System Research Co., Ltd. (3771) AI Stock Analysis

• Market Cap: ¥32.72B
• Dividend Yield: 3.06%
• Average Volume (3M): 65.13K
• Price to Earnings (P/E): 13.4
• Beta (1Y): 0.95
• Revenue Growth: 11.53%
• EPS Growth: 23.23%
• Country: JP
• Employees: 1,442
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 41.02
• Shares Outstanding: 16,720,000
• 10 Day Avg. Volume: 28,730
• 30 Day Avg. Volume: 65,130
• PEG Ratio: 0.96
• Price to Book (P/B): 2.19
• Price to Sales (P/S): 1.00
• P/FCF Ratio: 26.66
• 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: 77 Outperform
• Price Target: ¥2,365.00 ▲(20.36% Upside)

System Research Co., Ltd. scores well due to its strong financial performance and reasonable valuation. The technical analysis suggests some short-term caution but indicates longer-term strength. The absence of earnings call data and corporate events does not impact the overall score significantly.

Positive Factors

Revenue Growth

Consistent revenue growth indicates expanding market reach and effective product adoption, supporting long-term business sustainability.

Balance Sheet Strength

A low debt-to-equity ratio enhances financial stability and flexibility, allowing the company to invest in growth opportunities without excessive risk.

Profitability Metrics

Improved profitability metrics suggest efficient operations and cost management, which can sustain competitive advantage and shareholder value.

Negative Factors

Cash Flow Generation

Declining free cash flow could limit the company's ability to fund new projects and return capital to shareholders, impacting long-term growth.

Cash Flow to Net Income Ratio

A moderate cash flow to net income ratio suggests potential inefficiencies in cash conversion, which may affect liquidity and investment capacity.

Cash Flow Management

Suboptimal cash flow management can constrain operational flexibility and limit strategic investments, affecting long-term competitiveness.

System Research Co., Ltd. Business Overview & Revenue Model

Company Description

System Research Co., Ltd. (3771) is a technology-driven company specializing in the development and provision of software solutions and IT services. Operating primarily in the information technology sector, the company offers a range of products, including system integration services, software development, and IT consulting. With a focus on enhancing operational efficiency for businesses, System Research Co., Ltd. serves various industries, leveraging advanced technologies to deliver tailored solutions that meet the evolving needs of its clients.

How the Company Makes Money

System Research Co., Ltd. generates revenue primarily through its software solutions and IT services. The company earns money by charging clients for system integration projects, custom software development, and ongoing IT support and consulting services. Key revenue streams include project-based contracts, long-term service agreements, and maintenance fees for software products. Additionally, the company may engage in partnerships with other firms to enhance its service offerings, thereby expanding its customer base and increasing its earnings potential. These strategic alliances can lead to joint ventures, co-development of technologies, and access to new markets, further contributing to the company's financial growth.

System Research Co., Ltd. Financial Statement Overview

Summary

System Research Co., Ltd. demonstrates strong financial health with robust revenue growth and profitability metrics. The balance sheet is solid with low leverage and strong equity backing. However, there is room for improvement in cash flow generation, which slightly tempers the overall financial performance score.

Income Statement

System Research Co., Ltd. has demonstrated strong revenue growth, with a notable increase from ¥23,320 million to ¥25,931 million, a growth rate of approximately 11.2%. Gross profit margin stands at 23.2%, indicating efficient cost management. Net profit margin improved to 8.5%, reflecting enhanced profitability. Both EBIT margin and EBITDA margin are solid, at 11.6% and 12.7% respectively, showcasing robust operational efficiency.

Balance Sheet

The company maintains a strong balance sheet with a low debt-to-equity ratio of 0.11, indicating conservative leverage. Return on Equity (ROE) is healthy at 18.6%, suggesting efficient use of equity to generate profits. The equity ratio is strong at 67.4%, highlighting a stable financial position with substantial equity backing its assets.

Cash Flow

System Research Co., Ltd. experienced a decline in free cash flow by approximately 35.3%, which may indicate increased capital expenditures or other cash outflows. However, the operating cash flow to net income ratio is robust at 0.94, reflecting efficient cash conversion from earnings. The free cash flow to net income ratio is moderate at 0.44, suggesting room for improvement in cash flow generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	26.68B	25.93B	23.32B	21.56B	18.41B	16.16B
Gross Profit	6.21B	6.03B	5.36B	4.82B	4.12B	3.47B
EBITDA	3.35B	3.29B	2.86B	2.32B	2.24B	1.72B
Net Income	2.28B	2.19B	1.97B	1.60B	1.49B	1.09B
Balance Sheet
Total Assets	16.02B	17.53B	16.15B	14.18B	12.88B	11.20B
Cash, Cash Equivalents and Short-Term Investments	7.08B	8.20B	8.33B	7.37B	6.35B	5.84B
Total Debt	1.36B	1.30B	1.44B	1.40B	1.40B	1.43B
Total Liabilities	4.74B	5.70B	5.63B	5.05B	4.75B	4.05B
Stockholders Equity	11.26B	11.81B	10.51B	9.12B	8.12B	7.14B
Cash Flow
Free Cash Flow	0.00	971.47M	1.50B	1.51B	1.23B	942.47M
Operating Cash Flow	0.00	2.06B	2.46B	1.80B	1.29B	1.09B
Investing Cash Flow	0.00	-1.14B	-926.71M	-273.30M	-254.65M	-144.11M
Financing Cash Flow	0.00	-1.04B	-546.50M	-501.65M	-526.75M	-466.15M

System Research Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1965.00
• 50DMA: Negative
• 100DMA: Negative
• 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:3771, the sentiment is Negative. The current price of 1965 is below the 20-day moving average (MA) of 1970.00, below the 50-day MA of 2031.62, and above the 200-day MA of 1896.00, indicating a neutral trend. The MACD of -14.70 indicates Negative momentum. The RSI at 45.15 is Neutral, neither overbought nor oversold. The STOCH value of 28.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3771.

System Research Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3763	82 Outperform	¥42.51B	17.05	―	2.02%	20.81%	68.06%
3771	77 Outperform	¥32.72B	13.42	―	3.06%	11.53%	23.23%
3921	74 Outperform	¥25.78B	15.14	―	2.55%	16.13%	62.27%
3712	72 Outperform	¥18.42B	15.34	―	1.85%	6.39%	6.38%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4259	61 Neutral	¥60.35B	―	―	―	8.98%	-581.59%
5254	58 Neutral	¥27.13B	41.11	―	―	40.99%	-36.76%

System Research Co., Ltd. Corporate Events

System Research Co., Ltd. Announces Corrections to Financial Results

System Research Co., Ltd. announced corrections to its previously released consolidated financial results for the six months ended September 30, 2025. The corrections involve adjustments to the cash flow statements, with revised figures showing an increase in net cash provided by operating activities and a higher net cash used in financing activities. These corrections could impact stakeholders’ understanding of the company’s financial position and cash management strategies.

System Research Co., Ltd. Reports Strong Financial Growth for H1 2025

System Research Co., Ltd. reported a significant increase in its financial performance for the six months ending September 30, 2025, with net sales rising by 12.3% and operating profit increasing by 24.3% compared to the previous year. This growth reflects the company’s strong market positioning and effective operational strategies, which have positively impacted its profitability and stakeholder confidence.

System Research Co., Ltd. Completes Share Distribution, Alters Major Shareholders

System Research Co., Ltd. has completed an off-floor distribution of 800,000 shares, resulting in a change in its major shareholders. This move, aimed at improving share distribution and liquidity, led to Toshiyuki Yamada no longer being the largest shareholder, with his voting rights dropping from 14.39% to 9.57%. The company states that this change will not impact its financial results.

System Research Co., Ltd. Announces Off-Floor Share Distribution

System Research Co., Ltd. announced an off-floor distribution of 800,000 shares to enhance the liquidity and distribution of its shares. This move is initiated by a major shareholder’s decision to sell shares, potentially altering the company’s major shareholder structure, which will be disclosed upon confirmation.

System Research Co., Ltd. Announces Off-Floor Share Distribution

System Research Co., Ltd. announced an off-floor distribution of 800,000 shares to enhance share liquidity, scheduled between September 25 and October 1, 2025. This move follows a major shareholder’s intention to sell shares, potentially impacting the company’s shareholder structure, with changes to major shareholders disclosed upon recognition.