Kokusai Co., Ltd. (7722) AI Stock Analysis

• Market Cap: ¥11.67B
• Dividend Yield: 3.37%
• Average Volume (3M): 80.51K
• Price to Earnings (P/E): 6.4
• Beta (1Y): 0.68
• Revenue Growth: 22.71%
• EPS Growth: 442.11%
• Country: JP
• Employees: 287
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 36.03
• Shares Outstanding: 14,200,000
• 10 Day Avg. Volume: 50,330
• 30 Day Avg. Volume: 80,506
• PEG Ratio: -0.02
• Price to Book (P/B): 0.75
• Price to Sales (P/S): 0.64
• P/FCF Ratio: 8.62
• 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: 76 Outperform
• Price Target: ¥959.00 ▲(45.74% Upside)
• Action: Reiterated Date: 02/10/26
• Date: Action: Reiterated 02/10/26

The score is driven primarily by a strong financial recovery and a robust, conservatively leveraged balance sheet, supported by attractive valuation (low P/E and solid dividend yield). Technicals are positive due to the strong uptrend, but overbought signals temper the overall score.

Positive Factors

Revenue rebound & margins

A 28.9% revenue rebound with a 36.8% gross margin and return to net profitability indicates improving product demand and operational leverage. Sustained margin levels and regained profitability support reinvestment, stable cash generation and a stronger earnings base over the medium term.

Conservative balance sheet

Low leverage (D/E 0.30) and a healthy equity ratio provide financial flexibility to fund capex, R&D or weather demand cycles without forcing distress sales. This conservative capital structure reduces refinancing risk and supports durable strategic investments and shareholder distributions.

Recurring aftermarket & services

A business model combining capital equipment sales with recurring aftermarket consumables, parts and engineering/services increases customer stickiness and predictable revenue. These recurring streams smooth cycles in capital spending and support long-term cash flow stability and margin resilience.

Negative Factors

Free cash flow decline

A meaningful drop in free cash flow growth (-24.1%) despite positive operating conversion limits internal funding for capex, dividends or buybacks. If this trend persists it can constrain strategic investments and reduce the firm's ability to capitalize on growth opportunities or buffer downturns.

Earnings volatility history

Documented historical earnings volatility and past losses suggest sensitivity to demand swings and operational cyclicality. Such variability complicates planning, raises forecasting risk, and can undermine consistent returns and investor confidence during slower industry cycles.

End-market capex sensitivity

Reliance on capital equipment sales to electronics manufacturers exposes revenues to customers' capital expenditure cycles and semiconductor/product demand. Even with aftermarket revenue, core equipment demand can be lumpy, creating structural headwinds in prolonged downturns of end markets.

Kokusai Co., Ltd. Business Overview & Revenue Model

Company Description

Kokusai Co., Ltd. engages in the manufacture and sale of testers, measurement instruments, and automatic inspection equipment for motors and rotating equipment in Japan and internationally. It offers balancing machines, tire balancers for production line, tire uniformity machines/tire and wheel assembly balancers, tire drum durability testing machines, road wheel balance and runout measuring equipment, tire balance weight appliers, shaft straightening machines, coil winding testers, motor testers for production line, gear testers, seismic systems, electric servo motor-driven vibration testers, and electrodynamic vibration testers. The company serves automotive, home appliances, office equipment, and digital equipment industries. Kokusai Co., Ltd. was founded in 1969 and is headquartered in Tama, Japan.

How the Company Makes Money

Kokusai Co., Ltd. generates revenue mainly through the sale of precision dispensing systems and related factory automation equipment to manufacturers (notably in electronics production). A typical revenue model for this type of business includes: (1) equipment sales (capital expenditures by customers) for dispensing machines, controllers, and integrated automated systems; (2) recurring aftermarket revenue from consumables and replacement parts used in dispensing (e.g., valves/nozzles and other wear components), maintenance, and repair services; and (3) engineering/services revenue from system integration, customization, installation, and process optimization support to fit customer production lines. Significant drivers of earnings generally include customer demand for higher throughput and yield in electronics assembly, adoption of automation, and cycles in end-markets served by the company’s manufacturing customers. Specific details on major partnerships, customer concentration, or segment-level revenue breakdown are null.

Kokusai Co., Ltd. Financial Statement Overview

Summary

Strong rebound in revenue (+28.9%) and return to profitability with healthy gross margin (36.8%) and net margin (7.1%). Balance sheet is solid with low leverage (D/E 0.30) and strong equity ratio (53.9%). Cash flow is generally sound with good cash conversion (OCF/NI 1.10), but free cash flow declined (-24.1%) and prior earnings volatility remains a risk.

Income Statement

Kokusai Co., Ltd. exhibited a strong recovery in the latest fiscal year with a significant increase in revenue and return to profitability. The Gross Profit Margin stood at 36.8%, and the Net Profit Margin was 7.1%, reflecting efficient cost management. The company showed a remarkable revenue growth rate of 28.9% from the previous year, indicating a robust rebound. EBIT and EBITDA margins were also positive, highlighting improved operational performance. However, historical volatility in earnings and previous periods of losses pose potential risks.

Balance Sheet

The balance sheet is solid, with a strong equity base and prudent leverage. The Debt-to-Equity Ratio is 0.30, suggesting conservative financial management. Return on Equity (ROE) improved to 8.4%, driven by positive net income. The Equity Ratio is healthy at 53.9%, emphasizing financial stability. Overall, the company's balance sheet reflects a strong financial position with adequate liquidity and low leverage risk.

Cash Flow

The cash flow statement shows a stable cash generation capacity. The Free Cash Flow Growth Rate was -24.1%, due to a decrease in operating cash flows. The Operating Cash Flow to Net Income Ratio is 1.10, indicating good cash conversion. However, the Free Cash Flow to Net Income Ratio is slightly lower at 1.04, suggesting room for improvement in capital efficiency. Despite some fluctuations, the overall cash flow health remains satisfactory.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	14.37B	13.20B	10.24B	10.04B	11.13B	11.51B
Gross Profit	5.53B	4.90B	2.69B	2.92B	3.56B	3.62B
EBITDA	1.92B	1.60B	21.64M	375.39M	868.77M	718.11M
Net Income	1.18B	940.38M	-258.16M	-66.37M	475.02M	179.81M
Balance Sheet
Total Assets	20.52B	20.84B	20.52B	20.41B	17.37B	18.69B
Cash, Cash Equivalents and Short-Term Investments	8.30B	7.90B	8.25B	7.41B	5.45B	5.91B
Total Debt	3.03B	3.41B	4.02B	4.79B	2.48B	2.48B
Total Liabilities	8.97B	9.24B	9.50B	9.16B	6.07B	7.57B
Stockholders Equity	11.18B	11.22B	10.74B	11.02B	11.13B	10.98B
Cash Flow
Free Cash Flow	0.00	974.29M	1.28B	-514.43M	-130.32M	-264.72M
Operating Cash Flow	0.00	1.03B	1.34B	-471.56M	-119.70M	23.14M
Investing Cash Flow	0.00	-315.95M	-518.82M	129.41M	225.16M	-501.94M
Financing Cash Flow	0.00	-977.82M	-1.05B	2.03B	-509.07M	690.09M

Kokusai Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 658.00
• 50DMA: Negative
• 100DMA: Negative
• 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:7722, the sentiment is Negative. The current price of 658 is below the 20-day moving average (MA) of 910.20, below the 50-day MA of 963.78, and below the 200-day MA of 757.20, indicating a neutral trend. The MACD of -30.76 indicates Positive momentum. The RSI at 39.46 is Neutral, neither overbought nor oversold. The STOCH value of 42.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7722.

Kokusai Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6488	79 Outperform	¥11.65B	10.27	―	2.82%	7.10%	18.03%
6402	79 Outperform	¥10.88B	6.38	―	2.15%	-0.94%	6.93%
7722	76 Outperform	¥11.67B	6.43	―	3.37%	22.71%	442.11%
6384	73 Outperform	¥11.52B	27.33	―	4.76%	41.13%	535.42%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6393	60 Neutral	¥12.94B	10.99	―	6.70%	7.96%	43.37%
6495	52 Neutral	¥12.39B	42.22	―	1.65%	3.96%	―