Shigematsu Works Co., Ltd. (7980) AI Stock Analysis

• Market Cap: ¥7.22B
• Dividend Yield: 1.93%
• Average Volume (3M): 7.97K
• Price to Earnings (P/E): 6.1
• Beta (1Y): 0.07
• Revenue Growth: 4.41%
• EPS Growth: -16.07%
• Country: JP
• Employees: 386
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Instruments & Supplies
• EPS (TTM): 32.29
• Shares Outstanding: 7,200,000
• 10 Day Avg. Volume: 9,150
• 30 Day Avg. Volume: 7,966
• PEG Ratio: 0.22
• Price to Book (P/B): 0.67
• Price to Sales (P/S): 0.41
• P/FCF Ratio: -3.47
• 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: 82 Outperform
• Price Target: ¥1,163.00 ▲(48.53% Upside)
• Action: Reiterated Date: 03/10/26
• Date: Action: Reiterated 03/10/26

The score is driven by strong technical uptrend signals and an attractive low P/E valuation. Financial performance is solid on revenue growth and margins with a stable balance sheet, but it is tempered by negative free cash flow and weak cash generation from operations.

Positive Factors

Consistent revenue growth and healthy margins

Shigematsu's reported 8.6% revenue growth alongside a 31.4% gross margin and 12.6% EBITDA margin indicates steady end-market demand and effective cost control. These margins support reinvestment and operational resilience, helping sustain profitability over the 2-6 month horizon and beyond.

Solid balance sheet with moderate leverage

A debt-to-equity ratio of 0.59 and a 47.5% equity ratio show a stable capital structure with moderate leverage. ROE around 9.1% demonstrates reasonable returns on equity. This financial positioning provides flexibility to fund operations or absorb shocks without severe solvency stress in the medium term.

Defensive business model with recurring demand

As a PPE and respiratory-protection manufacturer, the company benefits from recurring consumable demand (filters, renewals) and institutional customers bound by safety regulations. This structural demand and customer stickiness supports predictable revenue streams and lowers long-term revenue volatility risks.

Negative Factors

Negative free cash flow and weak cash conversion

A -1.65 billion yen free cash flow and an operating-cash-to-net-income ratio of 0.29 indicate operations and capex are consuming cash. Persistent weak cash conversion limits internal funding for growth, dividends, or debt reduction, potentially forcing external financing and reducing strategic flexibility.

Increasing debt noted as a potential risk

The balance-sheet note about rising total debt signals growing leverage risk. With modest net margins and negative FCF, additional debt raises interest and refinancing exposure, could constrain capital allocation, and amplify downside in adverse demand or cost environments over the medium term.

Revenue exposed to cyclical industrial and public-health trends

Sales depend on industrial activity and episodic public-health demand, creating structural cyclicality. While baseline compliance purchases provide a floor, significant swings in industrial output or pandemic-driven spikes can produce revenue and utilization volatility, complicating medium-term planning.

Shigematsu Works Co., Ltd. Business Overview & Revenue Model

Company Description

Shigematsu Works Co., Ltd. manufactures and sells protective equipment in Japan. It offers protective clothing and gloves; eye protectors; reusable respirators; disposable respirators; powered air purifying respirators; supplied-air respirators; self-contained breathing apparatus; gas respirators/chemical cartridge respirators; face shields; earmuffs; safety belts; stretchers; and oxygen meters. The company is also involved in the manufacture and sale of instrument, chemical, and material related to safety and health, disaster-prevention in the plumbing and industrial fields. Shigematsu Works Co., Ltd. was founded in 1917 and is headquartered in Tokyo, Japan.

How the Company Makes Money

The company primarily makes money by manufacturing and selling respiratory protection products and related PPE to corporate and institutional customers that need workplace safety equipment. Revenue is generated through product sales across its PPE lineup (with respiratory protection as the core), typically via distribution channels such as safety-equipment dealers and industrial supply networks, as well as direct sales to end users where applicable. Earnings are influenced by ongoing replacement demand (e.g., consumable filters and periodic product renewal), workplace safety compliance requirements, and fluctuations in industrial activity and public-health-driven demand for protective equipment. Specific breakdowns by segment, customer mix, pricing model, or named strategic partnerships: null.

Shigematsu Works Co., Ltd. Financial Statement Overview

Summary

Strong income statement (revenue growth 8.6%, gross margin 31.4%, EBITDA margin 12.6%) and a solid balance sheet (debt-to-equity 0.59, equity ratio 47.5%). The main drag is cash flow: negative free cash flow (-1.65B yen) and weak operating cash conversion (operating cash flow to net income 0.29).

Income Statement

Shigematsu Works Co., Ltd. has shown a strong revenue growth rate of 8.6% in the most recent year, with consistent improvements in gross and net profit margins. The gross profit margin stands at 31.4%, while the net profit margin is 5.5%, indicating efficient cost management and profitability. The EBITDA margin of 12.6% reflects a healthy operating performance. However, EBIT margin at 7.6% suggests room for operational cost optimization.

Balance Sheet

The company's balance sheet displays a solid equity base with a debt-to-equity ratio of 0.59, reflecting moderate leverage. The return on equity is 9.1%, indicating good profitability relative to shareholder investment. The equity ratio of 47.5% suggests a stable financial structure, though an increase in total debt from the previous year could be a potential risk factor if not managed properly.

Cash Flow

The cash flow analysis reveals a challenging year with a negative free cash flow of -1.65 billion yen, largely due to high capital expenditures. The operating cash flow to net income ratio of 0.29 indicates weaker cash generation from operations. The free cash flow to net income ratio is negative, highlighting the impact of capital investments on cash reserves, necessitating careful management of cash flow.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	14.08B	14.11B	13.00B	12.88B	11.92B	12.70B
Gross Profit	4.27B	4.30B	3.93B	4.01B	3.63B	4.02B
EBITDA	1.67B	1.73B	1.31B	1.69B	1.25B	1.36B
Net Income	665.87M	780.58M	584.08M	748.24M	589.11M	651.05M
Balance Sheet
Total Assets	17.98B	18.17B	16.22B	15.32B	14.32B	13.98B
Cash, Cash Equivalents and Short-Term Investments	1.46B	1.48B	1.63B	1.63B	1.35B	1.53B
Total Debt	4.84B	5.04B	3.12B	3.13B	3.36B	3.45B
Total Liabilities	9.32B	9.61B	7.94B	7.97B	7.83B	8.37B
Stockholders Equity	8.66B	8.57B	8.28B	7.35B	6.50B	5.62B
Cash Flow
Free Cash Flow	0.00	-1.65B	399.81M	667.73M	26.94M	-328.40M
Operating Cash Flow	0.00	228.18M	966.39M	1.12B	490.66M	762.84M
Investing Cash Flow	0.00	-2.21B	-838.81M	-643.92M	-496.46M	-1.13B
Financing Cash Flow	0.00	1.83B	-125.72M	-299.93M	-173.66M	399.23M

Shigematsu Works Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 783.00
• 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:7980, the sentiment is Positive. The current price of 783 is below the 20-day moving average (MA) of 1013.90, below the 50-day MA of 887.14, and below the 200-day MA of 823.58, indicating a bullish trend. The MACD of 46.68 indicates Positive momentum. The RSI at 54.98 is Neutral, neither overbought nor oversold. The STOCH value of 19.45 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7980.

Shigematsu Works Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7980	82 Outperform	¥7.22B	6.06	―	1.93%	4.41%	-16.07%
7730	71 Outperform	¥148.57B	18.72	―	2.73%	5.10%	-26.13%
7747	68 Neutral	¥836.83B	24.33	11.64%	0.82%	13.53%	-7.39%
7716	63 Neutral	¥234.08B	-69.02	-2.06%	2.66%	5.43%	-20.67%
8086	62 Neutral	¥242.36B	5.59	4.38%	2.03%	6.04%	733.13%
7702	54 Neutral	¥10.60B	31.52	―	3.85%	0.38%	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%