Fonfun Corporation (2323) AI Stock Analysis

• Market Cap: ¥8.82B
• Dividend Yield: N/A
• Average Volume (3M): 38.93K
• Price to Earnings (P/E): 34.8
• Beta (1Y): 0.84
• Revenue Growth: 103.49%
• EPS Growth: 620.98%
• Country: JP
• Employees: 28
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 10.11
• Shares Outstanding: 7,098,040
• 10 Day Avg. Volume: 34,370
• 30 Day Avg. Volume: 38,926
• PEG Ratio: 0.12
• Price to Book (P/B): 2.94
• Price to Sales (P/S): 2.22
• P/FCF Ratio: 15.22
• 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: 72 Outperform
• Price Target: ¥1,388.00 ▲(77.72% Upside)

The score is primarily supported by strong financial performance—rapid revenue growth, healthy margins, and solid cash generation. Technicals remain bullish but are stretched with overbought signals, increasing pullback risk. Valuation is a notable constraint due to a high P/E and no dividend yield provided.

Positive Factors

Strong revenue growth and healthy margins

Sustained high revenue growth with healthy gross and net margins indicates durable product-market fit and pricing power in mobile communications. This supports reinvestment in product development and user acquisition, making growth more likely to persist over the medium term.

Robust cash generation and conversion

Operating cash flow consistently exceeding net income and rising free cash flow signal strong cash conversion. That durability funds capex, product investment and reduces external financing reliance, strengthening long-term operational flexibility and strategic optionality.

Effective capital return on equity

A high ROE indicates efficient use of shareholder capital to generate profits, supporting sustainable earnings growth. A balanced equity ratio shows reasonable capital structure that can finance expansion while maintaining return discipline over multiple quarters.

Negative Factors

Elevated leverage risk

Debt-to-equity near 1.0 increases sensitivity to interest rate moves and revenue shocks; higher leverage can constrain strategic flexibility and raise refinancing risk during downturns, making capital management critical for medium-term stability.

Very small employee base

A headcount of 28 creates operational concentration and execution risk: limited bandwidth for scaling, product development, customer support, and succession. Reliance on a compact team raises retention and single-point-of-failure risks as the business grows.

Revenue exposure to ad and engagement cycles

Heavy reliance on ad revenues and user engagement makes topline sensitive to cyclical ad spending and user churn. Maintaining long-term monetization requires sustained engagement and competitive differentiation versus large app ecosystems, which is structurally challenging.

Fonfun Corporation Business Overview & Revenue Model

Company Description

fonfun corporation provides content services for internet-compatible mobile phones. It offers Remote mail (personal version), an email service; Remote mail (corporate service), a service to view and send and receive company emails from mobile phones, smartphones, and tablets; Remote catalog, a solution to convert Word, Excel, PowerPoint, and PDF files to image files; Remote browsing, a gateway service to access business servers from terminals; and Remote business card BizCompass, a solution to convert scanned business cards into data. It also provides Remote talk, a business chat; fonfun Any Clutch remote, a service to access and operate its PC from laptop, smartphone, and tablet; and Voice mail, a business communication tool. In addition, it offers Web application diagnosis, a service that diagnoses and investigates whether there is a security problem in Web application by performing a pseudo attack; Network diagnosis, a service that diagnoses and investigates whether there are any security problems with the servers, network devices, OS, middleware, and server software; fonfun SMS, a SMS service for site guidance, notification transmission, reminder, and reservation reminders; and Questionnaire Connect, a questionnaire system that connects site and top management. The company was formerly known as Net Village Co., Ltd. and changed its name to fonfun corporation in October 2006. fonfun corporation was founded in 1997 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Fonfun Corporation generates revenue through a multi-faceted business model that includes subscription services, in-app purchases, and advertising. The company charges users a monthly fee for access to premium features of its mobile applications, which include enhanced messaging capabilities and exclusive content. Additionally, Fonfun earns revenue from in-app purchases that allow users to acquire digital goods or features within the applications. Advertising partnerships also contribute significantly to the company's earnings, as Fonfun leverages its user base to sell targeted advertising space within its platforms. Strategic partnerships with telecommunications providers further enhance revenue opportunities through bundled service offerings and co-marketing initiatives.

Fonfun Corporation Financial Statement Overview

Summary

Fonfun Corporation demonstrates strong financial performance with significant revenue growth and healthy profitability margins. The balance sheet is well-managed, with a prudent use of debt and strong equity returns. Cash flow management is efficient, supporting the company's growth and operational activities. While leverage is slightly high, the company's overall financial health is solid and positions it well for future growth.

Income Statement

Fonfun Corporation's revenue has shown strong growth, increasing from 699,744,000 to 1,268,700,000, a significant growth rate of 81.26%. The gross profit margin is healthy at 38.6%, and the net profit margin also shows strong performance at 13.35%. The EBIT and EBITDA margins are robust, indicating effective cost management and operational efficiency.

Balance Sheet

The company maintains a solid balance sheet with a debt-to-equity ratio of 1.02, indicating a balanced approach to leveraging. Return on equity (ROE) is strong at 17.69%, suggesting effective use of shareholder funds to generate profits. The equity ratio stands at 44.56%, reflecting a good capital structure, though slightly high leverage could pose risks if not managed carefully.

Cash Flow

Fonfun Corporation exhibits robust cash flow management with a steady increase in operating cash flow. The operating cash flow to net income ratio is 1.13, indicating strong cash conversion. Free cash flow is positive and has grown significantly, reflecting a strong ability to generate cash from operations.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	680.81M	1.27B	699.74M	393.09M	556.32M	592.31M
Gross Profit	391.76M	489.66M	407.59M	217.74M	357.00M	408.00M
EBITDA	160.07M	159.88M	91.89M	58.63M	27.05M	95.02M
Net Income	121.32M	169.35M	68.15M	18.91M	-17.11M	41.41M
Balance Sheet
Total Assets	952.60M	2.15B	1.01B	939.38M	950.09M	904.32M
Cash, Cash Equivalents and Short-Term Investments	568.78M	711.06M	677.93M	533.21M	614.27M	531.25M
Total Debt	172.73M	976.14M	249.28M	327.44M	315.21M	240.95M
Total Liabilities	291.69M	1.19B	386.79M	389.35M	396.88M	333.90M
Stockholders Equity	660.91M	957.32M	621.73M	550.03M	553.20M	570.41M
Cash Flow
Free Cash Flow	67.01M	185.25M	173.76M	105.47M	24.74M	86.89M
Operating Cash Flow	67.01M	190.53M	175.98M	108.33M	31.53M	90.36M
Investing Cash Flow	0.00	-1.22B	288.05M	-164.93M	-133.86M	86.31M
Financing Cash Flow	0.00	875.50M	-89.27M	26.83M	74.15M	-35.53M

Fonfun Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 781.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2323, the sentiment is Positive. The current price of 781 is below the 20-day moving average (MA) of 930.05, below the 50-day MA of 839.80, and above the 200-day MA of 613.70, indicating a bullish trend. The MACD of 76.68 indicates Negative momentum. The RSI at 86.40 is Negative, neither overbought nor oversold. The STOCH value of 73.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2323.

Fonfun Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4421	72 Outperform	¥2.98B	11.04	―	2.86%	5.74%	5.97%
2323	72 Outperform	¥8.82B	34.80	―	―	103.49%	620.98%
3970	66 Neutral	¥2.55B	-11.08	―	4.29%	15.64%	-268.60%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
5618	46 Neutral	¥2.71B	-9.35	―	―	23.63%	64.65%
3753	42 Neutral	¥2.15B	-5.70	―	―	-2.29%	31.48%
4427	39 Underperform	¥2.67B	162.61	―	―	-12.77%	―