Fuji Seal International (TSE:7864) - Share price, News & Analysis

Q: What is the Fair Price of 7864 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

7864 (¥1579) is trading below our estimate of [[fair value]] (¥5200.22)

7864 fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	3/6
Past Performance	2/6
Financial Health	6/6
Dividends	4/6

7864 Stock Overview

Fuji Seal International, Inc. provides packaging solutions primarily for food, beverages, dairy, home and personal care, and pharmaceutical products.

Rewards

Trading at 69.6% below our estimate of its fair value

Earnings are forecast to grow 17.23% per year

Risk Analysis

Dividend of 2.22% is not well covered

Profit margins (3.1%) are lower than last year (5.7%)

Fuji Seal International Competitors

TSE:7947

JP¥302.4b

Toyo Seikan Group Holdings

TSE:5901

JP¥327.9b

Takemoto Yohki

TSE:4248

JP¥9.6b

Ishizuka Glass

TSE:5204

JP¥6.4b

Price History & Performance

Summary of all time highs, changes and price drops for Fuji Seal International
Historical stock prices
Current Share Price	JP¥1,579.00
52 Week High	JP¥2,594.00
52 Week Low	JP¥1,402.00
Beta	0.39
1 Month Change	3.88%
3 Month Change	8.08%
1 Year Change	-31.38%
3 Year Change	-38.05%
5 Year Change	-53.83%
Change since IPO	383.78%

Shareholder Returns

	7864	JP Packaging	JP Market
7D	3.3%	2.8%	2.8%
1Y	-31.4%	-0.3%	-2.6%

Return vs Industry: 7864 underperformed the JP Packaging industry which returned -0.3% over the past year.

Return vs Market: 7864 underperformed the JP Market which returned -2.6% over the past year.

Price Volatility

Is 7864's price volatile compared to industry and market?
7864 volatility
7864 Average Weekly Movement	3.8%
Packaging Industry Average Movement	2.7%
Market Average Movement	3.5%
10% most volatile stocks in JP Market	7.4%
10% least volatile stocks in JP Market	1.9%

Stable Share Price: 7864 is not significantly more volatile than the rest of JP stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: 7864's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1897	5,892	Shigeko Okazaki	https://www.fujiseal.com/en/

Fuji Seal International, Inc. provides packaging solutions primarily for food, beverages, dairy, home and personal care, and pharmaceutical products. The company offers shrink sleeve labels for containers; self-adhesive labels/pressure sensitive labels used in promotional and advertising campaign tools; spouted pouches; rotary machines, linear machines, hybrid steam tunnels, pressure-sensitive labelers, and PSL labeling systems; and packaging services, as well as offers spare and wear parts, training, and support services. It operates in Japan, the United States, Europe, and ASEAN countries.

Fuji Seal International Fundamentals Summary

How do Fuji Seal International's earnings and revenue compare to its market cap?
7864 fundamental statistics
Market Cap	JP¥86.45b
Earnings (TTM)	JP¥5.20b
Revenue (TTM)	JP¥170.37b

16.6x

P/E Ratio

0.5x

P/S Ratio

Is 7864 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
7864 income statement (TTM)
Revenue	JP¥170.37b
Cost of Revenue	JP¥141.36b
Gross Profit	JP¥29.01b
Other Expenses	JP¥23.81b
Earnings	JP¥5.20b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Nov 10, 2022

Earnings per share (EPS)	94.96
Gross Margin	17.03%
Net Profit Margin	3.05%
Debt/Equity Ratio	9.9%

How did 7864 perform over the long term?

See historical performance and comparison

Dividends

2.2%

Current Dividend Yield

37%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 7864 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 7864?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 7864. This is calculated by dividing 7864's market cap by their current preferred multiple.
What is 7864's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	JP¥86.45b

7864 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	0.4x
Enterprise Value/EBITDA	4.5x
PEG Ratio	1x

Price to Earnings Ratio vs Peers

How does 7864's PE Ratio compare to its peers?

7864 PE Ratio vs Peers

The above table shows the PE ratio for 7864 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	12.8x
7947 FP	29x	12.7%	JP¥302.4b
5901 Toyo Seikan Group Holdings	7.6x	5.2%	JP¥327.9b
4248 Takemoto Yohki	10.8x	n/a	JP¥9.6b
5204 Ishizuka Glass	3.9x	n/a	JP¥6.4b
7864 Fuji Seal International	16.6x	17.2%	JP¥86.5b

Price-To-Earnings vs Peers: 7864 is expensive based on its Price-To-Earnings Ratio (16.6x) compared to the peer average (12.8x).

Price to Earnings Ratio vs Industry

How does 7864's PE Ratio compare vs other companies in the JP Packaging Industry?

Price-To-Earnings vs Industry: 7864 is expensive based on its Price-To-Earnings Ratio (16.6x) compared to the JP Packaging industry average (10x)

Price to Earnings Ratio vs Fair Ratio

What is 7864'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.

7864 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	16.6x
Fair PE Ratio	11.8x

Price-To-Earnings vs Fair Ratio: 7864 is expensive based on its Price-To-Earnings Ratio (16.6x) compared to the estimated Fair Price-To-Earnings Ratio (11.8x).

Share Price vs Fair Value

What is the Fair Price of 7864 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 7864 (¥1579) is trading below our estimate of fair value (¥5200.22)

Significantly Below Fair Value: 7864 is trading below fair value by more than 20%.

Analyst Price Targets

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

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is Fuji Seal International forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

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

17.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 7864's forecast earnings growth (17.2% per year) is above the savings rate (0.04%).

Earnings vs Market: 7864's earnings (17.2% per year) are forecast to grow faster than the JP market (8.5% per year).

High Growth Earnings: 7864's earnings are forecast to grow, but not significantly.

Revenue vs Market: 7864's revenue (5.6% per year) is forecast to grow faster than the JP market (4.3% per year).

High Growth Revenue: 7864's revenue (5.6% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 7864's Return on Equity is forecast to be low in 3 years time (6.7%).

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Past Performance

How has Fuji Seal International performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

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

3.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 7864 has high quality earnings.

Growing Profit Margin: 7864's current net profit margins (3.1%) are lower than last year (5.7%).

Past Earnings Growth Analysis

Earnings Trend: 7864's earnings have grown by 3.5% per year over the past 5 years.

Accelerating Growth: 7864's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 7864 had negative earnings growth (-45%) over the past year, making it difficult to compare to the Packaging industry average (1.3%).

Return on Equity

High ROE: 7864's Return on Equity (4.6%) is considered low.

Discover strong past performing companies

Financial Health

How is Fuji Seal International'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: 7864's short term assets (¥107.4B) exceed its short term liabilities (¥53.6B).

Long Term Liabilities: 7864's short term assets (¥107.4B) exceed its long term liabilities (¥6.9B).

Debt to Equity History and Analysis

Debt Level: 7864 has more cash than its total debt.

Reducing Debt: 7864's debt to equity ratio has reduced from 22.5% to 9.9% over the past 5 years.

Debt Coverage: 7864's debt is well covered by operating cash flow (92.7%).

Interest Coverage: 7864 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Fuji Seal International 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

2.22%

Current Dividend Yield

Dividend Yield vs Market

Fuji Seal International Dividend Yield vs Market

How does Fuji Seal International dividend yield compare to the market?
Segment	Dividend Yield
Company (Fuji Seal International)	2.2%
Market Bottom 25% (JP)	1.6%
Market Top 25% (JP)	3.7%
Industry Average (Packaging)	3.0%
Analyst forecast in 3 Years (Fuji Seal International)	2.3%

Notable Dividend: 7864's dividend (2.22%) is higher than the bottom 25% of dividend payers in the JP market (1.65%).

High Dividend: 7864's dividend (2.22%) is low compared to the top 25% of dividend payers in the JP market (3.7%).

Stability and Growth of Payments

Stable Dividend: 7864's dividends per share have been stable in the past 10 years.

Growing Dividend: 7864's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (36.9%), 7864's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: 7864 is paying a dividend but the company has no free cash flows.

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Management

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

1.8yrs

Average management tenure

CEO

Shigeko Okazaki (65 yo)

20.33yrs

Tenure

Ms. Shigeko Okazaki serves as Representative Executive Officer Chairperson at Fuji Seal International, Inc. since 2021 and has served as Chairman since 2021 until 2021. She serves as the Chief Executive Of...

Leadership Team

Experienced Management: 7864's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.

Board Members

Experienced Board: 7864's board of directors are considered experienced (7.3 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

What is the ownership structure of 7864?
Owner Type	Number of Shares	Ownership Percentage
Company Controlled Foundation	4,800,000	8.8%
Individual Insiders	10,722,000	19.6%
Institutions	17,589,565	32.1%
General Public	21,638,500	39.5%

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

Top Shareholders

Top 25 shareholders own 59.51% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
14.69%	Shigeko Okazaki	8,041,000	¥12.7b	0%	no data
8.77%	Fuji Seal Foundation, Endowment Arm	4,800,000	¥7.6b	0%	no data
7.76%	Global Alpha Capital Management Ltd.	4,250,332	¥6.7b	0%	1.91%
3.26%	Hiroko Fujio	1,784,000	¥2.8b	0%	no data
3.14%	Massachusetts Financial Services Company	1,717,213	¥2.7b	0.05%	no data
2.55%	Nomura Asset Management Co., Ltd.	1,398,400	¥2.2b	-0.08%	0.01%
2.45%	The Vanguard Group, Inc.	1,342,815	¥2.1b	0.67%	no data
2.13%	Tweedy, Browne Company LLC	1,168,200	¥1.8b	0%	0.17%
1.84%	Rheos Capital Works, Inc.	1,006,200	¥1.6b	0%	0.2%
1.77%	Tokio Marine Asset Management Co., Ltd.	967,700	¥1.5b	0%	0.08%
1.69%	Daiwa Asset Management Co. Ltd.	924,000	¥1.5b	0.17%	0.01%
1.53%	Yoichi Okazaki	837,000	¥1.3b	0%	no data
1.43%	Dimensional Fund Advisors LP	784,953	¥1.2b	5.98%	no data
1.21%	BlackRock, Inc.	663,460	¥1.0b	-0.78%	no data
1.14%	Nikko Asset Management Co., Ltd.	625,400	¥987.5m	-1.08%	no data
0.87%	Sumitomo Mitsui DS Asset Management Company, Limited	476,400	¥752.2m	0.06%	0.02%
0.79%	Orbis Investment Management Limited	431,800	¥681.8m	11.2%	0.02%
0.69%	Norges Bank Investment Management	377,918	¥596.7m	0%	no data
0.44%	Allspring Global Investments, LLC	239,417	¥378.0m	5.26%	no data
0.4%	Mitsubishi UFJ Kokusai Asset Management Co., Ltd.	218,700	¥345.3m	-1.71%	no data
0.39%	Charles Schwab Investment Management, Inc.	212,843	¥336.1m	12.3%	no data
0.23%	Caisse de dépôt et placement du Québec	124,300	¥196.3m	0%	no data
0.12%	Asset Management One Co., Ltd.	66,900	¥105.6m	7.73%	no data
0.11%	American Century Investment Management Inc	62,500	¥98.7m	-22.46%	no data
0.11%	Mercer Global Investments Europe Limited	60,800	¥96.0m	0%	no data

Ticker	Exchange	Primary Security	Security Type	Country	Currency	Listed on
7864	TSE (The Tokyo Stock Exchange)	Yes	Common Stock	JP	JPY	Oct 1997
FUJS.F	OTCPK (Pink Sheets LLC)	Yes	Common Stock	US	USD	Oct 1997

Data	Last Updated (UTC time)
Company Analysis	2022/10/05 00:00
End of Day Share Price	2022/10/05 00:00
Earnings	2022/06/30
Annual Earnings	2022/03/31