Techno Ryowa Ltd. (1965) AI Stock Analysis

• Market Cap: ¥156.27B
• Dividend Yield: 1.55%
• Average Volume (3M): 75.94K
• Price to Earnings (P/E): 16.1
• Beta (1Y): 1.34
• Revenue Growth: 20.44%
• EPS Growth: 106.45%
• Country: JP
• Employees: 899
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 137.65
• Shares Outstanding: 21,228,603
• 10 Day Avg. Volume: 45,450
• 30 Day Avg. Volume: 75,936
• PEG Ratio: 0.12
• Price to Book (P/B): 1.04
• Price to Sales (P/S): 0.66
• P/FCF Ratio: 12.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 78 Outperform
• Price Target: ¥8,778.00 ▲(32.20% Upside)

The score is driven primarily by strong financial performance (healthy growth and profitability with an exceptionally strong balance sheet). Technicals are supportive due to a clear uptrend, but the stock appears overbought (high RSI/Stoch), which tempers the outlook. Valuation is reasonable but not especially compelling given the modest dividend yield.

Positive Factors

Balance Sheet Strength

Extremely low leverage and a high equity ratio provide durable financial flexibility. The strong capital structure and improving ROE reduce insolvency risk, enable self-funded R&D and capex, and allow the company to absorb cyclicality or pursue strategic investments without heavy external financing.

Revenue Growth & Margin Improvement

Sustained top-line expansion coupled with rising EBIT/EBITDA margins signals improving product mix and operational efficiency. This structural trend supports reinvestment in automation and R&D, strengthens competitive positioning in industrial customers, and underpins long-term cash generation if maintained.

Improving Cash Generation

A meaningful turnaround to positive operating and free cash flow demonstrates better cash conversion of earnings. Durable cash generation reduces reliance on external capital, funds recurring maintenance, R&D and dividends, and increases resilience to industry downturns if the trend persists.

Negative Factors

End-market Cyclicality

Concentration in industrial and automotive end-markets exposes revenue to cyclical capital spending and trade cycles. Structural demand swings in these sectors can materially affect order books and utilization, requiring diversification or contract visibility to stabilize long-term revenue and capacity planning.

Legacy Cash Flow Volatility

Historic negative operating cash flow indicates prior earnings were not fully cash-backed, suggesting working-capital or receivables management issues. Although improved, the company must sustain cash conversion to avoid repeating funding shortfalls that could constrain R&D, capex, or strategic initiatives.

Modest Net Margin Cushion

An 8.6% net margin provides limited buffer against cost inflation or pricing pressure in competitive engineering markets. Maintaining margins requires continuous productivity gains, pricing power, and R&D-driven differentiation; failure to do so could compress earnings and free cash flow over the medium term.

Techno Ryowa Ltd. Business Overview & Revenue Model

Company Description

Techno Ryowa Ltd. engages in the design, construction, and maintenance of environmental control systems primarily in Japan. The company offers industrial equipment, including clean systems, temperature/humidity control systems, energy/resource conservation equipment, spot air conditioning systems, industrial waste water/air treatment facilities, refrigeration/low-temperature equipment, production process operations, clean effluent processing plants, and nuclear power-related equipment. It also provides general building equipment comprising general air conditioning equipment, plumbing systems, disaster prevention/fire extinguishing systems, waste water treatment systems, district cooling/heating products, and co-generation systems. In addition, the company is involved in the provision of equipment maintenance services, such as equipment diagnosis and overhaul maintenance; design/construction of building ancillary equipment; and manufacture/sales of related machinery. Techno Ryowa Ltd. was incorporated in 1949 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Techno Ryowa Ltd. generates revenue through multiple streams, primarily by selling its core products, including industrial automation systems and electronic components, to various industries such as manufacturing, automotive, and telecommunications. The company also offers maintenance and support services for its products, creating a steady income stream from existing customers. Strategic partnerships with other technology firms and collaboration on joint projects further enhance its market reach and product offerings. Additionally, the firm invests in research and development to innovate and adapt its products to meet the evolving needs of the market, which helps in retaining clients and attracting new business.

Techno Ryowa Ltd. Financial Statement Overview

Summary

Strong fundamentals supported by solid revenue growth (14.26%), improved profitability (EBIT 11.44%, EBITDA 12.53%, net margin 8.62%), an exceptionally low debt-to-equity ratio (0.0012) and high equity ratio (66.04%). Cash flow has improved with positive free cash flow, though the operating cash flow to net income ratio (0.64) suggests cash conversion is good but not best-in-class.

Income Statement

Techno Ryowa Ltd. demonstrates strong performance in its income statement, with a robust revenue growth rate of 14.26% over the last year. The company has improved its EBIT and EBITDA margins to 11.44% and 12.53%, respectively, indicating enhanced operational efficiency. Furthermore, the net profit margin increased to 8.62%, showcasing strong profitability. These metrics reflect a healthy financial trajectory, though the company should remain vigilant about maintaining these margins in a competitive industry.

Balance Sheet

The balance sheet of Techno Ryowa Ltd. is notably strong, with a low debt-to-equity ratio of 0.0012, indicating minimal leverage and financial risk. The return on equity has improved to 13.71%, reflecting efficient use of shareholder funds. Additionally, the equity ratio of 66.04% signifies a strong capital structure, with ample equity backing total assets. The company is well-positioned to withstand economic fluctuations and invest in growth opportunities.

Cash Flow

Techno Ryowa Ltd. has shown a significant turnaround in cash flow operations, with positive free cash flow growth. The operating cash flow to net income ratio stands at 0.64, indicating solid cash generation relative to net income. The free cash flow to net income ratio is 0.61, suggesting effective cash management. Despite previous years of negative operating cash flow, the current improvement signals a positive trend, though continued focus on maintaining cash flow strength is advisable.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	88.48B	84.19B	73.69B	61.03B	56.90B	54.87B
Gross Profit	19.41B	17.14B	12.69B	9.54B	9.08B	7.91B
EBITDA	12.15B	10.54B	6.16B	3.52B	3.38B	2.40B
Net Income	8.34B	7.26B	4.51B	2.34B	2.24B	1.23B
Balance Sheet
Total Assets	78.42B	80.16B	76.23B	63.46B	63.70B	62.44B
Cash, Cash Equivalents and Short-Term Investments	18.01B	12.77B	10.02B	13.26B	14.87B	14.82B
Total Debt	810.00M	65.00M	125.00M	65.00M	165.00M	121.00M
Total Liabilities	24.89B	27.21B	27.05B	20.08B	21.24B	21.16B
Stockholders Equity	53.53B	52.95B	49.18B	43.37B	42.46B	41.28B
Cash Flow
Free Cash Flow	0.00	4.45B	-1.85B	-359.00M	615.00M	675.00M
Operating Cash Flow	0.00	4.65B	-1.45B	-157.00M	904.00M	1.14B
Investing Cash Flow	0.00	-159.00M	-340.00M	-625.00M	-130.00M	-1.29B
Financing Cash Flow	0.00	-1.79B	-1.72B	-883.00M	-565.00M	-1.11B

Techno Ryowa Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6640.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1965, the sentiment is Positive. The current price of 6640 is below the 20-day moving average (MA) of 7722.50, below the 50-day MA of 6796.20, and above the 200-day MA of 4824.15, indicating a bullish trend. The MACD of 350.34 indicates Positive momentum. The RSI at 56.69 is Neutral, neither overbought nor oversold. The STOCH value of 17.24 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1965.

Techno Ryowa Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1976	80 Outperform	¥80.94B	10.27	―	3.46%	-3.62%	9.37%
1965	78 Outperform	¥156.27B	16.08	―	1.55%	20.44%	106.45%
1982	77 Outperform	¥108.52B	17.09	―	2.14%	4.81%	-1.16%
1952	73 Outperform	¥156.36B	12.69	―	2.81%	8.83%	49.49%
1960	73 Outperform	¥21.66B	8.53	―	2.97%	22.32%	5024.88%
1967	73 Outperform	¥52.34B	11.99	―	2.19%	5.45%	86.27%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%