HS Holdings Co.,Ltd. (8699) AI Stock Analysis

• Market Cap: ¥51.70B
• Dividend Yield: 0.83%
• Average Volume (3M): 34.04K
• Price to Earnings (P/E): 2.8
• Beta (1Y): 0.53
• Revenue Growth: 24.64%
• EPS Growth: 33.45%
• Country: JP
• Employees: 530
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Capital Markets
• EPS (TTM): 129.02
• Shares Outstanding: 40,953,500
• 10 Day Avg. Volume: 26,010
• 30 Day Avg. Volume: 34,036
• PEG Ratio: 0.07
• Price to Book (P/B): 0.30
• Price to Sales (P/S): 0.67
• P/FCF Ratio: 9.61
• 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: 75 Outperform
• Price Target: ¥1,492.00 ▲(27.52% Upside)

The score is driven primarily by exceptionally strong valuation (very low P/E and high dividend yield). Financial performance is stable overall due to a robust, low-leverage balance sheet, but is held back by declining revenue and weak operating margin. Technicals show an uptrend, yet overbought signals temper the outlook.

Positive Factors

Low leverage and strong equity base

The extremely low debt-to-equity and high equity ratio provide durable financial flexibility, lowering default and refinancing risk. With 14% ROE, the firm can compound shareholder capital and fund opportunistic investments or dividends without relying on leverage, aiding multi‑period stability.

Diversified business model and partnerships

A multi‑stream model—investment income, real estate rental/sales, and manufacturing—reduces single‑industry cyclicality and smooths earnings across cycles. Strategic partnerships expand distribution and ops capabilities, supporting sustainable cash generation and risk mitigation over many quarters.

Improving free cash flow

A return to positive FCF strengthens internal funding for capex, dividends, and investments without adding debt. While cash conversion can improve, durable positive FCF enhances capital allocation optionality and reduces reliance on external financing across future reporting periods.

Negative Factors

Sharp revenue decline

A 25% revenue decline materially reduces scale and operating leverage, pressuring margins and reinvestment capacity. If persistent, shrinking top‑line makes it harder to cover fixed costs, sustain investment programs, or maintain dividends, weakening long‑term earnings durability.

Negative operating (EBIT) margin

A negative EBIT margin signals core business operating inefficiency; profits appear driven by non‑operational items. Over time, lack of sustainable operating profitability limits reinvestment from operations, increases earnings volatility, and undermines the resilience of recurring earnings.

Earnings reliant on investment income

Dependence on dividends and capital gains ties earnings and cash flow to market cycles and asset realizations. This structural reliance increases volatility and makes forward cash flows and dividend sustainability dependent on external market conditions rather than predictable operating cash generation.

HS Holdings Co.,Ltd. Business Overview & Revenue Model

Company Description

HS Holdings Co.,Ltd. provides merger and acquisition intermediary services in Japan. It offers merger and acquisition consulting and brokerage, business succession consulting, business investment management, venture investment, and business revitalization consulting services. The company was formerly known as Sawada Holdings Co., Ltd. HS Holdings Co.,Ltd. was founded in 1958 and is based in Tokyo, Japan.

How the Company Makes Money

HS Holdings Co., Ltd. generates revenue through multiple streams, including equity investments, real estate development, and the provision of manufacturing services. The company primarily earns income from dividends and capital gains on its investments in various sectors. Additionally, HS Holdings has established significant partnerships with industry leaders, enhancing its market reach and operational efficiency. The real estate segment contributes to its revenue through rental income and property sales, while the manufacturing division generates profit through the production and sale of goods to both domestic and international clients. Overall, the company's diverse portfolio helps mitigate risks and stabilize its earnings.

HS Holdings Co.,Ltd. Financial Statement Overview

Summary

Mixed fundamentals: a strong balance sheet (very low debt-to-equity of 0.02, high equity ratio of 74.9%, ROE of 14.0%) supports stability, but the income statement shows a sharp revenue decline (-25.0%) and weak operating performance (EBIT margin -2.8%). Cash flow is improving (positive FCF), though cash conversion remains moderate (OCF/net income 0.37).

Income Statement

The income statement shows a mixed performance. The gross profit margin for the latest period is 21.0%, indicating reasonable profitability. However, the company experienced a significant decline in revenue from the previous year, with a revenue growth rate of -25.0%. The net profit margin stands at 32.0%, which is strong, but the negative EBIT margin of -2.8% highlights operational challenges. Overall, the company demonstrates profitability but faces revenue and operational efficiency issues.

Balance Sheet

The balance sheet is robust with a low debt-to-equity ratio of 0.02, indicating minimal leverage and financial stability. The return on equity is strong at 14.0%, reflecting efficient use of equity to generate profits. Additionally, the equity ratio is high at 74.9%, suggesting a solid financial structure with a significant proportion of assets financed by equity. Overall, the balance sheet reveals a strong financial position with low leverage and high equity.

Cash Flow

The cash flow statement shows improvement in free cash flow, with a positive free cash flow of 2,711 million yen, compared to a negative figure in the previous year. The operating cash flow to net income ratio is 0.37, indicating moderate cash generation relative to net income. However, the free cash flow to net income ratio is 0.22, suggesting some inefficiencies in converting income into cash. Overall, cash flow performance is improving but still faces challenges in cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	38.35B	38.71B	50.48B	78.28B	62.49B	58.15B
Gross Profit	22.94B	36.99B	42.20B	55.39B	40.66B	32.49B
EBITDA	103.00M	16.06B	17.04B	34.58B	21.21B	12.02B
Net Income	12.69B	12.10B	9.46B	11.37B	6.54B	-3.02B
Balance Sheet
Total Assets	114.57B	115.33B	98.77B	621.73B	577.45B	499.59B
Cash, Cash Equivalents and Short-Term Investments	17.85B	18.05B	18.40B	149.69B	88.14B	92.32B
Total Debt	2.69B	1.31B	1.14B	78.04B	63.64B	54.48B
Total Liabilities	27.30B	28.63B	26.36B	540.32B	503.02B	428.25B
Stockholders Equity	86.72B	86.37B	71.87B	59.63B	52.54B	54.58B
Cash Flow
Free Cash Flow	0.00	2.71B	-26.63B	15.12B	-7.47B	74.81B
Operating Cash Flow	0.00	4.53B	-25.59B	18.50B	-4.79B	77.64B
Investing Cash Flow	0.00	-6.05B	-8.10B	-17.94B	-7.66B	-8.70B
Financing Cash Flow	0.00	-287.00M	12.13B	2.58B	-1.72B	-14.75B

HS Holdings Co.,Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1170.00
• 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:8699, the sentiment is Positive. The current price of 1170 is below the 20-day moving average (MA) of 1274.75, below the 50-day MA of 1209.86, and above the 200-day MA of 1069.19, indicating a bullish trend. The MACD of 26.94 indicates Positive momentum. The RSI at 60.85 is Neutral, neither overbought nor oversold. The STOCH value of 54.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8699.

HS Holdings Co.,Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8707	81 Outperform	¥81.62B	8.87	―	5.75%	10.85%	30.77%
8699	75 Outperform	¥51.70B	2.82	―	0.83%	24.64%	33.45%
8704	72 Outperform	¥28.67B	7.55	―	3.91%	-11.56%	-26.01%
8622	71 Outperform	¥35.37B	11.83	5.54%	5.47%	-1.80%	-1.02%
8614	68 Neutral	¥53.06B	13.66	―	4.86%	6.40%	41.18%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
8708	64 Neutral	¥44.02B	17.72	―	4.36%	1.14%	-16.88%