Sanko Gosei Ltd. (7888) AI Stock Analysis

• Market Cap: ¥18.75B
• Dividend Yield: 3.25%
• Average Volume (3M): 97.72K
• Price to Earnings (P/E): 5.3
• Beta (1Y): 1.36
• Revenue Growth: 0.52%
• EPS Growth: 62.37%
• Country: JP
• Employees: 2,905
• Sector: Technology
• Sector Strength: 83
• Industry: Semiconductors
• EPS (TTM): 117.08
• Shares Outstanding: 30,688,568
• 10 Day Avg. Volume: 63,050
• 30 Day Avg. Volume: 97,723
• PEG Ratio: 0.49
• Price to Book (P/B): 0.64
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.01
• 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

• Rating: 80 Outperform
• Price Target: ¥697.00 ▲(13.33%Upside)

Sanko Gosei Ltd. receives an overall score of 80, driven by strong financial performance and attractive valuation. The company shows robust revenue growth, improved profitability, and a stable financial position. Technical indicators suggest potential for upward movement, though free cash flow management remains a challenge.

Sanko Gosei Ltd. Business Overview & Revenue Model

Company Description

Sanko Gosei Ltd. (7888) is a Japanese company operating primarily in the manufacturing sector, focusing on the production of high-precision plastic components. It serves various industries, including automotive, electronics, and consumer goods, by providing innovative and reliable plastic solutions. The company is known for its advanced molding technologies and commitment to quality and sustainability in its manufacturing processes.

How the Company Makes Money

Sanko Gosei Ltd. makes money through the design, production, and sale of plastic components and assemblies. The company's key revenue streams include supplying high-quality plastic parts to major automotive manufacturers, electronics companies, and other industrial clients. Sanko Gosei leverages its expertise in precision molding and engineering to deliver customized solutions that meet the specific needs of its customers. The company's revenue is further supported by its strategic partnerships with global manufacturers and its ability to adapt to evolving market demands through continuous innovation and technological advancements.

Sanko Gosei Ltd. Financial Statement Overview

Summary

Sanko Gosei Ltd. exhibits robust revenue growth and improved profitability, driven by effective cost management and operational efficiencies. The balance sheet reflects a stable financial position with controlled leverage. However, the decline in free cash flow signals potential cash flow management challenges. Overall, the company is on a positive trajectory with opportunities for further optimization in profitability and cash flow.

Income Statement

Sanko Gosei Ltd. has demonstrated a strong revenue growth of 15.6% from 2023 to 2024. Gross profit margin improved to 14.3% in 2024, reflecting efficient cost management, while the net profit margin increased to 2.8%. The EBIT margin of 4.4% and EBITDA margin of 8.8% indicate healthy operational performance. However, the net profit margin remains relatively low, suggesting room for profit optimization.

Balance Sheet

The company maintains a stable balance sheet with a debt-to-equity ratio of 0.77, indicating moderate leverage. Return on equity improved to 8.7% in 2024, showcasing enhanced profitability. The equity ratio stands at 39.9%, reflecting a balanced capital structure. While the financial position is solid, higher equity ratios could bolster financial resilience.

Cash Flow

Operating cash flow decreased slightly but remained strong at 5.7 billion JPY. Free cash flow, however, dropped significantly by 80%, indicating reduced cash available for growth investments. The operating cash flow to net income ratio is healthy at 2.2, but the free cash flow to net income ratio dropped to 0.3, suggesting a need to enhance free cash flow generation.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
93.64B	93.78B	81.11B	65.66B	55.15B	50.72B
	Gross Profit
14.51B	13.38B	11.49B	9.71B	8.77B	6.82B
	EBIT
5.04B	4.13B	3.48B	2.54B	2.41B	694.00M
	EBITDA
7.93B	8.24B	7.09B	5.74B	5.50B	3.68B
	Net Income Common Stockholders
3.21B	2.61B	2.10B	1.81B	1.30B	-406.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
10.86B	9.96B	8.78B	6.82B	8.08B	7.50B
	Total Assets
76.93B	74.93B	65.58B	58.41B	56.63B	48.11B
	Total Debt
24.25B	23.17B	19.96B	20.06B	20.07B	17.88B
	Net Debt
13.39B	13.21B	11.19B	13.24B	11.99B	10.38B
	Total Liabilities
45.37B	44.45B	39.63B	35.16B	35.98B	29.56B
	Stockholders Equity
30.99B	29.91B	25.48B	22.81B	20.29B	18.19B
Cash Flow		Free Cash Flow
0.00	782.00M	4.04B	16.00M	859.00M	-1.03B
	Operating Cash Flow
0.00	5.70B	6.79B	3.01B	3.53B	1.61B
	Investing Cash Flow
0.00	-4.94B	-2.87B	-2.35B	-3.34B	-2.75B
	Financing Cash Flow
0.00	-110.00M	-2.25B	-2.36B	-102.00M	1.70B

Sanko Gosei Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 615.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7888, the sentiment is Positive. The current price of 615 is above the 20-day moving average (MA) of 610.05, above the 50-day MA of 589.83, and above the 200-day MA of 596.36, indicating a bullish trend. The MACD of 2.80 indicates Positive momentum. The RSI at 58.34 is Neutral, neither overbought nor oversold. The STOCH value of 88.02 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7888.

Sanko Gosei Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6627	80 Outperform	¥27.02B	8.19		3.70%	3.61%	-14.91%
7888	80 Outperform	¥18.75B	5.25		3.25%	0.52%	62.37%
6855	79 Outperform	¥27.28B	7.90		1.85%	36.47%	454.91%
6387	79 Outperform	€21.93B	14.93	12.01%	1.65%	8.39%	7.06%
7420	73 Outperform	¥26.06B	11.84		5.81%	6.47%	-6.67%
Sector *	62 Neutral	$11.91B	9.99	-7.22%	4.96%	7.31%	-8.91%

Sanko Gosei Ltd. Corporate Events

Sanko Gosei Ltd. Increases Year-End Dividend Forecast

Sanko Gosei Ltd. has announced an increase in its year-end dividend forecast to 14 yen per share, up by 2 yen from the previous forecast, resulting in an annual dividend of 24 yen per share. This decision reflects the company’s commitment to providing stable and continuous returns to shareholders, considering future business development and management structure strengthening.