Hikari Food Service Co. Ltd. (138A) AI Stock Analysis

Hikari Food Service Co. Ltd.

(TSE/TYO:138A)

Select Model

Rating:65Neutral

Price Target:JPY 3,182.00▲(1.34% Upside)

Action:downgraded

Date:08/06/26

Hikari Food Service earns a moderate overall score driven heavily by strong top-line growth and a conservatively leveraged balance sheet. The score is primarily constrained by thinning net profit margins, indicating operational cost challenges, as well as mixed technical momentum that suggests ongoing price consolidation. A fair valuation profile with a P/E of 19.33 and a 1.36% dividend yield provides a stable baseline for the stock.

Positive Factors

Sustained Revenue GrowthConsistent top-line expansion over multiple years demonstrates product-market fit and capability to win share in the restaurants industry. Durable revenue growth supports scale economies, funds reinvestment, and provides a base to stabilize margins and service obligations over the next 2–6 months and beyond.

Negative Factors

Compressed Net MarginsSharp margin compression at the operating and net levels suggests rising operating costs or pricing pressure that erode profitability. Low net margins limit retained earnings, reduce buffer against cost inflation, and constrain long-term capacity to fund growth or improve returns.

Hikari Food Service Co. Ltd. (138A) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 3.11B
Dividend Yield: 1.27%
Average Volume (3M): 2,779
Price to Earnings (P/E): 25.0
Beta (1Y): 0.38
Revenue Growth: 11.80%
EPS Growth: -3.06%
Country: Japan
Employees: 176
Sector: Consumer Cyclical
Sector Strength: 61
Industry: Restaurants

Hikari Food Service Co. Ltd. Business Overview & Revenue Model

Company Description

Hikari Food Service Co., Ltd. engages in food and beverage business in Japan. It operates standing bars under the Tachinomi Yakiton Daikoku, Fish camellia, and Kanayama family names; and direct store of a meat wholesaler under the Yakiniku Marui Butc...

How the Company Makes Money

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Hikari Food Service Co. Ltd. Financial Statement Overview

Summary

Solid revenue growth and a fortified balance sheet with conservative leverage, though offset by thin net profit margins of 3.6% and moderate free cash flow conversion.

Income Statement

68Positive

Balance Sheet

75Positive

Cash Flow

65Positive

Financial statement breakdown
Breakdown	TTM	Nov 2025	Nov 2024	Nov 2023	Nov 2022	Nov 2021
Income Statement
Total Revenue	3.07B	2.86B	2.57B	2.23B	1.68B	868.43M
Gross Profit	2.24B	2.10B	1.88B	1.61B	1.22B	608.17M
EBITDA	346.59M	286.83M	275.77M	342.24M	188.86M	148.44M
Net Income	151.10M	102.46M	100.33M	201.04M	62.88M	40.58M
Balance Sheet
Total Assets	2.88B	2.65B	2.41B	1.76B	1.87B	1.78B
Cash, Cash Equivalents and Short-Term Investments	1.60B	1.39B	1.32B	862.24M	935.04M	819.17M
Total Debt	929.75M	830.76M	749.02M	986.82M	1.34B	1.40B
Total Liabilities	1.48B	1.34B	1.16B	1.40B	1.71B	1.67B
Stockholders Equity	1.41B	1.31B	1.25B	363.89M	162.85M	104.98M
Cash Flow
Free Cash Flow	206.08M	45.50M	-32.62M	300.94M	197.24M	-147.97M
Operating Cash Flow	210.79M	290.25M	209.01M	373.05M	389.03M	28.69M
Investing Cash Flow	-60.19M	23.46M	-306.29M	-83.33M	-327.34M	-284.71M
Financing Cash Flow	58.56M	40.51M	526.96M	-362.52M	-55.82M	181.15M

Hikari Food Service Co. Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

JP:138A against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:8181	72Outperform	JPY 2.53B	4.17	―	3.05%	0.80%	43.18%
JP:3077	68Neutral	JPY 8.18B	14.99	―	―	―	―
JP:138A	65Neutral	JPY 3.11B	25.02	―	1.27%	11.80%	-3.06%
Sector *	61Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
JP:3358	49Neutral	JPY 3.13B	40.38	―	1.19%	49.12%	274.67%
JP:3067	46Neutral	JPY 4.02B	58.90	―	―	-1.19%	―
JP:2762	40Underperform	JPY 2.67B	-3.00	―	―	9.21%	21.76%

* Consumer Cyclical Sector Average

Performance Comparison

JP:138A and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:138A	Hikari Food Service Co. Ltd.	3140.00	227.09	7.80%
JP:2762	Sanko Marketing Foods Co., Ltd.	61.00	-36.00	-37.11%
JP:3067	Tokyo Ichiban Foods Co., Ltd.	450.00	-4.00	-0.88%
JP:3077	Horiifoodservice Co., Ltd.	1180.00	823.00	230.53%
JP:3358	Y.S. FOOD CO., LTD.	84.00	-4.06	-4.61%
JP:8181	Totenko Co., Ltd.	984.00	-142.70	-12.67%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Aug 06, 2026

Hikari Food Service Co. Ltd. AI Stock Analysis