Sanso Electric Co., Ltd. (6518) AI Stock Analysis

• Market Cap: ¥5.95B
• Dividend Yield: 2.5%
• Average Volume (3M): 1.97K
• Price to Earnings (P/E): 6.1
• Beta (1Y): 0.42
• Revenue Growth: 9.07%
• EPS Growth: N/A
• Country: JP
• Employees: 597
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 41.53
• Shares Outstanding: 4,678,500
• 10 Day Avg. Volume: 1,790
• 30 Day Avg. Volume: 1,973
• PEG Ratio: -0.40
• Price to Book (P/B): 0.30
• Price to Sales (P/S): 0.22
• P/FCF Ratio: -2.12
• 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: ¥1,429.00 ▲(40.79% Upside)
• Action: Upgraded Date: 03/05/26
• Date: Action: Upgraded 03/05/26

The score is driven primarily by solid financial stability but pressured by declining profitability and negative free cash flow. Technicals are supportive with strong trend and momentum, though overbought RSI limits upside near-term. Valuation is a meaningful positive due to the low P/E and a modest dividend yield.

Positive Factors

Strong balance-sheet solvency

Very low leverage (debt-to-equity 0.16) and a high equity ratio provide durable financial flexibility. This solvency reduces refinancing risk, supports working-capital and capex needs through industry cycles, and preserves optionality to invest or withstand demand volatility over months.

Durable industrial end-markets

Core products and engineering/support services serve repeated, industrial and commercial fluid-handling needs. These are structural, mission‑critical applications with aftermarket and service stickiness, helping stabilize revenues and customer relationships over multi-quarter horizons.

Low market volatility (beta)

A beta near 0.42 signals lower sensitivity to market swings versus peers. In a cyclical machinery sector this reduces earnings and financing volatility, aiding longer-term operational planning and capital allocation decisions, and helping preserve value during downturns.

Negative Factors

Margin compression

Significant margin erosion across gross, EBIT and net measures materially reduces internal funds for reinvestment and weakens pricing power. Sustained compression indicates structural cost or pricing pressure that will impair profitability and competitiveness unless operational fixes are realized.

Negative free cash flow

A shift to -$1.70B FCF and weaker operating-cash-to-income conversion implies the business is not converting accounting profits into spendable cash. Persistent negative FCF constrains capex, dividends and debt service, and may force external financing or asset adjustments.

Weak capital efficiency (ROE decline)

A sharp fall in ROE to ~1% signals poor returns on shareholder capital, reducing the appeal of reinvestment and limiting internal funding for growth. If ROE remains depressed, the firm may struggle to generate attractive shareholder returns or finance improvements organically.

Sanso Electric Co., Ltd. Business Overview & Revenue Model

Company Description

Sanso Electric Co.,Ltd. engages in the manufacturing and selling of motors, pumps, and system solution products in Japan. Its products include magnetic drive, self-priming magnetic drive, self-priming centrifugal, cast-iron line, automatic shallow-well, and centrifugal pumps, as well as desalion and sansolver systems. The company was incorporated in 1957 and is based in Himeji, Japan.

How the Company Makes Money

Sanso Electric Co., Ltd. generates revenue through the sale of its core products, including power supplies and control systems, which are essential for industrial automation and energy management. The company benefits from multiple revenue streams, including direct sales to manufacturers, partnerships with OEMs (Original Equipment Manufacturers), and long-term contracts with large industrial clients. Additionally, Sanso Electric invests in research and development to create innovative products that meet evolving customer needs, thereby enhancing market competitiveness. Strategic collaborations with other companies in the tech and renewable energy sectors further bolster its revenue, allowing for shared resources and expanded market reach.

Sanso Electric Co., Ltd. Financial Statement Overview

Summary

Strong balance-sheet stability (low debt-to-equity of 0.16 and high equity ratio of 64.26%) is offset by weakening operating performance: revenue fell 9.26% (2024→2025), margins compressed (gross margin down to 16.15%), and profitability declined sharply (net margin 0.74%, EBIT margin 0.43%). Cash generation is a key concern with free cash flow turning negative (-$1.70B).

Income Statement

The company shows fluctuating revenue with recent declines, as seen in a 9.26% decrease in revenue from 2024 to 2025. Gross profit margin has decreased to 16.15% in 2025 from 18.34% in 2024. Net profit margin has also dropped to 0.74% in 2025 from 2.79% in 2024. The EBIT margin slightly decreased to 0.43% in 2025 from 3.84% in 2024, while EBITDA margin saw a decline to 7.24% in 2025 from 9.23% in 2024, indicating weakened profitability over the period.

Balance Sheet

The company's debt-to-equity ratio improved to 0.16 in 2025 from 0.21 in 2024, reflecting a strong equity position. Return on equity decreased to 0.99% in 2025 from 4.21% in 2024, but the equity ratio remains robust at 64.26% in 2025, slightly up from 59.98% in 2024, indicating strong solvency and financial stability.

Cash Flow

There is a significant decline in free cash flow from 2024 to 2025, turning negative at -$1.70 billion. The operating cash flow to net income ratio dropped to 2.55 in 2025 from 4.14 in 2024, and the free cash flow to net income ratio turned negative, indicating potential liquidity issues and the need for improved cash flow management.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	16.39B	16.03B	17.67B	18.62B	17.10B	12.93B
Gross Profit	2.82B	2.59B	3.24B	3.49B	3.18B	2.65B
EBITDA	1.43B	1.16B	1.63B	1.88B	1.85B	1.36B
Net Income	332.87M	118.44M	493.07M	815.65M	884.32M	402.35M
Balance Sheet
Total Assets	18.71B	18.51B	19.53B	20.43B	17.68B	15.75B
Cash, Cash Equivalents and Short-Term Investments	2.85B	2.71B	4.96B	4.25B	2.53B	2.92B
Total Debt	1.69B	1.86B	2.49B	3.23B	1.55B	1.70B
Total Liabilities	6.80B	6.61B	7.82B	9.31B	7.31B	6.39B
Stockholders Equity	11.90B	11.90B	11.72B	11.12B	10.37B	9.36B
Cash Flow
Free Cash Flow	0.00	-1.70B	1.37B	562.23M	-23.27M	739.16M
Operating Cash Flow	0.00	302.10M	2.04B	1.16B	570.26M	1.24B
Investing Cash Flow	0.00	-1.87B	-339.08M	-715.85M	-619.11M	-244.33M
Financing Cash Flow	0.00	-939.59M	-1.06B	1.26B	-409.67M	-573.26M

Sanso Electric Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1015.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6518, the sentiment is Positive. The current price of 1015 is below the 20-day moving average (MA) of 1207.70, below the 50-day MA of 1097.58, and above the 200-day MA of 970.15, indicating a bullish trend. The MACD of 56.80 indicates Negative momentum. The RSI at 78.27 is Negative, neither overbought nor oversold. The STOCH value of 60.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6518.

Sanso Electric Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6360	79 Outperform	¥5.49B	8.84	―	6.61%	-30.65%	-46.85%
6396	79 Outperform	¥4.95B	-66.26	―	1.19%	-6.39%	-3.86%
6518	70 Outperform	¥5.95B	6.11	―	2.50%	9.07%	―
6334	68 Neutral	¥4.50B	-15.45	―	1.22%	12.31%	138.05%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6408	61 Neutral	¥5.91B	3.03	―	1.37%	-3.05%	―
6467	56 Neutral	¥3.22B	-8.29	―	1.81%	-3.20%	-226.19%