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

• Market Cap: ¥128.99B
• Dividend Yield: 2.44%
• Average Volume (3M): 70.45K
• Price to Earnings (P/E): 8.6
• Beta (1Y): 0.41
• Revenue Growth: 4.89%
• EPS Growth: 7.47%
• Country: JP
• Employees: 4,806
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Home Improvement
• EPS (TTM): 152.67
• Shares Outstanding: 34,682,114
• 10 Day Avg. Volume: 67,010
• 30 Day Avg. Volume: 70,450
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥4,047.00
• Price Target Upside: -1.41% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 67 Neutral
• Price Target: ¥4,047.00 ▼(-1.41% Downside)

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.

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

Company Description

Kohnan Shoji Co., Ltd. operates and manages a chain of home center stores that offer DIY products and household goods to general consumers and professionals in Japan. Its home center stores offer home improvement products, which include lumber, building materials, tools, hardware, pain supplies, working clothes and equipment, gardening tools and equipment, plants, material handling products, housing and plumbing supplies, and remodeling and renovating products; housekeeping products, such as electrical appliance, kitchenware and dining, furniture and decor, bedding, electronics and lighting, household supply, health and personal care, footwear, clothing, cleaning, and laundry products; and car and leisure products, including automotive supplies and accessories, pet supplies, stationary and office supplies, cycling products, and sports and outdoor products. The company also operates Homestock store, a discount and convenient home center that offer approximately 22,000 items to consumers; and KOHNAN PRO stores, which sell various tools, building materials, paint supplies, and working equipment for professional customers. As of February 29, 2020, it operated 453 shops primarily in the Kinki area. The company was founded in 1978 and is headquartered in Osaka, Japan.

How the Company Makes Money

Kohnan Shoji Co., Ltd. generates revenue through the sale of home improvement and household products via its extensive network of retail stores across Japan. The company focuses on offering a variety of products that cater to the needs of homeowners and DIY enthusiasts. Its revenue model is primarily based on direct sales to consumers, facilitated by its strategically located stores that attract a steady flow of customers. Additionally, Kohnan Shoji leverages its brand reputation and customer loyalty to drive sales. The company may also engage in partnerships with suppliers to optimize its product offerings and pricing strategies, ensuring competitive advantage and sustained profitability.

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	501.40B	501.40B	472.65B	439.02B	441.22B	442.07B
Gross Profit	196.57B	196.57B	187.12B	175.72B	176.01B	175.78B
EBITDA	36.90B	40.69B	39.07B	36.19B	39.52B	42.72B
Net Income	14.21B	14.21B	14.05B	13.23B	15.59B	18.65B
Balance Sheet
Total Assets	479.01B	479.01B	458.56B	419.25B	398.08B	395.10B
Cash, Cash Equivalents and Short-Term Investments	10.84B	10.84B	11.72B	9.22B	12.24B	14.68B
Total Debt	193.19B	193.19B	184.10B	158.80B	147.38B	147.06B
Total Liabilities	313.21B	313.21B	301.30B	269.70B	255.63B	261.81B
Stockholders Equity	165.79B	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: 4105.00
• 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:7516, the sentiment is Positive. The current price of 4105 is above the 20-day moving average (MA) of 4026.80, above the 50-day MA of 3914.74, and above the 200-day MA of 3664.58, indicating a bullish trend. The MACD of 57.32 indicates Negative momentum. The RSI at 67.25 is Neutral, neither overbought nor oversold. The STOCH value of 79.66 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	79 Outperform	211.15B	11.86	6.49%	2.93%	6.96%	-19.43%
3191	71 Outperform	131.77B	16.30	6.84%	2.67%	1.81%	-7.32%
8218	71 Outperform	168.12B	11.41	5.57%	1.60%	1.84%	-3.32%
7516	67 Neutral	¥128.99B	8.59		2.44%	4.89%	7.47%
3199	60 Neutral	32.15B	15.32	8.94%	1.49%	3.11%	-5.40%
2790	57 Neutral	58.12B	-1,817.94	0.12%	2.85%	-4.81%	-101.28%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%