, which may help mitigate short-term cash flow concerns. The operating cash flow to net income ratio is negative, pointing to potential inefficiencies in cash generation.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	68.27B	67.86B	50.73B	38.88B	39.87B	41.66B
Gross Profit	7.79B	7.78B	4.93B	4.08B	4.57B	4.20B
EBITDA	2.90B	2.91B	-558.27M	-96.84M	571.50M	470.86M
Net Income	1.64B	1.75B	-771.20M	479.42M	-31.51M	267.31M
Balance Sheet
Total Assets	50.88B	59.04B	48.80B	45.64B	45.46B	44.85B
Cash, Cash Equivalents and Short-Term Investments	8.40B	9.11B	9.87B	11.02B	8.90B	6.64B
Total Debt	3.36B	3.15B	1.58B	430.48M	670.25M	580.84M
Total Liabilities	20.97B	28.45B	19.96B	15.64B	14.82B	14.15B
Stockholders Equity	29.77B	30.47B	28.78B	29.95B	30.56B	30.60B
Cash Flow
Free Cash Flow	0.00	-1.97B	-2.11B	907.03M	2.52B	-2.01B
Operating Cash Flow	0.00	-1.55B	-660.29M	1.51B	2.87B	-1.32B
Investing Cash Flow	0.00	-591.00M	-922.24M	670.57M	-353.02M	1.30B
Financing Cash Flow	0.00	1.01B	51.36M	-543.78M	-423.67M	-373.07M

Sanyo Engineering & Construction Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1326.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1960, the sentiment is Negative. The current price of 1326 is below the 20-day moving average (MA) of 1475.35, below the 50-day MA of 1469.84, and above the 200-day MA of 1193.21, indicating a neutral trend. The MACD of -4.66 indicates Positive momentum. The RSI at 46.64 is Neutral, neither overbought nor oversold. The STOCH value of 56.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:1960.

Sanyo Engineering & Construction Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9768	77 Outperform	¥28.66B	11.92	―	2.37%	3.01%	-13.60%
1780	76 Outperform	¥31.06B	6.97	―	2.03%	26.15%	64.47%
1960	73 Outperform	¥22.12B	8.25	―	2.97%	22.32%	5024.88%
1827	73 Outperform	¥49.46B	7.92	―	1.96%	2.55%	-14.37%
1828	73 Outperform	¥28.67B	9.70	―	3.44%	-5.43%	34.48%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1776	60 Neutral	¥18.21B	14.29	―	2.54%	5.89%	-30.27%