Kanseki Co., Ltd. (9903) AI Stock Analysis

• Market Cap: ¥5.92B
• Dividend Yield: 2.34%
• Average Volume (3M): 1.27K
• Price to Earnings (P/E): 12.2
• Beta (1Y): 0.11
• Revenue Growth: -1.54%
• EPS Growth: N/A
• Country: JP
• Employees: 336
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Home Improvement
• EPS (TTM): 11.33
• Shares Outstanding: 8,050,000
• 10 Day Avg. Volume: 1,630
• 30 Day Avg. Volume: 1,270
• PEG Ratio: -0.12
• Price to Book (P/B): 1.09
• Price to Sales (P/S): 0.18
• P/FCF Ratio: 4.35
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 55 Neutral
• Price Target: ¥894.00 ▲(4.44% Upside)

Kanseki Co., Ltd. is on a recovery path with improved financial performance, but high leverage and stagnant revenue growth are concerns. The technical indicators suggest weak momentum, while the valuation is reasonable with a decent dividend yield. The absence of earnings call and corporate events data limits further insights.

Positive Factors

Improved Profitability

Improved profitability indicates effective cost management and operational efficiency, which can enhance long-term financial health.

Cash Flow Strength

Strong cash flow supports debt management and growth investments, providing a solid foundation for future expansion and stability.

Operational Efficiency

Improved margins reflect better operational efficiency, which can lead to sustained profitability and competitive advantage.

Negative Factors

High Leverage

High leverage poses a risk to financial stability, especially if earnings do not continue to recover, potentially limiting future growth.

Stagnant Revenue Growth

Stagnant revenue growth can hinder long-term profitability and market expansion, challenging the company's ability to scale.

Moderate Financial Position

A moderate financial position with high leverage may limit the company's ability to withstand economic downturns or invest in new opportunities.

Kanseki Co., Ltd. Business Overview & Revenue Model

Company Description

Kanseki Co., Ltd. (9903) is a leading company in the Japanese market specializing in the development and manufacturing of advanced ceramic materials and precision components. The company operates primarily in the electronics and industrial sectors, providing high-performance products such as insulators, substrates, and other materials that cater to the needs of semiconductor, telecommunications, and automotive industries. Kanseki is recognized for its commitment to innovation and quality, ensuring that its product offerings meet the stringent demands of its clients.

How the Company Makes Money

Kanseki Co., Ltd. generates revenue primarily through the sale of its ceramic materials and precision components to various industries, including electronics, automotive, and telecommunications. The company employs a B2B revenue model, where it establishes long-term contracts and partnerships with manufacturers and suppliers in these sectors. Key revenue streams include direct product sales, custom manufacturing services, and ongoing contracts for high-volume production. Additionally, Kanseki benefits from strategic partnerships with technology firms that enhance its product development capabilities and expand its market reach. The company's focus on R&D and innovation allows it to maintain a competitive edge, driving sales growth and profitability.

Kanseki Co., Ltd. Financial Statement Overview

Summary

Kanseki Co., Ltd. shows signs of recovery with improved profitability and cash flow metrics. Despite a challenging prior year, the company has improved its margins and cash generation. However, high leverage and stagnant revenue growth remain concerns for long-term stability.

Income Statement

Kanseki Co., Ltd. demonstrated a recovery in profitability with a positive net income of ¥518 million in the most recent period, bouncing back from a significant loss in the prior year. The gross profit margin improved to 27.7% from 23.8% in the previous year, reflecting better cost management. However, the revenue growth was stagnant, with a marginal increase of only 0.5% from the previous year. EBIT and EBITDA margins also showed improvement, indicating better operational efficiency. The company's performance shows signs of stabilization, but the lack of strong revenue growth could be a concern for future profitability.

Balance Sheet

The balance sheet indicates a moderate financial position with a debt-to-equity ratio of 1.93, reflecting a significant level of leverage. The equity ratio stands at 25.4%, suggesting a reasonable proportion of equity financing relative to total assets. Return on equity improved to 8.4% from a negative figure in the previous year, indicating better utilization of shareholders' funds. While improvements are noted, the high leverage poses a risk to financial stability, especially if earnings do not continue to recover.

Cash Flow

Cash flow analysis shows a positive turn in free cash flow to ¥1.54 billion from a negative figure last year, mainly due to improved operating cash flow. The operating cash flow to net income ratio is 4.25, indicating strong cash generation relative to reported profits. The free cash flow to net income ratio is 2.97, signifying healthy cash conversion. The company's cash flow position appears robust, supporting its capacity to manage debt and reinvest in growth opportunities.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	18.91M	37.07B	36.87B	38.63B	41.61B	42.33B
Gross Profit	5.70M	10.28B	8.80B	11.45B	12.63B	13.06B
EBITDA	667.69M	1.24B	-4.20B	1.75B	1.22B	3.60B
Net Income	400.00K	518.41M	-5.22B	694.06M	-187.45M	1.80B
Balance Sheet
Total Assets	30.41B	24.28B	25.50B	29.58B	27.48B	28.86B
Cash, Cash Equivalents and Short-Term Investments	1.21B	812.45M	748.49M	1.12B	2.18B	2.77B
Total Debt	11.99B	11.92B	13.28B	12.51B	11.46B	11.67B
Total Liabilities	19.21B	18.11B	19.35B	18.43B	17.77B	18.95B
Stockholders Equity	11.20B	6.16B	6.15B	11.16B	9.71B	9.90B
Cash Flow
Free Cash Flow	0.00	1.54B	-1.03B	-1.91B	116.32M	3.15B
Operating Cash Flow	0.00	2.20B	-316.02M	-1.38B	577.67M	3.59B
Investing Cash Flow	0.00	-709.34M	-700.88M	-1.49B	-477.05M	-518.10M
Financing Cash Flow	0.00	-1.43B	649.04M	1.64B	-631.49M	-1.92B

Kanseki Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 856.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9903, the sentiment is Negative. The current price of 856 is below the 20-day moving average (MA) of 860.50, below the 50-day MA of 857.20, and below the 200-day MA of 875.27, indicating a bearish trend. The MACD of 0.29 indicates Positive momentum. The RSI at 46.26 is Neutral, neither overbought nor oversold. The STOCH value of 22.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:9903.

Kanseki Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9976	72 Outperform	¥5.58B	11.98	―	3.88%	4.17%	10.59%
9835	62 Neutral	¥3.94B	23.65	―	2.04%	-0.69%	-64.22%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
8208	61 Neutral	―	―	―	―	-3.21%	56.44%
9903	55 Neutral	¥5.92B	12.25	―	2.34%	-1.54%	―
7450	48 Neutral	¥10.67B	-5.05	―	0.50%	-0.60%	-386.40%
7590	46 Neutral	¥7.96B	―	―	1.21%	6.36%	96.61%