SHINKO Inc. (7120) AI Stock Analysis

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SHINKO Inc.

(7120)

Rating:78Outperform

Price Target:

¥2,551.00

▲(16.54%Upside)

SHINKO Inc. shows a strong financial position with consistent revenue growth and improved profitability, supported by a stable balance sheet and robust cash flow generation. The technical indicators highlight bullish momentum, although caution is advised due to overbought conditions. The valuation is attractive, with a low P/E ratio and high dividend yield. These factors collectively suggest a positive outlook for the stock.

SHINKO Inc. (7120) vs. iShares MSCI Japan ETF (EWJ)

Market Cap

¥4.03B

Dividend Yield4.43%

Average Volume (3M)4.94K

Price to Earnings (P/E)7.4

Beta (1Y)0.42

Revenue Growth4.70%

EPS Growth31.78%

CountryJP

Employees811

SectorTechnology

Sector Strength83

IndustryInformation Technology Services

Share Statistics

EPS (TTM)181.86

Shares Outstanding1,834,000

10 Day Avg. Volume5,040

30 Day Avg. Volume4,936

Financial Highlights & Ratios

PEG Ratio2.23

Price to Book (P/B)2.40

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

SHINKO Inc. Business Overview & Revenue Model

Company DescriptionSHINKO Inc. (7120) operates in the manufacturing sector, specializing in the production of precision components and equipment. The company offers a diverse range of products that include semiconductor packaging solutions, electronic components, and related materials. SHINKO Inc. is known for its high-quality manufacturing capabilities and innovative technologies that cater to various industries, including electronics, automotive, and telecommunications.

How the Company Makes MoneySHINKO Inc. generates revenue primarily through the sale of its precision components and semiconductor packaging solutions. The company benefits from long-term contracts and relationships with major electronics manufacturers who require high-quality and reliable components for their products. Additionally, SHINKO Inc. engages in research and development to innovate and improve its product offerings, thereby maintaining a competitive edge in the market. Collaboration with key industry players and investment in advanced manufacturing technologies also contribute to the company's earnings by enhancing production efficiency and expanding its market reach.

SHINKO Inc. Financial Statement Overview

Summary

SHINKO Inc. demonstrates strong revenue growth and profitability metrics, with a solid balance sheet featuring no debt and a healthy equity base. However, the recent decline in equity and cash flow concerns in the TTM period warrant attention for future sustainability.

Income Statement

Very Positive

SHINKO Inc. has shown strong revenue growth, with a consistent increase in total revenue over the years, highlighted by a 20.7% growth from 2022 to 2023. The company's gross profit margin is solid, reflecting efficient cost management. However, there is a slight decline in EBIT from 2023 to TTM, which may need careful monitoring. Overall, profitability metrics are robust, suggesting a strong competitive position.

Balance Sheet

Positive

SHINKO Inc.'s balance sheet is strong, characterized by no total debt as of the latest TTM report, and a healthy equity base with an equity ratio of 25%. The company has maintained a negative net debt position, indicating a strong liquidity position. However, the decrease in stockholders' equity from the previous year could be a potential concern for long-term stability.

Cash Flow

Positive

The cash flow position of SHINKO Inc. appears mixed. While the company had a solid free cash flow in the previous year, the TTM data shows zero operating and free cash flow, which could indicate challenges in cash generation. The absence of operating cash flow relative to net income in the TTM period needs further investigation to ensure operational sustainability.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Breakdown
Income Statement		Total Revenue
16.79B	16.15B	15.95B	13.89B	12.68B
	Gross Profit
3.91B	3.72B	3.63B	3.32B	3.08B
	EBIT
624.67M	627.16M	752.83M	605.68M	474.75M
	EBITDA
697.54M	706.17M	830.57M	679.53M	467.25M
	Net Income Common Stockholders
399.13M	410.62M	481.56M	423.52M	236.98M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.08B	1.51B	929.59M	920.99M	937.74M
	Total Assets
5.75B	6.52B	6.47B	5.52B	5.52B
	Total Debt
0.00	61.67M	349.25M	33.54M	437.20M
	Net Debt
-1.08B	-1.45B	-580.34M	-887.45M	-500.54M
	Total Liabilities
4.31B	4.60B	4.84B	4.53B	4.41B
	Stockholders Equity
1.44B	1.91B	1.63B	990.35M	1.11B
Cash Flow		Free Cash Flow
0.00	1.07B	-431.30M	942.66M	-420.60M
	Operating Cash Flow
0.00	1.13B	-401.53M	978.09M	-290.15M
	Investing Cash Flow
0.00	-114.05M	-29.78M	-35.43M	-173.14M
	Financing Cash Flow
0.00	-441.10M	439.90M	-959.40M	227.51M

SHINKO Inc. Technical Analysis

Technical Analysis Sentiment

Positive

Last Price2189.00

Price Trends

50DMA

2078.38

Positive

100DMA

2033.43

Positive

200DMA

1966.98

Positive

Market Momentum

MACD

36.61

Positive

RSI

58.40

Neutral

STOCH

45.18

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7120, the sentiment is Positive. The current price of 2189 is below the 20-day moving average (MA) of 2191.90, above the 50-day MA of 2078.38, and above the 200-day MA of 1966.98, indicating a bullish trend. The MACD of 36.61 indicates Positive momentum. The RSI at 58.40 is Neutral, neither overbought nor oversold. The STOCH value of 45.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7120.

SHINKO Inc. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4736	82 Outperform	¥4.54B	10.48		1.21%	9.32%	25.59%
7120	78 Outperform	¥4.03B	7.40		4.43%	4.70%	31.78%
4416	71 Outperform	¥4.32B	319.28		―	-2.43%	-78.05%
4450	69 Neutral	¥3.98B	11.54		1.64%	17.68%	-31.19%
3682	63 Neutral	¥4.12B	18.69		4.04%	9.26%	1.71%
Sector *	62 Neutral	$11.72B	10.43	-7.10%	2.91%	7.41%	-7.94%
4068	54 Neutral	¥3.89B	26.89		―	30.73%	―

* Technology Sector Average

Performance Comparison

JP:7120

SHINKO Inc.

2,192.00

253.11

13.05%

JP:3682

Encourage Technologies Co., Ltd.

614.00

22.62

3.82%

JP:4068

Basis Corporation

2,033.00

885.00

77.09%

JP:4416

True Data Inc.

880.00

440.00

100.00%

JP:4450

Power Solutions Ltd.

1,343.00

-190.98

-12.45%

JP:4736

Nippon RAD Inc.

835.00

48.12

6.12%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.