Pacific Net Co., Ltd. (3021) AI Stock Analysis

• Market Cap: ¥12.56B
• Dividend Yield: 2.47%
• Average Volume (3M): 16.93K
• Price to Earnings (P/E): 8.2
• Beta (1Y): 0.90
• Revenue Growth: 20.51%
• EPS Growth: 42.33%
• Country: JP
• Employees: 234
• Sector: Technology
• Sector Strength: 88
• Industry: Computer Hardware
• EPS (TTM): 47.17
• Shares Outstanding: 5,392,500
• 10 Day Avg. Volume: 32,980
• 30 Day Avg. Volume: 16,926
• PEG Ratio: 0.57
• Price to Book (P/B): 1.94
• Price to Sales (P/S): 0.81
• P/FCF Ratio: -6.24
• 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: ¥2,567.00 ▲(32.32% Upside)
• Action: Reiterated Date: 01/16/26
• Date: Action: Reiterated 01/16/26

The score is driven primarily by solid financial performance tempered by leverage and negative free cash flow, while technicals are supportive with strong trend/momentum. Valuation also contributes positively due to a moderate P/E and a meaningful dividend yield.

Positive Factors

Consistent revenue growth

Sustained top-line growth indicates recurring demand for the company’s games and platform services, supporting predictable cash inflows and allowing phased reinvestment in new titles. This durability in revenue reduces reliance on a single hit game and supports multi‑quarter planning and scale advantages.

Healthy gross and EBIT/EBITDA margins

Strong gross and operating margins reflect effective cost control and pricing power in publishing and platform operations. Margin resilience supports internal funding for development and marketing, cushions against revenue swings, and helps sustain profitability across product cycles over the medium term.

Effective use of shareholders' funds (ROE)

A commendable ROE signals management’s ability to generate returns from invested capital, implying efficient resource allocation and disciplined capital deployment. This strength underpins long‑term shareholder value creation and suggests the business can grow equity value even with moderate leverage.

Negative Factors

High leverage

Elevated debt levels increase interest and refinancing risk, reducing financial flexibility to fund new game development or weather weaker title performance. In a volatile entertainment cycle, leverage magnifies downside and can constrain strategic choices over the next several quarters unless deleveraging occurs.

Negative free cash flow

Negative free cash flow despite solid operating cash generation suggests capex or investments outpace cash inflows, pressuring liquidity. Persistent negative FCF can force external financing, limit dividend sustainability, or slow content investment, undermining long‑term growth initiatives.

Modest net profit margin

A relatively modest net margin means less revenue converts to retained earnings, leaving a smaller buffer against downturns and less internal capital to reduce debt or fund new titles. Over multiple quarters this constrains balance sheet repair and hampers ability to scale profitably.

Pacific Net Co., Ltd. Business Overview & Revenue Model

Company Description

Pacific Net Co., Ltd. (3021) is a technology-driven company specializing in telecommunications and internet services. The company operates primarily in the Asia-Pacific region, focusing on providing high-quality broadband solutions, mobile communication services, and related digital products. Pacific Net aims to enhance connectivity and digital experiences for both individual consumers and businesses through its innovative service offerings and advanced network infrastructure.

How the Company Makes Money

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Pacific Net Co., Ltd. Financial Statement Overview

Summary

Income statement strength (75) is supported by consistent revenue growth and healthy EBIT/EBITDA margins, but the balance sheet (68) shows elevated leverage risk and cash flow (60) is pressured by negative free cash flow, reducing overall financial quality.

Income Statement

Pacific Net Co., Ltd. has demonstrated consistent revenue growth over the years, with a notable increase of 3.87% in the latest period. The gross profit margin remains strong, indicating effective cost management. However, the net profit margin is relatively modest, suggesting room for improvement in operational efficiency. The EBIT and EBITDA margins are healthy, reflecting solid earnings before interest and taxes.

Balance Sheet

The company's balance sheet shows a high debt-to-equity ratio, which indicates significant leverage and potential risk if not managed properly. However, the return on equity is commendable, demonstrating effective use of shareholders' funds. The equity ratio is moderate, suggesting a balanced approach to financing with both debt and equity.

Cash Flow

Pacific Net Co., Ltd. faces challenges with negative free cash flow, indicating potential liquidity issues. The operating cash flow is strong relative to net income, showing good cash generation from operations. However, the negative free cash flow to net income ratio highlights the need for better cash management strategies.

Breakdown	May 2024	May 2023	May 2022	May 2021	May 2020
Income Statement
Total Revenue	8.10B	6.92B	6.40B	5.51B	5.22B
Gross Profit	3.23B	2.92B	2.66B	2.21B	2.42B
EBITDA	3.64B	2.91B	2.42B	2.08B	2.08B
Net Income	529.68M	432.12M	336.30M	209.81M	496.59M
Balance Sheet
Total Assets	12.40B	10.49B	8.01B	6.85B	5.80B
Cash, Cash Equivalents and Short-Term Investments	1.22B	1.38B	1.17B	915.90M	1.81B
Total Debt	7.70B	6.48B	4.27B	3.35B	2.32B
Total Liabilities	9.02B	7.43B	5.27B	4.31B	3.37B
Stockholders Equity	3.38B	3.06B	2.74B	2.54B	2.43B
Cash Flow
Free Cash Flow	-1.05B	-1.80B	-501.63M	-1.67B	958.29M
Operating Cash Flow	3.57B	2.52B	2.74B	1.36B	2.38B
Investing Cash Flow	-4.73B	-4.41B	-3.26B	-3.14B	-1.47B
Financing Cash Flow	991.49M	2.10B	783.48M	883.10M	1.69M

Pacific Net Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1940.00
• 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:3021, the sentiment is Positive. The current price of 1940 is below the 20-day moving average (MA) of 2382.25, below the 50-day MA of 2173.54, and above the 200-day MA of 1589.12, indicating a bullish trend. The MACD of 57.50 indicates Positive momentum. The RSI at 56.22 is Neutral, neither overbought nor oversold. The STOCH value of 52.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3021.

Pacific Net Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6670	80 Outperform	¥218.24B	8.54	―	2.70%	10.23%	8.78%
4832	76 Outperform	¥65.90B	13.11	―	2.65%	3.62%	8.01%
6676	75 Outperform	¥61.06B	6.56	―	2.03%	-13.53%	173.43%
3021	71 Outperform	¥12.56B	8.19	―	2.47%	20.51%	42.33%
6597	67 Neutral	¥7.93B	13.29	―	1.65%	3.70%	107.81%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6836	55 Neutral	¥4.08B	-92.18	―	―	17.29%	―