Hakuten Corporation (2173) AI Stock Analysis

• Market Cap: ¥16.84B
• Dividend Yield: 2.46%
• Average Volume (3M): 81.84K
• Price to Earnings (P/E): 8.5
• Beta (1Y): 0.81
• Revenue Growth: 6.38%
• EPS Growth: 18.64%
• Country: JP
• Employees: 545
• Sector: Communication Services
• Sector Strength: 97
• Industry: Advertising Agencies
• EPS (TTM): 54.42
• Shares Outstanding: 16,248,520
• 10 Day Avg. Volume: 37,160
• 30 Day Avg. Volume: 81,840
• PEG Ratio: 0.08
• Price to Book (P/B): 2.65
• Price to Sales (P/S): 0.57
• P/FCF Ratio: 5.00
• 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: 79 Outperform
• Price Target: ¥1,120.00 ▲(68.93% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by strengthened financial performance (accelerating growth, higher margins and profits, and improved leverage) and supported by attractive valuation (low P/E with a solid dividend). Technicals are positive on the medium/long-term trend but show some near-term consolidation (below the 20-day average), keeping the overall score in the high-70s rather than higher.

Positive Factors

Revenue growth & margin expansion

Sustained ~22% top-line growth alongside margin expansion indicates improving product mix and operating leverage. Over the next 2-6 months, stronger margins and revenue momentum should support durable profit conversion, higher retained earnings, and greater reinvestment or cash returns.

Improved leverage & high ROE

Material decline in leverage with a low debt-to-equity and very strong ROE signals a healthier, more flexible balance sheet. This improvement reduces financial risk, supports capital allocation choices, and enables durable ability to invest, pay down debt, or sustain distributions.

Strong free cash flow generation

FCF nearly equaling net income indicates earnings quality and true cash conversion in the latest year. Reliable free cash flow supports long-term obligations, discretionary spending, and cushions against cycles, improving durable financial resilience and strategic optionality.

Negative Factors

Historical earnings volatility

A prior loss year (2021) and noted historical volatility show results are not yet proven through a full cycle. This raises the risk that top-line or margin deterioration could reverse recent gains, making medium-term earnings sustainability less certain.

Uneven cash conversion / working-capital swings

Material year-to-year swings in cash conversion, including negative FCF in 2023, point to working-capital and timing sensitivity. Such variability can strain liquidity, complicate planning, and amplify funding needs during slower periods.

Past high leverage and cyclicality

Although leverage improved, the company previously operated with high debt and negative returns. That historical pattern suggests vulnerability to industry cyclicality or shocks, which could rapidly erode flexibility and force defensive financial actions in downturns.

Hakuten Corporation Business Overview & Revenue Model

Company Description

Hakuten Corporation (2173) is a Japanese company primarily engaged in the development and manufacturing of advanced electronic materials and components. The company operates across various sectors, including electronics, telecommunications, and renewable energy. Core products include semiconductor materials, display materials, and other high-performance components designed for use in consumer electronics, automotive applications, and industrial systems.

How the Company Makes Money

Hakuten Corporation generates revenue through the sale of its specialized electronic materials and components, which are utilized in a wide array of industries. The primary revenue streams include the production and supply of semiconductor materials, which are in high demand due to the growth of the electronics market. Additionally, the company benefits from long-term contracts with major technology firms, ensuring a steady flow of income. Strategic partnerships with leading manufacturers in the telecommunications and automotive sectors further enhance its market position and revenue potential. The company's focus on innovation and development of new materials also provides additional revenue opportunities through licensing agreements and collaborations with research institutions.

Hakuten Corporation Financial Statement Overview

Summary

Strong turnaround and scaling: ~22% revenue growth in 2025 with margin expansion (net margin ~8.2% vs ~5.3% in 2024) and sharply higher profits (net income ~¥1.91B in 2025). Balance sheet leverage improved materially (debt-to-equity ~0.26 in 2025) with very strong ROE (~38%). Offsets are historical volatility (losses in 2021) and uneven cash conversion across years, despite strong 2025 free cash flow (~¥2.65B) that nearly matches net income.

Income Statement

Profitability and growth have strengthened meaningfully. Revenue accelerated to ~22% growth in 2025 (annual) following solid growth in 2024 and 2023, while margins expanded (net margin ~8.2% in 2025 vs ~5.3% in 2024). Earnings have scaled sharply (net income rising from ~¥0.87B in 2023 to ~¥1.91B in 2025). The key weakness is historical volatility—FY2021 showed losses and negative operating profitability—so results appear improved but not yet “through-cycle” proven.

Balance Sheet

Leverage has improved substantially and looks manageable: debt-to-equity declined to ~0.26 in 2025 from ~0.84 in 2023 and ~2.36 in 2021, alongside a larger equity base (equity ~¥5.0B in 2025). Returns on equity are very strong (~38% in 2025), reflecting high profitability relative to equity. The main risk is the company’s history of higher leverage and negative returns (2021), indicating the balance sheet has improved, but past cyclicality/pressure is a consideration.

Cash Flow

Cash generation is strong in the latest year: operating cash flow rose to ~¥2.70B in 2025 and free cash flow to ~¥2.65B, with free cash flow nearly matching net income (~0.98x), suggesting good earnings quality. However, cash conversion has been uneven across years (including negative free cash flow in 2023-03), and operating cash flow relative to revenue remains moderate (~0.62 in 2025 vs ~0.34 in 2024), implying working-capital timing can materially swing cash results.

Breakdown	TTM	Dec 2025	Mar 2025	Dec 2023	Mar 2023	Mar 2022
Income Statement
Total Revenue	19.09B	23.34B	18.84B	17.39B	13.94B	10.63B
Gross Profit	6.12B	7.49B	5.69B	5.13B	3.88B	3.13B
EBITDA	1.72B	2.75B	1.53B	1.42B	827.80M	1.15B
Net Income	1.11B	1.91B	999.00M	866.00M	553.63M	760.81M
Balance Sheet
Total Assets	8.16B	10.18B	7.90B	7.67B	4.94B	4.78B
Cash, Cash Equivalents and Short-Term Investments	2.70B	4.50B	2.64B	2.53B	1.03B	1.58B
Total Debt	1.71B	1.27B	1.74B	2.21B	1.09B	1.05B
Total Liabilities	4.14B	5.18B	4.54B	5.03B	2.95B	3.03B
Stockholders Equity	4.02B	5.00B	3.35B	2.64B	1.99B	1.74B
Cash Flow
Free Cash Flow	0.00	2.65B	997.00M	941.33M	-56.88M	404.27M
Operating Cash Flow	0.00	2.70B	1.10B	1.45B	114.07M	487.78M
Investing Cash Flow	0.00	-53.03M	-169.00M	-833.33M	-334.39M	513.70M
Financing Cash Flow	0.00	-799.59M	-816.00M	1.03B	-328.90M	-1.44B

Hakuten Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 663.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2173, the sentiment is Positive. The current price of 663 is below the 20-day moving average (MA) of 1008.05, below the 50-day MA of 953.73, and below the 200-day MA of 699.64, indicating a bullish trend. The MACD of 27.38 indicates Negative momentum. The RSI at 65.17 is Neutral, neither overbought nor oversold. The STOCH value of 85.79 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2173.

Hakuten Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2173	79 Outperform	¥16.84B	8.54	―	2.46%	6.38%	18.64%
6535	75 Outperform	¥30.17B	13.21	―	5.35%	58.08%	29.89%
4293	64 Neutral	¥84.70B	24.00	―	7.03%	-10.10%	-37.28%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
2122	59 Neutral	¥8.91B	31.54	―	2.61%	11.84%	246.10%
2491	57 Neutral	¥14.12B	19.45	―	7.85%	-3.20%	34.08%
6094	50 Neutral	¥12.76B	16.48	―	―	-2.68%	91.68%