Tokai Senko K.K. (3577) AI Stock Analysis

• Market Cap: ¥3.28B
• Dividend Yield: 2.77%
• Average Volume (3M): 1.34K
• Price to Earnings (P/E): 3.9
• Beta (1Y): 0.28
• Revenue Growth: 6.31%
• EPS Growth: 33.36%
• Country: JP
• Employees: 777
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Manufacturers
• EPS (TTM): 57.63
• Shares Outstanding: 3,614,252
• 10 Day Avg. Volume: 1,050
• 30 Day Avg. Volume: 1,343
• PEG Ratio: 0.07
• Price to Book (P/B): 0.42
• Price to Sales (P/S): 0.21
• P/FCF Ratio: 4.71
• 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: 69 Neutral
• Price Target: ¥1,105.00 ▲(22.64% Upside)
• Action: Downgraded Date: 10/29/25
• Date: Action: Downgraded 10/29/25

Tokai Senko K.K. shows strong financial performance with robust revenue growth and cash flow generation, contributing significantly to the overall score. The stock's valuation is attractive, with a low P/E ratio and a decent dividend yield. However, technical indicators suggest a bearish trend, which slightly offsets the positive financial and valuation aspects.

Positive Factors

Strong free cash flow generation

Exceptionally strong free cash flow growth and high operating-cash-to-income conversion indicate persistent cash-generation capacity. This durable cash cushion supports reinvestment, dividends, debt reduction, and strategic initiatives without relying on external financing for the next several quarters.

Conservative leverage and stable balance sheet

A low debt-to-equity ratio and near-50% equity ratio reflect a conservative capital structure. That durable financial flexibility reduces refinancing risk, enables opportunistic M&A or capex, and provides resilience versus cyclical industry swings over the medium term.

Revenue growth with margin improvement

Consistent revenue expansion paired with a rising gross margin signals improving product mix or cost control. That structural trend supports sustainable top-line momentum and better earnings leverage, strengthening prospects for continued profit improvement across upcoming reporting periods.

Negative Factors

Low return on equity

ROE of ~4.4% remains low for a manufacturing business, implying limited effectiveness in converting equity into profits. Over months this constrains shareholder value creation and suggests management must improve capital allocation or operational productivity to boost long-term returns.

Thin operating profitability

An EBIT margin under 3% points to weak operating leverage and limited buffer against cost inflation or demand shocks. Persistently low operating profitability reduces capacity to invest in growth or absorb pricing pressure, making earnings vulnerable absent structural efficiency gains.

Modest net profit margin

Although net margins improved, a ~2% net margin leaves little room for error and limits retained earnings for reinvestment. Over the medium term this compresses strategic flexibility and increases sensitivity of shareholder returns to small revenue or cost fluctuations.

Tokai Senko K.K. Business Overview & Revenue Model

Company Description

Tokai Senko K.K. engages in textile designing, printing, dyeing, and finishing activities. The company also develops and sells industrial machineries. Tokai Senko K.K. was founded in 1941 and is headquartered in Nagoya, Japan.

How the Company Makes Money

null

Tokai Senko K.K. Financial Statement Overview

Summary

Tokai Senko K.K. exhibits a positive financial performance with strong revenue growth and improved profitability margins. The balance sheet reflects a stable financial position with low leverage. The cash flow statement indicates strong cash generation, supporting future growth opportunities. While the company shows promising trends, there is room for improvement in operational efficiency and profitability.

Income Statement

Tokai Senko K.K. has shown a strong revenue growth rate of 8.6% from 2024 to 2025, indicating a positive trajectory in sales. The gross profit margin improved to 14.8% in 2025, reflecting better cost management. The net profit margin increased significantly to 2.2%, showing enhanced profitability. However, the EBIT margin of 2.9% suggests room for improvement in operational efficiency.

Balance Sheet

The company's debt-to-equity ratio decreased to 0.29, indicating a conservative leverage position. The return on equity improved to 4.4%, reflecting better utilization of shareholder funds. The equity ratio stands at 48.1%, suggesting a stable financial structure. However, the relatively low ROE indicates potential for further profitability enhancement.

Cash Flow

Tokai Senko K.K. demonstrated a robust free cash flow growth rate of 108.5%, highlighting strong cash generation capabilities. The operating cash flow to net income ratio of 2.6 suggests efficient cash conversion from operations. The free cash flow to net income ratio of 2.0 further underscores the company's strong cash flow position.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	14.41B	14.35B	13.22B	13.06B	11.14B	10.62B
Gross Profit	2.18B	2.13B	1.65B	1.54B	1.50B	1.37B
EBITDA	1.27B	1.14B	781.40M	623.25M	609.47M	397.93M
Net Income	301.33M	311.71M	129.81M	-100.91M	48.49M	-174.33M
Balance Sheet
Total Assets	14.30B	14.89B	14.55B	13.94B	13.38B	12.91B
Cash, Cash Equivalents and Short-Term Investments	3.15B	3.07B	2.68B	2.50B	2.32B	2.27B
Total Debt	2.29B	2.11B	2.52B	2.83B	2.65B	2.53B
Total Liabilities	6.04B	6.30B	6.54B	6.62B	6.23B	6.05B
Stockholders Equity	7.00B	7.17B	6.84B	6.23B	6.19B	6.05B
Cash Flow
Free Cash Flow	0.00	635.39M	304.80M	-100.86M	-181.54M	-158.43M
Operating Cash Flow	0.00	808.81M	531.06M	189.36M	57.18M	319.79M
Investing Cash Flow	0.00	-41.56M	-19.98M	-99.13M	123.23M	-359.96M
Financing Cash Flow	0.00	-487.47M	-439.78M	26.95M	-49.40M	-114.31M

Tokai Senko K.K. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 901.00
• 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:3577, the sentiment is Positive. The current price of 901 is below the 20-day moving average (MA) of 1002.95, below the 50-day MA of 993.38, and below the 200-day MA of 915.88, indicating a bullish trend. The MACD of 4.71 indicates Positive momentum. The RSI at 64.87 is Neutral, neither overbought nor oversold. The STOCH value of 76.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3577.

Tokai Senko K.K. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3569	78 Outperform	¥169.00B	9.78	10.24%	2.43%	6.08%	8.55%
3104	75 Outperform	¥117.04B	15.30	―	1.79%	10.76%	54.82%
3109	72 Outperform	¥13.52B	4.54	―	4.80%	4.49%	26.84%
3577	69 Neutral	¥3.28B	3.91	―	2.77%	6.31%	33.36%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
3202	57 Neutral	¥4.11B	14.35	―	2.63%	-3.01%	-65.96%
3409	44 Neutral	¥3.57B	-40.43	―	―	16.33%	75.48%