Kohnan Shoji Co., Ltd. (7516) AI Stock Analysis

• Market Cap: ¥126.79B
• Dividend Yield: 2.85%
• Average Volume (3M): 50.49K
• Price to Earnings (P/E): 8.4
• Beta (1Y): 0.44
• Revenue Growth: 3.83%
• EPS Growth: 7.24%
• Country: JP
• Employees: 4,806
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Home Improvement
• EPS (TTM): 77.81
• Shares Outstanding: 34,682,114
• 10 Day Avg. Volume: 48,950
• 30 Day Avg. Volume: 50,490
• PEG Ratio: 1.86
• Price to Book (P/B): 0.63
• Price to Sales (P/S): 0.21
• P/FCF Ratio: 46.64
• 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: 67 Neutral
• Price Target: ¥4,047.00 ▲(4.17% Upside)

The stock is supported by a strong valuation due to its low P/E ratio and attractive dividend yield. Financial performance is solid, though attention is needed for cash flow management and leverage. Technical analysis suggests a cautious outlook, with no clear momentum.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective sales strategies, contributing to long-term business sustainability.

Profitability

High gross profit margins suggest efficient cost management and pricing power, which can support sustained profitability over time.

Operational Cash Flow

Strong operational cash flow relative to net income highlights effective cash generation from core activities, supporting financial health.

Negative Factors

Free Cash Flow Decline

A significant decline in free cash flow can limit the company's ability to invest in growth opportunities and manage financial obligations.

Leverage

Moderate leverage could pose risks if earnings do not grow at a similar pace, potentially impacting financial flexibility and stability.

EBIT Margin Decline

A decline in EBIT margin indicates potential pressure on operational efficiency, which could affect profitability if not addressed.

Kohnan Shoji Co., Ltd. Business Overview & Revenue Model

Company Description

Kohnan Shoji Co., Ltd. (7516) is a prominent Japanese retail company specializing in home improvement and gardening supplies. Established in 1970, the company operates a chain of retail stores offering a wide range of products including building materials, home enhancement goods, gardening equipment, and household items. With a focus on the DIY (do-it-yourself) market, Kohnan Shoji serves both individual consumers and contractors, providing a comprehensive selection of goods that cater to various home improvement needs.

How the Company Makes Money

Kohnan Shoji generates revenue primarily through the sale of home improvement and gardening products in its retail stores. The company's revenue model is based on direct retail sales, which include a diverse range of items from tools and construction materials to gardening supplies and home decor. Key revenue streams also include sales from seasonal products and promotional items that align with customer needs throughout the year. Additionally, Kohnan Shoji may benefit from partnerships with suppliers and manufacturers, allowing for exclusive product offerings and potentially better pricing strategies. The company’s extensive store network and focus on customer service enhance its ability to attract and retain customers, further contributing to its earnings.

Kohnan Shoji Co., Ltd. Financial Statement Overview

Summary

The company shows strong revenue growth and stable profitability, with a robust balance sheet. However, a significant decrease in free cash flow and moderate leverage may pose risks. Management should focus on improving operational efficiencies and optimizing cash flow.

Income Statement

The company has demonstrated consistent revenue growth, with a notable increase of 6.08% in the most recent year. Gross profit margin stands at 39.19%, indicating strong profitability from core operations. Despite a slight decline in EBIT margin to 4.99%, the company maintains a solid EBITDA margin of 8.11%. Net profit margin is stable at 2.83%, reflecting efficient cost management. Overall, the income statement shows a healthy growth trajectory and profitability, though there is room for improvement in operational efficiencies.

Balance Sheet

The debt-to-equity ratio is 1.17, suggesting moderate leverage. Return on Equity (ROE) is 8.57%, indicating effective use of equity. The equity ratio of 34.61% shows a balanced capital structure. While the company has a healthy equity position, the moderate leverage might pose risks if earnings do not grow at a similar pace. Overall, the balance sheet reflects stability with potential leverage risks.

Cash Flow

The free cash flow has decreased significantly, showing a drop of 40.37%, which raises concerns about cash generation capabilities. The operating cash flow to net income ratio is 1.58, indicating that operating cash flow is greater than net income, a positive sign. However, the free cash flow to net income ratio is only 0.16, reflecting significant capital expenditures. The cash flow analysis highlights potential cash management issues despite strong operational cash generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	506.69B	501.40B	472.65B	439.02B	441.22B	442.07B
Gross Profit	198.32B	196.57B	187.12B	175.72B	176.01B	175.78B
EBITDA	40.65B	40.69B	39.07B	36.19B	39.52B	42.72B
Net Income	13.82B	14.21B	14.05B	13.23B	15.59B	18.65B
Balance Sheet
Total Assets	498.11B	479.01B	458.56B	419.25B	398.08B	395.10B
Cash, Cash Equivalents and Short-Term Investments	12.29B	10.84B	11.72B	9.22B	12.24B	14.68B
Total Debt	199.29B	193.19B	184.10B	158.80B	147.38B	147.06B
Total Liabilities	329.80B	313.21B	301.30B	269.70B	255.63B	261.81B
Stockholders Equity	168.30B	165.79B	157.26B	149.55B	142.44B	133.28B
Cash Flow
Free Cash Flow	0.00	2.23B	3.74B	-6.22B	6.35B	20.31B
Operating Cash Flow	0.00	22.44B	22.49B	9.40B	17.44B	35.12B
Investing Cash Flow	0.00	-21.72B	-24.01B	-17.93B	-12.68B	-15.22B
Financing Cash Flow	0.00	-1.43B	2.50B	5.43B	-7.29B	-17.20B

Kohnan Shoji Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3885.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7516, the sentiment is Positive. The current price of 3885 is below the 20-day moving average (MA) of 4006.75, below the 50-day MA of 3902.50, and above the 200-day MA of 3835.74, indicating a bullish trend. The MACD of 27.52 indicates Positive momentum. The RSI at 55.59 is Neutral, neither overbought nor oversold. The STOCH value of 57.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7516.

Kohnan Shoji Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3050	73 Outperform	¥222.69B	12.79	―	2.83%	1.49%	-21.76%
3191	68 Neutral	¥128.07B	15.94	―	3.43%	0.73%	-9.78%
8218	67 Neutral	¥169.53B	11.18	―	1.58%	1.69%	3.90%
7516	67 Neutral	¥126.79B	8.36	―	2.85%	3.83%	7.24%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
3199	58 Neutral	¥29.50B	14.74	―	1.66%	1.84%	-14.00%
2790	55 Neutral	¥61.95B	90.87	0.41%	2.78%	-6.21%	-29.75%

Kohnan Shoji Co., Ltd. Corporate Events

Kohnan Shoji Completes Treasury Share Acquisition

Kohnan Shoji Co., Ltd. has completed the acquisition of 86,900 treasury shares at a total cost of 340,173,000 yen, as part of a resolution made by its Board of Directors. This move is part of a broader strategy to purchase up to 650,000 shares, enhancing the company’s financial flexibility and potentially increasing shareholder value.

The most recent analyst rating on (JP:7516) stock is a Hold with a Yen4047.00 price target. To see the full list of analyst forecasts on Kohnan Shoji Co., Ltd. stock, see the JP:7516 Stock Forecast page.

Kohnan Shoji Announces Treasury Share Purchase Status

Kohnan Shoji Co., Ltd. has announced the status of its treasury share purchase, acquiring 77,100 shares at a total cost of 316,238,500 yen through market purchases on the Tokyo Stock Exchange. This move is part of a broader plan approved by the Board of Directors to acquire up to 650,000 shares, indicating a strategic effort to manage capital and potentially enhance shareholder value.

The most recent analyst rating on (JP:7516) stock is a Hold with a Yen4047.00 price target. To see the full list of analyst forecasts on Kohnan Shoji Co., Ltd. stock, see the JP:7516 Stock Forecast page.