Sougou Shouken Co., Ltd. (7850) AI Stock Analysis

• Market Cap: ¥2.54B
• Dividend Yield: 2.31%
• Average Volume (3M): 1.30K
• Price to Earnings (P/E): 7.3
• Beta (1Y): 0.36
• Revenue Growth: 2.68%
• EPS Growth: -1.62%
• Country: JP
• Employees: 381
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): 34.04
• Shares Outstanding: 3,060,110
• 10 Day Avg. Volume: 1,080
• 30 Day Avg. Volume: 1,303
• PEG Ratio: 0.50
• Price to Book (P/B): 0.84
• Price to Sales (P/S): 0.16
• P/FCF Ratio: 4.81
• 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: ¥897.00 ▲(5.90% Upside)

The overall stock score of 64 reflects a combination of positive financial performance and attractive valuation, offset by bearish technical indicators. The company's financial stability and cash flow improvements are significant strengths, while the low P/E ratio and decent dividend yield enhance its appeal. However, the current bearish trend in technical analysis suggests caution.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a strong market position and ability to expand its customer base, supporting long-term business sustainability.

Leverage Reduction

Reduced leverage enhances financial stability and lowers risk, providing more flexibility for future investments and growth opportunities.

Cash Flow Management

Effective cash generation supports operational needs and strategic initiatives, ensuring the company can sustain growth and manage financial obligations.

Negative Factors

Low Net Profit Margin

A low net profit margin indicates inefficiencies in cost management or pricing strategy, which may hinder long-term profitability and shareholder returns.

Equity Ratio Concerns

A low equity ratio can signal vulnerability to financial stress, limiting the company's ability to absorb losses and potentially affecting its creditworthiness.

Profitability Challenges

Challenges in improving profitability and cash conversion efficiency may restrict the company's ability to invest in growth and improve shareholder value.

Sougou Shouken Co., Ltd. Business Overview & Revenue Model

Company Description

Sougou Shouken Co.,Ltd. provides printing services in Japan. The company offers commercial printing services, including planning, designing, printing, processing, and shipping of flyers, catalogs, posters, DMs, POPs, publications, etc. It is also involved in printing new year cards; and the production of promotion materials and methods for event planning, such as exhibitions, conventions, and commemorative events, as well as sales promotion. In addition, the company offers IT solutions; augmented reality sales promotion services; and wood, acrylic, building materials, etc., as well as create designs. Further, it provides packages and fixtures suitable for products; print magazines, archive, paralympic art, and aerial drone services, as well as cultivates LED vegetables. The company was founded in 1962 and is headquartered in Sapporo, Japan.

How the Company Makes Money

Sougou Shouken generates revenue through the sale of its office supplies and stationery products. The company has a diverse revenue model that includes direct sales to retailers, online sales through e-commerce platforms, and bulk sales to corporate clients. Key revenue streams include retail sales from physical stores, online orders, and partnerships with educational institutions and businesses that require office supplies in large quantities. Additionally, Sougou Shouken may engage in promotional collaborations or exclusive product lines with other brands, which can further enhance its earnings. The company's ability to maintain strong relationships with suppliers and distributors also plays a critical role in its financial performance.

Sougou Shouken Co., Ltd. Financial Statement Overview

Summary

Sougou Shouken Co., Ltd. demonstrates positive financial trends with revenue growth and improved profitability metrics. The company has reduced its leverage, enhancing financial stability. Cash flow management shows significant improvement, although there is room for further enhancement in profitability and cash conversion efficiency. The company is on a stable growth trajectory, but should focus on increasing net profit margins and maintaining strong cash flow management.

Income Statement

Sougou Shouken Co., Ltd. has shown consistent revenue growth over the past year, with a 3.34% increase in the latest period. The gross profit margin has improved slightly to 30.95%, indicating efficient cost management. However, the net profit margin remains low at 1.96%, suggesting challenges in converting revenue into profit. The EBIT and EBITDA margins are modest, reflecting moderate operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has improved to 0.90, indicating a reduction in leverage and a stronger equity position. However, the equity ratio remains relatively low, suggesting potential risks in financial stability. Return on equity has improved, reflecting better profitability relative to shareholder equity.

Cash Flow

Operating cash flow remains strong, with a healthy free cash flow to net income ratio of 0.90, indicating effective cash generation relative to earnings. The free cash flow growth rate is notably high, reflecting significant improvements in cash flow management. However, the operating cash flow to net income ratio suggests room for improvement in converting earnings into cash.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	16.24B	16.24B	15.80B	15.86B	15.31B	16.16B
Gross Profit	5.02B	5.03B	4.74B	4.49B	4.21B	4.58B
EBITDA	834.58M	702.00M	893.33M	812.12M	825.14M	900.65M
Net Income	319.54M	319.00M	274.50M	207.48M	178.93M	256.22M
Balance Sheet
Total Assets	7.98B	7.98B	7.67B	8.35B	8.95B	9.39B
Cash, Cash Equivalents and Short-Term Investments	1.30B	1.30B	1.18B	1.34B	1.53B	1.65B
Total Debt	2.88B	2.83B	3.10B	4.11B	4.76B	4.98B
Total Liabilities	4.81B	4.81B	4.78B	5.74B	6.47B	6.99B
Stockholders Equity	3.14B	3.14B	2.86B	2.58B	2.45B	2.37B
Cash Flow
Free Cash Flow	0.00	547.00M	541.13M	539.05M	339.99M	1.27B
Operating Cash Flow	0.00	610.00M	863.66M	642.06M	584.72M	1.44B
Investing Cash Flow	0.00	-157.00M	41.38M	-120.87M	-294.47M	-183.57M
Financing Cash Flow	0.00	-332.00M	-1.07B	-708.99M	-401.71M	-1.20B

Sougou Shouken Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 847.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7850, the sentiment is Negative. The current price of 847 is below the 20-day moving average (MA) of 864.75, below the 50-day MA of 853.08, and below the 200-day MA of 870.50, indicating a bearish trend. The MACD of -2.93 indicates Positive momentum. The RSI at 43.42 is Neutral, neither overbought nor oversold. The STOCH value of 24.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7850.

Sougou Shouken Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7805	77 Outperform	¥3.36B	7.56	―	1.93%	-1.00%	105.56%
7919	68 Neutral	¥3.49B	7.56	―	3.69%	0.62%	-24.08%
7851	67 Neutral	¥1.14B	12.13	―	2.07%	7.89%	―
7850	64 Neutral	¥2.54B	7.35	―	2.31%	2.68%	-1.62%
7939	64 Neutral	¥2.11B	9.89	―	3.72%	9.08%	40.91%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7916	61 Neutral	¥5.63B	10.36	―	2.72%	-1.30%	―