Sanko Gosei Ltd. (7888) AI Stock Analysis

• Market Cap: ¥27.83B
• Dividend Yield: 2.65%
• Average Volume (3M): 167.09K
• Price to Earnings (P/E): 7.2
• Beta (1Y): 1.43
• Revenue Growth: -2.86%
• EPS Growth: 47.66%
• Country: JP
• Employees: 2,905
• Sector: Technology
• Sector Strength: 85
• Industry: Semiconductors
• EPS (TTM): 42.07
• Shares Outstanding: 30,688,568
• 10 Day Avg. Volume: 149,470
• 30 Day Avg. Volume: 167,090
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: ¥797.00
• Price Target Upside: -12.13% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 84 Outperform
• Price Target: ¥797.00 ▼(-12.13% Downside)

Sanko Gosei Ltd. stands out with an attractive valuation due to its low P/E ratio and high dividend yield, making it appealing to value investors. The company's strong financial performance is supported by revenue growth and profitability, though challenges in free cash flow management exist. Technical indicators suggest bullish momentum but indicate overbought conditions, suggesting potential near-term price correction.

Sanko Gosei Ltd. Business Overview & Revenue Model

Company Description

Sanko Gosei Ltd. engages in the molding and sale of plastic parts in Japan and internationally. It is involved in the production and assembly of mechanical/digital parts; and design, production, and sale of molds for plastic molded parts, industrial products, and industrial robots. The company's products include auto parts, such as exterior and interior parts, structured parts, instrument panels, functional parts, fan shrouds, and power pistons. It also provides OA apparatus, such as printer flames and fuser assemblies, automated fuser assembly lines, toner cartridge plastic parts, CMT automated assembly lines, printer covers, printers, and optical equipment flames; and air-conditioner products, including quiet and heat-resistant cross flow fans, propeller fans, and turbofans, as well as panels and covers for air conditioners. In addition, the company offers molded plastic parts for medical equipment; and GPS parts, saxophones, compact disc and mechanical chassis parts, nursing care bed parts, and recaps. Its products are used in industrial electric equipment, information and telecommunication appliance, automobile, household appliance, housing equipment, and nursing care products. Sanko Gosei Ltd. was founded in 1940 and is headquartered in Nanto, Japan.

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. demonstrates solid financial performance with strong revenue growth and improved profitability margins. The balance sheet is stable with moderate leverage, but there is a significant drop in free cash flow, indicating potential challenges in cash management.

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	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	93.78B	81.11B	65.66B	55.15B	50.72B
Gross Profit	13.38B	11.49B	9.71B	8.77B	6.82B
EBITDA	8.24B	7.09B	5.74B	5.50B	3.68B
Net Income	2.61B	2.10B	1.81B	1.30B	-406.00M
Balance Sheet
Total Assets	74.93B	65.58B	58.41B	56.63B	48.11B
Cash, Cash Equivalents and Short-Term Investments	9.96B	8.78B	6.82B	8.08B	7.50B
Total Debt	23.17B	19.96B	20.06B	20.07B	17.88B
Total Liabilities	44.45B	39.63B	35.16B	35.98B	29.56B
Stockholders Equity	29.91B	25.48B	22.81B	20.29B	18.19B
Cash Flow
Free Cash Flow	782.00M	4.04B	16.00M	859.00M	-1.03B
Operating Cash Flow	5.70B	6.79B	3.01B	3.53B	1.61B
Investing Cash Flow	-4.94B	-2.87B	-2.35B	-3.34B	-2.75B
Financing Cash Flow	-110.00M	-2.25B	-2.36B	-102.00M	1.70B

Sanko Gosei Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 907.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Neutral

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 907 is above the 20-day moving average (MA) of 873.80, above the 50-day MA of 771.78, and above the 200-day MA of 648.72, indicating a bullish trend. The MACD of 39.67 indicates Positive momentum. The RSI at 70.92 is Negative, neither overbought nor oversold. The STOCH value of 70.56 is Neutral, 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
7888	84 Outperform	¥27.83B	7.17		2.65%	-2.86%	47.66%
Sector *	61 Neutral	$35.62B	7.50	-10.94%	1.87%	8.86%	-10.27%
SMU	―	€135.65M	15.09	12.01%	―	―	―
6855	78 Outperform	¥36.24B	10.14		2.27%	32.53%	182.70%
6627	75 Outperform	¥40.80B	13.92		2.39%	-0.46%	-25.32%
7420	73 Outperform	¥26.78B	10.63		4.60%	5.49%	17.69%

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.