Sanko Gosei Ltd

Sanko Gosei maintains a conservative capital structure with a debt-to-equity ratio of 0.77, below the industry median of 1.2. The company holds 9.96 billion JPY in cash and equivalents, but this is offset by 23.17 billion JPY in long-term debt, resulting in a net cash position of -13.21 billion JPY. The liquidity position is rated as medium, with a current ratio of 1.24, indicating moderate short-term solvency.

Profitability metrics show a return on equity (ROE) of 3.33% and a return on assets (ROA) of 1.33%, both below the industry median of 5.2% and 2.8%, respectively. Gross margin stands at 15.43%, while operating margin is 4.45%, both in line with the sector average. The company's net income of 995 million JPY reflects a 3.92% margin on revenue, which is below the industry median of 5.1%.

Geographically, Sanko Gosei's revenue is concentrated in Japan, with over 80% of total revenue derived from domestic operations. The company has no disclosed international segments, and its exposure to global markets is limited. Segment-wise, the company operates as a single business unit, with no material diversification across product lines.

Growth expectations for the current fiscal year are modest, with revenue projected to increase by 6.4% to 97 billion JPY, compared to 91.1 billion JPY in the prior year. Earnings per share (EPS) are expected to rise by 8.9% to 137.80 JPY from 126.53 JPY. These projections suggest a cautious outlook, with capital expenditures of -4.92 billion JPY indicating ongoing investment in operational capacity.

The company faces moderate liquidity risk due to its net cash-negative position and a current ratio of 1.24. While dilution risk is currently low, the absence of a significant equity buffer could expose the company to financial stress in a downturn. No recent dilutive events have been reported, and the company has not issued new shares in the past 12 months.

Recent filings and transcripts indicate a focus on cost optimization and supply chain resilience. The company has not disclosed any material legal or regulatory issues in the past 12 months. Analysts remain cautiously optimistic, with a consensus EPS estimate of 137.80 JPY for the current fiscal year.

Net income surged 47.6% year-over-year to JPY 3.86 billion in FY2025, demonstrating strong bottom-line growth momentum.

Operating income expanded 44.4% to JPY 5.41 billion in FY2025, indicating significant improvement in core operational profitability.

Free cash flow jumped 63.6% to JPY 2.26 billion in FY2025, reflecting robust cash generation capabilities.

Cash conversion ratio of 5.73 ranks best-in-class among 854 industrial machinery peers, highlighting superior efficiency.

Revenue grew at a 13.4% CAGR over four years, showing consistent top-line expansion despite recent slight deceleration.

Debt-to-equity ratio of 0.77 sits in the bottom quartile of peers, signaling elevated leverage and financial risk.

Credit risk is flagged as high, suggesting potential vulnerabilities in the company's financial stability or counterparty exposure.

Operating margin of 4.45% remains below the 6.21% median for the industrial machinery cohort, indicating weaker profitability.

Revenue ¥26.49B, +8,5% YoY; Operating income +8,6% YoY.

• ▍Revenue ¥26.49B, +8,5% YoY
• ▍Operating income +8,6% YoY
• ▍Net income +8,8% YoY
• ▍Net margin 5.1%

Revenue ¥23.71B, −6,5% YoY; Operating income +37,1% YoY.

• ▍Revenue ¥23.71B, −6,5% YoY
• ▍Operating income +37,1% YoY
• ▍Net income +28,9% YoY
• ▍Net margin 5.4%

Revenue ¥21.61B; Operating income ¥980.0M.

• ▍Revenue ¥21.61B
• ▍Operating income ¥980.0M
• ▍Net margin 3.0%

Revenue ¥24.42B; Operating income ¥1.91B.

• ▍Revenue ¥24.42B
• ▍Operating income ¥1.91B
• ▍Net margin 5.1%

Revenue ¥21.36B; Operating income ¥972.0M.

• ▍Revenue ¥21.36B
• ▍Operating income ¥972.0M
• ▍Net margin 3.2%

Revenue ¥25.36B; Operating income ¥1.13B.

• ▍Revenue ¥25.36B
• ▍Operating income ¥1.13B
• ▍Net margin 3.9%

Revenue ¥91.10B, −2,9% YoY; Operating income +44,4% YoY.

• ▍Revenue ¥91.10B, −2,9% YoY
• ▍Operating income +44,4% YoY
• ▍Net income +47,6% YoY
• ▍Free cash flow +63,6% YoY
• ▍Net margin 4.2%

Revenue ¥93.78B, +15,6% YoY; Operating income +13,3% YoY.

• ▍Revenue ¥93.78B, +15,6% YoY
• ▍Operating income +13,3% YoY
• ▍Net income +24,6% YoY
• ▍Free cash flow −45,5% YoY
• ▍Net margin 2.8%

Revenue ¥81.11B, +23,5% YoY; Operating income +35,8% YoY.

• ▍Revenue ¥81.11B, +23,5% YoY
• ▍Operating income +35,8% YoY
• ▍Net income +15,7% YoY
• ▍Free cash flow +55,7% YoY
• ▍Net margin 2.6%

Revenue ¥65.66B, +19,1% YoY; Operating income +3,7% YoY.

• ▍Revenue ¥65.66B, +19,1% YoY
• ▍Operating income +3,7% YoY
• ▍Net income +39,2% YoY
• ▍Free cash flow +8,7% YoY
• ▍Net margin 2.8%

Revenue ¥55.15B; Operating income ¥2.35B.

• ▍Revenue ¥55.15B
• ▍Operating income ¥2.35B
• ▍Net margin 2.4%