Hatsuho Shouji Co., Ltd. (7425) AI Stock Analysis

• Market Cap: ¥7.20B
• Dividend Yield: 2.89%
• Average Volume (3M): 1.65K
• Price to Earnings (P/E): 7.8
• Beta (1Y): 0.53
• Revenue Growth: 1.59%
• EPS Growth: -5.99%
• Country: JP
• Employees: 471
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): 66.06
• Shares Outstanding: 3,480,660
• 10 Day Avg. Volume: 1,080
• 30 Day Avg. Volume: 1,653
• PEG Ratio: -5.83
• Price to Book (P/B): 0.26
• Price to Sales (P/S): 0.07
• P/FCF Ratio: 10.63
• 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: 73 Outperform
• Price Target: ¥2,261.00 ▲(12.32% Upside)

Hatsuho Shouji Co., Ltd. shows a stable financial position with strong balance sheet metrics and low leverage, contributing positively to its score. The valuation is attractive with a low P/E ratio and a reasonable dividend yield. However, technical indicators suggest a neutral to slightly bearish short-term trend, which tempers the overall score.

Positive Factors

Strong Balance Sheet

A strong balance sheet with low leverage enhances financial stability, providing resilience against economic fluctuations and enabling strategic investments.

Cash Generation

Robust cash generation capabilities indicate efficient operations and the ability to fund growth initiatives without relying heavily on external financing.

Operational Efficiency

Improved return on equity signifies effective management and operational efficiency, enhancing shareholder value and supporting sustainable growth.

Negative Factors

Profitability Margins

Declining net profit margins indicate challenges in converting revenue into profit, potentially affecting long-term profitability and competitive positioning.

Cash Flow Conversion

Low cash flow conversion ratios suggest inefficiencies in translating profits into cash, which could limit the company's ability to reinvest in growth.

Revenue Growth

Modest revenue growth may indicate limited market expansion or competitive pressures, potentially impacting the company's ability to scale operations.

Hatsuho Shouji Co., Ltd. Business Overview & Revenue Model

Company Description

Hatsuho Shouji Co., Ltd. (7425) is a Japanese trading company that primarily operates in the textile and apparel sector. The company engages in the import and export of various textile products, including fabrics, garments, and related materials. Hatsuho Shouji also provides services related to product development and supply chain management, catering to both domestic and international markets.

How the Company Makes Money

Hatsuho Shouji generates revenue through multiple streams, primarily by acting as an intermediary in the textile trade. The company earns money by importing textiles from international suppliers and selling them to domestic manufacturers and retailers, often marking up the price for profit. Additionally, Hatsuho Shouji offers consultancy and product development services, which create supplementary income. The company may also establish partnerships with manufacturers to secure exclusive distribution rights, enhancing its revenue potential. Furthermore, by maintaining a robust supply chain and logistics network, Hatsuho Shouji optimizes operational efficiency, contributing positively to its overall earnings.

Hatsuho Shouji Co., Ltd. Financial Statement Overview

Summary

Hatsuho Shouji Co., Ltd. exhibits stable financial health with consistent revenue growth and a strong balance sheet. The low leverage and improving return on equity highlight operational efficiency and financial prudence. However, profitability margins and cash flow metrics suggest areas for enhancement in profit conversion and cash management.

Income Statement

Hatsuho Shouji Co., Ltd. demonstrated a steady revenue growth rate of 1.18% over the last year, which is modest yet stable. The gross profit margin stands at 17.81%, indicating reasonable cost management. However, the net profit margin slightly declined to 2.80%, reflecting challenges in converting revenue into profit. The EBIT margin is 3.70%, and the EBITDA margin is 4.17%, showing some room for improvement in operational efficiency.

Balance Sheet

The company maintains a strong equity base with an equity ratio of 43.26%, signaling a solid financial foundation. The debt-to-equity ratio is low at 0.13, which suggests conservative leverage practices. Return on equity improved to 10.30%, reflecting effective utilization of equity to generate profits. Overall, the balance sheet is stable with healthy liquidity and low leverage risk.

Cash Flow

Free cash flow growth was robust at 443.18% from the previous year, indicating improved cash generation capabilities. However, the operating cash flow to net income ratio is 0.64, suggesting that not all profits are translating into cash flow. The free cash flow to net income ratio stands at 0.25, which indicates potential for further improvement in cash conversion efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	35.18B	34.83B	34.42B	31.79B	29.91B	29.06B
Gross Profit	6.21B	6.20B	6.21B	5.83B	4.99B	4.73B
EBITDA	1.68B	1.45B	1.73B	1.58B	1.10B	692.55M
Net Income	906.39M	974.14M	975.00M	854.61M	501.36M	216.39M
Balance Sheet
Total Assets	20.94B	21.87B	22.73B	21.11B	18.97B	18.07B
Cash, Cash Equivalents and Short-Term Investments	7.01B	6.16B	6.50B	5.95B	5.42B	4.63B
Total Debt	1.06B	1.27B	1.71B	999.24M	1.39B	1.89B
Total Liabilities	10.13B	11.28B	13.04B	12.34B	11.01B	10.60B
Stockholders Equity	9.65B	9.46B	8.64B	7.78B	7.04B	6.62B
Cash Flow
Free Cash Flow	0.00	231.67M	44.00M	1.02B	1.18B	-310.65M
Operating Cash Flow	0.00	628.24M	692.00M	1.30B	1.22B	-131.72M
Investing Cash Flow	0.00	-313.20M	-679.00M	-220.90M	201.02M	82.66M
Financing Cash Flow	0.00	-657.51M	543.00M	-549.08M	-627.78M	-485.54M

Hatsuho Shouji Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2013.00
• 50DMA: Positive
• 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:7425, the sentiment is Positive. The current price of 2013 is below the 20-day moving average (MA) of 2074.18, above the 50-day MA of 2010.66, and above the 200-day MA of 1901.60, indicating a bullish trend. The MACD of 35.62 indicates Negative momentum. The RSI at 62.12 is Neutral, neither overbought nor oversold. The STOCH value of 51.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7425.

Hatsuho Shouji Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5660	74 Outperform	¥8.33B	8.77	―	3.97%	0.34%	-1.55%
7425	73 Outperform	¥7.20B	7.79	―	2.89%	1.59%	-5.99%
5491	70 Outperform	¥6.35B	4.98	―	―	-5.93%	-36.01%
5446	64 Neutral	¥4.80B	12.45	―	3.17%	-20.10%	-14.13%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
7531	57 Neutral	¥6.14B	-182.01	―	0.69%	-8.94%	-143.33%
5476	56 Neutral	¥8.19B	-1.16	―	―	3.22%	-451.22%