Shinwa Wise Holdings Co Ltd

Shinwa Wise Holdings has a liquidity position that appears robust, with cash and equivalents amounting to ¥1.34 billion, which is significantly higher than its long-term debt of ¥328.12 million. The company's current ratio of 2.16 indicates a strong ability to meet short-term obligations with its current assets. However, the negative operating cash flow of ¥809.78 million suggests that the company is not generating sufficient cash from its operations to sustain its activities.

The company's profitability is a concern, as it reported a net loss of ¥693.14 million and an operating loss of ¥647.34 million. The return on equity of -28.82% and return on assets of -16.35% are significantly below the industry median for online services, indicating that the company is underperforming in terms of generating returns for its shareholders and utilizing its assets efficiently.

Shinwa Wise Holdings' revenue is concentrated in a single business segment, as disclosed in its latest financial report. There is no detailed geographic breakdown provided, but the company is headquartered in Japan, and it is likely that a significant portion of its revenue is derived from the domestic market. This concentration could expose the company to regional economic downturns or regulatory changes.

The company's growth trajectory is currently negative, with a net loss and declining operating income. The outlook for the current fiscal year is not optimistic, and there is no indication of a turnaround in the near term. The company's capital expenditures of ¥110.93 million suggest some investment in growth, but this is not sufficient to offset the operating losses.

The risk assessment for Shinwa Wise Holdings indicates low liquidity and dilution risk, with no immediate filing-based flags detected. However, the company's negative operating cash flow and net loss raise concerns about its long-term sustainability. There is no evidence of dilution in the near term, as the number of shares outstanding has not changed between basic and diluted shares.

Recent events, as disclosed in the latest financial filings, show that the company has not issued any new shares or taken on significant debt. The company's management has not provided any forward-looking statements that suggest a change in strategy or a path to profitability. The lack of positive developments in the recent filings is a red flag for investors.

Net income improved 85.9% year-over-year to a loss of 142.3 million JPY in fiscal 2025.

Free cash flow surged 93.7% year-over-year, narrowing the deficit to 69.6 million JPY in fiscal 2025.

Long-term debt decreased steadily to 292.6 million JPY in fiscal 2025, reducing leverage from 434.6 million JPY in 2021.

Cash conversion ratio of 1.17 exceeds the Online Services cohort median of 1.06, indicating superior cash generation efficiency.

Dilution and liquidity risks are assessed as low, providing a stable capital structure despite operational challenges.

Operating margin of -1.47% places the company in the bottom quartile of the 387-firm Online Services cohort.

The company faces high credit risk, posing a significant threat to financial stability and potential borrowing costs.

Net margin of -1.57% remains in the bottom quartile of the Online Services cohort, highlighting severe profitability issues.

Revenue ¥391.9M, +44,2% YoY; Operating income +96,4% YoY.

• ▍Revenue ¥391.9M, +44,2% YoY
• ▍Operating income +96,4% YoY
• ▍Net income +80,2% YoY
• ▍Net margin -8.3%

Revenue ¥399.4M, −45,6% YoY; Operating income −140,4% YoY.

• ▍Revenue ¥399.4M, −45,6% YoY
• ▍Operating income −140,4% YoY
• ▍Net income −132,4% YoY
• ▍Net margin -12.7%

Revenue ¥207.1M, −67,3% YoY; Operating income −642,5% YoY.

• ▍Revenue ¥207.1M, −67,3% YoY
• ▍Operating income −642,5% YoY
• ▍Net income −779,7% YoY
• ▍Net margin -110.0%

Revenue ¥427.3M, −3,2% YoY; Operating income +78,3% YoY.

• ▍Revenue ¥427.3M, −3,2% YoY
• ▍Operating income +78,3% YoY
• ▍Net income +75,9% YoY
• ▍Net margin -39.0%

Revenue ¥271.8M; Operating income -¥188.1M.

• ▍Revenue ¥271.8M
• ▍Operating income -¥188.1M
• ▍Net margin -60.7%

Revenue ¥734.7M; Operating income ¥115.7M.

• ▍Revenue ¥734.7M
• ▍Operating income ¥115.7M
• ▍Net margin 21.2%

Revenue ¥633.8M; Operating income ¥40.5M.

• ▍Revenue ¥633.8M
• ▍Operating income ¥40.5M
• ▍Net margin 5.3%

Revenue ¥441.6M; Operating income -¥647.3M.

• ▍Revenue ¥441.6M
• ▍Operating income -¥647.3M
• ▍Net margin -157.0%

Revenue ¥2.07B, +1,6% YoY; Operating income +81,5% YoY.

• ▍Revenue ¥2.07B, +1,6% YoY
• ▍Operating income +81,5% YoY
• ▍Net income +85,9% YoY
• ▍Free cash flow +93,7% YoY
• ▍Net margin -6.9%

Revenue ¥2.04B, −41,6% YoY; Operating income −288,8% YoY.

• ▍Revenue ¥2.04B, −41,6% YoY
• ▍Operating income −288,8% YoY
• ▍Net income −431,3% YoY
• ▍Free cash flow −384,6% YoY
• ▍Net margin -49.6%

Revenue ¥3.49B, +32,6% YoY; Operating income +101,3% YoY.

• ▍Revenue ¥3.49B, +32,6% YoY
• ▍Operating income +101,3% YoY
• ▍Net income +111,2% YoY
• ▍Free cash flow +79,6% YoY
• ▍Net margin 8.7%

Revenue ¥2.63B, −6,5% YoY; Operating income +135,2% YoY.

• ▍Revenue ¥2.63B, −6,5% YoY
• ▍Operating income +135,2% YoY
• ▍Net income +518,1% YoY
• ▍Free cash flow +191,9% YoY
• ▍Net margin 5.5%