Air Water (4088) AI Stock Analysis

• Market Cap: ¥490.55B
• Dividend Yield: 3.21%
• Average Volume (3M): 1.04M
• Price to Earnings (P/E): 9.8
• Beta (1Y): 0.65
• Revenue Growth: 4.35%
• EPS Growth: 7.88%
• Country: JP
• Employees: 20,348
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): N/A
• Shares Outstanding: 229,755,050
• 10 Day Avg. Volume: 2,002,900
• 30 Day Avg. Volume: 1,041,256
• PEG Ratio: 0.86
• Price to Book (P/B): 0.83
• Price to Sales (P/S): 0.40
• P/FCF Ratio: 16.76
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: ¥2,393.00 ▲(10.48% Upside)

Air Water's strong financial performance and attractive valuation are offset by bearish technical indicators. The company's robust revenue growth and stable profitability are positive, but the decline in free cash flow and negative market momentum present challenges. The low P/E ratio and high dividend yield suggest potential value, but caution is advised due to current market trends.

Positive Factors

Revenue Growth

Strong revenue growth reflects increasing demand and market expansion, supporting long-term business sustainability and competitive positioning.

Market Diversification

Diversification across multiple sectors reduces dependency on a single market, enhancing resilience against sector-specific downturns.

Strategic Partnerships

Partnerships facilitate cross-selling opportunities and market expansion, strengthening competitive advantage and revenue potential.

Negative Factors

Free Cash Flow Decline

Declining free cash flow may limit the company's ability to invest in growth opportunities and manage financial obligations effectively.

Operational Efficiency

Lower operational margins indicate potential inefficiencies, which could impact profitability and competitiveness if not addressed.

Debt Levels

While leverage is moderate, any increase in debt could heighten financial risk, affecting long-term financial stability and flexibility.

Air Water Business Overview & Revenue Model

Company Description

Air Water Inc. (4088) is a Japanese company primarily engaged in the production and supply of industrial gases, water purification systems, and related services. Operating in various sectors including healthcare, food and beverage, and manufacturing, Air Water offers a diverse range of products such as oxygen, nitrogen, and carbon dioxide, as well as water treatment solutions and logistics services. The company focuses on innovation and sustainable practices to enhance efficiency and environmental responsibility in its operations.

How the Company Makes Money

Air Water generates revenue through multiple streams, primarily from the sale of industrial gases, which include oxygen, nitrogen, and argon used in various industries. The company also earns income from its water purification and treatment systems, which cater to both municipal and industrial clients. Additionally, Air Water has a logistics segment that provides transportation and supply chain solutions, contributing further to its earnings. Strategic partnerships with other companies in sectors such as healthcare and food processing enhance Air Water's market reach and create opportunities for cross-selling its products and services, bolstering its overall revenue.

Air Water Financial Statement Overview

Summary

Air Water demonstrates strong revenue growth and stable profitability, supported by a solid balance sheet with moderate leverage. However, the decline in free cash flow growth is a concern, indicating potential challenges in cash management.

Income Statement

Air Water's income statement shows robust revenue growth, with a TTM revenue growth rate of 90.8%, indicating strong market demand. The gross profit margin of 21.7% and net profit margin of 4.6% are stable, reflecting efficient cost management. However, the EBIT margin of 6.8% and EBITDA margin of 10.3% suggest room for improvement in operational efficiency.

Balance Sheet

The balance sheet reflects a healthy equity position with a debt-to-equity ratio of 0.84, indicating moderate leverage. The return on equity (ROE) of 9.9% demonstrates effective use of equity to generate profits. The equity ratio of 42.1% shows a strong capital structure, though there is potential risk if debt levels increase.

Cash Flow

The cash flow statement reveals a decline in free cash flow growth by 39.1% TTM, which could impact future investments. The operating cash flow to net income ratio of 0.28 indicates adequate cash generation relative to net income. However, the free cash flow to net income ratio of 0.18 suggests limited cash availability for discretionary spending.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.09T	1.08T	1.02T	1.00T	888.67B	806.63B
Gross Profit	235.87B	231.53B	220.27B	200.08B	199.11B	180.90B
EBITDA	111.40B	124.30B	115.51B	106.34B	107.95B	88.84B
Net Income	50.44B	49.08B	44.36B	40.14B	43.21B	27.37B
Balance Sheet
Total Assets	1.22T	1.25T	1.22T	1.09T	1.02T	926.82B
Cash, Cash Equivalents and Short-Term Investments	60.46B	70.61B	64.97B	65.94B	59.55B	45.98B
Total Debt	429.69B	446.73B	443.25B	390.21B	373.74B	337.82B
Total Liabilities	692.13B	713.29B	714.21B	645.16B	602.17B	554.43B
Stockholders Equity	513.66B	517.14B	488.56B	430.23B	395.13B	357.80B
Cash Flow
Free Cash Flow	15.69B	25.76B	16.16B	-9.72B	25.24B	24.57B
Operating Cash Flow	87.40B	93.24B	79.63B	56.95B	71.57B	76.60B
Investing Cash Flow	-65.14B	-62.17B	-97.97B	-71.14B	-53.15B	-52.70B
Financing Cash Flow	-26.25B	-27.34B	14.72B	19.26B	-6.62B	-20.89B

Air Water Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2166.00
• 50DMA: Negative
• 100DMA: Negative
• 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:4088, the sentiment is Negative. The current price of 2166 is above the 20-day moving average (MA) of 2165.90, below the 50-day MA of 2234.25, and above the 200-day MA of 2148.96, indicating a neutral trend. The MACD of -21.10 indicates Negative momentum. The RSI at 45.66 is Neutral, neither overbought nor oversold. The STOCH value of 67.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4088.

Air Water Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4202	80 Outperform	¥362.83B	10.08	9.34%	4.44%	-0.48%	-35.29%
4403	75 Outperform	¥764.00B	21.71	12.15%	1.55%	2.62%	2.81%
4118	74 Outperform	¥272.31B	10.32	5.47%	3.48%	2.60%	9.50%
4088	69 Neutral	¥490.55B	9.84	10.06%	3.21%	4.35%	7.88%
4183	64 Neutral	¥736.77B	40.98	2.02%	3.92%	-4.63%	-65.11%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
4182	55 Neutral	$553.56B	-73.86	-1.15%	3.56%	-6.83%	-123.67%

Air Water Corporate Events

Air Water Inc. Announces Leadership Change Amid Accounting Investigation

Air Water Inc. announced the resignation of its Chairman and Representative Director, Kikuo Toyoda, effective December 3, 2025, as part of an ongoing investigation into inappropriate accounting practices at its subsidiaries. The company plans to implement governance reforms and internal control measures under the leadership of a newly established Management Reform Committee to prevent future issues.

Air Water Inc. Granted Extension for Semi-Annual Report Filing

Air Water Inc. has received approval from the Kanto Local Finance Bureau to extend the filing deadline for its Semi-Annual Securities Report for the fiscal period ending March 31, 2026. The new deadline is set for February 13, 2026, allowing the company additional time to prepare the report and publish the financial results for the second quarter. The company has expressed apologies to its stakeholders for any inconvenience caused by this delay.

Air Water Inc. Forms Management Reform Committee to Address Accounting Issues

Air Water Inc. has established a Management Reform Committee in response to inappropriate accounting practices, aiming to overhaul its management control system and internal controls. The committee, comprising external experts and company executives, will focus on cause analysis, ethical reforms, and recommendations to enhance transparency and restore public trust.

Air Water Inc. Announces Interim Dividend Amid Accounting Investigation

Air Water Inc. has announced an interim dividend of ¥37.50 per share, maintaining its commitment to shareholder returns despite facing accounting issues. The company is investigating inappropriate accounting practices that may impact its financial results, but it remains confident in its business performance and plans to uphold its dividend policy.

Air Water Inc. Delays Securities Report Amid Accounting Investigation

Air Water Inc. has announced a delay in filing its Semi-Annual Securities Report due to ongoing investigations into inappropriate accounting practices at several subsidiaries. The Special Investigating Committee, comprising external experts, is conducting a thorough review of the issues, which include potential involvement of company officers and employees, and the investigation is expected to take significant time, impacting the company’s financial reporting and internal controls.

Air Water Inc. Establishes Special Investigating Committee for Accounting Issues

Air Water Inc. has announced the establishment of a Special Investigating Committee to address inappropriate accounting practices involving the deferral of loss recognition, impacting approximately 2.5 billion yen across four cases. The company is cooperating with the investigation and will provide updates to stakeholders as findings become available, while apologizing for the inconvenience caused.

Air Water Inc. Launches Special Investigating Committee Amid Accounting Concerns

Air Water Inc. has announced the establishment of a Special Investigating Committee following the discovery of inappropriate accounting practices at several of its subsidiaries. The committee, composed of external experts, will conduct a thorough investigation to assess the financial impact and recommend measures to prevent recurrence. This move aims to ensure transparency and restore stakeholder confidence amid concerns over the company’s financial reporting practices.

Air Water Completes Acquisition of Ci Medical

Air Water Inc. has successfully completed a tender offer for the common shares of Ci Medical Co., Ltd., which will become a consolidated subsidiary of Air Water as of October 14, 2025. This acquisition is expected to enhance Air Water’s operational capabilities and market positioning within the medical industry, potentially impacting stakeholders positively by expanding its portfolio and consolidating its presence in the market.

Air Water Extends Tender Offer for Ci Medical Co., Ltd.

Air Water Inc. has announced an amendment to its tender offer for Ci Medical Co., Ltd., extending the offer period by 10 business days until October 6, 2025. This decision follows the Japan Fair Trade Commission’s notice that no exclusion order will be issued, allowing the tender offer to proceed without withdrawal, which could impact Air Water’s strategic positioning in the medical sector.