DAIWA TSUSHIN Co.,Ltd (7116) AI Stock Analysis

• Market Cap: ¥3.17B
• Dividend Yield: 4.3%
• Average Volume (3M): 19.80K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.57
• Revenue Growth: 6.21%
• EPS Growth: -179.71%
• Country: JP
• Employees: 115
• Sector: Industrials
• Sector Strength: 72
• Industry: Security & Protection Services
• EPS (TTM): 28.58
• Shares Outstanding: 2,707,000
• 10 Day Avg. Volume: 6,210
• 30 Day Avg. Volume: 19,800
• PEG Ratio: 0.07
• Price to Book (P/B): 1.17
• Price to Sales (P/S): 0.51
• P/FCF Ratio: -3.56
• 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: 49 Neutral
• Price Target: ¥1,168.00 ▲(22.95% Upside)

The score is held back primarily by weak financial performance—loss-making operations and negative free cash flow despite strong revenue growth and increased leverage risk. Technicals are supportive due to strong momentum above key moving averages, but extreme overbought readings reduce confidence near-term. Valuation is mixed: the dividend helps, but the negative P/E reflects underlying losses.

Positive Factors

Revenue Growth

The company's significant revenue growth indicates a strong demand for its products and services, suggesting a robust market position and potential for future expansion.

Market Demand

The increasing demand for digital transformation and connectivity solutions provides a favorable market environment for DAIWA TSUSHIN, supporting long-term business growth.

Product and Service Diversification

Diversified revenue streams from equipment sales and IT services reduce risk and enhance the company's ability to adapt to market changes.

Negative Factors

Profitability Challenges

Weak profitability and declining margins indicate operational inefficiencies, which could hinder the company's ability to sustain growth and invest in future opportunities.

Cash Flow Issues

Negative free cash flow and low cash conversion highlight liquidity issues, potentially limiting the company's financial flexibility and ability to fund operations.

Increased Leverage Risk

Higher leverage increases financial risk, potentially impacting the company's ability to manage debt obligations and invest in growth initiatives.

DAIWA TSUSHIN Co.,Ltd Business Overview & Revenue Model

Company Description

DAIWA TSUSHIN Co., Ltd engages in security and mobile businesses. The company is involved in development, sales, installation, and maintenance of security and surveillance cameras; AI robots; and entry/exit control systems. It also sells mobile communication and peripheral devices; AI facial recognition temperature detection system; mechanical security systems; communication and OA equipment; and network design, construction, and LAN construction services. DAIWA TSUSHIN Co., Ltd was founded in 1996 and is headquartered in Kanazawa, Japan.

How the Company Makes Money

DAIWA TSUSHIN generates revenue through multiple streams, primarily by selling telecommunications and networking equipment to businesses and government organizations. The company also earns income from IT system integration services, which involve customizing and implementing technology solutions tailored to client needs. Additionally, DAIWA TSUSHIN may have partnerships with major technology providers that enhance its product offerings and expand its market reach. These partnerships can lead to collaborative projects and shared revenues, further contributing to the company's financial performance. Moreover, the growing demand for digital transformation and enhanced connectivity solutions in various sectors provides a robust market for DAIWA TSUSHIN's offerings.

DAIWA TSUSHIN Co.,Ltd Financial Statement Overview

Summary

The company shows significant revenue growth but is struggling with profitability and cash flow. The negative net profit margin and free cash flow highlight financial instability, while increased leverage adds risk.

Income Statement

The income statement shows a mixed performance. While the revenue has grown significantly by 60.4% in the latest year, the company is struggling with profitability, as indicated by a negative net profit margin of -3.11%. The gross profit margin has decreased from previous years, and EBIT and EBITDA margins are relatively low, suggesting operational challenges.

Balance Sheet

The balance sheet indicates moderate financial stability. The debt-to-equity ratio has increased to 0.72, reflecting higher leverage, which could pose risks. However, the company maintains a reasonable equity ratio, and the return on equity, although negative, shows potential for improvement if profitability issues are addressed.

Cash Flow

The cash flow statement reveals significant challenges, with a negative free cash flow and a concerning free cash flow growth rate of -Infinity. The operating cash flow to net income ratio is low, indicating difficulties in converting income into cash. These factors highlight liquidity issues that need urgent attention.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.24B	5.24B	5.16B	4.82B	4.79B	6.74B
Gross Profit	1.76B	1.80B	1.66B	1.61B	1.75B	3.37B
EBITDA	479.75M	517.00M	448.46M	445.77M	683.31M	2.19B
Net Income	-162.00M	-163.00M	257.37M	242.81M	394.48M	1.40B
Balance Sheet
Total Assets	5.32B	5.32B	3.99B	3.75B	3.34B	3.90B
Cash, Cash Equivalents and Short-Term Investments	777.00M	777.00M	805.19M	767.65M	399.68M	1.09B
Total Debt	1.63B	1.63B	751.85M	766.05M	952.80M	845.61M
Total Liabilities	3.05B	3.05B	1.30B	1.32B	1.16B	2.11B
Stockholders Equity	2.27B	2.27B	2.68B	2.43B	2.18B	1.79B
Cash Flow
Free Cash Flow	0.00	-748.00M	86.71M	534.56M	-754.39M	1.23B
Operating Cash Flow	0.00	149.00M	170.71M	810.56M	-498.88M	1.24B
Investing Cash Flow	0.00	-1.08B	-46.29M	-256.17M	-288.06M	14.42M
Financing Cash Flow	0.00	801.00M	-88.28M	-186.44M	102.01M	-891.54M

DAIWA TSUSHIN Co.,Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 950.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7116, the sentiment is Positive. The current price of 950 is below the 20-day moving average (MA) of 1048.85, above the 50-day MA of 911.92, and above the 200-day MA of 876.82, indicating a bullish trend. The MACD of 88.56 indicates Negative momentum. The RSI at 85.07 is Negative, neither overbought nor oversold. The STOCH value of 16.67 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7116.

DAIWA TSUSHIN Co.,Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9686	77 Outperform	¥18.05B	8.44	―	3.28%	34.15%	324.87%
7464	76 Outperform	¥3.24B	12.86	―	5.23%	-1.35%	-17.35%
4754	67 Neutral	¥7.90B	10.28	―	2.40%	3.00%	-13.82%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7058	62 Neutral	¥4.39B	20.11	―	3.03%	6.87%	-1.10%
4264	60 Neutral	¥8.53B	58.07	―	―	5.80%	-43.56%
7116	49 Neutral	¥3.17B	-26.64	―	4.30%	6.21%	-179.71%