Environment Friendly Holdings Corp. (3777) AI Stock Analysis

• Market Cap: ¥17.66B
• Dividend Yield: N/A
• Average Volume (3M): 2.29M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.99
• Revenue Growth: -62.84%
• EPS Growth: -27.61%
• Country: JP
• Employees: 33
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): -0.33
• Shares Outstanding: 304,456,970
• 10 Day Avg. Volume: 1,889,820
• 30 Day Avg. Volume: 2,293,736
• PEG Ratio: 0.30
• Price to Book (P/B): 2.85
• Price to Sales (P/S): 0.53
• P/FCF Ratio: -75.41
• 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: 54 Neutral
• Price Target: ¥59.00 ▲(18.00% Upside)

The score is primarily held back by weak profitability and worsening free cash flow, despite a very strong, low-leverage balance sheet. Technical signals are broadly neutral with some medium-term support, but valuation is pressured by negative earnings (negative P/E) and no indicated dividend yield.

Positive Factors

Very low leverage / strong equity ratio

Extremely low leverage and a high equity ratio provide durable financial flexibility, reducing bankruptcy risk and enabling the company to fund R&D or absorb losses without urgent refinancing. This balance sheet strength supports multi‑quarter resilience and strategic optionality.

Lean workforce supporting scalability

A very small employee base implies a lean cost structure and potential for scalable software development and distribution. Over months this supports margin recovery if revenue rises, and allows management to reallocate capital toward product investment rather than large fixed payroll commitments.

Top-line stability with modest growth

Consistent revenue around the current level shows structural demand for the company’s offerings. Even modest, positive top‑line growth provides a base to leverage fixed costs, making durable margin improvement achievable if management addresses operational inefficiencies.

Negative Factors

Negative and thin profitability margins

Persistently low gross margins and negative operating margins signal structural cost and pricing pressure. Over several months this constrains the company’s ability to convert revenue into sustainable profits, limiting reinvestment capacity and pressuring long‑term competitiveness.

Worsening free cash flow

A sharply declining free cash flow profile indicates the business is consuming more cash over time, raising the risk of funding needs. This deterioration is durable unless operations improve, potentially forcing external financing or slower strategic execution over the next several quarters.

Negative return on equity

A negative ROE despite a strong equity base shows the company is not generating adequate returns on shareholder capital. Over a multi‑month horizon this undermines shareholder value creation and may necessitate strategic changes or capital restructuring to restore profitable growth.

Environment Friendly Holdings Corp. Business Overview & Revenue Model

Company Description

Environment Friendly Holdings Corp. engages in the renewable energy business. It operates in the IT-related businesses. The company was formerly known as FHT holdings Corp. and changed its name to Environment Friendly Holdings Corp. in April 2024. Environment Friendly Holdings Corp. was incorporated in 1995 and is based in Tokyo, Japan.

How the Company Makes Money

Environment Friendly Holdings Corp. generates revenue through multiple streams, primarily from the sale of renewable energy products and services, including solar panels and energy storage solutions. Additionally, the company earns money through its waste management services, which involve recycling and processing waste materials for various industries. Significant partnerships with governmental and non-governmental organizations enhance its revenue potential by securing contracts for large-scale environmental projects. Furthermore, the company may also benefit from grants and incentives related to green energy initiatives, contributing to its overall earnings.

Environment Friendly Holdings Corp. Financial Statement Overview

Summary

Modest revenue growth (+1.41%) but weak profitability and efficiency: low gross margin (3.06%), negative net margin (-0.89%), and negative EBIT/EBITDA margins. Balance sheet strength (very low debt-to-equity 0.01; equity ratio 91.18%) helps cushion risk, but declining free cash flow (from -$72M to -$121M) keeps the score subdued.

Income Statement

The company experienced a slight increase in revenue from $16.999 billion to $17.237 billion, translating to a modest revenue growth rate of 1.41%. However, profitability metrics such as gross profit margin (3.06%) and net profit margin (-0.89%) are below industry standards, indicating challenges in maintaining efficient operations and cost management. Negative EBIT margin (-0.31%) and EBITDA margin (-0.10%) highlight ongoing operational inefficiencies.

Balance Sheet

The balance sheet reflects a strong equity position with a low debt-to-equity ratio of 0.01 and an equity ratio of 91.18%. The company's return on equity is negative at -4.81%, driven by net losses. Overall, the company's balance sheet is stable with strong asset coverage, but profitability remains a concern.

Cash Flow

The company's free cash flow decreased significantly from -$72 million to -$121 million, indicating deteriorating cash-generating ability from operations. The operating cash flow to net income ratio is negative, reflecting challenges in converting income into cash. The company needs to improve operational cash flows to enhance financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.30B	17.24B	17.00B	754.09M	263.72M	354.31M
Gross Profit	448.99M	526.86M	1.05B	184.91M	62.36M	72.48M
EBITDA	36.82M	-114.42M	195.00M	-149.91M	261.52M	-3.24B
Net Income	-102.00M	-154.89M	153.00M	-171.31M	260.93M	-1.76B
Balance Sheet
Total Assets	3.67B	3.51B	3.38B	1.83B	1.64B	610.67M
Cash, Cash Equivalents and Short-Term Investments	514.95M	1.04B	1.13B	934.58M	897.34M	120.81M
Total Debt	9.84M	32.79M	18.70M	24.60M	33.28M	0.00
Total Liabilities	212.07M	309.45M	251.00M	159.61M	120.88M	501.53M
Stockholders Equity	3.46B	3.20B	3.12B	1.67B	1.52B	109.14M
Cash Flow
Free Cash Flow	0.00	-121.00M	-72.00M	-277.22M	-566.34M	-144.99M
Operating Cash Flow	0.00	-93.00M	-66.42M	-275.82M	-566.34M	-144.99M
Investing Cash Flow	0.00	-31.00M	65.90M	-2.45M	186.55M	600.00K
Financing Cash Flow	0.00	23.19M	196.47M	315.51M	1.16B	9.63M

Environment Friendly Holdings Corp. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 50.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3777, the sentiment is Neutral. The current price of 50 is below the 20-day moving average (MA) of 60.40, below the 50-day MA of 51.28, and below the 200-day MA of 50.94, indicating a neutral trend. The MACD of 2.14 indicates Positive momentum. The RSI at 45.73 is Neutral, neither overbought nor oversold. The STOCH value of 8.89 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:3777.

Environment Friendly Holdings Corp. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4389	80 Outperform	¥10.82B	17.73	―	1.48%	17.83%	34.25%
4495	78 Outperform	¥13.51B	20.49	―	1.16%	23.67%	24.95%
4412	75 Outperform	¥19.02B	116.95	―	―	39.66%	―
9553	69 Neutral	¥21.71B	107.28	―	―	14.28%	-30.60%
4168	64 Neutral	¥10.63B	12.95	―	0.70%	9.78%	-23.98%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3777	54 Neutral	¥17.66B	-81.01	―	―	-62.84%	-27.61%