AsiaQuest Co.,Ltd. (4261) AI Stock Analysis

• Market Cap: ¥6.05B
• Dividend Yield: N/A
• Average Volume (3M): 6.50K
• Price to Earnings (P/E): 22.3
• Beta (1Y): 1.15
• Revenue Growth: 27.60%
• EPS Growth: -15.54%
• Country: JP
• Employees: 480
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 45.48
• Shares Outstanding: 1,477,600
• 10 Day Avg. Volume: 5,980
• 30 Day Avg. Volume: 6,500
• PEG Ratio: 0.24
• Price to Book (P/B): 2.02
• Price to Sales (P/S): 0.84
• P/FCF Ratio: 11.08
• 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: 70 Outperform
• Price Target: ¥4,505.00 ▲(5.88% Upside)

AsiaQuest Co.,Ltd. scores well due to its strong financial performance, characterized by robust revenue growth and profitability. However, technical indicators suggest the stock is overbought, and its high valuation limits its appeal. The absence of earnings call insights and corporate events does not impact the score.

Positive Factors

Revenue growth and margins

Sustained ~29% top-line growth with a healthy 48.1% gross margin and improving net margin (7.3%) indicates durable demand and efficient cost structure. Over 2–6 months this supports reinvestment capacity, competitive pricing flexibility, and stronger operating leverage.

Conservative leverage and strong equity base

Very low leverage and a 61% equity ratio provide long-term financial resilience, lowering bankruptcy risk and preserving borrowing capacity. This structural strength enables strategic investment or M&A without jeopardizing balance sheet integrity in downturns.

Robust cash generation

A >200% increase in free cash flow and an operating cash flow to net income ratio of 1.77 signal durable cash conversion. Strong FCF supports capex, product development, and shareholder returns while reducing reliance on external financing over the medium term.

Negative Factors

Earnings per share decline

Negative EPS growth despite strong revenue highlights margin pressure, one-off charges, or dilution that reduce shareholder earnings power. If persistent, declining EPS can constrain long-term returns, limit dividend capacity, and weaken investor confidence in profitability execution.

Potential underutilization of cash

A very high cash cushion relative to low debt may signal conservative capital deployment. Over time this can depress return on equity and miss growth or yield-enhancing opportunities unless management articulates a clear capital allocation strategy (buybacks, M&A, dividends).

Cash flow volatility and growth sustainability

Historic FCF swings and the note that maintaining high growth is challenging imply earnings and cash unpredictability. Structural volatility complicates multi-period planning, may raise financing costs, and increases execution risk as competitive pressures test margins and growth durability.

AsiaQuest Co.,Ltd. Business Overview & Revenue Model

Company Description

AsiaQuest Co., Ltd. provides digital transformation services in Japan and internationally. The company offers DX solutions and consulting; Internet of Things and artificial intelligence systems; and cloud deployment support, including amazon web service, Microsoft azure, google cloud, and SaaS/security implementation support services. It also provides web system development, app development, and UI/UX services. AsiaQuest Co., Ltd. was incorporated in 2012 and is headquartered in Tokyo, Japan.

How the Company Makes Money

AsiaQuest generates revenue through multiple streams, including the sale of software licenses, subscription fees for cloud services, and customized IT solutions for businesses. A significant portion of its income comes from long-term contracts with corporate clients in telecommunications and finance, where the company provides ongoing support and system maintenance. Additionally, AsiaQuest has established partnerships with leading technology firms, enabling it to offer integrated solutions that enhance its service portfolio. These collaborations not only expand its market reach but also contribute to its earnings by attracting new clients looking for comprehensive IT solutions.

AsiaQuest Co.,Ltd. Financial Statement Overview

Summary

AsiaQuest Co.,Ltd. demonstrates strong financial health with impressive revenue and profitability growth, a robust equity position, and efficient cash generation. However, the sustainability of high growth rates and the use of excess cash should be monitored.

Income Statement

The company exhibits strong revenue growth with a 29.4% increase from 2023 to 2024 and consistent improvement over the past years. Gross profit margin remains healthy at 48.1% for 2024, indicating efficient cost management. Net profit margin improved to 7.3%, reflecting enhanced profitability. EBIT and EBITDA margins are solid at 11.3% and 12.9%, respectively, showcasing good operational efficiency. However, maintaining these high growth rates could be challenging in a competitive industry.

Balance Sheet

The balance sheet is robust with a low debt-to-equity ratio of 0.10, indicating prudent leverage management. The equity ratio stands at 61.1%, reflecting a solid capital structure. Return on equity is impressive at 17.5%, showing strong profitability relative to shareholder equity. The company has consistently improved its equity position, enhancing financial stability. However, the high cash position compared to debt suggests potential underutilization of capital.

Cash Flow

The cash flow statement reveals strong free cash flow growth, up 232.3% from 2023 to 2024. Operating cash flow to net income ratio is excellent at 1.77, indicating efficient cash generation from operations. The free cash flow to net income ratio of 1.05 suggests good cash retention capabilities. Despite these strengths, past fluctuations in free cash flow highlight potential volatility in cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.62B	4.06B	3.14B	2.61B	2.24B	1.80B
Gross Profit	2.20B	1.95B	1.51B	1.27B	1.02B	772.87M
EBITDA	533.46M	527.62M	353.94M	405.66M	329.28M	125.99M
Net Income	290.54M	295.40M	198.00M	232.45M	195.83M	62.86M
Balance Sheet
Total Assets	2.78B	2.76B	2.26B	2.15B	1.97B	1.28B
Cash, Cash Equivalents and Short-Term Investments	1.38B	1.52B	1.52B	1.56B	1.49B	791.45M
Total Debt	147.91M	178.66M	324.00M	469.39M	599.49M	719.19M
Total Liabilities	949.87M	1.08B	865.00M	958.47M	1.06B	1.08B
Stockholders Equity	1.83B	1.69B	1.40B	1.19B	911.08M	196.08M
Cash Flow
Free Cash Flow	0.00	308.29M	93.00M	170.09M	277.30M	155.87M
Operating Cash Flow	0.00	521.18M	127.00M	197.70M	301.91M	189.57M
Investing Cash Flow	0.00	-373.76M	-34.31M	-27.84M	3.93M	-29.00M
Financing Cash Flow	0.00	-149.44M	-142.00M	-101.42M	385.92M	348.29M

AsiaQuest Co.,Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4255.00
• 50DMA: Negative
• 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:4261, the sentiment is Positive. The current price of 4255 is above the 20-day moving average (MA) of 4235.75, below the 50-day MA of 4415.30, and above the 200-day MA of 3102.35, indicating a neutral trend. The MACD of -78.60 indicates Positive momentum. The RSI at 41.25 is Neutral, neither overbought nor oversold. The STOCH value of 16.52 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4261.

AsiaQuest Co.,Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5868	73 Outperform	¥4.08B	9.96	―	0.94%	14.35%	105.59%
4261	70 Outperform	¥6.05B	22.33	―	―	27.60%	-15.54%
4736	66 Neutral	¥3.32B	9.18	―	1.54%	7.59%	16.93%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
7072	60 Neutral	¥3.28B	21.97	―	―	12.30%	173.09%
5597	52 Neutral	¥6.69B	-14.58	―	―	-0.02%	-12.19%
5618	46 Neutral	¥2.65B	-9.17	―	―	23.63%	64.65%