Sankyo Seiko Co., Ltd. (8018) AI Stock Analysis

• Market Cap: ¥27.55B
• Dividend Yield: 5.87%
• Average Volume (3M): 43.47K
• Price to Earnings (P/E): 59.6
• Beta (1Y): 1.04
• Revenue Growth: -2.38%
• EPS Growth: -77.89%
• Country: JP
• Employees: 235
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Retail
• EPS (TTM): -29.97
• Shares Outstanding: 46,000,000
• 10 Day Avg. Volume: 28,160
• 30 Day Avg. Volume: 43,469
• PEG Ratio: -4.45
• Price to Book (P/B): 0.47
• Price to Sales (P/S): 1.06
• P/FCF Ratio: -160.14
• 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: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: ¥787.00 ▲(14.06% Upside)

Sankyo Seiko Co., Ltd. demonstrates strong financial health and positive technical indicators, contributing to a favorable stock score. However, the high P/E ratio suggests potential overvaluation, which is a significant risk factor. The attractive dividend yield partially offsets this concern, providing a stable income stream for investors.

Positive Factors

Revenue Growth

Sankyo Seiko's consistent revenue growth indicates strong demand for its products and effective market penetration, supporting long-term business stability.

Balance Sheet Strength

A strong balance sheet with low leverage and high equity ensures financial stability and flexibility, allowing the company to invest in growth opportunities.

Operational Efficiency

Improved operational efficiency through better EBIT and EBITDA margins enhances profitability and supports sustainable growth.

Negative Factors

Negative Free Cash Flow

Negative free cash flow can limit the company's ability to fund new projects and may necessitate external financing, impacting financial flexibility.

Earnings Volatility

Fluctuations in net profit margin suggest potential volatility in profitability, which could affect investor confidence and long-term financial planning.

Capital Expenditures

High capital expenditures, while potentially beneficial for growth, can strain cash reserves, limiting the ability to pursue other strategic investments.

Sankyo Seiko Co., Ltd. Business Overview & Revenue Model

Company Description

Sankyo Seiko Co., Ltd. (8018) is a Japanese company primarily engaged in the manufacturing and sale of precision machinery and components. With a history rooted in mechanical engineering, the company serves various industries, including automotive, aerospace, and consumer electronics. Its core products include high-precision machining tools, industrial machinery, and components for electronic devices. Sankyo Seiko's commitment to innovation and quality positions it as a reliable partner in the precision manufacturing sector.

How the Company Makes Money

Sankyo Seiko generates revenue through several key streams, including the sale of precision machinery and components, which are in high demand across various sectors such as automotive and electronics. The company utilizes a direct sales model, often working closely with manufacturers to provide tailored solutions that meet specific industry needs. Additionally, Sankyo Seiko benefits from long-term contracts and partnerships with major corporations in its target markets, ensuring a steady flow of orders. Research and development also play a crucial role in its revenue model, as the company invests in innovative technologies, thereby enhancing its product offerings and maintaining competitive advantage.

Sankyo Seiko Co., Ltd. Financial Statement Overview

Summary

Sankyo Seiko Co., Ltd. exhibits a strong financial position with consistent revenue growth and effective cost management. The balance sheet is robust with low leverage and high equity, ensuring financial stability. Despite positive operating cash flow, the negative free cash flow highlights the need to manage capital expenditures carefully to maintain long-term financial flexibility.

Income Statement

Sankyo Seiko Co., Ltd. has demonstrated consistent revenue growth over the past years, with a steady increase in total revenue from ¥16,914 million in 2022 to ¥22,594 million in 2025. The gross profit margin remains strong, averaging around 44%, indicating efficient cost management. However, the net profit margin shows slight fluctuations due to varying net income levels, suggesting potential volatility in profitability. The EBIT and EBITDA margins have improved, reflecting enhanced operational efficiency.

Balance Sheet

The balance sheet of Sankyo Seiko Co., Ltd. indicates strong financial health with a robust equity base. The debt-to-equity ratio is low, demonstrating prudent leverage management, while the equity ratio is consistently high, signifying financial stability. Return on Equity (ROE) has been maintained at a satisfactory level, showcasing effective utilization of shareholder funds. The company's liquidity position is strong, evidenced by significant cash reserves and low net debt.

Cash Flow

The cash flow analysis reveals a mixed picture. While operating cash flow remains positive, there is a noticeable decline in free cash flow due to increased capital expenditures, which could constrain cash availability for other investments. The operating cash flow to net income ratio is favorable, indicating efficient cash generation from operations. However, the negative free cash flow suggests potential challenges in sustaining capital investments without external financing.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	22.55B	22.59B	21.27B	19.47B	16.91B	17.17B
Gross Profit	9.65B	9.88B	9.86B	8.12B	6.65B	7.16B
EBITDA	3.49B	4.22B	4.48B	3.65B	3.44B	2.32B
Net Income	2.04B	2.11B	2.23B	2.21B	2.14B	1.14B
Balance Sheet
Total Assets	68.30B	69.82B	66.61B	53.00B	50.68B	51.65B
Cash, Cash Equivalents and Short-Term Investments	7.58B	9.01B	11.91B	14.37B	16.41B	17.11B
Total Debt	5.64B	5.59B	6.24B	3.92B	3.09B	4.69B
Total Liabilities	17.73B	18.64B	18.89B	12.85B	11.02B	13.32B
Stockholders Equity	50.22B	50.83B	47.39B	39.83B	39.36B	37.94B
Cash Flow
Free Cash Flow	0.00	-150.00M	-2.05B	2.64B	2.36B	2.39B
Operating Cash Flow	0.00	1.11B	3.20B	2.77B	2.39B	2.50B
Investing Cash Flow	0.00	-817.00M	-5.93B	-1.52B	-457.00M	1.13B
Financing Cash Flow	0.00	-3.10B	-421.00M	-3.38B	-2.72B	-1.06B

Sankyo Seiko Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 690.00
• 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:8018, the sentiment is Positive. The current price of 690 is below the 20-day moving average (MA) of 694.35, above the 50-day MA of 683.38, and above the 200-day MA of 637.50, indicating a neutral trend. The MACD of -0.24 indicates Positive momentum. The RSI at 49.81 is Neutral, neither overbought nor oversold. The STOCH value of 45.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8018.

Sankyo Seiko Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9837	78 Outperform	¥38.80B	11.91	―	4.20%	10.09%	54.33%
7683	76 Outperform	¥26.06B	29.20	―	1.06%	2.95%	-24.92%
8018	70 Outperform	¥27.55B	59.62	―	5.87%	-2.38%	-77.89%
8008	67 Neutral	¥37.43B	25.18	―	4.76%	48.00%	16.54%
8185	66 Neutral	¥33.15B	16.71	―	4.13%	-9.86%	-14.02%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
3548	53 Neutral	¥27.55B	-12.66	―	4.97%	-7.21%	-5127.88%