Saibo Co., Ltd. (3123) AI Stock Analysis

• Market Cap: ¥8.94B
• Dividend Yield: 2.75%
• Average Volume (3M): 5.57K
• Price to Earnings (P/E): 7.1
• Beta (1Y): 0.40
• Revenue Growth: -4.76%
• EPS Growth: 8.43%
• Country: JP
• Employees: 115
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Manufacturers
• EPS (TTM): 17.33
• Shares Outstanding: 13,600,000
• 10 Day Avg. Volume: 4,210
• 30 Day Avg. Volume: 5,566
• PEG Ratio: -0.87
• Price to Book (P/B): 0.35
• Price to Sales (P/S): 0.60
• P/FCF Ratio: 3.18
• 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: ¥801.00 ▲(36.22% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by attractive valuation (low P/E and dividend yield) and solid profitability with improving leverage. These positives are moderated by recent revenue contraction and weaker free-cash-flow conversion, while technicals show a strong uptrend but overbought conditions that add near-term risk.

Positive Factors

Resilient profitability

Consistent mid-teens EBIT and double-digit net margins indicate the business retains pricing power and cost control within apparel manufacturing. Durable margins support reinvestment, dividends and resilience across cycles, making operating performance a structural strength despite top-line swings.

Improved leverage

The reduction in leverage materially improves financial flexibility and lowers insolvency risk. A stronger equity base and lower debt ratio provide capacity for strategic investment or downturn buffers, which is important for a cyclical consumer-facing manufacturer over the next several months.

Positive cash generation

Sustained positive operating cash flow and positive FCF provide real cash to fund capex, working capital and shareholder returns. While FCF has declined recently, the current positive cash generation is a durable underpinning for financial stability and optionality over the medium term.

Negative Factors

Revenue contraction

A recent decline in revenue interrupts prior growth momentum and raises structural questions about demand and market share. In apparel manufacturing, sustained top-line weakness can undermine scale economics, restrict margin expansion, and limit ability to fund growth initiatives over coming quarters.

Weaker FCF conversion

Lower free cash flow relative to net income and historical volatility (including negative FCF in 2021–22) signal inconsistent cash conversion. That reduces capacity to deleverage, invest, or smooth dividends and increases sensitivity to working-capital swings in a cyclical sector over the medium term.

Moderate returns & sizeable debt

ROE around 6% suggests limited capital efficiency versus peers, constraining long-term shareholder value creation. Combined with material absolute debt, this leaves the company exposed if demand falls, limiting strategic flexibility and increasing refinancing or interest-rate sensitivity risks.

Saibo Co., Ltd. Business Overview & Revenue Model

Company Description

Saibo Co., Ltd. primarily manufactures and sells textile products in Japan and internationally. The company operates through Textile business, Real estate utilization business, and Driving range business segments. It offers apparel products, such as corporate office uniforms, working wear, service wear, jackets, and suits; and novelty and sports-related products. The company also provides textile materials, including rayon filament yarn, polyester yarn, mixed yarn, synthetic cotton, and polyester and linen fabrics, as well as embroidery lace materials. In addition, it involved in the rental of commercial facilities and real estate properties, building maintenance services, as well as golf driving range management activities. Further, the company engages in the provision of repairing services for automobile sheet metal paint products; interior construction and renovation business for general housing, condominiums, factories, and stores.; and sale of new and used vehicles; and insurance and communication equipment. Saibo Co., Ltd. was incorporated in 1948 and is headquartered in Kawaguchi, Japan.

How the Company Makes Money

Saibo Co., Ltd. generates revenue primarily through the sale of its proprietary pharmaceutical products, which include both prescription medications and over-the-counter health solutions. The company also derives income from its contract manufacturing services, providing production capabilities to other companies in the biotech sector. Additionally, Saibo engages in strategic partnerships with research institutions and pharmaceutical companies, allowing it to share development costs and access broader markets. These collaborations often result in milestone payments and royalties, contributing significantly to the company's earnings. Furthermore, Saibo invests in research and development to innovate new products, which can lead to licensing agreements and further revenue opportunities.

Saibo Co., Ltd. Financial Statement Overview

Summary

Solid profitability (TTM gross margin ~25%, net margin ~10%, EBIT margin low-teens) and improved leverage (debt-to-equity ~0.66) support the score. Offsetting factors are a recent revenue decline and weaker/less consistent cash conversion, with TTM free cash flow down materially and covering only about two-thirds of net income.

Income Statement

TTM (Trailing-Twelve-Months) revenue is slightly down versus the prior annual period, following a stronger growth stretch in 2022–2024. Profitability is a clear positive: gross margin is ~25% and net margin is ~10% in TTM, with EBIT margin holding around the low-teens across periods—showing resilient operating performance despite softer top-line momentum. Key weakness is the recent revenue contraction, which raises questions on near-term demand and growth durability.

Balance Sheet

Leverage has improved over time, with debt-to-equity down from above 1.0 in earlier years to ~0.66 in TTM (Trailing-Twelve-Months), which strengthens financial flexibility. Equity has also trended higher versus 2021–2022, supporting the capital base. Returns on equity are moderate (~6% TTM) rather than strong, and total debt remains sizeable in absolute terms, keeping some balance-sheet risk in a cyclical consumer-facing industry.

Cash Flow

Cash generation is positive with TTM (Trailing-Twelve-Months) operating cash flow of ~¥2.4B and free cash flow of ~¥1.2B. However, free cash flow has declined materially in TTM versus the prior year, and free cash flow covers only about two-thirds of net income, indicating less robust cash conversion recently. The historical record shows volatility (including negative free cash flow in 2021–2022), which tempers confidence even though the last few years are improved.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	10.39B	10.30B	11.42B	10.18B	8.96B	6.73B
Gross Profit	2.59B	2.70B	2.64B	2.40B	1.86B	1.96B
EBITDA	2.78B	2.71B	2.92B	2.61B	2.20B	1.52B
Net Income	1.28B	859.55M	945.72M	733.21M	499.59M	587.76M
Balance Sheet
Total Assets	43.01B	41.95B	43.53B	41.85B	42.90B	39.13B
Cash, Cash Equivalents and Short-Term Investments	3.91B	3.95B	3.64B	2.99B	2.59B	1.82B
Total Debt	12.34B	12.88B	14.00B	15.07B	16.75B	14.80B
Total Liabilities	21.19B	21.82B	23.97B	23.67B	25.41B	22.52B
Stockholders Equity	19.36B	17.74B	17.20B	15.97B	15.33B	14.51B
Cash Flow
Free Cash Flow	1.20B	1.95B	1.94B	1.93B	-1.06B	-10.07B
Operating Cash Flow	2.43B	2.37B	2.27B	2.30B	2.04B	2.14B
Investing Cash Flow	-1.24B	-627.31M	-165.85M	-147.64M	-2.98B	-12.14B
Financing Cash Flow	-1.10B	-1.48B	-1.37B	-1.90B	1.74B	10.07B

Saibo Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 588.00
• 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:3123, the sentiment is Positive. The current price of 588 is below the 20-day moving average (MA) of 676.25, below the 50-day MA of 637.30, and above the 200-day MA of 573.81, indicating a bullish trend. The MACD of 20.10 indicates Positive momentum. The RSI at 61.71 is Neutral, neither overbought nor oversold. The STOCH value of 61.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3123.

Saibo Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3569	78 Outperform	¥196.10B	13.54	10.24%	2.43%	6.08%	8.55%
3104	75 Outperform	¥120.03B	24.35	―	1.79%	10.76%	54.82%
3123	72 Outperform	¥8.94B	7.11	―	2.75%	-4.76%	8.43%
3002	66 Neutral	¥154.04B	48.89	2.34%	3.38%	>-0.01%	-49.83%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
3591	59 Neutral	¥238.39B	19.95	5.31%	2.29%	-6.04%	146.54%