Systems Engineering Consultants Co., Ltd. (3741) AI Stock Analysis

• Market Cap: ¥31.07B
• Dividend Yield: 1.79%
• Average Volume (3M): 124.77K
• Price to Earnings (P/E): 22.1
• Beta (1Y): 0.86
• Revenue Growth: 21.97%
• EPS Growth: 15.89%
• Country: JP
• Employees: 347
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 39.32
• Shares Outstanding: 10,240,000
• 10 Day Avg. Volume: 118,140
• 30 Day Avg. Volume: 124,770
• PEG Ratio: -0.44
• Price to Book (P/B): 2.47
• Price to Sales (P/S): 2.24
• P/FCF Ratio: -83.84
• 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): 22,801
• Revenue Forecast (FY): ¥1.74T

• Rating: 76 Outperform
• Price Target: ¥3,056.00 ▲(0.69% Upside)

The company's strong financial performance and positive technical indicators are the primary drivers of the stock score. While the valuation is fair, the attractive dividend yield adds to the stock's appeal. The absence of earnings call data and corporate events does not impact the overall score.

Positive Factors

Revenue Growth

Sustained revenue growth indicates strong market demand and effective sales strategies, positioning the company well for future expansion.

Balance Sheet Strength

A strong balance sheet with minimal leverage enhances financial stability and provides a solid foundation for long-term growth.

Profitability

High profit margins reflect efficient cost management and operational effectiveness, supporting sustainable profitability.

Negative Factors

Cash Flow Constraints

Negative free cash flow indicates cash constraints, which could limit the company's ability to invest in growth opportunities.

Cash Flow Volatility

Volatile cash flow poses a risk to financial stability, potentially impacting the company's ability to manage unexpected expenses.

Operating Cash Flow Decline

A decline in operating cash flow suggests challenges in converting profits into cash, which may affect liquidity and operational flexibility.

Systems Engineering Consultants Co., Ltd. Business Overview & Revenue Model

Company Description

Systems Engineering Consultants Co., Ltd. (3741) is a leading provider of engineering consulting services, specializing in systems integration and technology solutions across various sectors, including telecommunications, transportation, and defense. The company focuses on delivering tailored solutions that enhance operational efficiency and drive innovation for its clients. With a strong emphasis on research and development, Systems Engineering Consultants Co., Ltd. aims to leverage cutting-edge technologies to address complex engineering challenges faced by organizations.

How the Company Makes Money

The company generates revenue primarily through consulting fees for its engineering services, which include system design, implementation, and ongoing support. Key revenue streams also include project-based contracts with public and private sector clients, as well as maintenance and support services for existing systems. Additionally, Systems Engineering Consultants Co., Ltd. may engage in strategic partnerships with technology providers to offer bundled services, further enhancing their service offerings and market reach. The company's focus on high-value, long-term contracts with clients in critical sectors, along with its reputation for quality and expertise, are significant factors contributing to its earnings.

Systems Engineering Consultants Co., Ltd. Financial Statement Overview

Summary

The company exhibits strong financial performance with robust revenue growth, efficient cost management, and minimal leverage. However, the decline in operating cash flow and negative free cash flow pose challenges, slightly tempering the overall financial score.

Income Statement

The company has demonstrated strong revenue growth with a 20.6% increase from the previous year, reflecting robust market demand and effective sales strategies. Gross profit margin and EBIT margin stand at 29.8% and 17.4% respectively, indicating efficient cost management and operational profitability. The net profit margin is also healthy at 13.1%, showing solid bottom-line performance. Overall, the income statement reflects a company with increasing revenue and profitability, positioning it well within the competitive software industry.

Balance Sheet

The balance sheet is strong with a low debt-to-equity ratio of 0.004, indicating minimal leverage and sound financial stability. The equity ratio of 79.2% suggests a high proportion of assets financed by equity, further strengthening the company's financial position. Return on equity is a solid 14.4%, showcasing effective utilization of shareholder funds. The company's high equity and low debt levels mitigate potential financial risks, providing a stable foundation for future growth.

Cash Flow

The cash flow statement shows a decline in operating cash flow, resulting in negative free cash flow in the most recent period. This is a concern as it suggests cash flow constraints despite the company's profitability. However, the free cash flow to net income ratio was positive in previous years, indicating potential for cash flow recovery. Overall, while the cash flow position requires improvement, historical performance suggests resilience.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.42B	10.30B	8.53B	7.49B	6.56B	6.53B
Gross Profit	3.06B	3.07B	2.55B	2.24B	1.97B	1.85B
EBITDA	1.83B	1.94B	1.58B	1.32B	1.14B	1.08B
Net Income	1.30B	1.34B	1.11B	878.83M	780.30M	727.68M
Balance Sheet
Total Assets	10.68B	11.78B	10.11B	9.19B	8.43B	7.94B
Cash, Cash Equivalents and Short-Term Investments	5.60B	2.23B	2.97B	3.08B	3.23B	2.85B
Total Debt	326.75M	36.00M	36.00M	36.00M	36.00M	36.00M
Total Liabilities	1.66B	2.45B	1.71B	1.58B	1.33B	1.36B
Stockholders Equity	9.01B	9.33B	8.40B	7.60B	7.09B	6.58B
Cash Flow
Free Cash Flow	0.00	-275.22M	345.47M	431.18M	629.42M	-76.76M
Operating Cash Flow	0.00	-250.49M	384.07M	526.79M	642.95M	-52.13M
Investing Cash Flow	0.00	-40.97M	-139.18M	-303.57M	28.72M	-40.65M
Financing Cash Flow	0.00	-445.43M	-352.99M	-381.51M	-290.70M	-423.19M

Systems Engineering Consultants Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3035.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3741, the sentiment is Positive. The current price of 3035 is above the 20-day moving average (MA) of 2841.75, above the 50-day MA of 2661.62, and above the 200-day MA of 2464.23, indicating a bullish trend. The MACD of 108.02 indicates Negative momentum. The RSI at 63.47 is Neutral, neither overbought nor oversold. The STOCH value of 76.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3741.

Systems Engineering Consultants Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4493	78 Outperform	¥17.63B	25.58	―	0.17%	31.39%	13.12%
3741	76 Outperform	¥31.07B	22.10	―	1.79%	21.97%	15.89%
3992	66 Neutral	¥21.00B	22.21	―	2.32%	5.07%	10.80%
3850	65 Neutral	¥18.60B	27.37	―	0.91%	15.28%	60.07%
4847	65 Neutral	¥24.87B	19.33	―	3.71%	6.02%	-11.83%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Systems Engineering Consultants Co., Ltd. Corporate Events

Systems Engineering Consultants Reports Strong Half-Year Financial Results and Announces Stock Split

Systems Engineering Consultants Co., Ltd. reported an 18.3% increase in net sales for the six months ending September 30, 2025, compared to the previous year. The company also implemented a 2-for-1 stock split effective October 1, 2025, impacting earnings per share calculations and future dividend forecasts.

Systems Engineering Consultants Revises Financial Forecast Upward

Systems Engineering Consultants Co., Ltd. has revised its financial forecast for the six months ending September 30, 2025, due to better-than-expected sales and profits driven by increased development activities in key sectors. The company’s full-year forecast remains unchanged, indicating stable performance aligned with their strategic plan.

Systems Engineering Consultants Announces Share Split and Dividend Increase

Systems Engineering Consultants Co., Ltd. has announced a 2-for-1 share split, effective October 1, 2025, to improve share liquidity and expand its investor base. This move will double the total number of issued shares to 10,240,000 and amend the Articles of Incorporation to reflect an increased authorized share count of 32,000,000. Additionally, the company has revised its dividend forecasts, increasing the projected year-end dividend by 1 yen on a pre-share split basis, which reflects a commitment to enhancing shareholder returns.