Kosei Securities Co., Ltd. (8617) AI Stock Analysis

• Market Cap: ¥5.48B
• Dividend Yield: 1.12%
• Average Volume (3M): 11.64K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.98
• Revenue Growth: -34.90%
• EPS Growth: -1619.67%
• Country: JP
• Employees: 42
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Capital Markets
• EPS (TTM): 9.08
• Shares Outstanding: 9,486,400
• 10 Day Avg. Volume: 7,570
• 30 Day Avg. Volume: 11,636
• PEG Ratio: 0.04
• Price to Book (P/B): 0.25
• Price to Sales (P/S): 7.05
• P/FCF Ratio: -1.35
• 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: 50 Neutral
• Price Target: ¥560.00 ▲(23.08% Upside)
• Action: Upgraded Date: 01/27/26
• Date: Action: Upgraded 01/27/26

The score is held down primarily by severe deterioration in profitability and cash flow, despite a comparatively strong, low-debt balance sheet. Technicals are supportive with strong momentum, but overbought signals raise near-term risk. Valuation provides limited support given negative earnings and a low dividend yield.

Positive Factors

Strong equity base

A 72.17% equity ratio indicates a durable capital structure that cushions operational losses and supports credibility with counterparties. Over a 2–6 month horizon this capital buffer preserves strategic optionality to invest or restructure without immediate solvency pressure.

Very low financial leverage

Near-zero debt materially reduces fixed interest burden and bankruptcy risk, giving management flexibility to fund recovery via retained capital or modest borrowing. This low leverage is a lasting structural strength during periods of cash shortfall.

High gross margin

An 86% gross margin suggests the core business or trading activities generate wide spreads before overhead. If revenue stabilizes, this structural profitability at the gross level improves prospects for restoring operating profitability through cost control and scale.

Negative Factors

Severe revenue contraction

A 62.7% year-on-year revenue collapse signals loss of scale that erodes fixed-cost coverage, client reach, and pricing power. Revenue recovery typically takes months to quarters, and prolonged contraction undermines long-term margin recovery and strategic investments.

Deep negative profitability

A net margin near -84% and negative ROE reflect persistent operating losses that destroy shareholder value and impede reinvestment. Over several months this weak profitability limits ability to rebuild reserves or fund growth without external financing or drastic structural changes.

Large free cash flow deficit

A ¥2,916m negative FCF denotes significant cash burn and weak cash conversion. Even with strong equity, sustained negative FCF pressures liquidity, forces reliance on financing or asset sales, and constrains operational investments or client service capacity over the medium term.

Kosei Securities Co., Ltd. Business Overview & Revenue Model

Company Description

The Kosei Securities Co., Ltd. engages in the brokerage, underwriting, and selling of securities in Japan. It handles stocks, bonds, mutual funds, futures/options, real estate investment trusts, and insurance. The company was founded in 1961 and is headquartered in Osaka, Japan.

How the Company Makes Money

Kosei Securities generates revenue through multiple streams, primarily from brokerage fees on securities transactions, which include commissions earned from buying and selling stocks and other financial instruments. Additionally, the company earns income from investment advisory services provided to clients, which often includes management fees based on assets under management. Another significant revenue source is underwriting services for new equity and debt issuances, where the company helps corporations raise capital in exchange for fees. Partnerships with financial institutions and participation in large-scale investment projects also contribute to its earnings, as they allow Kosei Securities to expand its service offerings and reach a broader client base.

Kosei Securities Co., Ltd. Financial Statement Overview

Summary

Financial health is weak overall: revenues fell 62.69% and net margin is deeply negative (-83.51%) with negative EBIT/EBITDA, compounded by heavy cash burn (free cash flow -2,916M JPY). The main offset is a strong balance sheet with low leverage (equity ratio 72.17%, debt-to-equity 0.02), but profitability and cash generation remain severely impaired.

Income Statement

The income statement shows a concerning trend with declining revenues and significant losses. The Gross Profit Margin is healthy at 86.05% for the latest year, but the Net Profit Margin is heavily negative at -83.51% due to substantial net losses. Revenue has sharply decreased by 62.69% from the previous year, indicating a severe downturn. The negative EBIT and EBITDA margins further highlight operational inefficiencies.

Balance Sheet

The balance sheet remains robust with a strong Equity Ratio of 72.17%, indicating a solid capital structure with low leverage. The Debt-to-Equity Ratio is low at 0.02, suggesting minimal reliance on debt. However, the Return on Equity is negative at -2.97%, reflecting the company's struggle to generate returns for shareholders amidst losses.

Cash Flow

The cash flow statement reveals severe challenges, with a significant negative Free Cash Flow of -2,916 million yen and a sharp decline from the previous year. The Operating Cash Flow to Net Income Ratio is negative, underscoring the cash burn and inability to convert sales into cash. The Free Cash Flow to Net Income Ratio also highlights inefficiencies in cash management.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	600.00M	558.00M	1.50B	433.00M	443.00M	1.11B
Gross Profit	525.00M	480.00M	1.44B	417.00M	425.00M	1.07B
EBITDA	-410.00M	-462.00M	496.00M	-442.00M	-404.00M	208.00M
Net Income	-444.00M	-466.00M	377.00M	-397.00M	-212.00M	162.00M
Balance Sheet
Total Assets	27.53B	21.78B	24.61B	21.05B	20.41B	22.52B
Cash, Cash Equivalents and Short-Term Investments	9.07B	5.45B	9.22B	8.49B	7.39B	8.20B
Total Debt	474.00M	353.00M	268.00M	359.00M	515.00M	615.00M
Total Liabilities	11.94B	6.06B	7.67B	5.71B	4.49B	5.84B
Stockholders Equity	15.59B	15.72B	16.94B	15.34B	15.92B	16.67B
Cash Flow
Free Cash Flow	0.00	-2.92B	770.00M	370.00M	-1.10B	345.00M
Operating Cash Flow	0.00	-2.91B	831.00M	383.00M	-1.09B	557.00M
Investing Cash Flow	0.00	769.00M	-419.00M	-160.00M	205.00M	-621.00M
Financing Cash Flow	0.00	-160.00M	-47.00M	-48.00M	-123.00M	-69.00M

Kosei Securities Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 455.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:8617, the sentiment is Positive. The current price of 455 is below the 20-day moving average (MA) of 563.75, below the 50-day MA of 518.06, and below the 200-day MA of 474.43, indicating a bullish trend. The MACD of 16.57 indicates Positive momentum. The RSI at 73.95 is Negative, neither overbought nor oversold. The STOCH value of 89.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8617.

Kosei Securities Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8747	81 Outperform	¥18.06B	4.73	―	4.13%	-9.87%	4.37%
7175	74 Outperform	¥7.45B	7.99	―	4.08%	-10.65%	-19.65%
8613	71 Outperform	¥73.17B	14.26	9.22%	6.15%	7.45%	45.25%
8614	68 Neutral	¥54.67B	14.47	―	4.86%	6.40%	41.18%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
8700	65 Neutral	¥7.10B	11.26	―	3.66%	4.48%	19.69%
8617	50 Neutral	¥5.48B	-68.51	―	1.12%	-34.90%	-1619.67%