Kyowakogyosyo Co., Ltd. (5971) AI Stock Analysis

• Market Cap: ¥10.48B
• Dividend Yield: 1.15%
• Average Volume (3M): 663.00
• Price to Earnings (P/E): 12.2
• Beta (1Y): 0.22
• Revenue Growth: 4.81%
• EPS Growth: 39.74%
• Country: JP
• Employees: 287
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): N/A
• Shares Outstanding: 1,360,000
• 10 Day Avg. Volume: 510
• 30 Day Avg. Volume: 663
• PEG Ratio: -0.20
• Price to Book (P/B): 0.46
• Price to Sales (P/S): 0.68
• P/FCF Ratio: 5.56
• 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: 79 Outperform
• Price Target: ¥8,592.00 ▲(14.41% Upside)
• Action: Reiterated Date: 12/30/25
• Date: Action: Reiterated 12/30/25

The score is primarily supported by very strong balance-sheet strength and generally healthy cash generation, which reduce financial risk. Offsetting this is the recent profitability/margin step-down in 2025, which raises cyclicality concerns. Technically, the trend is positive but momentum is elevated, and valuation appears reasonable with only a modest dividend yield.

Positive Factors

Balance Sheet Strength

A conservative balance sheet with minimal debt enhances financial stability and reduces risk, providing flexibility for future investments.

Cash Generation

Consistent positive cash flow supports operational stability and allows for reinvestment in growth opportunities, enhancing long-term sustainability.

Revenue Growth

Long-term revenue growth indicates a strong market position and the ability to capture market share, supporting future expansion.

Negative Factors

Margin Compression

Margin compression suggests challenges in maintaining pricing power or controlling costs, potentially impacting profitability and competitive positioning.

Earnings Variability

Variability in earnings quality and cash conversion can indicate operational inefficiencies or market volatility, affecting predictability and planning.

Profitability Concerns

Moderate profitability levels may limit the company's ability to invest in growth initiatives or weather economic downturns, impacting long-term competitiveness.

Kyowakogyosyo Co., Ltd. Business Overview & Revenue Model

Company Description

Kyowakogyosyo Co.,Ltd. manufactures and sells hexagon bolts, JIS hexagon socket head cap screws, bolts for construction machinery and internal combustion engines, cold-forged parts for automobiles, and special cold-/hot-forged parts in Japan and internationally. It also offers automobile parts, such as transmission, steering and suspension, and other forging parts; gears; and industrial bolts and bolts for internal combustion engines. The company was founded in 1950 and is based in Komatsu, Japan.

How the Company Makes Money

Kyowakogyosyo Co., Ltd. generates revenue through the production and sale of its precision machinery parts and metal products. The company primarily earns income from supplying these components to manufacturers in the automotive, construction, and other industrial sectors. Key revenue streams include direct sales to industrial manufacturers, as well as partnerships and contracts with companies that require specific machinery parts for their production needs. Additionally, the company's ability to maintain quality and innovate in machinery components contributes significantly to its earnings by attracting and retaining customers who prioritize reliability and performance in their operations.

Kyowakogyosyo Co., Ltd. Financial Statement Overview

Summary

Strong financial resilience driven by an exceptionally conservative balance sheet (effectively no debt, steadily rising equity). Cash flow is generally healthy with positive operating cash flow and solid 2025 free cash flow, but earnings quality/cash conversion has shown variability. Income performance is the main drawback: revenue has grown long term but was uneven, and profitability/margins compressed meaningfully in 2025 versus 2024.

Income Statement

Revenue has grown over the long run (from ~¥8.1B in 2020 to ~¥10.5B in 2025), but the path has been uneven with a sharp step-down in 2024–2025 after the 2023 peak. Profitability is currently moderate (2025 net margin ~6.8%, EBIT margin ~8.9%), and margins have compressed meaningfully versus 2024 (net margin ~13.2%, EBIT margin ~16.6%), indicating weaker pricing/mix and/or higher costs. Strengths are consistent profitability and a solid gross margin profile (~19% in 2025), while the key weakness is margin volatility and earnings sensitivity to the revenue cycle.

Balance Sheet

The balance sheet is very conservative: debt is effectively zero in 2025 and has been minimal across the period, resulting in negligible leverage risk. Equity has steadily increased (from ~¥11.4B in 2020 to ~¥15.7B in 2025) alongside asset growth, supporting financial flexibility. Returns on equity are positive but not consistently high (roughly mid-single-digit in 2025 after a stronger 2024), so the main trade-off versus the very strong solvency is only moderate capital efficiency.

Cash Flow

Cash generation is generally healthy, with positive operating cash flow each year and strong free cash flow in 2025 (~¥1.28B). In 2025, free cash flow is close to net income (free cash flow to net income ~0.91), which supports earnings quality. However, cash conversion has not been consistent—there were years where operating cash flow was materially below net income (e.g., 2022–2023), and free cash flow in 2024 was notably lower than 2023, highlighting working-capital and/or investment-driven variability.

Breakdown	TTM	Apr 2025	Apr 2024	Apr 2023	Apr 2022	Apr 2021
Income Statement
Total Revenue	10.73B	10.46B	10.97B	13.21B	11.66B	8.08B
Gross Profit	2.15B	1.99B	2.14B	2.45B	2.80B	1.63B
EBITDA	1.40B	1.30B	2.22B	1.87B	1.85B	1.14B
Net Income	831.45M	708.29M	1.44B	1.09B	1.08B	571.84M
Balance Sheet
Total Assets	18.30B	18.15B	17.90B	17.14B	16.59B	14.45B
Cash, Cash Equivalents and Short-Term Investments	9.36B	9.27B	8.44B	8.08B	7.07B	6.87B
Total Debt	0.00	0.00	7.47M	109.47M	239.45M	190.93M
Total Liabilities	2.21B	2.50B	2.36B	2.68B	3.25B	2.21B
Stockholders Equity	16.08B	15.66B	15.55B	14.46B	13.33B	12.25B
Cash Flow
Free Cash Flow	0.00	1.28B	611.47M	795.73M	490.38M	824.35M
Operating Cash Flow	0.00	1.42B	1.66B	1.09B	927.11M	912.23M
Investing Cash Flow	0.00	-1.13B	-2.58B	422.86M	-975.57M	324.61M
Financing Cash Flow	0.00	-391.86M	-214.14M	-266.56M	-60.24M	-362.74M

Kyowakogyosyo Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 7510.00
• 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:5971, the sentiment is Positive. The current price of 7510 is below the 20-day moving average (MA) of 7553.00, above the 50-day MA of 7378.00, and above the 200-day MA of 6611.30, indicating a bullish trend. The MACD of 43.53 indicates Positive momentum. The RSI at 57.81 is Neutral, neither overbought nor oversold. The STOCH value of 49.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5971.

Kyowakogyosyo Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5971	79 Outperform	¥10.48B	12.21	―	1.15%	4.81%	39.74%
6157	77 Outperform	¥21.89B	14.20	―	3.31%	0.97%	-10.47%
6165	73 Outperform	¥13.34B	44.98	―	3.84%	5.57%	89.21%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7726	63 Neutral	¥5.74B	-14.04	―	2.05%	-6.69%	-80.28%
5967	61 Neutral	¥11.16B	12.57	―	2.20%	-2.69%	6.29%
5990	54 Neutral	¥4.60B	32.98	―	3.60%	-4.75%	-178.90%