Seihyo Co., Ltd. (2872) AI Stock Analysis

Seihyo Co., Ltd.

(TSE/TYO:2872)

Select Model

Rating:39Underperform

Price Target:JPY 1,888.00▼(-1.92% Downside)

Action:downgraded

Date:08/04/26

Seihyo Co. faces severe headwinds driven by alarming cash burn, rapidly contracting profit margins, and trailing unprofitability. These fundamental weaknesses are compounded by pervasive bearish technical momentum and an unattractive valuation, culminating in a highly depressed overall score.

Positive Factors

Steady Revenue GrowthConsistent multi-year top-line growth indicates stable end-market demand for Seihyo's frozen desserts and supports scale advantages. Durable revenue expansion provides a foundation for long-term investments in capacity and distribution, helping absorb cyclical dips even if margins remain thin.

Negative Factors

Deeply Negative Free Cash FlowSustained negative free cash flow erodes internal funding ability and forces reliance on external financing or asset sales. Over several quarters this limits capacity for capex, marketing, or margin improvement initiatives and raises the risk that liquidity stress could constrain strategic options or increase borrowing costs.

Seihyo Co., Ltd. (2872) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 2.71B
Dividend Yield: 0.93%
Average Volume (3M): 2,733
Price to Earnings (P/E): -65.1
Beta (1Y): 0.13
Revenue Growth: 16.96%
EPS Growth: -143.18%
Country: Japan
Employees: 108
Sector: Consumer Defensive
Sector Strength: 62
Industry: Packaged Foods

Seihyo Co., Ltd. Business Overview & Revenue Model

Company Description

Seihyo Co., Ltd. is a Japanese enterprise primarily involved in the manufacturing, procurement, and sale of frozen desserts throughout Japan. The company's activities encompass the production, sourcing, and wholesale distribution of ice cream, alongs...

How the Company Makes Money

Seihyo makes money primarily by manufacturing and selling frozen desserts/ice products. Revenue is generated from (1) sales of its own branded frozen dessert products to distribution partners such as wholesalers and retailers, where Seihyo earns prod...

Seihyo Co., Ltd. Financial Statement Overview

Summary

Despite consistent top-line growth, financial health is severely compromised. A razor-thin net profit margin (0.24%), an increasing debt-to-equity ratio (0.83), and three consecutive years of persistently negative free cash flow indicate alarming cash burn and substantial fundamental risk.

Income Statement

45Neutral

Balance Sheet

55Neutral

Cash Flow

20Very Negative

Financial statement breakdown
Breakdown	TTM	Feb 2026	Feb 2025	Feb 2024	Feb 2023	Feb 2022
Income Statement
Total Revenue	5.57B	4.80B	4.48B	4.26B	4.19B	3.96B
Gross Profit	946.22M	823.55M	848.61M	703.90M	578.12M	618.14M
EBITDA	198.75M	204.42M	260.01M	221.17M	171.46M	188.82M
Net Income	-41.29M	11.48M	119.50M	61.41M	20.59M	63.48M
Balance Sheet
Total Assets	4.97B	3.99B	3.31B	2.93B	2.88B	2.09B
Cash, Cash Equivalents and Short-Term Investments	400.12M	234.51M	329.43M	215.12M	573.34M	213.76M
Total Debt	1.93B	1.25B	1.17B	912.49M	600.43M	524.00M
Total Liabilities	3.36B	2.49B	1.92B	1.65B	1.38B	992.95M
Stockholders Equity	1.61B	1.50B	1.40B	1.28B	1.50B	1.10B
Cash Flow
Free Cash Flow	0	-525.27M	-41.59M	-354.97M	45.38M	163.71M
Operating Cash Flow	0	44.84M	34.69M	169.46M	210.00M	253.02M
Investing Cash Flow	0	-127.81M	-80.53M	-531.54M	-178.05M	-89.72M
Financing Cash Flow	0	-11.95M	160.15M	3.85M	327.63M	-48.61M

Seihyo Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

JP:2872 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:2871	74Outperform	JPY 544.74B	18.82	10.25%	2.28%	10.36%	20.76%
JP:2918	74Outperform	JPY 45.86B	11.43	―	4.57%	2.88%	3.21%
JP:3392	72Outperform	JPY 11.63B	9.09	―	3.50%	3.66%	9.21%
JP:2922	64Neutral	JPY 24.79B	12.69	―	1.42%	-1.66%	101.11%
Sector *	62Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
JP:7475	58Neutral	JPY 32.98B	23.19	―	1.86%	0.57%	-13.40%
JP:2872	39Underperform	JPY 3.08B	-65.14	―	0.93%	16.96%	-143.18%

* Consumer Defensive Sector Average

Performance Comparison

JP:2872 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:2872	Seihyo Co., Ltd.	1927.00	20.88	1.10%
JP:2871	Nichirei Corporation	2148.50	367.46	20.63%
JP:2918	WARABEYA NICHIYO HOLDINGS Co., Ltd.	2626.00	-313.79	-10.67%
JP:2922	Natori Co., Ltd.	1970.00	49.21	2.56%
JP:3392	DELICA FOODS HOLDINGS CO. LTD.	715.00	-116.97	-14.06%
JP:7475	ALBIS Co., Ltd.	3770.00	1111.41	41.80%

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 04, 2026

Seihyo Co., Ltd. AI Stock Analysis