Systems Engineering Consultants Co., Ltd. (3741) AI Stock Analysis

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Systems Engineering Consultants Co., Ltd.

(TSE/TYO:3741)

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Rating:84Outperform

Price Target:JPY 3,141.00▲(16.98% Upside)

Action:reiterated

Date:08/17/26

The stock scores 84, reflecting a favorable investment profile. The most significant strengths are the company's excellent financial performance, including strong revenue growth, high margins, and a debt-free balance sheet. Technical analysis supports a bullish trend, though overbought signals suggest potential near-term consolidation. Valuation is reasonable, with a P/E of 20.4 and a 1.8% dividend yield. Overall, the company is well-positioned for continued success.

Positive Factors

Consistent ProfitabilitySustained double-digit net margins and mid-to-high-teens EBIT margins indicate a profitable operating model with meaningful earnings resilience. Maintaining these levels across periods supports internal reinvestment, strengthens financial durability, and provides a foundation for compounding shareholder returns.

Negative Factors

Volatile Cash ConversionPeriods of negative operating and free cash flow despite positive earnings show that reported profitability does not consistently translate into cash. Such volatility can constrain reinvestment and distributions during weaker periods, making future cash generation less predictable.

Systems Engineering Consultants Co., Ltd. (3741) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 27.41B
Dividend Yield: 2.23%
Average Volume (3M): 65.08K
Price to Earnings (P/E): 12.1
Beta (1Y): 1.22
Revenue Growth: 3.67%
EPS Growth: 17.00%
Country: Japan
Employees: 365
Sector: Technology
Sector Strength: 61
Industry: Software - Infrastructure

Systems Engineering Consultants Co., Ltd. Business Overview & Revenue Model

Company Description

Systems Engineering Consultants Co.,LTD. (SEC), established in Tokyo, Japan, in 1970, is a dedicated software development firm specializing in real-time solutions for mobile networking, Internet technology, and public infrastructure domains within Ja...

How the Company Makes Money

Detailed, reliably verifiable information about Systems Engineering Consultants Co., Ltd. (3741)'s revenue model, key revenue streams, and partnerships is null.

Systems Engineering Consultants Co., Ltd. Financial Statement Overview

Summary

The company exhibits strong revenue growth (7.7% latest, 20.6% prior) and healthy profit margins (net margin 13.5%, EBIT margin 16.8%). Balance sheet is exceptionally strong with virtually no debt (debt-to-equity 0.0035) and high return on equity (14.6%). Cash flow has been volatile but rebounded strongly in the latest year, with operating cash flow of ¥1.7B and free cash flow of ¥1.6B. Overall financial health is excellent.

Income Statement

88Very Positive

Balance Sheet

95Very Positive

Cash Flow

80Positive

Financial statement breakdown
Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	11.69B	11.22B	10.30B	8.53B	7.49B	6.56B
Gross Profit	3.55B	3.33B	3.07B	2.55B	2.24B	1.97B
EBITDA	2.13B	1.94B	1.94B	1.58B	1.32B	1.14B
Net Income	1.64B	1.51B	1.34B	1.11B	878.83M	780.30M
Balance Sheet
Total Assets	11.99B	12.44B	12.04B	10.11B	9.39B	8.60B
Cash, Cash Equivalents and Short-Term Investments	6.11B	3.32B	2.23B	2.97B	3.08B	3.23B
Total Debt	279.36M	36.00M	46.55M	36.00M	36.00M	36.00M
Total Liabilities	1.93B	2.12B	2.71B	1.71B	1.79B	1.51B
Stockholders Equity	10.06B	10.31B	9.33B	8.40B	7.60B	7.09B
Cash Flow
Free Cash Flow	0	1.60B	-275.22M	345.47M	431.18M	629.42M
Operating Cash Flow	0	1.70B	-250.49M	384.07M	526.79M	642.95M
Investing Cash Flow	0	-46.88M	-40.97M	-139.18M	-303.57M	28.72M
Financing Cash Flow	0	-561.12M	-445.43M	-352.99M	-381.51M	-290.70M

Systems Engineering Consultants Co., Ltd. Technical Analysis

Technical Analysis SentimentNegative

Last Price2685.00

Price Trends

50DMA3075.58Negative

100DMA3098.50Negative

200DMA3273.70Negative

Market Momentum

MACD-105.21Positive

RSI36.18Neutral

STOCH43.48Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3741, the sentiment is Negative. The current price of 2685.00 is below the 20-day moving average (MA) of 2899.65, below the 50-day MA of 3075.58, and below the 200-day MA of 3273.70, indicating a bearish trend. The MACD of -105.21 indicates Positive momentum. The RSI at 36.18 is Neutral, neither overbought nor oversold. The STOCH value of 43.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3741.

Systems Engineering Consultants Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

JP:3741 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:3915	86Outperform	JPY 27.20B	13.16	―	0.77%	19.19%	93.45%
JP:3741	84Outperform	JPY 27.84B	12.05	―	2.23%	3.67%	17.00%
JP:4434	71Outperform	JPY 22.95B	20.67	―	1.31%	23.79%	―
JP:4847	68Neutral	JPY 41.38B	23.08	―	2.33%	14.81%	40.83%
JP:3850	66Neutral	JPY 16.06B	14.79	―	1.99%	23.85%	56.39%
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
JP:5036	61Neutral	JPY 78.65B	10.07	―	3.19%	26.65%	25.67%

* Technology Sector Average

Performance Comparison

JP:3741 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:3741	Systems Engineering Consultants Co., Ltd.	2685.00	65.11	2.49%
JP:3850	NTT Data Intramart Corporation	3245.00	-762.04	-19.02%
JP:3915	TerraSky Co., Ltd.	2086.00	6.42	0.31%
JP:4434	Serverworks Co., Ltd.	3050.00	1276.38	71.96%
JP:4847	Intelligent Wave Inc.	1591.00	667.03	72.19%
JP:5036	Japan Business Systems, Inc.	1566.00	200.31	14.67%

Systems Engineering Consultants Co., Ltd. Corporate Events

Systems Engineering Consultants Reports Higher Six-Month Sales and Profits

Nov 12, 2026

Systems Engineering Consultants Co., Ltd., listed on the Tokyo Stock Exchange under securities code 3741, reported non-consolidated financial results for the six months ended September 30, 2026. Net sales were ¥5,622 million, up 5.7% year on year, wh...

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 17, 2026

Systems Engineering Consultants Co., Ltd. AI Stock Analysis