Daisui Co., Ltd. (7538) AI Stock Analysis

• Market Cap: ¥6.05B
• Dividend Yield: 1.67%
• Average Volume (3M): 5.94K
• Price to Earnings (P/E): 5.1
• Beta (1Y): 0.41
• Revenue Growth: 4.32%
• EPS Growth: 24.60%
• Country: JP
• Employees: 424
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Food Distribution
• EPS (TTM): 31.16
• Shares Outstanding: 13,774,819
• 10 Day Avg. Volume: 6,300
• 30 Day Avg. Volume: 5,940
• PEG Ratio: 0.21
• Price to Book (P/B): 0.37
• Price to Sales (P/S): 0.04
• P/FCF Ratio: -3.21
• 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: 72 Outperform
• Price Target: ¥504.00 ▲(40.39% Upside)
• Action: Upgraded Date: 03/01/26
• Date: Action: Upgraded 03/01/26

The score is driven by strong valuation (low P/E) and supportive technical momentum (price above key moving averages with positive MACD). These positives are moderated by financial performance concerns centered on negative operating and free cash flow, despite improved profitability and a solid balance sheet structure.

Positive Factors

Margin recovery & profitability

Daisui has moved from prior losses to positive EBIT/EBITDA and a net margin of 1.20%, showing operational fixes and cost discipline. Sustained positive margins indicate the business model can generate recurring profits, supporting reinvestment and resilience across 2–6 months if cost control holds.

Balance sheet strength & low leverage

A low debt-to-equity ratio and near-50% equity ratio provide a durable financial buffer against industry volatility. Improved ROE (10.38%) shows better capital efficiency. This capital structure supports strategic investments and preserves access to financing without excessive leverage over the medium term.

Revenue and EPS growth trajectory

Top-line growth and strong EPS improvement point to recovering demand and operating leverage. Consistent revenue expansion alongside double-digit EPS growth suggests management is translating sales into earnings improvement, a durable sign the company can expand profitability if cash conversion trends improve.

Negative Factors

Negative operating cash flow

Negative operating and free cash flow indicate earnings are not yet converting into cash, limiting the firm's ability to self-fund capex, dividends, or working capital needs. Persisting cash deficits force reliance on financing or asset actions and constrain durable investment capacity.

Thin absolute margins

Gross and net margins remain low, leaving limited buffer against input cost inflation or pricing pressures typical in food distribution. Thin margins reduce capacity to absorb shocks and to invest in growth initiatives; maintaining margin improvements is critical for long-term stability.

Declining cash reserves & liquidity risk

Despite a stable capital structure, falling cash reserves increase short-term liquidity vulnerability. If working capital needs rise or cash conversion stays weak, the company may need external funding, which could raise costs or restrict operational flexibility over the next several months.

Daisui Co., Ltd. Business Overview & Revenue Model

Company Description

Daisui Co.,Ltd., together with its subsidiaries, engages in the wholesale of marine products in Japan. It also offers fresh fish, frozen fish, salted, and dried fish; and refrigeration warehousing services. The company supplies its products to supermarkets and restaurants. It also exports its products. Daisui Co.,Ltd. was incorporated in 1939 and is based in Osaka, Japan.

How the Company Makes Money

Daisui Co., Ltd. generates revenue through multiple channels, primarily from the sale of its industrial machinery and equipment. The company has a diverse revenue model that includes direct sales to large enterprises, government contracts, and partnerships with distributors and retailers in both domestic and international markets. Key revenue streams include the sale of hydraulic systems and automation equipment, which are in high demand across various sectors. Additionally, Daisui may earn income from after-sales services such as maintenance, repairs, and parts replacement. Strategic partnerships with other manufacturers and technology providers also enhance its product offerings and market reach, contributing significantly to its overall earnings.

Daisui Co., Ltd. Financial Statement Overview

Summary

Profitability improved with a return to positive EBIT/EBITDA margins and a 10.38% ROE, supported by a stable gross margin. However, financial quality is held back by weak cash generation, with negative operating cash flow (-1.06B yen) and negative free cash flow (-1.34B yen), raising liquidity and sustainability risk despite manageable leverage (debt-to-equity 0.26).

Income Statement

Daisui Co., Ltd. demonstrated a moderate revenue growth of 0.86% in the latest fiscal year, with a notable improvement from the previous year's negative EBIT and EBITDA margins to positive values of 0.69% and 1% respectively. The gross profit margin remained stable at approximately 6.67%. Net profit margin improved to 1.20%, indicating better profitability after a challenging period. The company managed to recover from losses in prior years, showcasing resilience and operational efficiency improvements.

Balance Sheet

The balance sheet indicates a stable financial structure with a debt-to-equity ratio of 0.26, suggesting a manageable level of leverage. Return on equity (ROE) improved to 10.38%, reflecting enhanced profitability and equity utilization. The equity ratio stands at 46.11%, indicating a solid equity base. However, cash reserves have decreased, which might impact liquidity management.

Cash Flow

Daisui Co., Ltd. faced challenges in cash flow management, with a negative operating cash flow of -1.06 billion yen. Free cash flow also declined significantly to -1.34 billion yen, suggesting potential issues in covering capital expenditures. The operating cash flow to net income ratio was negative, indicating potential inefficiencies in translating earnings into cash. This could pose risks if not addressed promptly.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	100.08B	99.30B	98.46B	98.46B	88.79B	114.24B
Gross Profit	6.58B	6.62B	6.68B	6.77B	5.93B	6.80B
EBITDA	941.00M	994.00M	1.18B	733.00M	194.00M	813.00M
Net Income	1.10B	1.19B	1.01B	701.00M	-18.00M	653.00M
Balance Sheet
Total Assets	24.90B	24.84B	24.75B	22.49B	21.07B	20.16B
Cash, Cash Equivalents and Short-Term Investments	1.95B	3.00B	4.34B	2.93B	2.28B	3.58B
Total Debt	2.80B	3.00B	2.90B	4.10B	3.20B	2.70B
Total Liabilities	13.30B	13.38B	14.70B	14.26B	13.52B	12.49B
Stockholders Equity	11.60B	11.46B	10.04B	8.23B	7.55B	7.67B
Cash Flow
Free Cash Flow	0.00	-1.34B	2.57B	-402.00M	-2.11B	222.00M
Operating Cash Flow	0.00	-1.06B	2.65B	-349.00M	-2.00B	285.00M
Investing Cash Flow	0.00	-296.00M	227.00M	123.00M	280.00M	338.00M
Financing Cash Flow	0.00	12.00M	-1.27B	841.00M	428.00M	-194.00M

Daisui Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 359.00
• 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:7538, the sentiment is Positive. The current price of 359 is below the 20-day moving average (MA) of 424.65, below the 50-day MA of 396.36, and above the 200-day MA of 354.17, indicating a bullish trend. The MACD of 12.50 indicates Negative momentum. The RSI at 66.90 is Neutral, neither overbought nor oversold. The STOCH value of 54.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7538.

Daisui Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7538	72 Outperform	¥6.05B	5.11	―	1.67%	4.32%	24.60%
7687	71 Outperform	¥3.11B	10.85	―	1.79%	13.82%	23.24%
8030	68 Neutral	¥16.78B	5.56	―	3.17%	5.19%	11.04%
7114	67 Neutral	¥4.11B	34.94	―	―	10.69%	-59.77%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
8039	61 Neutral	¥9.12B	24.88	―	0.95%	6.26%	67.81%
2683	47 Neutral	¥2.55B	65.57	―	1.01%	-1.44%	-61.28%