Showa Sangyo Co., Ltd. (2004) AI Stock Analysis

• Market Cap: ¥97.32B
• Dividend Yield: 3.8%
• Average Volume (3M): 27.93K
• Price to Earnings (P/E): 10.0
• Beta (1Y): 0.41
• Revenue Growth: -2.01%
• EPS Growth: -29.88%
• Country: JP
• Employees: 2,858
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Agricultural Farm Products
• EPS (TTM): 88.37
• Shares Outstanding: 32,995,420
• 10 Day Avg. Volume: 29,850
• 30 Day Avg. Volume: 27,930
• PEG Ratio: -2.19
• Price to Book (P/B): 0.68
• Price to Sales (P/S): 0.28
• P/FCF Ratio: 10.88
• 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): 48,003.74
• Revenue Forecast (FY): ¥51.90T

• Rating: 71 Outperform
• Price Target: ¥3,315.00 ▲(10.50% Upside)

Showa Sangyo Co., Ltd. scores well due to its stable financial performance and attractive valuation. The company's strong equity base and effective cost management support its financial health. The stock's valuation is appealing with a reasonable P/E ratio and a solid dividend yield. Technical indicators are mixed, with some positive momentum but no strong signals. Overall, the stock is a solid performer in the agricultural farm products industry.

Positive Factors

Strong Equity Base

A strong equity base with moderate leverage indicates financial stability, providing resilience against economic fluctuations and supporting long-term growth.

Effective Cost Management

Effective cost management allows the company to sustain profitability even in challenging revenue environments, ensuring long-term financial health.

Cash Generation Ability

Strong cash generation relative to net income enhances financial flexibility, enabling investment in growth opportunities and debt servicing.

Negative Factors

Revenue Decline

A decline in revenue can signal challenges in market demand or competitive pressures, potentially impacting future growth prospects if not addressed.

Free Cash Flow Constraints

Constraints on free cash flow may limit the company's ability to invest in new projects or return capital to shareholders, affecting long-term strategic flexibility.

Low Return on Equity

A lower ROE compared to industry standards may indicate inefficiencies in using equity capital, potentially impacting investor returns and attractiveness.

Showa Sangyo Co., Ltd. Business Overview & Revenue Model

Company Description

Showa Sangyo Co., Ltd. manufactures, processes, and sells food products in Japan. Its household foods business offers a range of food products, including vegetable oils, wheat flour, tempura batter mixes, hotcake mixes and other premixes, pasta, health foods, and gift sets for home use. The company's flour milling business provides wheat flour and premixes. Its vegetable oils business produces vegetable oils, such as refined soybean oils, salad oils, specialty oils for cooking tempura, deep-fried foods, and donuts; functional and healthy premium oils; and soybean meals, soybean proteins, and commercial-use premixes and pasta. The company's starches and sweeteners business produces cornstarch, modified starch, and corn sweeteners, including dextrose, high fructose corn syrup, corn syrup, powdered corn syrup, dextrin, and isomalto-oligosaccharides. Its animal feed business supplies animal feed for poultry, swine, cows, beef cattle, and fish farming; egg packs for household consumption and foods made from processing eggs; and fertilizers, as well as operates pig-fattening farms. The company's warehousing business operates refrigerated and frozen warehouses; and provides freight transportation services. Its real estate business develops commercial facilities; and leases office and commercial buildings, distribution facilities, and land for business use. Showa Sangyo Co., Ltd. was incorporated in 1936 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Showa Sangyo Co., Ltd. generates revenue primarily through the trading of chemicals and industrial materials. The company acts as an intermediary between manufacturers and end-users, earning profits from the markup on products it sells. Key revenue streams include the sale of chemical products, plastics, and other industrial materials, along with potential consulting services related to supply chain management. Additionally, strategic partnerships with manufacturers and suppliers enhance its product offerings and market reach, contributing significantly to its earnings.

Showa Sangyo Co., Ltd. Financial Statement Overview

Summary

Showa Sangyo Co., Ltd. demonstrates a stable financial position with consistent profitability and a strong equity base. The company has managed to maintain margins despite a slight decline in revenue, indicating effective cost control. The balance sheet is healthy, with moderate leverage and a strong equity position, though return on equity could be improved. Cash flow management poses some challenges, particularly in terms of free cash flow, but overall, the company is financially sound.

Income Statement

Showa Sangyo Co., Ltd. has shown stable income statement metrics with a strong gross profit margin of 17.1% for the latest year. However, there was a slight decline in total revenue by approximately 3.4% from the previous year. The net profit margin stands at a healthy 3.5%, supported by a robust EBITDA margin of 8.1%. Despite a reduction in revenue, the company has managed to maintain profitability, indicating strong cost management.

Balance Sheet

The company's balance sheet reflects a sound equity position with a debt-to-equity ratio of 0.37, indicating moderate leverage. The return on equity (ROE) is 8.6%, which is decent but could be improved. The equity ratio of 52.8% suggests a strong equity buffer, underscoring financial stability. Overall, the balance sheet is stable with room for improvement in leveraging equity for higher returns.

Cash Flow

Cash flow analysis reveals challenges in free cash flow growth, with a decline from the previous year. The operating cash flow to net income ratio is 1.75, indicating strong cash generation relative to net income. However, the free cash flow to net income ratio is 0.73, suggesting potential constraints on free cash flow. Managing capital expenditures effectively could enhance cash flow stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	333.14B	334.43B	346.36B	335.05B	287.63B	256.00B
Gross Profit	56.88B	57.08B	56.88B	45.54B	46.20B	46.64B
EBITDA	22.02B	27.18B	27.08B	21.17B	16.19B	20.55B
Net Income	9.18B	11.60B	12.36B	7.78B	4.01B	10.12B
Balance Sheet
Total Assets	258.35B	255.50B	262.24B	247.77B	231.31B	213.31B
Cash, Cash Equivalents and Short-Term Investments	7.72B	8.11B	8.14B	6.22B	9.17B	11.16B
Total Debt	51.68B	50.59B	54.18B	61.66B	53.12B	45.77B
Total Liabilities	118.45B	116.88B	128.99B	131.41B	122.22B	110.23B
Stockholders Equity	136.24B	134.98B	129.61B	113.00B	105.70B	99.61B
Cash Flow
Free Cash Flow	0.00	8.49B	12.64B	-13.05B	-10.03B	3.01B
Operating Cash Flow	0.00	20.27B	23.75B	-2.93B	1.33B	13.77B
Investing Cash Flow	0.00	-11.38B	-12.40B	-6.16B	-11.73B	-26.38B
Financing Cash Flow	0.00	-10.06B	-9.44B	6.14B	8.40B	13.80B

Showa Sangyo Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3000.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2004, the sentiment is Positive. The current price of 3000 is above the 20-day moving average (MA) of 2885.35, above the 50-day MA of 2968.04, and above the 200-day MA of 2927.21, indicating a bullish trend. The MACD of -8.47 indicates Negative momentum. The RSI at 61.99 is Neutral, neither overbought nor oversold. The STOCH value of 97.92 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2004.

Showa Sangyo Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1379	75 Outperform	¥63.60B	9.96	―	2.44%	5.74%	76.28%
2004	71 Outperform	¥97.32B	9.96	―	3.80%	-2.01%	-29.88%
2003	71 Outperform	¥65.20B	19.07	―	3.98%	1.21%	-14.59%
2292	70 Neutral	¥84.98B	15.19	―	3.59%	4.55%	79.33%
2874	64 Neutral	¥77.84B	39.44	―	1.86%	4.41%	-41.71%
2938	63 Neutral	¥52.58B	26.48	―	0.34%	4.70%	-2.58%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%

Showa Sangyo Co., Ltd. Corporate Events

Showa Sangyo Announces Secondary Offering of Shares

Showa Sangyo Co., Ltd. announced a secondary offering of shares involving several financial institutions, with a total of 3,236,000 shares of common stock to be sold. This move is aimed at adjusting the company’s capital structure and potentially enhancing its market position, although the exact financial impact will depend on market demand and pricing.

Showa Sangyo Reports Mixed Financial Results for First Half of 2025

Showa Sangyo Co., Ltd. reported a slight decline in net sales and profits for the six months ending September 30, 2025, compared to the previous year. Despite this, the company saw a significant increase in comprehensive income, indicating potential resilience in its financial health. The company has announced a dividend increase, reflecting confidence in its future cash flow, although it forecasts a slight decrease in profits for the full fiscal year ending March 31, 2026.