Nihon Seimitsu Co., Ltd. (7771) AI Stock Analysis

• Market Cap: ¥6.83B
• Dividend Yield: N/A
• Average Volume (3M): 221.33K
• Price to Earnings (P/E): 33.0
• Beta (1Y): 1.67
• Revenue Growth: -0.41%
• EPS Growth: 512.76%
• Country: JP
• Employees: 1,626
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Luxury Goods
• EPS (TTM): 7.78
• Shares Outstanding: 22,238,298
• 10 Day Avg. Volume: 98,260
• 30 Day Avg. Volume: 221,330
• PEG Ratio: 0.75
• Price to Book (P/B): 1.08
• Price to Sales (P/S): 0.22
• P/FCF Ratio: 11.40
• 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: 64 Neutral
• Price Target: ¥332.00 ▲(264.84% Upside)

The score is anchored by mixed financial performance—cash flow strength and revenue growth are offset by a net loss and high leverage. Technicals are trending strongly but are overheated, which tempers the outlook. Valuation is a headwind given the high P/E and no dividend yield provided.

Positive Factors

B2B, long-term contracts with automotive/aerospace clients

A B2B model supplying precision parts to automotive and aerospace with long-term contracts creates a durable revenue base. Such relationships support predictable demand, high switching costs, and repeated orders, helping stabilize revenues and support capital investment over months.

Positive operating and free cash flow

Consistent positive operating and free cash flow despite a net loss shows resilient cash generation from core operations. This durable cash conversion supports reinvestment, servicing debt, and funding capital expenditure without immediate reliance on external financing.

Stable gross margin and positive EBIT margin

A ~21% gross margin and a positive EBIT margin indicate sustained cost control and pricing power in precision manufacturing. These structural margins reflect competitive manufacturing capabilities and help the company maintain profitability potential as volumes recover or scale.

Negative Factors

Net loss and negative net profit margin

A net loss and negative net margin undermine long-term profitability and retained earnings. Persisting losses reduce ability to invest, limit organic growth funding, and can pressure strategic options, making sustained recovery and shareholder returns more challenging.

Elevated leverage (debt-to-equity 2.00)

A debt-to-equity ratio of 2.00 signals high financial leverage that raises interest burden and refinancing risk. In cyclical downturns this durable capital-structure weakness can constrain investment, limit defensive flexibility, and increase default vulnerability.

Negative return on equity and limited equity buffer

Negative ROE indicates the company currently fails to generate shareholder returns, while an equity ratio near 26% provides only a modest cushion. Together these structural issues reduce resilience to shocks and limit capital available for growth or operational improvements.

Nihon Seimitsu Co., Ltd. Business Overview & Revenue Model

Company Description

Nihon Seimitsu Co., Ltd. manufactures and sells watch bands and exterior parts, spectacle frames, and other products in Japan. The company offers cemented carbide and pure titanium, metal, and urethane bands, as well as wristwatch band and bezels. It also provides fishing tackles, electrostatic eliminators, and numeric keypad electronic lock, as well as ion plating services. The company was incorporated in 1978 and is headquartered in Kawaguchi, Japan.

How the Company Makes Money

Nihon Seimitsu Co., Ltd. generates revenue primarily through the sale of its precision machined components to various industries. The company operates on a business-to-business (B2B) model, supplying products to manufacturers in the automotive and aerospace sectors who require high-precision parts for their operations. Key revenue streams include long-term contracts with major automotive manufacturers, which provide a stable income base, as well as orders from electronics firms that rely on precision components for their products. Additionally, the company may engage in partnerships with technology firms to develop innovative machining solutions, further enhancing its product offerings and revenue potential.

Nihon Seimitsu Co., Ltd. Financial Statement Overview

Summary

Nihon Seimitsu Co., Ltd. shows strong revenue growth and positive cash flow, but faces challenges with profitability and high leverage. The net loss and high debt levels suggest a need for strategic adjustments.

Income Statement

Nihon Seimitsu Co., Ltd. has shown a positive trend in revenue growth, with a recent year-over-year increase of 6.4%. The gross profit margin is fairly stable at approximately 21% in 2025, indicating efficient cost management. However, the net profit margin has turned negative in 2025 due to a net loss, reflecting challenges in converting revenue into profit. The EBIT margin is positive but modest at 3.85%, suggesting some operational efficiency but potential room for improvement.

Balance Sheet

The debt-to-equity ratio stands at 2.00, indicating a relatively high leverage which could pose risks in economic downturns. The return on equity has been negative due to the net loss, implying inefficiencies in generating returns for shareholders. However, the equity ratio of 26.06% demonstrates a decent level of financial stability with a significant portion of assets financed by equity.

Cash Flow

The company has shown resilience with a positive operating cash flow of 253 million JPY in 2025, despite a net loss. The free cash flow remains positive, albeit lower than previous years, highlighting effective cash management. However, the free cash flow to net income ratio is negative due to the net loss, indicating potential challenges in cash generation relative to profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.06B	7.16B	6.73B	6.90B	5.74B	4.77B
Gross Profit	1.51B	1.50B	1.42B	1.44B	1.24B	660.85M
EBITDA	107.50M	279.64M	710.09M	482.01M	138.73M	-361.24M
Net Income	-278.28M	-20.02M	390.83M	175.55M	-128.17M	-631.93M
Balance Sheet
Total Assets	5.55B	5.64B	5.79B	5.30B	5.37B	5.37B
Cash, Cash Equivalents and Short-Term Investments	840.00M	875.86M	964.76M	601.31M	486.49M	683.67M
Total Debt	2.91B	2.94B	3.10B	3.18B	3.26B	3.22B
Total Liabilities	4.09B	4.17B	4.32B	4.04B	4.19B	3.97B
Stockholders Equity	1.46B	1.47B	1.47B	1.26B	1.18B	1.40B
Cash Flow
Free Cash Flow	0.00	139.16M	415.51M	200.83M	-213.79M	-384.56M
Operating Cash Flow	0.00	253.04M	475.57M	217.71M	-173.64M	-305.47M
Investing Cash Flow	0.00	-113.60M	-62.79M	-28.98M	-42.64M	-78.12M
Financing Cash Flow	0.00	-207.55M	-86.51M	-83.18M	28.54M	581.38M

Nihon Seimitsu Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 91.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7771, the sentiment is Positive. The current price of 91 is below the 20-day moving average (MA) of 132.95, below the 50-day MA of 104.96, and below the 200-day MA of 91.56, indicating a bullish trend. The MACD of 37.12 indicates Negative momentum. The RSI at 87.78 is Negative, neither overbought nor oversold. The STOCH value of 96.15 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7771.

Nihon Seimitsu Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7769	76 Outperform	¥34.02B	15.07	―	1.93%	-2.29%	151.87%
7878	66 Neutral	¥1.66B	21.90	―	5.13%	0.99%	-42.44%
7771	64 Neutral	¥6.83B	32.96	―	―	-0.41%	512.76%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7872	50 Neutral	¥6.56B	-9.90	―	4.64%	-0.68%	46.43%
7794	49 Neutral	¥8.62B	-3.74	―	―	-33.00%	-206.51%
7810	41 Neutral	¥2.52B	101.52	―	0.25%	18.69%	5.17%