TOWA Hi SYSTEM Co., Ltd. (4172) AI Stock Analysis

• Market Cap: ¥5.40B
• Dividend Yield: 3.94%
• Average Volume (3M): 2.21K
• Price to Earnings (P/E): 12.0
• Beta (1Y): 0.45
• Revenue Growth: 13.85%
• EPS Growth: 11.52%
• Country: JP
• Employees: 117
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Care Facilities
• EPS (TTM): 61.09
• Shares Outstanding: 2,228,000
• 10 Day Avg. Volume: 2,640
• 30 Day Avg. Volume: 2,210
• PEG Ratio: 1.05
• Price to Book (P/B): 1.29
• Price to Sales (P/S): 2.25
• P/FCF Ratio: 12.91
• 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: ¥2,702.00 ▲(14.69% Upside)
• Action: Reiterated Date: 12/30/25
• Date: Action: Reiterated 12/30/25

The score is driven primarily by strong financial quality—improving margins and a debt-free, growing equity base—supported by attractive valuation (low P/E and solid dividend yield). The main constraint is neutral-to-mixed technical momentum, alongside historical revenue and cash-flow volatility.

Positive Factors

Improving Margins

Improving margins indicate enhanced operational efficiency and pricing power, contributing to long-term profitability.

Debt-Free Balance Sheet

A debt-free balance sheet enhances financial flexibility and reduces risk, supporting sustainable growth and stability.

Equity Growth

Rising equity base reflects strong retained earnings and financial health, enabling reinvestment and shareholder value creation.

Negative Factors

Revenue Volatility

Revenue volatility can indicate market or competitive challenges, affecting predictability and long-term growth prospects.

Cash Flow Volatility

Volatile cash flows can hinder strategic investments and operational stability, impacting long-term financial health.

Uneven Revenue Growth

Inconsistent revenue growth may signal challenges in market expansion or product adoption, affecting long-term growth trajectory.

TOWA Hi SYSTEM Co., Ltd. Business Overview & Revenue Model

Company Description

Hi-CRATES CO.,LTD. engages in the research, development, sales, and support of integrated dental electronic medical record systems. It is also involved in research and development, sale, and support for iPad and web applications; and provision of AI and voice electronic medical record, visual examination and various periodontal examination, medical interview, self-pay estimate, image management system, etc. The company's products include electronic medical records, customer information display when receiving a call, visual and periodontal examination system, sub-clinical record system, treatment proposal and quotation system, oral x-ray examination, cloud reservation management, online medical consultation system, digital patient registration card, automatic payment machine and change dispenser, and other products. The company was formerly known as TOWA Hi SYSTEM CO.,LTD. and changed its name to Hi-CRATES CO.,LTD. in January 2026. The company was incorporated in 1978 and is headquartered in Okayama, Japan.

How the Company Makes Money

TOWA Hi SYSTEM Co., Ltd. makes money primarily through its IT solutions and services. The company generates revenue by offering software development services, where it designs and implements tailor-made software solutions for clients across various industries. Another key revenue stream is system integration, where TOWA Hi SYSTEM helps organizations integrate and optimize their IT systems to improve operational efficiency. Additionally, the company provides IT consulting services, advising businesses on technology strategies and digital transformation. The company's earnings are further bolstered by long-term contracts and partnerships with major corporations, ensuring a steady flow of income from maintenance and support services.

TOWA Hi SYSTEM Co., Ltd. Financial Statement Overview

Summary

Strong and improving profitability (gross margin up to ~77% and operating margin up to ~27% in 2025) with a very conservative balance sheet (zero debt and rising equity). Offsets are uneven revenue growth and historically lumpy cash flow, including negative free cash flow in 2023.

Income Statement

Profitability is strong and improving: gross margin rose from ~71.5% (2023) to ~77.0% (2025) and operating margin expanded meaningfully (from ~11.3% in 2023 to ~27.0% in 2025). Net margin is healthy at ~18.6% (2025) and earnings improved versus the 2023 dip. The main weakness is top-line volatility—revenue contracted in 2022–2023 before returning to growth in 2024 and accelerating in 2025.

Balance Sheet

The balance sheet is conservatively positioned with zero debt across all reported years and steadily growing equity (from ~2.65B in 2020 to ~4.20B in 2025), supporting financial flexibility. Returns on equity are solid and relatively stable around ~10–11% in 2024–2025 (after a weaker 2023), indicating decent profitability on the capital base. A modest watch item is that returns are good but not consistently rising year over year.

Cash Flow

Cash generation is generally supportive, with positive operating cash flow and free cash flow in most years and strong conversion in 2024–2025 (free cash flow roughly ~97% and ~91% of net income, respectively). However, cash flows have shown meaningful volatility—2023 was notably weak with negative free cash flow, and 2025 operating cash flow was roughly in line with net income (slightly below), suggesting periodic working-capital or investment swings.

Breakdown	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	2.41B	2.11B	2.04B	2.22B	2.37B
Gross Profit	1.85B	1.60B	1.46B	1.63B	1.78B
EBITDA	739.43M	500.83M	299.00M	527.25M	575.05M
Net Income	448.09M	401.81M	258.51M	316.27M	375.57M
Balance Sheet
Total Assets	4.72B	4.38B	4.06B	4.05B	4.02B
Cash, Cash Equivalents and Short-Term Investments	1.70B	1.61B	1.60B	1.80B	2.16B
Total Debt	0.00	0.00	0.00	0.00	0.00
Total Liabilities	525.85M	441.62M	327.84M	455.95M	515.13M
Stockholders Equity	4.20B	3.93B	3.73B	3.59B	3.50B
Cash Flow
Free Cash Flow	420.19M	490.61M	-115.80M	243.93M	122.69M
Operating Cash Flow	461.22M	504.44M	61.07M	342.68M	248.00M
Investing Cash Flow	-735.24M	186.01M	-360.86M	-481.22M	-574.52M
Financing Cash Flow	-227.34M	-178.24M	-95.88M	-222.74M	444.72M

TOWA Hi SYSTEM Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2356.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4172, the sentiment is Positive. The current price of 2356 is below the 20-day moving average (MA) of 2405.55, below the 50-day MA of 2386.14, and above the 200-day MA of 2312.53, indicating a bullish trend. The MACD of 7.79 indicates Positive momentum. The RSI at 55.35 is Neutral, neither overbought nor oversold. The STOCH value of 59.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4172.

TOWA Hi SYSTEM Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9220	81 Outperform	¥3.00B	6.24	―	2.82%	4.82%	9.78%
4172	78 Outperform	¥5.40B	12.01	―	3.94%	13.85%	11.52%
2374	75 Outperform	¥30.28B	17.64	―	2.48%	3.88%	0.31%
2425	75 Outperform	¥3.03B	13.13	―	2.56%	-3.06%	-38.56%
2373	60 Neutral	¥5.89B	15.40	―	4.07%	6.08%	38.00%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
7061	45 Neutral	¥7.63B	27.36	―	1.41%	18.03%	-11.68%