Dawn Corporation (2303) AI Stock Analysis

• Market Cap: ¥8.47B
• Dividend Yield: 0.99%
• Average Volume (3M): 7.70K
• Price to Earnings (P/E): 18.8
• Beta (1Y): 0.58
• Revenue Growth: -0.69%
• EPS Growth: -6.98%
• Country: JP
• Employees: 63
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 19.50
• Shares Outstanding: 3,300,000
• 10 Day Avg. Volume: 14,780
• 30 Day Avg. Volume: 7,700
• PEG Ratio: 1.86
• Price to Book (P/B): 2.54
• Price to Sales (P/S): 4.24
• P/FCF Ratio: 23.21
• 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: 78 Outperform
• Price Target: ¥3,138.00 ▲(27.41% Upside)

The score is primarily supported by strong financial performance, led by high margins and an exceptionally low-risk, debt-free balance sheet, offset by some cash flow volatility in the most recent year. Technical indicators are moderately positive with improving momentum, while valuation is fair but not a strong bargain given the ~19x P/E and low dividend yield.

Positive Factors

Debt-free balance sheet

A zero-debt capital structure materially reduces financial and interest-rate risk, giving management durable flexibility to fund operations and strategic initiatives from retained earnings. Over 2–6 months this improves resilience to macro shocks and lowers refinancing exposure.

High and sustainable margins

Exceptionally strong gross and operating margins indicate durable pricing power and scalable software economics. High margins support reinvestment, persistent profitability through cycles, and the ability to absorb higher SG&A or R&D spending while maintaining cash-generative operations.

Multi-year revenue expansion

Steady top-line growth over several years signals product-market fit and consistent customer adoption. This persistent expansion underpins long-term revenue predictability, supports scaling operating leverage, and validates the company's competitive position in its application software market.

Negative Factors

Recent cash-flow variability

A notable drop in operating cash coverage and year-over-year FCF decline despite higher profits points to working-capital or timing swings. Such variability can constrain discretionary spending, dividend sustainability, and capital allocation precision over the medium term.

Uneven growth cadence

Pronounced year-to-year swings in growth complicate forecasting and resource planning. Persistent cadence variability can force conservative hiring and investment, reduce operating leverage realization, and increase the need for financial buffers to manage uneven revenue cycles.

Small scale and low liquidity

A small employee base and low trading volume reflect limited scale and market liquidity. Structurally, this can constrain sales capacity, slow product development scale-up, and make large institutional investment or secondary capital raises more difficult without dilutive terms.

Dawn Corporation Business Overview & Revenue Model

Company Description

Dawn Corp. engages in the development and maintenance of Saas based geographic information systems (GIS) in Japan. It provides NET119, a cloud emergency call services; Live110 and Live119, a video reporting system; DMaCS, a disaster information sharing service; AED GO, an AED transportation support system; mailio, a message delivery service; and Town Guidance Town Development Map, an Internet public map service. The company also offers GeoBase/GeoBase.NET, a new-generation GIS middleware; Town Map Pro, a cloud-based service that allows user to build an integrated GIS; infectious disease crisis management system; and easy log analysis services. In addition, it sells license software for building geographic information systems. The company was founded in 1991 and is headquartered in Kobe, Japan.

How the Company Makes Money

Dawn Corporation generates revenue through multiple streams, primarily centered around the manufacturing and sale of electronic components. The company's semiconductor division is a significant contributor to its income, with products being sold to various industries, including telecommunications, automotive, and consumer electronics. Dawn Corporation has established long-term partnerships with leading global tech firms, securing contracts to supply essential components for their products. Additionally, the company earns revenue from its software solutions, which are often bundled with its hardware products or sold separately as standalone offerings. The company's strategic investments in research and development also foster innovation, allowing it to maintain a competitive edge and attract new business opportunities.

Dawn Corporation Financial Statement Overview

Summary

Strong fundamentals driven by consistent multi-year revenue growth and high profitability (gross margin ~63–68%, EBIT margin ~30–35%, net margin ~19–26%). Balance sheet strength is exceptional with zero debt and solid ROE (~12–16%). Main watch item is recent cash flow variability in 2025 despite improved earnings, suggesting timing/working-capital effects.

Income Statement

Revenue has grown consistently from 2021–2025 (about ¥1.12B to ¥1.65B), showing a steady expansion trajectory, with 2025 growth re-accelerating versus 2024. Profitability is a key strength: gross margin remains strong (~63–68%) and operating profitability is high (EBIT margin ~30–35%), supporting healthy net margins (~19–26%). The main weakness is growth volatility—2024 was near-flat while 2025 shows a large rebound—suggesting demand cadence may be uneven year-to-year.

Balance Sheet

The balance sheet is very conservative with zero reported debt across all periods, materially reducing financial risk and interest-rate sensitivity. Equity and assets have steadily increased over time, indicating retained earnings and balance sheet compounding. Returns on equity are consistently solid (~12–16%), reflecting good profitability relative to the capital base. A potential downside is that a debt-free structure can sometimes limit capital efficiency, but the overall financial risk profile is exceptionally strong.

Cash Flow

Cash generation quality is generally good: free cash flow closely tracks net income (free cash flow to net income ~0.96–1.00 across years), implying earnings are largely cash-backed. However, cash flow durability is less consistent—operating cash flow coverage of net income fell to ~1.09 in 2025 from higher levels in prior years, and 2025 free cash flow growth shows a sharp decline versus 2024 despite higher revenue and profits. This points to working-capital or timing effects that can create year-to-year cash flow variability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.59B	1.65B	1.50B	1.37B	1.22B	1.12B
Gross Profit	1.05B	1.08B	1.02B	888.64M	818.80M	735.09M
EBITDA	540.78M	579.78M	538.00M	446.43M	403.36M	343.90M
Net Income	391.61M	418.77M	388.12M	321.06M	283.50M	237.72M
Balance Sheet
Total Assets	2.97B	3.07B	2.82B	2.50B	2.37B	2.10B
Cash, Cash Equivalents and Short-Term Investments	1.67B	1.73B	1.92B	1.79B	2.07B	1.78B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	231.73M	323.98M	334.94M	269.32M	229.27M	220.34M
Stockholders Equity	2.74B	2.75B	2.48B	2.23B	2.14B	1.88B
Cash Flow
Free Cash Flow	151.45M	301.18M	397.07M	358.14M	254.40M	227.76M
Operating Cash Flow	151.37M	302.57M	414.66M	365.69M	257.07M	228.54M
Investing Cash Flow	-167.52M	-336.79M	-129.51M	-58.83M	-102.67M	-110.78M
Financing Cash Flow	-80.14M	-161.19M	-149.18M	-244.50M	-38.37M	-31.86M

Dawn Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2463.00
• 50DMA: Positive
• 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:2303, the sentiment is Positive. The current price of 2463 is below the 20-day moving average (MA) of 2699.60, below the 50-day MA of 2542.32, and above the 200-day MA of 2409.86, indicating a neutral trend. The MACD of 35.50 indicates Positive momentum. The RSI at 55.75 is Neutral, neither overbought nor oversold. The STOCH value of 24.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2303.

Dawn Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2303	78 Outperform	¥8.47B	18.75	―	0.99%	-0.69%	-6.98%
2186	69 Neutral	¥7.19B	19.43	―	3.65%	―	―
4397	68 Neutral	¥7.81B	19.22	―	―	11.32%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4845	61 Neutral	¥6.63B	6.89	―	4.25%	-24.66%	―
5259	50 Neutral	¥7.37B	-19.34	―	―	6.59%	-294.11%
9561	41 Neutral	¥3.93B	-7.06	―	―	3.34%	-219.24%

Dawn Corporation Corporate Events

Dawn Corporation Posts Profit Growth on Modest Sales Increase, Raises Annual Dividend Forecast

For the six months ended 30 November 2025, Dawn Corporation reported modest top-line growth with net sales rising 1.7% year on year to ¥646 million, while operating profit increased 7.6% to ¥206 million and ordinary profit grew 9.4% to ¥213 million; net profit advanced 7.8% to ¥148 million, lifting basic earnings per share to ¥48.96. The company’s financial position remains robust, with total assets of ¥3,088 million and an equity ratio of 92.3%, and it plans to maintain shareholder returns through a full-year dividend of ¥26 per share for the fiscal year ending May 31, 2026, up from ¥24 in the prior year, supported by a full-year earnings forecast that anticipates continued, albeit moderate, growth in sales and profitability.

The most recent analyst rating on (JP:2303) stock is a Buy with a Yen2831.00 price target. To see the full list of analyst forecasts on Dawn Corporation stock, see the JP:2303 Stock Forecast page.