Akatsuki Corp. (8737) AI Stock Analysis

• Market Cap: ¥16.30B
• Dividend Yield: 5.49%
• Average Volume (3M): 45.69K
• Price to Earnings (P/E): 6.1
• Beta (1Y): 0.72
• Revenue Growth: 18.05%
• EPS Growth: 34.17%
• Country: JP
• Employees: 365
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 30.68
• Shares Outstanding: 34,029,545
• 10 Day Avg. Volume: 46,390
• 30 Day Avg. Volume: 45,686
• PEG Ratio: 1.27
• Price to Book (P/B): 0.85
• Price to Sales (P/S): 0.27
• P/FCF Ratio: -3.64
• 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: 73 Outperform
• Price Target: ¥598.00 ▲(8.14% Upside)

The overall stock score is driven by strong financial performance and attractive valuation. The company's robust revenue growth and profitability, coupled with a low P/E ratio and high dividend yield, make it appealing. However, technical indicators suggest potential short-term weakness, and cash flow challenges need addressing for sustained growth.

Positive Factors

Revenue Growth

Strong revenue growth indicates successful product offerings and market expansion, enhancing the company's competitive position in the digital entertainment sector.

Gross Profit Margin Improvement

Improved gross profit margins suggest effective cost control and pricing strategies, contributing to sustainable profitability and operational efficiency.

Diversified Revenue Model

A diversified revenue model reduces dependency on a single income stream, providing resilience against market fluctuations and enhancing long-term financial stability.

Negative Factors

High Leverage

High leverage can increase financial risk, especially in volatile markets, potentially impacting the company's ability to invest in growth opportunities.

Cash Flow Challenges

Negative cash flow from operations may limit the company's ability to fund new projects and meet financial obligations, affecting long-term growth.

Operational Efficiency

Suboptimal EBIT margins indicate room for enhancing operational efficiency, which is crucial for sustaining profitability and competitive advantage.

Akatsuki Corp. Business Overview & Revenue Model

Company Description

Akatsuki Corp., together with its subsidiaries, engages in the real estate and securities businesses in Japan. It plans, designs, constructs, and regenerates used real estate properties, as well as sells renovated and furnished apartments. The company also provides investment advice to real estate properties; and storage room rental services. In addition, it offers algorithms for Japanese stocks, as well as advisory services to investment trust companies. The company was formerly known as Akatsuki Financial Group, Inc. and changed its name to Akatsuki Corp. in July 2016. Akatsuki Corp. was incorporated in 1950 and is headquartered in Chuo, Japan.

How the Company Makes Money

Akatsuki Corp. generates revenue primarily through the in-game purchases and monetization of its mobile games, which include popular titles that leverage freemium models, allowing players to download games for free while offering in-game items and features for purchase. Additional revenue streams include licensing agreements for its characters and franchises, as well as partnerships with other entertainment companies for co-productions and collaborative projects. The company also explores opportunities in anime production, where it can earn income through distribution rights and merchandise sales, contributing to a diversified revenue model.

Akatsuki Corp. Financial Statement Overview

Summary

Akatsuki Corp. exhibits strong revenue growth and profitability, supported by an improving gross profit margin. The balance sheet shows high leverage but remains stable with a strong return on equity. Cash flow challenges, particularly in operating activities, could pose risks if not addressed. Overall, the company demonstrates a positive trajectory with areas needing attention for sustained financial health.

Income Statement

The company shows a robust growth trajectory with a significant increase in total revenue, rising from 39.3 billion JPY in 2023 to 56.5 billion JPY in 2025. Gross profit margin improved, indicating efficient cost management. Net profit margin rose to 4.66%, reflecting solid profitability. However, the EBIT margin, while positive, suggests potential areas for operational efficiency improvements.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 2.38, indicating high leverage but manageable given industry standards. The equity ratio is 19.42%, showing a reasonable level of equity financing. Return on equity is relatively strong at 14.72%, signifying effective use of shareholder funds. However, the company's high debt levels present a potential risk in volatile market conditions.

Cash Flow

The company's cash flow demonstrates some challenges, with negative operating cash flow in the latest period, raising concerns about cash generation. Free cash flow has seen volatility, currently negative, which may impact future investment capabilities. However, previous periods showed positive free cash flow, indicating potential for recovery.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	57.34B	56.48B	46.68B	39.34B	35.31B	39.09B
Gross Profit	21.34B	21.86B	19.84B	14.89B	16.65B	17.07B
EBITDA	4.35B	4.81B	4.61B	2.32B	2.19B	3.00B
Net Income	2.60B	2.63B	2.54B	780.95M	1.01B	1.43B
Balance Sheet
Total Assets	106.23B	92.04B	92.13B	69.28B	64.18B	61.66B
Cash, Cash Equivalents and Short-Term Investments	52.63B	19.75B	47.52B	12.49B	14.08B	17.34B
Total Debt	45.34B	42.57B	42.64B	33.65B	31.55B	29.95B
Total Liabilities	87.44B	73.18B	75.38B	54.42B	49.41B	47.87B
Stockholders Equity	17.80B	17.87B	16.15B	14.31B	14.10B	13.78B
Cash Flow
Free Cash Flow	0.00	-4.19B	729.47M	-853.52M	-4.75B	6.63B
Operating Cash Flow	0.00	-3.94B	817.00M	-474.00M	-4.61B	6.85B
Investing Cash Flow	0.00	-402.61M	-771.45M	51.88M	-950.44M	-1.44B
Financing Cash Flow	0.00	-20.83M	10.78B	-631.79M	2.48B	-5.39B

Akatsuki Corp. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 553.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:8737, the sentiment is Positive. The current price of 553 is above the 20-day moving average (MA) of 538.20, above the 50-day MA of 538.49, and above the 200-day MA of 503.90, indicating a bullish trend. The MACD of 6.25 indicates Negative momentum. The RSI at 69.98 is Neutral, neither overbought nor oversold. The STOCH value of 88.52 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8737.

Akatsuki Corp. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8737	73 Outperform	¥16.30B	6.11	―	5.49%	18.05%	34.17%
3772	69 Neutral	¥21.08B	13.50	―	1.87%	-40.77%	-91.81%
3454	69 Neutral	¥16.72B	10.62	―	3.03%	36.31%	52.62%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
7347	62 Neutral	¥16.49B	239.29	―	2.53%	1.35%	-91.61%
2134	41 Neutral	¥23.00B	-11.91	―	―	-21.88%	17.12%
8783	40 Underperform	¥10.42B	-1.73	―	―	-17.04%	46.36%