Hirose Tusyo, Inc. (7185) AI Stock Analysis

• Market Cap: ¥24.63B
• Dividend Yield: 1.12%
• Average Volume (3M): 13.43K
• Price to Earnings (P/E): 11.2
• Beta (1Y): 0.50
• Revenue Growth: -11.70%
• EPS Growth: -38.42%
• Country: JP
• Employees: 87
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Capital Markets
• EPS (TTM): 78.96
• Shares Outstanding: 6,878,000
• 10 Day Avg. Volume: 10,230
• 30 Day Avg. Volume: 13,430
• PEG Ratio: -0.49
• Price to Book (P/B): 1.31
• Price to Sales (P/S): 2.53
• P/FCF Ratio: -14.06
• 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: ¥3,925.00 ▲(10.88% Upside)
• Action: Reiterated Date: 10/01/25
• Date: Action: Reiterated 10/01/25

The overall score is low, primarily driven by the company's severe negative cash flow, which overshadows its strong balance sheet and profitability, indicating a potential disconnect between reported profits and actual cash generation. This fundamental weakness is compounded by a strongly bearish technical outlook, with the stock in a clear downtrend. While the valuation appears reasonable based on its P/E ratio, these significant operational and market risks weigh heavily on the stock's profile.

Positive Factors

Strong Profit Margins

High profit margins indicate efficient cost management and pricing power, contributing to sustained profitability and competitive advantage.

Stable Balance Sheet

A stable balance sheet with low debt levels enhances financial flexibility and resilience, supporting long-term strategic initiatives.

Effective Equity Utilization

Strong return on equity reflects efficient use of shareholder funds, driving value creation and investor confidence over time.

Negative Factors

Declining Revenue Growth

Negative revenue growth suggests challenges in market expansion and product adoption, potentially impacting future earnings and market position.

Negative Operating Cash Flow

Negative operating cash flow can strain liquidity and limit reinvestment capabilities, posing risks to financial health and growth potential.

Revenue Decline Concerns

Ongoing revenue and cash flow declines may hinder the company's ability to sustain operations and invest in growth, affecting long-term viability.

Hirose Tusyo, Inc. Business Overview & Revenue Model

Company Description

Hirose Tusyo Inc. engages in the foreign exchange margin trading business in Japan. The company was founded in 2004 and is headquartered in Osaka, Japan.

How the Company Makes Money

Hirose Tusyo, Inc. makes money through a combination of trading fees, spreads, and commissions charged to its clients. The company earns revenue by facilitating trading activities on its platforms, where it charges a spread on Forex and other financial products. This spread is the difference between the buying and selling price of a currency pair or other traded instrument. Additionally, Hirose Tusyo may charge commissions on certain trades, depending on the account type and trading volume. The company also benefits from interest income on client deposits held in trading accounts. Key partnerships with liquidity providers and financial institutions enhance Hirose Tusyo's ability to offer competitive pricing and access to a wide range of markets, contributing to its revenue generation.

Hirose Tusyo, Inc. Financial Statement Overview

Summary

The company has a strong, low-debt balance sheet and high profitability margins. However, this is severely undermined by declining revenue and, most critically, a persistent and significant negative cash flow from operations, which represents a major risk.

Income Statement

The company demonstrates exceptional profitability with a Gross Profit Margin of 98.93% and a strong Net Profit Margin of 21.85% in its latest annual report. However, there are signs of a slowdown, as total revenue declined by 4.76% compared to the previous year, and key profitability metrics like Net Profit Margin and EBIT Margin have also compressed. While fundamentally profitable, the negative growth trajectory is a point of concern.

Balance Sheet

The balance sheet reflects a strong and conservative financial position. The company maintains a low Debt-to-Equity ratio of 0.37, which has improved from the prior year, indicating minimal reliance on debt financing. Stockholders' Equity has shown consistent growth over the years. The primary weakness is a decline in Return on Equity (ROE) to 11.28%, down from 16.71% in the prior year, reflecting the recent drop in net income.

Cash Flow

The company's cash flow statement raises significant concerns. For the second consecutive year, both Operating Cash Flow and Free Cash Flow were negative, standing at -1.83B and -1.83B respectively. This indicates that despite reporting a net profit, the company's core operations are consuming cash rather than generating it. The negative Operating Cash Flow to Net Income ratio highlights a stark disconnect between accrual-based profits and actual cash performance, representing a critical risk.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	9.94B	10.20B	10.71B	10.32B	8.72B	8.73B
Gross Profit	9.87B	10.15B	10.67B	10.23B	8.67B	8.67B
EBITDA	2.70B	3.12B	4.30B	3.64B	2.76B	2.91B
Net Income	1.93B	2.23B	2.93B	2.41B	1.84B	1.94B
Balance Sheet
Total Assets	120.45B	117.62B	119.07B	103.72B	95.46B	91.01B
Cash, Cash Equivalents and Short-Term Investments	15.81B	13.59B	11.96B	11.69B	12.86B	13.38B
Total Debt	7.82B	7.40B	7.60B	6.30B	6.20B	7.00B
Total Liabilities	100.36B	97.86B	101.56B	88.51B	81.43B	78.83B
Stockholders Equity	20.08B	19.77B	17.51B	15.22B	14.03B	12.18B
Cash Flow
Free Cash Flow	0.00	-1.83B	-350.35M	98.42M	90.81M	4.28B
Operating Cash Flow	0.00	2.24B	-306.00M	126.80M	147.15M	4.33B
Investing Cash Flow	0.00	-53.52M	-314.04M	-32.97M	441.86M	-302.33M
Financing Cash Flow	0.00	-476.85M	546.99M	-1.14B	-827.69M	-2.12B

Hirose Tusyo, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3540.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7185, the sentiment is Positive. The current price of 3540 is below the 20-day moving average (MA) of 3741.50, below the 50-day MA of 3706.00, and below the 200-day MA of 3884.18, indicating a neutral trend. The MACD of 7.04 indicates Positive momentum. The RSI at 52.86 is Neutral, neither overbought nor oversold. The STOCH value of 58.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7185.

Hirose Tusyo, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8707	81 Outperform	¥85.15B	6.63	―	5.75%	10.85%	30.77%
8609	80 Outperform	¥183.43B	6.74	―	4.01%	-2.39%	-4.54%
8613	71 Outperform	¥69.84B	12.60	9.22%	6.15%	7.45%	45.25%
8628	69 Neutral	¥248.06B	12.14	14.00%	5.13%	3.27%	-1.81%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
7185	49 Neutral	¥24.63B	11.21	―	1.12%	-11.70%	-38.42%
8698	43 Neutral	¥175.73B	13.27	7.26%	4.16%	14.69%	-114.36%