Hip Corporation (2136) AI Stock Analysis

• Market Cap: ¥6.15B
• Dividend Yield: 3.39%
• Average Volume (3M): 4.12K
• Price to Earnings (P/E): 12.0
• Beta (1Y): 0.62
• Revenue Growth: 5.71%
• EPS Growth: 18.97%
• Country: JP
• Employees: 765
• Sector: Industrials
• Sector Strength: 72
• Industry: Staffing & Employment Services
• EPS (TTM): 32.94
• Shares Outstanding: 3,975,300
• 10 Day Avg. Volume: 4,550
• 30 Day Avg. Volume: 4,116
• PEG Ratio: 1.28
• Price to Book (P/B): 1.06
• Price to Sales (P/S): 0.71
• P/FCF Ratio: 24.37
• 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: 66 Neutral
• Price Target: ¥1,672.00 ▲(5.89% Upside)
• Action: Downgraded Date: 03/24/26
• Date: Action: Downgraded 03/24/26

The score is driven primarily by solid profitability and a strengthening, low-leverage balance sheet, offset by a material FY2025 cash flow deterioration. Valuation is supportive (P/E ~12 and ~3.5% yield), but technical signals remain weak-to-neutral with price below major moving averages and negative MACD.

Positive Factors

Revenue Growth

Consistent revenue growth reflects the company's ability to expand its market reach and adapt to evolving customer needs, supporting long-term business sustainability.

Balance Sheet Health

A low debt-to-equity ratio indicates financial stability and low leverage, providing the company with flexibility to invest in growth opportunities and withstand economic fluctuations.

Cash Flow Generation

Strong cash flow generation ensures the company can fund its operations, invest in new projects, and maintain financial health, which is crucial for long-term success.

Negative Factors

Decline in Free Cash Flow

A decline in free cash flow may indicate increased capital expenditures or inefficiencies in working capital management, potentially impacting future investment capacity.

Monitoring Free Cash Flow Trends

The need to monitor free cash flow trends suggests potential volatility or uncertainty in cash management, which could affect the company's ability to fund future growth initiatives.

Lack of Earnings Call Insights

The absence of earnings call insights may indicate a lack of transparency or strategic direction, which could concern investors about the company's future plans and performance.

Hip Corporation Business Overview & Revenue Model

Company Description

HIP Corporation provides outsourcing services in Japan. It offers technical services in the areas of mechanical and electronic design, and software development. The company serves transportation equipment, machinery-related, information communication and precision equipment-related, electrical and electronic equipment, semiconductor circuit related, and information processing and software related clients. HIP Corporation was founded in 1995 and is headquartered in Yokohama, Japan.

Hip Corporation Financial Statement Overview

Summary

Steady revenue growth and solid profitability are supported by a strong, low-leverage balance sheet (debt-to-equity ~0.10). The main drag is a sharp FY2025 cash flow decline (free cash flow down ~68% YoY), raising concerns about earnings-to-cash conversion and working-capital pressure.

Income Statement

Revenue has grown steadily in recent years (up ~5.5% in FY2025 after ~3.4% in FY2024), showing resilient demand. Profitability is solid for the industry with a ~6.9% net margin and ~9.5% operating margin in FY2025. The main weakness is margin compression versus prior years (gross and operating margins are below FY2022–FY2023 levels), suggesting higher cost pressure or a less favorable mix.

Balance Sheet

Leverage is conservative and improving, with debt-to-equity declining to ~0.10 in FY2025 (from ~0.16–0.23 historically), which supports financial flexibility. Shareholders’ equity has risen consistently over time, indicating ongoing balance sheet strengthening. Returns on equity are healthy at ~10% in FY2025, though down modestly from the higher levels seen earlier (e.g., FY2020–FY2022).

Cash Flow

Cash generation weakened materially in FY2025: operating cash flow fell to ~¥218M and free cash flow to ~¥173M, with free cash flow down sharply year over year (about -68%). Free cash flow still covered a large portion of net income (~79%), but the big drop from prior years and the low conversion of earnings into operating cash flow in FY2025 signals higher working-capital needs and/or less consistent cash earnings quality.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	5.06B	5.97B	5.66B	5.48B	5.19B	5.01B
Gross Profit	1.05B	1.32B	1.28B	1.30B	1.14B	929.98M
EBITDA	354.25M	590.22M	576.28M	601.83M	476.98M	277.02M
Net Income	220.41M	413.67M	388.59M	401.54M	403.60M	364.26M
Balance Sheet
Total Assets	―	5.90B	6.14B	5.77B	5.59B	5.12B
Cash, Cash Equivalents and Short-Term Investments	―	3.43B	3.76B	3.42B	3.25B	2.82B
Total Debt	―	400.00M	600.67M	601.81M	652.96M	654.10M
Total Liabilities	―	1.92B	2.33B	2.13B	2.23B	2.05B
Stockholders Equity	―	3.98B	3.81B	3.63B	3.35B	3.07B
Cash Flow
Free Cash Flow	0.00	172.90M	543.94M	340.29M	551.74M	350.33M
Operating Cash Flow	0.00	217.54M	549.42M	344.76M	560.00M	367.38M
Investing Cash Flow	0.00	-95.17M	1.71M	-4.46M	-7.75M	-47.76M
Financing Cash Flow	0.00	-444.90M	-214.65M	-170.08M	-120.27M	-96.64M

Hip Corporation Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1579.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2136, the sentiment is Neutral. The current price of 1579 is above the 20-day moving average (MA) of 1574.20, below the 50-day MA of 1592.84, and above the 200-day MA of 1435.77, indicating a neutral trend. The MACD of -4.62 indicates Negative momentum. The RSI at 47.49 is Neutral, neither overbought nor oversold. The STOCH value of 78.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:2136.

Hip Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3991	78 Outperform	¥10.52B	13.11	―	1.72%	3.95%	4.50%
4377	70 Outperform	¥33.06B	30.08	―	0.39%	41.23%	50.13%
6539	70 Outperform	¥25.60B	24.11	―	5.45%	21.90%	0.46%
2136	66 Neutral	¥6.15B	11.98	―	3.39%	5.71%	18.97%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
2471	54 Neutral	¥19.28B	7.49	―	3.76%	6.74%	7.56%
3900	51 Neutral	¥10.03B	426.22	―	2.24%	32.39%	-127.51%