Sanso ElectricLtd (TSE:6518) - Share price, News & Analysis

Q: What is the Fair Price of 6518 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

6518 (¥1100) is trading above our estimate of [[fair value]] (¥420.86)

6518 fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	0/6
Past Performance	4/6
Financial Health	6/6
Dividends	4/6

6518 Stock Overview

Sanso Electric Co.,Ltd. engages in the manufacturing and selling of motors, pumps, and system solution products in Japan.

Rewards

Price-To-Earnings ratio (5.9x) is below the JP market (12.8x)

Earnings grew by 61.7% over the past year

Risk Analysis

Earnings have declined by 4% per year over past 5 years

Dividend of 2.27% is not well covered by earnings

Does not have a meaningful market cap (¥5B)

Sanso ElectricLtd Competitors

MK Seiko

TSE:5906

JP¥5.0b

Hoden Seimitsu Kako Kenkyusho

TSE:6469

JP¥4.6b

SANNO

TSE:3441

JP¥4.7b

Yamada

TSE:6392

JP¥5.7b

Price History & Performance

Summary of all time highs, changes and price drops for Sanso ElectricLtd
Historical stock prices
Current Share Price	JP¥1,100.00
52 Week High	JP¥1,260.00
52 Week Low	JP¥960.00
Beta	0.92
1 Month Change	4.17%
3 Month Change	10.55%
1 Year Change	10.89%
3 Year Change	43.98%
5 Year Change	-5.01%
Change since IPO	-51.01%

Shareholder Returns

	6518	JP Machinery	JP Market
7D	1.9%	3.0%	2.5%
1Y	10.9%	-3.1%	1.9%

Return vs Industry: 6518 exceeded the JP Machinery industry which returned -3.1% over the past year.

Return vs Market: 6518 exceeded the JP Market which returned 1.9% over the past year.

Price Volatility

Is 6518's price volatile compared to industry and market?
6518 volatility
6518 Average Weekly Movement	3.6%
Machinery Industry Average Movement	3.9%
Market Average Movement	3.8%
10% most volatile stocks in JP Market	7.8%
10% least volatile stocks in JP Market	2.0%

Stable Share Price: 6518 is not significantly more volatile than the rest of JP stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: 6518's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1957	564	Naoki Kuroda	https://www.sanso-elec.co.jp

Sanso Electric Co.,Ltd. engages in the manufacturing and selling of motors, pumps, and system solution products in Japan. Its products include magnetic drive, self-priming magnetic drive, self-priming centrifugal, cast-iron line, automatic shallow-well, and centrifugal pumps, as well as desalination and sansolver systems.

Sanso ElectricLtd Fundamentals Summary

How do Sanso ElectricLtd's earnings and revenue compare to its market cap?
6518 fundamental statistics
Market Cap	JP¥4.99b
Earnings (TTM)	JP¥852.00m
Revenue (TTM)	JP¥17.75b

5.9x

P/E Ratio

0.3x

P/S Ratio

Is 6518 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
6518 income statement (TTM)
Revenue	JP¥17.75b
Cost of Revenue	JP¥14.50b
Gross Profit	JP¥3.25b
Other Expenses	JP¥2.40b
Earnings	JP¥852.00m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	187.83
Gross Margin	18.30%
Net Profit Margin	4.80%
Debt/Equity Ratio	10.5%

How did 6518 perform over the long term?

See historical performance and comparison

Dividends

2.3%

Current Dividend Yield

13%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 6518 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 6518?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 6518. This is calculated by dividing 6518's market cap by their current preferred multiple.
What is 6518's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	JP¥4.99b

6518 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.2x
Enterprise Value/EBITDA	2.3x
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

How does 6518's PE Ratio compare to its peers?

6518 PE Ratio vs Peers

The above table shows the PE ratio for 6518 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	7.6x
5906 MK Seiko	11.3x	n/a	JP¥5.0b
6469 Hoden Seimitsu Kako Kenkyusho	3.9x	n/a	JP¥4.6b
3441 SANNO	10.3x	n/a	JP¥4.7b
6392 Yamada	4.7x	n/a	JP¥5.7b
6518 Sanso ElectricLtd	5.9x	n/a	JP¥5.0b

Price-To-Earnings vs Peers: 6518 is good value based on its Price-To-Earnings Ratio (5.9x) compared to the peer average (7.6x).

Price to Earnings Ratio vs Industry

How does 6518's PE Ratio compare vs other companies in the JP Machinery Industry?

Price-To-Earnings vs Industry: 6518 is good value based on its Price-To-Earnings Ratio (5.9x) compared to the JP Machinery industry average (10.6x)

Price to Earnings Ratio vs Fair Ratio

What is 6518's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

6518 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	5.9x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate 6518's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of 6518 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 6518 (¥1100) is trading above our estimate of fair value (¥420.86)

Significantly Below Fair Value: 6518 is trading above our estimate of fair value.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

Discover undervalued companies

Future Growth

How is Sanso ElectricLtd forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

8.1%

Forecasted Capital Goods industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Sanso ElectricLtd has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.

Discover growth companies

Check out Sanso ElectricLtd's track record over time to understand how much the company has returned to shareholders and its earnings growth rate in the past.

Past Performance

How has Sanso ElectricLtd performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-4.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 6518 has high quality earnings.

Growing Profit Margin: 6518's current net profit margins (4.8%) are higher than last year (3.9%).

Past Earnings Growth Analysis

Earnings Trend: 6518's earnings have declined by 4% per year over the past 5 years.

Accelerating Growth: 6518's earnings growth over the past year (61.7%) exceeds its 5-year average (-4% per year).

Earnings vs Industry: 6518 earnings growth over the past year (61.7%) exceeded the Machinery industry 25.3%.

Return on Equity

High ROE: 6518's Return on Equity (8.1%) is considered low.

Discover strong past performing companies

Financial Health

How is Sanso ElectricLtd's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 6518's short term assets (¥11.7B) exceed its short term liabilities (¥5.7B).

Long Term Liabilities: 6518's short term assets (¥11.7B) exceed its long term liabilities (¥2.0B).

Debt to Equity History and Analysis

Debt Level: 6518 has more cash than its total debt.

Reducing Debt: 6518's debt to equity ratio has reduced from 30.1% to 10.5% over the past 5 years.

Debt Coverage: 6518's debt is well covered by operating cash flow (51.4%).

Interest Coverage: 6518 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

Discover healthy companies

Dividend

What is Sanso ElectricLtd current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

2.27%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 6518's dividend (2.27%) is higher than the bottom 25% of dividend payers in the JP market (1.62%).

High Dividend: 6518's dividend (2.27%) is low compared to the top 25% of dividend payers in the JP market (3.61%).

Stability and Growth of Payments

Stable Dividend: 6518's dividends per share have been stable in the past 10 years.

Growing Dividend: 6518's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (13.3%), 6518's dividend payments are thoroughly covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: 6518 is paying a dividend but the company has no free cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

7.2yrs

Average management tenure

CEO

Naoki Kuroda (63 yo)

16.17yrs

Tenure

Mr. Naoki Kuroda has been the President & CEO of Sanso Electric Co.,Ltd. since June 2006 and serves as its Chairman. Mr. Kuroda joined Sanso Electric Co.,Ltd.in March 1989 and served as its Manager of Qua...

Leadership Team

Experienced Management: 6518's management team is seasoned and experienced (7.2 years average tenure).

Board Members

Experienced Board: 6518's board of directors are considered experienced (6.7 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/17 00:00
End of Day Share Price	2022/08/17 00:00
Earnings	2022/06/30
Annual Earnings	2022/03/31