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

• Market Cap: ¥106.40B
• Dividend Yield: 3.8%
• Average Volume (3M): 27.93K
• Price to Earnings (P/E): 7.7
• Beta (1Y): 0.43
• 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): 97.70
• 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): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: ¥3,702.00 ▲(22.79% Upside)
• Action: Upgraded Date: 10/30/25
• Date: Action: Upgraded 10/30/25

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

Balance-sheet strength

A low debt-to-equity ratio (0.37) and a 52.8% equity ratio provide durable financial flexibility. This strong equity buffer supports investment in processing capacity, cushions commodity-price swings, and lowers refinancing risk, helping preserve operational continuity over months.

Margin resilience

Sustained gross and EBITDA margins indicate the company can manage processing spreads and internal costs. Durable margin levels suggest pricing power or efficient operations in milling and oil processing, enabling ongoing profitability despite modest revenue volatility.

Operating cash generation

An operating-cash-flow-to-net-income ratio of 1.75 points to high-quality earnings and reliable cash conversion from core operations. This recurring cash generation supports working capital needs, routine capex and dividends, underpinning financial stability over the medium term.

Negative Factors

Declining revenue

A multi-percent revenue decline erodes operating leverage and can compress long-term growth prospects if persistent. For a commodity-linked food processor, shrinking volumes or sales can limit scale efficiencies and pressure margins and reinvestment capacity over the next several quarters.

Free cash flow constraints

A FCF-to-net-income ratio below 1.0 and a year-over-year decline signal limited residual cash after operations and capex. Persistently constrained FCF reduces capacity for strategic investments, debt reduction or dividend increases, weakening long-term financial optionality.

Commodity input exposure

The business model depends on purchasing agricultural raw materials, leaving margins exposed to volatile wheat and oilseed prices. Without strong hedging or upstream integration, persistent commodity swings can structurally compress processing spreads and profitability over time.

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 makes money mainly by purchasing agricultural raw materials (e.g., wheat and oilseeds), processing them in its facilities, and selling the resulting products through a mix of business-to-business and consumer channels. Key revenue streams include: (1) Flour and grain-based products: sales of wheat flour and flour-related products, including mixes and other grain-derived ingredients, sold to bakeries, noodle manufacturers, prepared-food companies, and retailers for household use. (2) Edible oils and fats: sales of cooking oils and processed fats produced from oilseed crushing/refining and related processing, sold to food manufacturers, foodservice operators, and retail channels. (3) Processed foods/ingredients: sales of value-added processed items and food ingredients derived from its milling and oil operations, which can include products positioned for home cooking as well as ingredients used in manufactured foods. The company’s earnings are influenced by volume sold across these categories and by processing margins (the spread between procurement costs for agricultural inputs and selling prices for finished products), as well as product mix (higher value-added branded/processed items versus commodity-like ingredients). Specific 2004 segment revenue splits, named major customers, or partnership details are null.

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
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	258.77B	265.85B	251.59B	235.38B	217.70B
Cash, Cash Equivalents and Short-Term Investments	7.72B	8.11B	8.14B	6.22B	9.17B	11.16B
Total Debt	51.68B	53.95B	58.74B	63.26B	56.14B	45.77B
Total Liabilities	118.45B	120.14B	132.59B	135.23B	126.28B	114.62B
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: 3015.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 3015 is below the 20-day moving average (MA) of 3351.00, below the 50-day MA of 3262.10, and below the 200-day MA of 3034.78, indicating a neutral trend. The MACD of 1.56 indicates Positive momentum. The RSI at 46.64 is Neutral, neither overbought nor oversold. The STOCH value of 19.38 is Positive, 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
1333	76 Outperform	¥224.52B	9.63	7.56%	2.84%	2.63%	-7.81%
1379	75 Outperform	¥61.01B	4.62	―	2.44%	5.74%	76.28%
2004	71 Outperform	¥106.40B	7.71	―	3.80%	-2.01%	-29.88%
2003	71 Outperform	¥65.20B	13.32	―	3.98%	1.21%	-14.59%
2292	70 Neutral	¥93.93B	7.70	―	3.59%	4.55%	79.33%
2938	63 Neutral	¥58.22B	22.47	―	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 Sets 2035 Profit Targets and Overhauls Dividend Policy

Showa Sangyo has revised its group management philosophy to emphasize “growing possibilities” from individual grains and people, reflecting a shift toward pursuing the broader potential of grains and long-term societal and environmental value. The company also unveiled a 10-year “SHOWA VISION 2035” targeting ROE of at least 9%, ROIC of at least 8%, and operating profit of ¥20 billion or more by FY2035, framing an ambitious profitability and efficiency roadmap.

To support this vision, Showa Sangyo launched a four-year Medium-Term Management Plan for FY2026–2029 focused on strengthening earnings through higher-value-added products, cost reductions, and expansion into overseas and new business domains, aiming to lift ROE to 8% and operating profit to ¥14 billion by FY2029. In tandem, it revised its dividend policy to prioritize shareholder returns via a payout ratio of 40% or a dividend-on-equity of 3%, whichever is higher, while maintaining stable dividends and balancing investment needs and financial conditions.

The most recent analyst rating on (JP:2004) stock is a Buy with a Yen3702.00 price target. To see the full list of analyst forecasts on Showa Sangyo Co., Ltd. stock, see the JP:2004 Stock Forecast page.

Showa Sangyo Reshapes Governance With Change in Representative Director Role

Showa Sangyo Co., Ltd. said its board has approved a change in representative directors as part of a broader review of its management structure. The move signals an adjustment in governance rather than a shift in day-to-day leadership, reflecting ongoing efforts to refine oversight as the company operates in a competitive food industry.

Effective April 1, 2026, Chairman Kazuhiko Niitsuma will step down as a representative director and remain as chairman in a non-representative capacity. The change removes his representative authority while maintaining his strategic role on the board, suggesting a clearer separation between executive representation and board oversight for stakeholders.

The most recent analyst rating on (JP:2004) stock is a Buy with a Yen3763.00 price target. To see the full list of analyst forecasts on Showa Sangyo Co., Ltd. stock, see the JP:2004 Stock Forecast page.

Showa Sangyo Posts Stable Sales but Lower Profit, Maintains Earnings and Dividend Outlook

Showa Sangyo reported consolidated net sales of ¥254.5 billion for the nine months ended December 31, 2025, down 0.4% year-on-year, with operating profit up 2.7% to ¥10.0 billion and ordinary profit flat, while profit attributable to owners of parent fell 14.0% to ¥8.9 billion, reflecting margin pressures despite stable overall operations. The company’s financial position strengthened with total assets rising to ¥277.2 billion and equity increasing, and it maintained its full-year forecast for FY2025/26, projecting modest net sales growth to ¥340.0 billion but declines in profit, while keeping its annual dividend forecast at ¥100 per share, signaling a commitment to shareholder returns amid expectations of weaker earnings.

The most recent analyst rating on (JP:2004) stock is a Hold with a Yen3225.00 price target. To see the full list of analyst forecasts on Showa Sangyo Co., Ltd. stock, see the JP:2004 Stock Forecast page.