Hosoya Pyroengineering Co., Ltd. (4274) AI Stock Analysis

• Market Cap: ¥5.90B
• Dividend Yield: 0.98%
• Average Volume (3M): 17.84K
• Price to Earnings (P/E): 45.3
• Beta (1Y): 0.82
• Revenue Growth: -4.35%
• EPS Growth: -19.25%
• Country: JP
• Employees: 90
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): 23.18
• Shares Outstanding: 4,032,000
• 10 Day Avg. Volume: 30,150
• 30 Day Avg. Volume: 17,843
• PEG Ratio: 0.33
• Price to Book (P/B): 1.33
• Price to Sales (P/S): 2.08
• P/FCF Ratio: -31.75
• 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: ¥1,665.00 ▲(63.88% Upside)
• Action: Reiterated Date: 02/21/26
• Date: Action: Reiterated 02/21/26

The score is driven primarily by solid financial performance (strong growth and profitability with low leverage), tempered by negative free cash flow and a stretched valuation (high P/E with a low dividend yield). Technicals are strong but overbought, adding near-term risk.

Positive Factors

High Profitability Margins

Sustained gross and net margins indicate durable pricing power and cost control in the core chemical operations. High margins provide ongoing capacity to fund R&D, cover cyclical downturns, and support reinvestment without relying solely on external financing.

Low Leverage / Strong Capital Structure

A low debt-to-equity ratio and high equity backing reduce financial risk and increase strategic flexibility. This capital structure supports long-term investment, M&A optionality, and resilience to rate or demand shocks while keeping interest burden low.

Operational Efficiency (EBIT/EBITDA)

Robust EBIT and EBITDA margins reflect efficient operations and scalable cost structure. Sustained operating profitability improves free cash flow potential over time, enhances ability to absorb input cost swings, and supports consistent reinvestment in advantaged products.

Negative Factors

Negative Free Cash Flow

Persistently negative free cash flow constrains internal funding for capex, dividends, and strategic initiatives. Over several quarters this can force reliance on external financing or asset sales, reducing financial flexibility and increasing execution risk for growth plans.

Declining Operating Cash Flow / Weak Cash Conversion

A drop in operating cash flow and poor cash conversion of reported profits suggest earnings may not be translating into liquid resources. Structural working capital or collection issues could persist, pressuring liquidity and the company's ability to sustain investments or distributions.

Weak Recent Top-line and EPS Trends

Negative recent revenue and steep EPS declines point to demand or margin pressures in recent periods. If these trends persist, they undermine the durability of profitability metrics, limit internal funding for strategic initiatives, and increase execution risk for restoring growth.

Hosoya Pyroengineering Co., Ltd. Business Overview & Revenue Model

Company Description

Hosoya Pyro-Engineering Co., Ltd. researches, develops, manufactures, tests, evaluates, and sells pyrotechnic products for leisure and space industries in Japan. The company offers smoke canisters, signal bullets, inflators, and wire cutters products. It is also involved in the combustion disposal of explosives; and research and development of liquid energy substances for space and defense. The company was formerly known as Hosoya Bussan Co., Ltd. and changed its name to Hosoya Pyro-Engineering Co., Ltd. in January 1954. Hosoya Pyro-Engineering Co., Ltd. was founded in 1906 and is headquartered in Akiruno, Japan.

How the Company Makes Money

Hosoya Pyroengineering generates revenue primarily through the sale of its industrial furnace systems and related services. The company's revenue model is built on a combination of product sales, installation services, and ongoing maintenance contracts. Key revenue streams include the design and manufacture of custom thermal processing equipment, spare parts sales, and consultancy services in pyroengineering. Additionally, Hosoya has established significant partnerships with major players in the manufacturing sector, which not only enhances its market reach but also contributes to consistent project-based income through long-term contracts. The company also benefits from technological innovations and energy efficiency trends in its target industries, allowing it to stay competitive and increase its earnings.

Hosoya Pyroengineering Co., Ltd. Financial Statement Overview

Summary

Strong income statement trends (11.3% revenue growth, improved profitability with 10.8% net margin) and a low-leverage balance sheet (debt-to-equity 0.20, 71.3% equity ratio) are offset by weak cash conversion, including negative free cash flow (-133.7 million) and declining operating cash flow.

Income Statement

The company's income statement shows strong growth with a notable revenue increase of 11.3% from the previous year. Gross profit margin is solid at 32.3%, and the net profit margin improved to 10.8%, indicating enhanced profitability. The EBIT margin is 14.3%, and EBITDA margin stands at 18.0%, both reflecting operational efficiency. Overall, the income statement demonstrates positive trends in revenue and profitability, suggesting a well-managed cost structure.

Balance Sheet

The balance sheet reveals a stable financial position with a debt-to-equity ratio of 0.20, indicating low leverage and prudent risk management. The company has a strong equity ratio of 71.3%, which signifies a robust capital structure. Return on equity is 6.9%, showing an adequate return to shareholders. Overall, the company maintains a healthy balance sheet with low financial risk and solid equity backing, although ROE could be improved.

Cash Flow

The cash flow statement shows a decrease in operating cash flow, resulting in a negative free cash flow of -133.7 million. The free cash flow to net income ratio is negative, indicating challenges in converting profits to cash. While past years showed positive free cash flow growth, recent figures suggest potential cash management issues. Improvements in cash generation and capital allocation are needed to strengthen liquidity.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	1.94B	2.04B	1.83B	1.76B	1.79B	1.56B
Gross Profit	575.79M	658.16M	535.90M	509.59M	524.53M	522.04M
EBITDA	279.77M	368.03M	271.40M	254.61M	252.22M	258.76M
Net Income	159.27M	219.80M	138.64M	132.32M	126.61M	143.31M
Balance Sheet
Total Assets	4.45B	4.48B	4.39B	4.28B	4.22B	4.11B
Cash, Cash Equivalents and Short-Term Investments	855.77M	725.35M	969.52M	1.20B	1.19B	868.19M
Total Debt	637.15M	635.01M	645.18M	769.75M	793.29M	818.71M
Total Liabilities	1.26B	1.29B	1.34B	1.35B	1.43B	1.38B
Stockholders Equity	3.19B	3.20B	3.05B	2.93B	2.79B	2.73B
Cash Flow
Free Cash Flow	0.00	-133.75M	-65.61M	69.64M	378.76M	-29.17M
Operating Cash Flow	0.00	-33.50M	19.08M	133.12M	440.93M	23.30M
Investing Cash Flow	0.00	-101.33M	-85.93M	-64.88M	-63.42M	-51.52M
Financing Cash Flow	0.00	-59.33M	-165.52M	-57.67M	-54.38M	-37.66M

Hosoya Pyroengineering Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1016.00
• 50DMA: Positive
• 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:4274, the sentiment is Positive. The current price of 1016 is below the 20-day moving average (MA) of 1298.75, below the 50-day MA of 1146.80, and below the 200-day MA of 1050.76, indicating a bullish trend. The MACD of 104.77 indicates Negative momentum. The RSI at 67.90 is Neutral, neither overbought nor oversold. The STOCH value of 47.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4274.

Hosoya Pyroengineering Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4093	79 Outperform	¥16.25B	12.89	―	3.89%	-3.00%	-29.83%
4097	79 Outperform	¥62.93B	14.82	―	2.88%	3.42%	13.37%
5013	78 Outperform	¥43.82B	8.53	―	3.53%	-3.45%	30.52%
4274	66 Neutral	¥5.90B	45.30	―	0.98%	-4.35%	-19.25%
4102	62 Neutral	¥3.27B	15.95	―	2.12%	-5.18%	4.52%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
4080	48 Neutral	¥13.27B	-10.19	-7.76%	―	-19.70%	-159.15%