Zaoh Company, Ltd. (9986) AI Stock Analysis

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Zaoh Company, Ltd.

(TSE/TYO:9986)

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Rating:79Outperform

Price Target:JPY 2,863.00▲(17.24% Upside)

Action:reiterated

Date:08/17/26

The overall score is driven primarily by the company’s very strong financial foundation: negligible debt, solid and consistent profitability, and generally healthy, recently improving cash flows support a low‑risk, stable profile. Technical indicators add a modest positive tilt, with price action slightly favoring an upward bias but lacking strong momentum. Valuation is reasonably attractive, combining a fair earnings multiple with a near‑4% dividend yield that complements the conservative balance sheet and income stability. Together, these factors point to a sound, income‑friendly stock with moderate upside rather than an aggressive growth or deep value opportunity.

Positive Factors

Very conservative balance sheetNegligible leverage materially reduces refinancing and solvency risk, giving Zaoh financial flexibility to withstand distributor-sector cycles and fund operations without depending heavily on external borrowing.

Negative Factors

Uneven revenue trajectoryThe interrupted revenue trend indicates inconsistent demand or customer and product mix conditions. Continued uneven sales would make capacity planning harder and could limit operating leverage and confidence in sustained expansion.

Zaoh Company, Ltd. (9986) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 13.23B
Dividend Yield: 4.30%
Average Volume (3M): 2,153
Price to Earnings (P/E): 17.7
Beta (1Y): 0.10
Revenue Growth: 0.09%
EPS Growth: 2.87%
Country: Japan
Employees: 238
Sector: General
Sector Strength: 55
Industry: Industrial - Distribution

Zaoh Company, Ltd. Business Overview & Revenue Model

Company Description

ZAOH Company, Ltd., headquartered in Tokyo, Japan, specializes in the import and distribution of various environmental and cleaning equipment across Japan. The company further supplies a range of machinery and devices for the construction, manufactur...

How the Company Makes Money

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Zaoh Company, Ltd. Financial Statement Overview

Summary

Income statement quality is strong with consistent profitability and recently improving revenue and margins, though growth and margins are still below prior peak levels (income score 77). The balance sheet is a standout, with almost no debt, steadily rising equity, and very low solvency risk, offset only by moderate returns on equity (balance sheet score 90). Cash flow generation is healthy and broadly aligned with earnings, with recent free cash flow rebound supporting the business despite a history of some volatility (cash flow score 82). Overall, these factors combine into a high financial performance score reflecting a financially robust, low‑risk profile with moderate but improving trends.

Income Statement

77Positive

Balance Sheet

90Very Positive

Cash Flow

82Very Positive

Financial statement breakdown
Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	9.43B	8.76B	8.45B	9.43B	9.65B	8.95B
Gross Profit	3.93B	4.03B	3.74B	3.88B	4.09B	3.90B
EBITDA	1.31B	1.18B	1.07B	1.35B	1.48B	1.46B
Net Income	782.33M	718.91M	616.60M	1.02B	1.05B	1.17B
Balance Sheet
Total Assets	14.17B	15.23B	14.76B	14.81B	15.12B	14.74B
Cash, Cash Equivalents and Short-Term Investments	6.30B	6.88B	6.76B	6.75B	7.16B	7.54B
Total Debt	0	43.80M	43.70M	20.04M	6.38M	0
Total Liabilities	1.85B	2.14B	1.88B	2.01B	1.95B	2.14B
Stockholders Equity	12.32B	13.09B	12.88B	12.80B	13.17B	12.60B
Cash Flow
Free Cash Flow	0	1.07B	401.69M	1.05B	168.54M	1.24B
Operating Cash Flow	0	1.13B	513.71M	1.19B	178.36M	1.30B
Investing Cash Flow	0	-449.95M	52.29M	-159.40M	-92.95M	-87.03M
Financing Cash Flow	0	-554.54M	-550.91M	-1.44B	-459.42M	-361.17M

Zaoh Company, Ltd. Technical Analysis

Technical Analysis SentimentNegative

Last Price2442.00

Price Trends

50DMA2463.35Negative

100DMA2450.45Negative

200DMA2483.80Negative

Market Momentum

MACD-6.98Positive

RSI37.73Neutral

STOCH51.44Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9986, the sentiment is Negative. The current price of 2442.00 is below the 20-day moving average (MA) of 2471.20, below the 50-day MA of 2463.35, and below the 200-day MA of 2483.80, indicating a bearish trend. The MACD of -6.98 indicates Positive momentum. The RSI at 37.73 is Neutral, neither overbought nor oversold. The STOCH value of 51.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:9986.

Zaoh Company, Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

JP:9986 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:8061	84Outperform	JPY 100.03B	11.50	―	3.18%	13.02%	51.95%
JP:9986	79Outperform	JPY 14.05B	17.67	―	4.30%	0.09%	2.87%
JP:9902	77Outperform	JPY 86.72B	12.53	―	3.21%	13.77%	37.66%
JP:8103	71Outperform	JPY 38.14B	11.32	―	4.45%	17.27%	-5.58%
JP:3176	68Neutral	JPY 62.60B	10.87	―	3.72%	8.96%	23.50%
JP:9830	59Neutral	JPY 161.96B	10.03	―	2.46%	10.37%	1.94%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%

* General Sector Average

Performance Comparison

JP:9986 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:9986	Zaoh Company, Ltd.	2442.00	72.56	3.06%
JP:3176	Sanyo Trading Co., Ltd.	1075.00	342.58	46.77%
JP:8061	Seika Corporation	2866.00	699.55	32.29%
JP:8103	Meiwa Corporation	943.00	175.99	22.94%
JP:9830	Trusco Nakayama Corporation	2475.00	94.01	3.95%
JP:9902	Nichiden Corporation	2957.00	605.27	25.74%

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

Zaoh Company, Ltd. AI Stock Analysis