SHINKO Inc. (7120) AI Stock Analysis

• Market Cap: ¥5.11B
• Dividend Yield: 3.51%
• Average Volume (3M): 16.72K
• Price to Earnings (P/E): 7.1
• Beta (1Y): 0.49
• Revenue Growth: 6.56%
• EPS Growth: 46.55%
• Country: JP
• Employees: 811
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 43.70
• Shares Outstanding: 5,502,000
• 10 Day Avg. Volume: 22,480
• 30 Day Avg. Volume: 16,716
• PEG Ratio: -0.12
• Price to Book (P/B): 2.05
• Price to Sales (P/S): 0.21
• P/FCF Ratio: 4.42
• 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: 84 Outperform
• Price Target: ¥1,144.00 ▲(39.51% Upside)
• Action: Reiterated Date: 11/26/25
• Date: Action: Reiterated 11/26/25

SHINKO Inc. scores highly due to its strong financial performance, positive technical indicators, and attractive valuation. The company's consistent revenue growth and profitability, combined with bullish market momentum and a compelling valuation, make it a strong candidate for investment. The lack of earnings call data and corporate events does not detract from the overall positive outlook.

Positive Factors

Cash generation

Strong operating cash conversion (OCF/Net Income 1.80) and positive free cash flow create durable internal funding for capex, R&D, dividends and debt reduction. This reduces reliance on external financing and supports steady strategic investment and execution over the medium term.

Improving margins

Gradual improvement in gross and net margins signals effective cost management and operational leverage in the business model. Sustained margin gains enhance cash flow ability and provide room to reinvest in product development or sales capacity for continued competitiveness.

Conservative capital structure

Very low financial leverage and a solid equity base lower solvency risk and provide capacity for opportunistic investments or acquisitions. High ROE indicates efficient capital use, supporting durable shareholder returns and strategic flexibility across market cycles.

Negative Factors

Decline in stockholders' equity

A year-over-year fall in shareholders' equity can erode the capital buffer that underpins conservative financing and future investments. If the trend continues it could constrain strategic moves, reduce borrowing headroom, and signal returns outpacing retained growth capacity.

Volatile free cash flow growth

Although FCF is positive, a recent decline introduces uncertainty in the predictability of internally generated funds. Persistent variability could impede consistent dividend policy, hamper planned capex or hiring, and force reliance on external funding for growth initiatives.

Modest revenue and thin net margin

Moderate top-line growth and a low single-digit net margin limit the firm's ability to scale profits quickly and absorb pricing or cost shocks. In a competitive IT services market, these structural constraints may pressure reinvestment capacity and long-term market share expansion.

SHINKO Inc. Business Overview & Revenue Model

Company Description

SHINKO Inc. (7120) is a Japanese company primarily engaged in the manufacturing and sales of semiconductor packaging materials and electronic components. The company operates within the semiconductor industry, focusing on advanced packaging solutions that are essential for modern electronic devices. Its core products include semiconductor packages, substrates, and related materials that cater to various applications, including automotive, consumer electronics, and industrial equipment.

How the Company Makes Money

SHINKO Inc. generates revenue primarily through the sale of its semiconductor packaging materials and electronic components. The company's revenue model is based on direct sales to manufacturers in the semiconductor and electronics sectors. Key revenue streams include contracts with major semiconductor firms for custom packaging solutions and high-volume production of standard products. Additionally, SHINKO has established partnerships with technology companies to develop innovative packaging solutions, which further enhances its market position. The company's focus on research and development allows it to stay competitive, adapt to market trends, and increase its profitability through value-added services and products.

SHINKO Inc. Financial Statement Overview

Summary

SHINKO Inc. demonstrates strong financial performance with consistent revenue growth and improving profitability. The company has a solid equity base and effective debt management, though there is some concern over the decrease in Stockholders' Equity and variability in free cash flow growth.

Income Statement

SHINKO Inc. demonstrates strong performance with consistent revenue growth and improving profitability. The Gross Profit Margin has improved from 23.1% in 2021 to 23.8% in 2025, indicating efficient cost management. The Net Profit Margin has also increased, reaching 3.0% in 2025, reflecting enhanced operational efficiency and cost control. The Revenue Growth Rate is healthy, with a 4.7% increase from 2024 to 2025, showcasing a positive trend in sales. EBIT and EBITDA Margins improved slightly over the years, reinforcing the company's profitability trajectory.

Balance Sheet

The balance sheet reveals a solid equity base with an Equity Ratio of 27.5% in 2025, indicating a stable capital structure. The company has effectively managed its debt, with a low Debt-to-Equity Ratio of 0.05. Return on Equity has improved to 29.3% in 2025, highlighting strong returns for shareholders. However, the decrease in Stockholders' Equity from 2024 to 2025 may be a point of concern if it continues.

Cash Flow

SHINKO Inc. exhibits a robust Operating Cash Flow to Net Income Ratio of 1.80 in 2025, indicating strong cash-generating capabilities. Free Cash Flow is positive and growing, although it decreased from 2024 to 2025. The Free Cash Flow to Net Income Ratio remains strong at 1.58, suggesting effective cash conversion. However, fluctuations in free cash flow growth may pose potential risks if not addressed.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	16.72B	16.90B	16.15B	15.95B	13.89B	12.68B
Gross Profit	3.99B	4.02B	3.72B	3.63B	3.32B	3.08B
EBITDA	693.33M	787.99M	706.17M	830.57M	679.53M	467.25M
Net Income	419.43M	512.87M	410.62M	481.56M	423.52M	236.98M
Balance Sheet
Total Assets	5.65B	6.37B	6.52B	6.47B	5.52B	5.52B
Cash, Cash Equivalents and Short-Term Investments	1.48B	1.53B	1.51B	929.59M	920.99M	937.74M
Total Debt	209.59M	85.96M	61.67M	349.25M	43.54M	437.20M
Total Liabilities	4.13B	4.62B	4.60B	4.84B	4.53B	4.41B
Stockholders Equity	1.52B	1.75B	1.91B	1.63B	990.35M	1.11B
Cash Flow
Free Cash Flow	0.00	811.29M	1.07B	-431.30M	942.66M	-420.60M
Operating Cash Flow	0.00	921.75M	1.13B	-401.53M	978.09M	-290.15M
Investing Cash Flow	0.00	-186.75M	-114.05M	-29.78M	-35.43M	-173.14M
Financing Cash Flow	0.00	-709.96M	-441.10M	439.90M	-959.40M	227.51M

SHINKO Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 820.00
• 50DMA: Negative
• 100DMA: Positive
• 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:7120, the sentiment is Positive. The current price of 820 is below the 20-day moving average (MA) of 927.80, below the 50-day MA of 937.56, and below the 200-day MA of 836.38, indicating a neutral trend. The MACD of -2.77 indicates Negative momentum. The RSI at 50.00 is Neutral, neither overbought nor oversold. The STOCH value of 40.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7120.

SHINKO Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7120	84 Outperform	¥5.11B	7.07	―	3.51%	6.56%	46.55%
3682	72 Outperform	¥4.57B	18.99	―	2.99%	1.14%	23.89%
4068	66 Neutral	¥3.38B	28.67	―	―	9.33%	133.75%
4736	66 Neutral	¥3.34B	9.33	―	1.54%	7.59%	16.93%
4450	65 Neutral	¥6.68B	16.86	―	1.13%	22.22%	28.14%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4416	57 Neutral	¥2.51B	51.60	―	―	5.05%	-50.80%

SHINKO Inc. Corporate Events

SHINKO Posts Strong Profit Rebound and Maintains Bullish Full-Year Outlook

SHINKO Inc. reported non-consolidated net sales of ¥12.61 billion for the nine months to December 31, 2025, up 5.9% year on year, with operating profit jumping 43.0% to ¥461 million and profit rising 50.8% to ¥307 million, driving basic earnings per share to ¥65.32 after a three-for-one stock split. Total assets grew to ¥7.15 billion and equity reached ¥1.91 billion, though the equity ratio slipped slightly to 26.7%, while management kept full-year guidance unchanged, targeting ¥18.32 billion in sales, a 17.0% increase in operating profit, and basic EPS of ¥114.02, alongside a forecast year-end dividend of ¥35 per share post-split, underscoring confidence in continued earnings growth despite a relatively low capital base.

The company maintained a zero interim dividend for the year ending March 31, 2026, but plans a year-end payout equivalent to ¥105.00 per share on a pre-split basis, signaling a commitment to shareholder returns even as it balances growth and capital adequacy. With no changes to accounting policies, a stable share count aside from the stock split, and an improving earnings trajectory after last year’s profit declines, SHINKO’s results suggest an operational recovery that could enhance its standing among small-cap Japanese equities and offer a more attractive income and growth profile to existing shareholders.

The most recent analyst rating on (JP:7120) stock is a Buy with a Yen1083.00 price target. To see the full list of analyst forecasts on SHINKO Inc. stock, see the JP:7120 Stock Forecast page.