Kohsai Co.Ltd. (7878) AI Stock Analysis

• Market Cap: ¥1.89B
• Dividend Yield: 5.13%
• Average Volume (3M): 1.19K
• Price to Earnings (P/E): 13.2
• Beta (1Y): 0.86
• Revenue Growth: 0.99%
• EPS Growth: -42.44%
• Country: JP
• Employees: 25
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Luxury Goods
• EPS (TTM): N/A
• Shares Outstanding: 1,584,000
• 10 Day Avg. Volume: 1,960
• 30 Day Avg. Volume: 1,186
• PEG Ratio: 0.53
• Price to Book (P/B): 0.94
• Price to Sales (P/S): 0.34
• P/FCF Ratio: -6.88
• 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: 60 Neutral
• Price Target: ¥1,273.00 ▲(31.37% Upside)
• Action: Downgraded Date: 03/15/26
• Date: Action: Downgraded 03/15/26

The score is primarily held back by weak and volatile cash flow and increasing leverage risk despite improving profitability. Technicals are supportive with an established uptrend, while valuation looks somewhat expensive, only partly offset by the dividend yield.

Positive Factors

Steady revenue growth

Sustained top-line growth across 2024–2026 demonstrates durable demand momentum and successful commercial execution. Consistent revenue increases improve capacity to scale operations and absorb fixed costs, supporting longer-term earnings stability and strategic reinvestment over the next 2–6 months.

Improving margins and ROE

Margin expansion and rising ROE signal improving operating leverage and efficiency versus prior years. Higher profitability metrics, even from low bases, increase the firm's ability to generate internal capital, support dividends or reinvestment, and reduce sensitivity to modest revenue swings.

Workable capital structure with equity build

Incremental equity build and an otherwise workable capital structure provide a buffer against shocks and give room for targeted financing. That structural equity improvement supports strategic flexibility and makes moderate external funding less risky over the medium term.

Negative Factors

Inconsistent and negative cash generation

Repeated negative operating and free cash flow in several years undermines the quality of reported earnings and limits self-funding ability. This inconsistency increases reliance on external financing for growth and capex, raising execution and refinancing risk over the coming months.

Rising leverage trend

A clear upward trend in leverage tightens financial flexibility and elevates solvency risk if cash flows weaken. Higher debt levels increase interest burden and reduce headroom for opportunistic investments or margin pressure, making the business more vulnerable to adverse cycles.

Thin margins and historical volatility

Relative margin thinness and prior earnings volatility highlight limited pricing power and exposure to cost shocks. With modest net and operating margins, profitability can deteriorate quickly during downturns, increasing operational risk and sensitivity to input cost or demand shifts.

Kohsai Co.Ltd. Business Overview & Revenue Model

Company Description

Kohsai Co.,Ltd. engages in the jewelry business in Japan. It offers jewelry and jewelry parts, which include earring parts and clasps, and forged rings. The company was formerly known as Kosaikogei Co.,Ltd. and changed its name to Kohsai Co.,Ltd. in August 2017. The company was founded in 1955 and is headquartered in Kai, Japan. Kohsai Co.,Ltd. operates as a subsidiary of Estio Co., Ltd.

Kohsai Co.Ltd. Financial Statement Overview

Summary

Steady revenue growth and improving margins/ROE support the score, but it is heavily offset by inconsistent and recently negative operating/free cash flow and a rising debt-to-equity trend, which increase financial risk.

Income Statement

Revenue has grown steadily from 2024 to 2026 (up ~8% in 2026 after ~11% in 2025), showing improving demand momentum. Profitability has also strengthened meaningfully versus earlier years: operating and EBITDA margins expanded from low levels in 2022–2023 to ~4.2% and ~5.8% in 2026, respectively, and net margin improved to ~2.6%. The key weakness is that margins are still relatively thin for the industry and the business showed volatility in 2022–2023 with very low earnings power, which raises sensitivity to cost pressures and downturns.

Balance Sheet

The balance sheet looks reasonable with equity building over time and returns on equity improving to ~7.1% in 2026 from much lower levels in 2021–2023. Leverage is moderate but trending higher: debt-to-equity rose from ~0.53 (2022) to ~0.75 (2026), indicating increasing reliance on debt funding as the company grows. Overall, the capital structure is workable, but the upward leverage trend is a clear risk if profitability or cash generation weakens.

Cash Flow

Cash generation is the main concern. Operating cash flow swung negative in multiple years (notably 2022, 2023, and 2026), and free cash flow is also negative in those periods, including a sizable deficit in 2026. While 2024–2025 showed positive operating and free cash flow, the inconsistency suggests working-capital or investment swings that reduce earnings quality and limit financial flexibility. This pattern increases dependence on the balance sheet (or external funding) to support operations and growth.

Breakdown	Jan 2026	Jan 2025	Jan 2024	Jan 2023	Jan 2022
Income Statement
Total Revenue	4.24B	3.93B	3.53B	3.36B	2.99B
Gross Profit	782.52M	705.63M	587.07M	452.31M	417.63M
EBITDA	247.78M	209.71M	167.16M	64.22M	66.37M
Net Income	110.36M	88.40M	91.99M	27.75M	30.05M
Balance Sheet
Total Assets	3.42B	3.01B	2.76B	2.61B	2.46B
Cash, Cash Equivalents and Short-Term Investments	506.81M	685.48M	482.55M	448.55M	535.46M
Total Debt	1.17B	1.07B	885.85M	923.24M	682.21M
Total Liabilities	1.87B	1.55B	1.37B	1.31B	1.18B
Stockholders Equity	1.55B	1.46B	1.39B	1.30B	1.28B
Cash Flow
Free Cash Flow	-211.20M	77.76M	103.60M	-298.86M	-106.08M
Operating Cash Flow	-130.93M	140.69M	124.01M	-252.00M	-15.85M
Investing Cash Flow	-83.70M	-102.21M	-39.91M	-25.86M	-68.45M
Financing Cash Flow	35.77M	167.27M	-50.26M	214.05M	-88.60M

Kohsai Co.Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 969.00
• 50DMA: Positive
• 100DMA: Positive
• 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:7878, the sentiment is Neutral. The current price of 969 is below the 20-day moving average (MA) of 1328.15, below the 50-day MA of 1177.66, and below the 200-day MA of 1110.85, indicating a neutral trend. The MACD of 20.60 indicates Positive momentum. The RSI at 44.84 is Neutral, neither overbought nor oversold. The STOCH value of 30.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:7878.

Kohsai Co.Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9990	74 Outperform	¥24.03B	11.37	―	3.99%	-2.12%	-15.35%
7937	68 Neutral	¥49.62B	6.98	2.46%	3.50%	22.68%	-9.41%
2736	65 Neutral	¥2.33B	-6.03	―	1.21%	1.04%	-66.56%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7878	60 Neutral	¥1.89B	13.17	―	5.13%	0.99%	-42.44%
7872	50 Neutral	¥6.65B	-1,548.06	―	4.64%	-0.68%	46.43%
7810	49 Neutral	¥3.24B	42.09	―	0.25%	18.69%	5.17%