Kitoku Shinryo Co., Ltd. (2700) AI Stock Analysis

• Market Cap: ¥21.48B
• Dividend Yield: 1.4%
• Average Volume (3M): 91.39K
• Price to Earnings (P/E): 3.5
• Beta (1Y): 0.85
• Revenue Growth: 38.11%
• EPS Growth: 300.47%
• Country: JP
• Employees: 374
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Packaged Foods
• EPS (TTM): 215.28
• Shares Outstanding: 8,530,000
• 10 Day Avg. Volume: 48,440
• 30 Day Avg. Volume: 91,386
• PEG Ratio: 0.06
• Price to Book (P/B): 0.12
• Price to Sales (P/S): 0.02
• P/FCF Ratio: -1.04
• 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: 64 Neutral
• Price Target: ¥2,722.00 ▲(1.53% Upside)

Kitoku Shinryo's overall stock score is driven by strong valuation metrics, indicating potential undervaluation. However, technical analysis reveals bearish momentum, which could pose short-term risks. Financial performance is solid but hampered by negative free cash flow, highlighting liquidity concerns.

Positive Factors

Essential staple product and distribution model

Rice and grains are staple categories with stable, predictable consumption. Kitoku Shinryo’s integrated distribution and processing model serving retail, wholesalers and foodservice across domestic and overseas channels supports recurring revenue, demand resilience and long-term cash generation potential.

Improving gross and operating margins

Sustained improvement in gross and operating margins indicates better cost control and higher value-added processing (milling, blending, packaging). Margin expansion from operational efficiencies strengthens durability of earnings and supports reinvestment capacity over the medium term.

Balanced leverage with improving ROE

A moderate debt-to-equity ratio and improved ROE signal disciplined capital use and room to fund growth without excessive leverage. A solid equity ratio provides balance sheet resilience, preserving access to credit and flexibility for strategic investments or cyclical shocks.

Negative Factors

Negative free cash flow and weak cash conversion

Negative free cash flow and poor cash conversion are durable concerns: they constrain investment, raise reliance on external financing, and limit ability to smooth dividends or absorb shocks. Persistent FCF weakness undermines financial flexibility over several quarters.

Thin net profit margin

A low net margin provides limited buffer against commodity cost increases or demand fluctuations. Sustained thin profitability reduces retained earnings available for reinvestment and makes earnings more sensitive to input cost or volume shocks over the medium term.

Revenue exposed to procurement cost spreads

Business relies on spreads between procurement and selling prices, creating structural exposure to commodity price volatility and inventory risk. If procurement costs rise faster than selling price pass-through, margins and cash flow can be pressured for multiple quarters without strong hedging or pricing power.

Kitoku Shinryo Co., Ltd. Business Overview & Revenue Model

Company Description

Kitoku Shinryo Co., Ltd. develops and sells rice in Japan and internationally. It also sells rice bran, imported grass, and other feed and feed ingredients; develops and sells value-added products, such as protein-adjusted rice; manufactures rice flour for confectionery and processed food; and sells glutinous rice and rice flour. Kitoku Shinryo Co., Ltd. was founded in 1882 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Kitoku Shinryo generates revenue primarily through the sale of food ingredients and seasonings to various sectors, including food service, manufacturing, and retail. The company's revenue model is based on direct sales to customers, where they leverage relationships with both suppliers and clients to ensure a steady supply of high-quality products. Key revenue streams include bulk sales of specialty seasonings, custom food solutions for manufacturers, and retail distribution of packaged products. Additionally, strategic partnerships with food producers and distributors enhance their market reach and contribute to consistent earnings, while participation in food expos and trade shows helps in acquiring new clients and expanding their customer base.

Kitoku Shinryo Co., Ltd. Financial Statement Overview

Summary

Kitoku Shinryo shows solid revenue growth and improved profitability margins, indicating operational strength. The balance sheet reflects a healthy leverage position and efficient equity usage. However, negative free cash flow signals potential liquidity concerns, which could impact future investments.

Income Statement

Kitoku Shinryo has shown consistent revenue growth with a 3.63% increase from 2023 to 2024. The gross profit margin improved to 7.59%, indicating better cost management. Net profit margin stands at 1.45%, reflecting moderate profitability. EBIT and EBITDA margins have improved to 2.00% and 2.44% respectively, showcasing operational efficiency.

Balance Sheet

The company's debt-to-equity ratio is 0.87, suggesting a balanced approach to leverage. Return on equity has improved to 11.49%, indicating efficient use of equity. The equity ratio is 37.34%, reflecting a solid capital structure with significant reliance on equity.

Cash Flow

Free cash flow has turned negative, showing a decline in liquidity. The operating cash flow to net income ratio is negative, highlighting potential cash flow challenges. Although there was previous free cash flow growth, the current decline poses risks to financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	143.82B	119.00B	114.84B	104.70B	107.81B	107.60B
Gross Profit	13.54B	9.03B	8.07B	6.88B	5.97B	5.21B
EBITDA	7.32B	3.09B	2.71B	2.09B	1.08B	677.61M
Net Income	4.60B	1.72B	1.48B	1.04B	505.12M	62.57M
Balance Sheet
Total Assets	47.09B	40.17B	32.11B	29.38B	29.86B	29.79B
Cash, Cash Equivalents and Short-Term Investments	5.95B	3.65B	2.55B	2.34B	1.85B	1.85B
Total Debt	14.92B	13.11B	9.93B	9.61B	12.75B	12.75B
Total Liabilities	28.26B	24.61B	18.72B	18.04B	19.28B	20.28B
Stockholders Equity	18.31B	15.00B	13.02B	11.02B	10.33B	9.39B
Cash Flow
Free Cash Flow	0.00	-1.73B	153.73M	3.68B	404.87M	385.96M
Operating Cash Flow	0.00	-929.89M	464.86M	4.34B	774.12M	704.93M
Investing Cash Flow	0.00	-985.00M	-421.88M	-569.82M	-574.09M	-142.60M
Financing Cash Flow	0.00	2.86B	149.52M	-3.29B	-309.32M	-1.28B

Kitoku Shinryo Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2681.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2700, the sentiment is Negative. The current price of 2681 is above the 20-day moving average (MA) of 2590.25, below the 50-day MA of 2774.28, and below the 200-day MA of 3133.98, indicating a bearish trend. The MACD of -76.78 indicates Negative momentum. The RSI at 36.48 is Neutral, neither overbought nor oversold. The STOCH value of 11.58 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:2700.

Kitoku Shinryo Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2009	79 Outperform	¥24.32B	22.95	―	3.62%	-0.23%	13.13%
2932	78 Outperform	¥23.13B	11.35	―	3.69%	8.75%	4.38%
2884	78 Outperform	¥20.95B	12.49	―	―	3.07%	50.05%
2204	67 Neutral	¥18.18B	22.87	―	2.12%	-1.97%	7.25%
2804	66 Neutral	¥24.17B	9.96	―	2.05%	0.99%	830.67%
2700	64 Neutral	¥21.48B	3.49	―	1.40%	38.11%	300.47%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%