$Renesas Electronics (6723.JP)$Listed in 1988, mainly engage...

Over the past 5 years, revenue declined slightly in the first 3 years, but saw significant growth from 2021 to 2022 at 39% and 51%. Operating profit also saw substantial growth in the past two years, with a 1.44-fold increase in 2022, and net income grew by 1.14 times in 2022. In 2022, interest expenses accounted for 14.6% of operating profit, indicating a heavy interest burden. The gross margin increased from 43.9% to 56.9% over the past 5 years, and the return on net assets in 2022 increased to 19.1%.

In the first 3 quarters of 2023, revenue shrank by 0.23%, operating profit decreased by 2.9%, while net income saw a significant increase of 46.42% due to the shift from interest expenses to interest income.

Over the past 5 years, the asset-liability ratio increased from 43.1% to 45.3%, but has now decreased to 37.5%. Goodwill increased significantly by 0.7 trillion in 2021, indicating acquisition activities. This explains the rapid growth in revenue and profit from 2021 to 2022, as well as the sharp increase in interest expenses starting in 2021. Typically, growth driven by acquisitions is limited in duration, as revenue growth is expected to stop in 2023. The proportion and growth rate of accounts receivable and inventory are normal. Goodwill and other intangible assets amount to 1.9 trillion, accounting for 92% of the total net assets of 2.06 trillion, with long-term borrowings of 320.414 billion, accounting for 15.5% of net assets, indicating a relatively moderate leverage ratio. There are 224.592 billion outstanding shares.

Currently, cash is 0.4 trillion, with a current ratio of 1 and a quick ratio of 0.76.

Over the past 5 years, operating cash flow has been lower than investing cash flow, resulting in no shareholder surplus.

The current PE ratio is 18.9, and the TTM PE ratio is 13.5. Considering both factors, a cautious approach is recommended (⭐️).