ADVAN GROUP CO. LTD. (7463) AI Stock Analysis

• Market Cap: ¥32.39B
• Dividend Yield: 4.33%
• Average Volume (3M): 34.95K
• Price to Earnings (P/E): 6.3
• Beta (1Y): 0.62
• Revenue Growth: -1.31%
• EPS Growth: 67.27%
• Country: JP
• Employees: 248
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Construction Materials
• EPS (TTM): 115.42
• Shares Outstanding: 45,312,690
• 10 Day Avg. Volume: 43,460
• 30 Day Avg. Volume: 34,950
• PEG Ratio: -0.13
• Price to Book (P/B): 0.57
• Price to Sales (P/S): 1.65
• P/FCF Ratio: -259.18
• 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: 75 Outperform
• Price Target: ¥1,159.00 ▲(26.67% Upside)
• Action: Upgraded Date: 01/12/26
• Date: Action: Upgraded 01/12/26

The score is driven by attractive valuation (low P/E and strong dividend yield) and constructive technical momentum. This is tempered by mixed financial quality—recent revenue decline, inconsistent operating profitability, and uneven cash-flow conversion/volatile free cash flow.

Positive Factors

High Net Profitability

Sustained high net margins (around 16%–51%, ~41% TTM) indicate strong pricing power or low incremental costs in core activities. Over months, this margin buffer supports resilience through cycles, funds shareholder returns, and provides capacity to invest in product/market initiatives without immediate revenue growth.

Manageable Leverage and Solid ROE

Moderate leverage (D/E ~0.27–0.45 historically, ~0.37 TTM) with a mid-teens ROE (~14% TTM) signals a balanced capital structure. This durability gives the firm flexibility to fund operations, maintain dividends, and pursue selective investments without excessive refinancing risk over the next several months.

Stable Gross Margins and Positive OCF

Consistently strong gross margins (~39%–46%) paired with positive operating cash flow across periods show core business economics are sound. This stability underpins cash generation for working capital and distributions, making short-to-medium term funding of operations and maintenance capex more predictable.

Negative Factors

Recent Revenue Decline

A multi-period revenue decline (TTM down ~4.3%) is a structural risk if it persists: shrinking top-line reduces operating leverage, limits reinvestment capacity, and can erode market position. Over 2–6 months this trend could pressure margins and return metrics if not reversed by new demand or product initiatives.

Weak Cash Conversion & Volatile FCF

Inconsistent conversion of earnings to cash and volatile free cash flow (FCF ~¥1.0B TTM, down ~18%) reduce financial flexibility. This makes funding dividends, capex, or growth initiatives less reliable and raises the risk that reported profits may not translate into sustainable cash available to stakeholders.

Inconsistent Operating Profitability / Earnings Quality

A negative operating margin in TTM alongside strong net income points to one-offs, non-operating gains, or accounting timing differences. This undermines confidence in recurring earnings and suggests reported profitability may not be fully sustainable across business cycles or comparable periods.

ADVAN GROUP CO. LTD. Business Overview & Revenue Model

Company Description

Advan Group Co., Ltd. manufactures, imports, and sells building materials in Japan. It provides building materials, such as tiles, kitchen products, floorings, around the water products, garage doors, stones and natural stones, washbasins, faucets, vinyl floor tiles, bricks, and wood-burning stoves. The company was founded in 1975 and is headquartered in Tokyo, Japan.

How the Company Makes Money

ADVAN GROUP CO. LTD. generates revenue through multiple streams, including the sale of advanced materials and components to manufacturers in the electronics and telecommunications industries. The company typically operates on a B2B model, supplying products that are critical for the production of consumer electronics, industrial equipment, and telecommunications infrastructure. Key revenue streams include direct sales of high-performance materials, long-term contracts with major electronics manufacturers, and potential licensing agreements for proprietary technologies. Additionally, strategic partnerships with leading companies in relevant sectors bolster its market position and contribute to sustained revenue growth.

ADVAN GROUP CO. LTD. Financial Statement Overview

Summary

Strong reported profitability and a reasonably leveraged balance sheet (moderate debt-to-equity; solid ROE), but revenue has recently turned negative and operating results/cash conversion are inconsistent. Volatile free cash flow and weaker conversion from earnings reduce confidence in profit sustainability.

Income Statement

Profitability is a clear strength: gross margins have stayed around ~39%–46% across the period, and net profit margins are unusually high (about 16%–51%), including ~41% in TTM (Trailing-Twelve-Months). However, the growth picture has softened—revenue is down in the most recent periods (TTM revenue down ~4.3% and slightly negative in the last two annual reports). Reported operating profitability is also inconsistent, with TTM showing a negative operating margin despite strong net income, suggesting earnings quality/recurringness may be uneven period to period.

Balance Sheet

Leverage looks manageable with debt-to-equity in a moderate range (~0.27–0.45 historically, ~0.37 in TTM (Trailing-Twelve-Months)), supported by a sizable equity base. Returns to shareholders are solid overall (roughly ~7%–21% ROE historically, ~14% in TTM), though they have cooled from the prior peak. The main weakness is the recent drift lower in ROE alongside declining revenue, which can pressure balance-sheet efficiency if the trend continues.

Cash Flow

Cash generation is mixed. Operating cash flow is positive in all periods shown, but conversion from earnings is inconsistent (operating cash flow is well below net income in recent years), and free cash flow has been volatile—negative in some years and only ~¥1.0B in TTM (Trailing-Twelve-Months), down ~18% versus the prior period. Strengths include a rebound from prior negative free cash flow and continued positive operating cash flow, but the weaker cash conversion and choppy free-cash-flow profile reduce confidence in the sustainability of reported profits.

Breakdown	TTM	Mar 2025	Mar 2023	Mar 2023	Mar 2021	Mar 2021
Income Statement
Total Revenue	17.39B	18.52B	20.30B	20.40B	17.57B	17.09B
Gross Profit	6.77B	7.35B	8.15B	8.57B	7.61B	7.91B
EBITDA	4.62B	9.61B	17.02B	5.88B	6.45B	4.86B
Net Income	5.46B	6.01B	10.30B	3.36B	3.82B	2.73B
Balance Sheet
Total Assets	82.29B	80.29B	78.70B	64.53B	57.59B	56.69B
Cash, Cash Equivalents and Short-Term Investments	7.60B	16.07B	18.02B	16.25B	13.00B	13.91B
Total Debt	19.40B	22.05B	21.83B	18.92B	11.58B	13.72B
Total Liabilities	24.16B	26.43B	29.11B	22.18B	14.93B	15.98B
Stockholders Equity	58.12B	53.86B	49.58B	42.36B	42.66B	40.71B
Cash Flow
Free Cash Flow	992.52M	-117.58M	2.24B	-97.74M	2.64B	4.44B
Operating Cash Flow	3.61B	1.89B	4.97B	3.75B	3.21B	5.46B
Investing Cash Flow	-3.63B	1.19B	-5.58B	-8.09B	-506.70M	-4.68B
Financing Cash Flow	-6.39B	-1.64B	-492.22M	3.76B	-3.94B	-1.86B

ADVAN GROUP CO. LTD. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 915.00
• 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:7463, the sentiment is Positive. The current price of 915 is below the 20-day moving average (MA) of 985.45, below the 50-day MA of 960.20, and above the 200-day MA of 880.20, indicating a bullish trend. The MACD of 19.11 indicates Negative momentum. The RSI at 59.55 is Neutral, neither overbought nor oversold. The STOCH value of 75.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7463.

ADVAN GROUP CO. LTD. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5290	82 Outperform	¥100.50B	8.24	―	2.30%	-0.22%	25.09%
7463	75 Outperform	¥32.39B	6.26	―	4.33%	-1.31%	67.27%
5363	75 Outperform	¥28.03B	8.40	―	3.52%	6.15%	17.51%
5357	73 Outperform	¥29.79B	15.65	―	5.04%	-2.29%	-41.92%
5356	68 Neutral	¥13.62B	10.15	―	3.42%	8.37%	8.13%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
5386	58 Neutral	¥2.99B	18.61	―	1.59%	-4.01%	-41.29%