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

• Market Cap: ¥6.44B
• Dividend Yield: 0.98%
• Average Volume (3M): 17.84K
• Price to Earnings (P/E): 11.0
• Beta (1Y): 0.70
• 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: 71 Outperform
• Price Target: ¥1,727.00 ▲(69.98% Upside)
• Action: Upgraded Date: 03/05/26
• Date: Action: Upgraded 03/05/26

The score is driven primarily by solid operating performance and a strong, low-leverage balance sheet, partially offset by weak cash flow (negative free cash flow). Technicals show a strong uptrend but overbought readings increase short-term risk, while valuation is supportive due to a reasonable P/E despite a low dividend yield.

Positive Factors

Strong profitability

Consistent top-line growth with double-digit revenue improvement and healthy margins indicates durable operating economics. Elevated gross and net margins (32.3% and 10.8%) and solid EBIT/EBITDA ratios reflect pricing power and cost control that support sustainable earnings over the medium term.

Low leverage / strong equity base

A low debt-to-equity ratio and a high equity ratio signal a conservative capital structure, reducing financial risk and interest burden. This balance sheet strength gives the company flexibility to fund investments, weather downturns, and prioritize strategic initiatives without near-term refinancing pressure.

Solid operating margins (EBIT/EBITDA)

Robust EBIT and EBITDA margins point to efficient operations and scalability of the business model. Higher operating margins provide internal cash generation potential (when converted) and room to reinvest in R&D or capacity, supporting competitive positioning over the next several quarters.

Negative Factors

Negative free cash flow

Negative free cash flow despite profitability indicates cash conversion issues and potential working capital or capex strain. Persistent FCF deficits reduce financial flexibility to invest, pay dividends, or deleverage and increase reliance on external funding if not corrected in coming quarters.

Earnings volatility

A steep year-over-year EPS decline signals volatility in bottom-line performance or one-off hits, undermining the consistency of earnings. Such swings make forecasting and capital allocation harder and may reflect exposure to cyclical end-markets or margin pressure that could persist near term.

Modest return on equity

ROE under 7% suggests limited efficiency converting equity into profits relative to peers. Even with low leverage, modest ROE can constrain long-term shareholder returns and implies management may need to improve asset utilization or pursue higher-return projects to lift capital efficiency.

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 (revenue up 11.3%, improved net margin to 10.8%, solid EBIT/EBITDA margins) and a healthy balance sheet (low leverage with 0.20 debt-to-equity, 71.3% equity ratio). Offsetting these positives, cash generation is a key weakness with negative free cash flow (-133.7M) and poor profit-to-cash conversion.

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 1410.90, below the 50-day MA of 1196.96, and below the 200-day MA of 1063.45, indicating a bullish trend. The MACD of 129.70 indicates Negative momentum. The RSI at 63.37 is Neutral, neither overbought nor oversold. The STOCH value of 45.45 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	¥15.49B	8.02	―	3.89%	-3.00%	-29.83%
4097	79 Outperform	¥60.95B	11.06	―	2.88%	3.42%	13.37%
5013	78 Outperform	¥44.03B	5.81	―	3.53%	-3.45%	30.52%
4274	71 Outperform	¥6.44B	10.96	―	0.98%	-4.35%	-19.25%
4102	62 Neutral	¥3.20B	8.35	―	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	13.41	-7.76%	―	-19.70%	-159.15%