The score is driven primarily by strong financial quality (especially the conservative balance sheet and improved profitability) and supportive technical trends (price above key moving averages with positive MACD). Valuation further strengthens the outlook with a low P/E and moderate dividend yield, while the key risk to monitor is cash-flow volatility and softer cash conversion in the most recent period.
Positive Factors
Conservative balance sheet / low leverage
A near-zero debt profile and steadily growing equity provide durable financial flexibility. This conservatism supports capital allocation for growth, cushions downturns without needing urgent external financing, and preserves strategic optionality for M&A or capex over the coming months.
Sustained revenue expansion
A multi-year revenue ramp demonstrates durable demand growth and successful commercial execution. Doubling top-line scale supports long-term market position, creates scope for fixed-cost absorption, and underpins the potential for sustained operating leverage as the company continues to scale.
Improving operating profit and net income
Material improvement in operating profit and net income across multiple years signals effective cost management and execution. This trend, combined with revenue growth, suggests the company can convert scale into lasting earnings power if operational discipline continues.
Negative Factors
Cash-flow volatility and weaker cash conversion
Irregular operating and free cash flow undermines the firm's ability to self-fund capex, dividends, or unexpected expenses. Persistent cash conversion weakness increases reliance on external financing or equity, raising execution risk and reducing resilience to cyclical or industry shocks over the medium term.
Gross margin compression
Declining gross margins despite higher revenue suggest pressure from cost of goods, pricing, or mix shifts. If structural, this erosion limits long-term operating leverage, constrains margin recovery even at scale, and may cap sustainable profitability unless addressed strategically.
Margins and returns below earlier peak
Profitability and ROE not reaching prior peaks indicate the company hasn't fully restored pre‑peak operating efficiency. This inconsistency raises questions about the longevity of recent profit improvements and suggests management must sustain execution to deliver historically higher returns.
SK Japan Co., Ltd. (7608) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥14.01B
Dividend Yield2.37%
Average Volume (3M)108.31K
Price to Earnings (P/E)11.4
Beta (1Y)0.67
Revenue GrowthN/A
EPS GrowthN/A
CountryJP
Employees128
SectorConsumer Cyclical
Sector Strength84
IndustryLeisure
Share Statistics
EPS (TTM)37.76
Shares Outstanding8,490,103
10 Day Avg. Volume131,770
30 Day Avg. Volume108,313
Financial Highlights & Ratios
PEG Ratio0.30
Price to Book (P/B)1.14
Price to Sales (P/S)0.48
P/FCF Ratio11.81
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
SK Japan Co., Ltd. Business Overview & Revenue Model
Company DescriptionSK Japan Co.,Ltd. plans, manufactures, and sells character stuffed animals, key chains, household goods, mobile phone accessory goods, prize products, etc. The company was founded in 1989 and is headquartered in Osaka, Japan.
How the Company Makes Money
SK Japan Co., Ltd. Financial Statement Overview
Summary
Strong overall financial quality supported by rapid revenue growth and improving operating profit/net income through 2025, plus a very conservative, near debt-free balance sheet. The main offset is uneven cash-flow consistency (negative in 2023 and weaker cash conversion in 2025) and some gross margin compression versus earlier years.
Income Statement
78
Positive
Revenue has expanded strongly over the last few years (from ~¥6.5B in 2022 to ~¥13.3B in 2025), with a particularly large step-up in 2023–2025 and positive growth again in 2025. Profitability has also improved versus 2022–2023, with operating profit and net income rising materially through 2025. Offsetting this, margins are still below the company’s earlier peak (notably 2020 gross and net margins), and gross margin has drifted down from 2022 to 2025 even as scale improved.
Balance Sheet
92
Very Positive
The balance sheet is very conservative, with essentially no debt in recent years and a near-zero debt-to-equity profile. Equity has grown steadily (from ~¥3.3B in 2020 to ~¥5.6B in 2025), supporting asset growth while maintaining a strong capital cushion. Returns on equity are solid and improving versus 2022–2023, though not consistently at the highest level seen earlier (e.g., around 2020).
Cash Flow
67
Positive
Cash generation is generally positive, with operating cash flow and free cash flow positive in most years and free cash flow tracking net income reasonably well in 2024–2025. However, cash flow has been volatile: operating and free cash flow turned negative in 2023, and in 2025 operating cash flow covered a notably smaller share of net income than the prior year, pointing to weaker cash conversion in the most recent period.
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jan 04, 2026