Kokusai Co., Ltd. (7722) AI Stock Analysis

Kokusai Co., Ltd.

(TSE/TYO:7722)

Select Model

Rating:78Outperform

Price Target:JPY 905.00▲(25.00% Upside)

Action:reiterated

Date:08/19/26

The company's strong financial health, highlighted by a robust balance sheet and high cash flow conversion, is the primary driver of the score. An attractive valuation with a low P/E and high dividend yield further supports the rating. These positives are partially offset by neutral technical signals and modest revenue growth, which temper the overall outlook.

Positive Factors

Profitability and Margin RecoveryThe return to profitability and materially higher margins indicates improved operating efficiency and cost control. If sustained, this creates a stronger earnings base and provides resilience even if revenue growth remains moderate.

Negative Factors

Modest and Uneven Revenue GrowthThe earnings recovery has relied more on margin normalization and cost control than sustained demand expansion. Uneven revenue performance may limit operating leverage and make future profit growth less durable if efficiency gains moderate.

Kokusai Co., Ltd. (7722) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 9.76B
Dividend Yield: 6.22%
Average Volume (3M): 31.74K
Price to Earnings (P/E): 7.4
Beta (1Y): 1.01
Revenue Growth: -2.31%
EPS Growth: 13.09%
Country: Japan
Employees: 296
Sector: General
Sector Strength: 55
Industry: Industrial - Machinery

Kokusai Co., Ltd. Business Overview & Revenue Model

Company Description

Kokusai Co., Ltd. engages in the manufacture and sale of testers and measurement instruments for motors and rotating equipment, and automatic inspection equipment in Japan, the United States, South Korea, China, and internationally. It offers balanci...

How the Company Makes Money

null

Kokusai Co., Ltd. Financial Statement Overview

Summary

Strong financial turnaround with 40% gross margins, 10% net margins, low debt-to-equity of 0.21, and robust cash flow conversion (94% of net income). Balance sheet is a particular strength, though revenue growth is modest.

Income Statement

85Very Positive

Balance Sheet

90Very Positive

Cash Flow

80Positive

Financial statement breakdown
Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	14.04B	14.95B	13.20B	10.24B	10.04B	11.13B
Gross Profit	5.79B	5.98B	4.90B	2.69B	2.92B	3.56B
EBITDA	2.19B	2.26B	1.60B	21.64M	375.39M	868.77M
Net Income	1.32B	1.50B	940.38M	-258.16M	-66.37M	475.02M
Balance Sheet
Total Assets	20.31B	20.80B	20.84B	20.52B	20.41B	17.37B
Cash, Cash Equivalents and Short-Term Investments	8.07B	8.54B	7.90B	8.25B	7.41B	5.45B
Total Debt	2.37B	2.57B	3.41B	4.02B	4.79B	2.48B
Total Liabilities	7.42B	7.84B	9.24B	9.50B	9.16B	6.07B
Stockholders Equity	12.41B	12.49B	11.22B	10.74B	11.02B	11.13B
Cash Flow
Free Cash Flow	0	1.72B	974.29M	1.28B	-514.43M	-130.32M
Operating Cash Flow	0	1.82B	1.03B	1.34B	-471.56M	-119.70M
Investing Cash Flow	0	-284.06M	-315.95M	-518.82M	129.41M	225.16M
Financing Cash Flow	0	-1.28B	-977.82M	-1.05B	2.03B	-509.07M

Kokusai Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

JP:7722 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:6488	81Outperform	JPY 12.16B	7.49	―	3.50%	8.79%	58.86%
JP:7722	78Outperform	JPY 9.95B	7.37	―	6.22%	-2.31%	13.09%
JP:6402	76Outperform	JPY 8.71B	7.51	―	4.72%	4.59%	34.39%
JP:6384	72Outperform	JPY 9.99B	14.08	―	4.32%	-2.00%	15.23%
JP:6393	67Neutral	JPY 12.03B	10.28	―	5.12%	-1.68%	-9.54%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
JP:6495	44Neutral	JPY 5.19B	60.49	―	1.98%	9.69%	29.00%

* General Sector Average

Performance Comparison

JP:7722 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:7722	Kokusai Co., Ltd.	724.00	104.74	16.91%
JP:6384	SHOWA SHINKU CO., LTD.	1622.00	239.34	17.31%
JP:6393	Yuken Kogyo Co., Ltd.	2932.00	134.36	4.80%
JP:6402	Kanematsu Engineering Co., Ltd.	1567.00	111.57	7.67%
JP:6488	Yoshitake Inc.	1000.00	87.25	9.56%
JP:6495	Miyairi Valve Mfg.Co., Ltd.	101.00	-11.95	-10.58%

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 19, 2026

Kokusai Co., Ltd. AI Stock Analysis