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

• Market Cap: ¥5.60B
• Dividend Yield: 0.98%
• Average Volume (3M): 17.84K
• Price to Earnings (P/E): 11.0
• Beta (1Y): 0.72
• 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: ¥1,547.00 ▲(52.26% 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

Profitability & margins

Consistently strong and improving margins indicate durable pricing power and effective cost control in the company's chemical operations. Sustained gross and operating margins support internal reinvestment, buffer raw-material volatility and provide operating leverage that should persist over the next several quarters.

Low leverage / strong balance sheet

A conservative capital structure with very low leverage and a high equity ratio materially reduces financial risk. This structural strength provides flexibility to fund capex or selective M&A, maintain investment-grade stability through cycles, and limits interest expense pressure over the medium term.

Stable operating performance and prudent capital management

The firm's operating consistency combined with conservative capital deployment creates durable resilience against industry cyclicality. Persistent operational efficiency and disciplined balance-sheet management support steady execution, enabling the company to pursue strategic initiatives while retaining financial stability.

Negative Factors

Weak cash generation / negative FCF

Significant negative free cash flow and declining operating cash conversion limit internal funding capacity for capex, R&D and dividends. Over the coming months this structural cash weakness could force reliance on external financing or delay strategic investments, constraining growth execution despite healthy accounting profits.

Modest return on equity

An ROE under 7% suggests the company generates only modest returns on shareholder capital. Persistently moderate ROE can limit long-term value creation and reduce the firm's ability to self-fund strategic expansion, pressuring management to improve asset efficiency or redeploy capital more effectively.

Limited scale

A small workforce implies limited scale relative to larger chemical competitors, which can constrain R&D depth, production footprint and commercial reach. Over time limited scale may hinder cost competitiveness, slow market expansion and reduce bargaining power with suppliers and customers.

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

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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	4.57B	4.48B	4.36B	4.29B	4.17B
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	1.37B	1.43B	1.42B	1.49B	1.44B
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: Neutral
• Last Price: 1016.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4274, the sentiment is Neutral. The current price of 1016 is below the 20-day moving average (MA) of 1524.55, below the 50-day MA of 1292.96, and below the 200-day MA of 1088.39, indicating a neutral trend. The MACD of 45.97 indicates Positive momentum. The RSI at 47.14 is Neutral, neither overbought nor oversold. The STOCH value of 12.82 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	¥15.97B	8.02	―	3.89%	-3.00%	-29.83%
4097	79 Outperform	¥61.94B	11.06	―	2.88%	3.42%	13.37%
5013	76 Outperform	¥40.23B	5.81	―	3.53%	-3.45%	30.52%
4274	71 Outperform	¥5.60B	10.96	―	0.98%	-4.35%	-19.25%
4102	62 Neutral	¥3.26B	8.35	―	2.12%	-5.18%	4.52%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%