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

• Market Cap: ¥8.50B
• Dividend Yield: N/A
• Average Volume (3M): 221.33K
• Price to Earnings (P/E): 102.2
• Beta (1Y): 2.38
• Revenue Growth: -0.41%
• EPS Growth: 512.76%
• Country: JP
• Employees: 1,626
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Luxury Goods
• EPS (TTM): 7.86
• 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: 66 Neutral
• Price Target: ¥417.00 ▲(358.24% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven by strong technical trend signals and solid cash generation, but is held back by weak profitability (net loss), elevated leverage, and a very high P/E valuation.

Positive Factors

Revenue Growth

Consistent 6.4% YoY revenue growth indicates steady demand and market traction in its luxury goods segment. Over 2-6 months this trend supports durability of top-line, enabling scale benefits, investment in product/brand and cushioning margin recovery when cost control follows.

Positive Operating & Free Cash Flow

Positive operating cash flow (253M JPY) and sustained free cash flow despite a net loss show real cash generation ability. This durable cash conversion supports working capital, capex and debt servicing, giving management flexibility to fund strategy or withstand cyclical pressure.

Stable Gross Margin

A stable ~21% gross margin signals persistent control over cost of goods sold and product pricing power in luxury goods. Sustained gross margin underpins potential to restore net profitability if operating expenses are optimized, making recovery structurally more achievable.

Negative Factors

Net Loss / Negative Net Margin

A negative net margin and reported net loss undermine retained earnings and shareholder returns. Persisting losses reduce reinvestment capacity, may force restructuring or cash-preservation actions, and weaken investor confidence if profitability isn't restored sustainably.

Elevated Leverage

A debt-to-equity ratio of 2.00 denotes high financial leverage relative to equity. Structurally this increases interest burden and refinancing risk, limiting strategic flexibility and magnifying downside in economic stress or slower sales trends.

Sharp EPS Decline

A ~78% decline in EPS reflects meaningful deterioration in earnings power. Over months this trend signals persistent margin pressure or one-off hits, raises questions about business model efficiency and makes recovery to prior profitability levels more challenging without structural changes.

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

Mixed fundamentals: revenue grew 6.4% YoY and operating/free cash flow stayed positive, but profitability deteriorated to a net loss and leverage is high (debt-to-equity 2.00), increasing financial risk.

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
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: Positive
• RSI: Neutral
• STOCH: Positive

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 511.30, below the 50-day MA of 310.16, and below the 200-day MA of 145.41, indicating a neutral trend. The MACD of 31.31 indicates Positive momentum. The RSI at 51.71 is Neutral, neither overbought nor oversold. The STOCH value of 11.18 is Positive, 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	¥34.93B	14.09	―	1.93%	-2.29%	151.87%
7878	72 Outperform	¥2.06B	27.10	―	5.13%	0.99%	-42.44%
7771	66 Neutral	¥8.50B	102.20	―	―	-0.41%	512.76%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7794	52 Neutral	¥22.45B	-5.01	―	―	-33.00%	-206.51%
7810	50 Neutral	¥3.92B	157.76	―	0.25%	18.69%	5.17%
7872	50 Neutral	¥6.70B	-11.54	―	4.64%	-0.68%	46.43%