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

• Market Cap: ¥5.32B
• Dividend Yield: 4.28%
• Average Volume (3M): 3.42K
• Price to Earnings (P/E): 12.9
• Beta (1Y): 0.48
• Revenue Growth: 13.40%
• EPS Growth: 21.76%
• Country: JP
• Employees: 117
• Sector: Healthcare
• Sector Strength: 51
• Industry: Medical - Healthcare Information Services
• EPS (TTM): 28.43
• Shares Outstanding: 2,228,000
• 10 Day Avg. Volume: 1,140
• 30 Day Avg. Volume: 3,423
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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

• Rating: 76 Outperform
• Price Target: ―

TOWA Hi SYSTEM Co., Ltd. boasts strong financial performance, with high profitability and stability due to zero debt and substantial equity. Despite some volatility in revenue growth and cash flow management, the firm's solid balance sheet offers resilience. The stock's valuation is appealing with a low P/E ratio and high dividend yield, providing a good income potential. The technical analysis suggests mixed trends, lacking momentum indicators, which calls for cautious optimism.

Positive Factors

Strong Profitability

The company's strong profitability margins indicate efficient cost management and pricing power, which are crucial for sustaining long-term financial health and competitiveness in the IT solutions sector.

Financial Stability

With zero debt and a strong equity position, TOWA Hi SYSTEM is well-positioned to weather economic fluctuations and invest in growth opportunities without financial strain.

Revenue Growth

Consistent revenue growth reflects successful market penetration and demand for the company's IT solutions, supporting long-term business expansion and shareholder value.

Negative Factors

Cash Flow Management

Lack of detailed operating cash flow data hinders the ability to fully evaluate cash generation capabilities, which is critical for funding operations and strategic initiatives.

Revenue Volatility

Revenue volatility can indicate challenges in maintaining consistent demand or pricing power, potentially impacting long-term growth and financial predictability.

Cash Flow Improvement Needed

While free cash flow shows improvement, the absence of current operating cash flow details suggests a need for better cash flow management to ensure liquidity and operational flexibility.

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

Company Description

TOWA Hi SYSTEM Co., Ltd. (4172) is a Japanese company that specializes in providing comprehensive IT solutions and services. The company operates in sectors such as software development, system integration, and IT consulting, catering to a broad range of industries including manufacturing, logistics, and finance. TOWA Hi SYSTEM is committed to leveraging cutting-edge technology to deliver innovative solutions that enhance business efficiency and productivity.

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

TOWA Hi SYSTEM Co., Ltd. demonstrates strong profitability with a high gross profit margin of 76.92% and a net profit margin of 20.51%. The company is financially stable with no debt and a high equity ratio of 91.64%. Cash flow management shows potential for improvement, with free cash flow improving but lacking detailed current operating cash flow data.

Income Statement

The company demonstrates strong profitability with a TTM gross profit margin of 76.92% and a net profit margin of 20.51%. Revenue growth is positive, with a 10.43% increase from the previous annual period. EBIT and EBITDA margins are robust at 23.80% and 27.02%, respectively, indicating efficient operational management. However, revenue has shown some volatility over the years.

Balance Sheet

The balance sheet is strong with no debt, resulting in a debt-to-equity ratio of 0. The equity ratio is high at 91.64%, reflecting financial stability and low leverage. Return on Equity (ROE) is solid at 11.62%, indicating effective use of equity to generate profits. The company maintains substantial cash reserves, further enhancing its financial resilience.

Cash Flow

Cash flow management shows mixed results. The free cash flow has improved significantly, showcasing a positive trajectory. However, the TTM operating cash flow is not reported, making it difficult to assess cash flow sufficiency. The previous operating cash flow was strong, suggesting potential for future cash generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.25B	2.11B	2.04B	2.22B	2.37B	1.91B
Gross Profit	1.72B	1.60B	1.46B	1.63B	1.78B	1.50B
EBITDA	664.54M	500.83M	299.00M	527.25M	575.05M	414.34M
Net Income	413.40M	401.81M	258.51M	316.27M	375.57M	245.50M
Balance Sheet
Total Assets	4.52B	4.38B	4.06B	4.05B	4.02B	3.08B
Cash, Cash Equivalents and Short-Term Investments	1.80B	1.61B	1.60B	1.80B	2.16B	2.04B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	398.14M	441.62M	327.84M	455.95M	515.13M	438.70M
Stockholders Equity	4.12B	3.93B	3.73B	3.59B	3.50B	2.65B
Cash Flow
Free Cash Flow	0.00	490.61M	-115.80M	243.93M	122.69M	401.31M
Operating Cash Flow	0.00	504.44M	61.07M	342.68M	248.00M	430.09M
Investing Cash Flow	0.00	186.01M	-360.86M	-481.22M	-574.52M	-27.51M
Financing Cash Flow	0.00	-178.24M	-95.88M	-222.74M	444.72M	-41.00M

TOWA Hi SYSTEM Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2368.00
• 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:4172, the sentiment is Positive. The current price of 2368 is above the 20-day moving average (MA) of 2321.40, above the 50-day MA of 2292.00, and above the 200-day MA of 2083.90, indicating a bullish trend. The MACD of 21.15 indicates Negative momentum. The RSI at 64.06 is Neutral, neither overbought nor oversold. The STOCH value of 93.88 is Negative, 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
3671	85 Outperform	¥9.04B	13.48		8.26%	26.12%	38.78%
4172	76 Outperform	¥5.32B	12.89		4.28%	13.40%	21.76%
6545	74 Outperform	¥3.42B	15.26		1.89%	5.27%	12.22%
6034	52 Neutral	¥4.00B	―		―	-2.66%	-913.85%
Sector *	51 Neutral	$8.02B	-0.39	-43.38%	2.20%	22.34%	-2.13%
4438	44 Neutral	¥2.71B	―		―	15.50%	-31.31%
3628	40 Neutral	¥6.63B	―		―	-2.60%	-103.03%