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

• Market Cap: ¥10.18B
• Dividend Yield: 1.15%
• Average Volume (3M): 663.00
• Price to Earnings (P/E): 11.8
• 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): 104.79
• 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: 77 Outperform
• Price Target: ―

Kyowakogyosyo Co., Ltd. scores well due to its strong financial foundation, marked by high profitability and low leverage. Technical indicators show some short-term bearish trends, but the stock remains near critical support levels. The valuation metrics are appealing, with a reasonable P/E ratio and dividend yield.

Positive Factors

Financial Stability

A high equity ratio and minimal leverage indicate strong financial stability, reducing financial risk and enhancing the company's ability to invest in growth opportunities.

Profitability

Strong profitability metrics suggest effective cost management and the ability to generate consistent earnings, supporting long-term business sustainability and shareholder value.

Cash Flow Management

Robust operational cash generation ensures liquidity for operational needs and investments, providing financial flexibility and stability in varying market conditions.

Negative Factors

Revenue Decline

A decline in revenue growth can signal challenges in market demand or competitive pressures, potentially impacting future profitability and market position if not addressed.

Earnings Decline

A significant drop in earnings per share growth indicates potential operational challenges or market headwinds, which could affect investor confidence and future capital raising abilities.

Free Cash Flow Decline

A decrease in free cash flow may limit the company's ability to fund new projects or return capital to shareholders, potentially impacting long-term growth and shareholder value.

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

Kyowakogyosyo Co., Ltd. demonstrates strong financial stability with high profitability and minimal leverage. Despite revenue challenges, effective cost and cash flow management provide a robust foundation for future stability and growth.

Income Statement

Kyowakogyosyo Co., Ltd. has shown mixed results in revenue growth, with revenues declining from the previous year. However, the company maintains strong profitability metrics, with a net profit margin of 13.16% and a gross profit margin of 19.51% for the latest year. The EBIT and EBITDA margins are also solid at 9.25% and 20.27% respectively, indicating effective cost management despite revenue pressures.

Balance Sheet

The balance sheet reflects a strong equity position with an equity ratio of 86.84%, underscoring financial stability. The debt-to-equity ratio of 0.0002 is exceptionally low, indicating minimal leverage and limited financial risk. Return on equity stands at 9.28%, suggesting efficient use of shareholder equity to generate profits.

Cash Flow

Cash flow analysis reveals robust operational cash generation, with a healthy operating cash flow to net income ratio of 1.15. Although free cash flow decreased compared to the previous year, the company demonstrates adequate cash flow management with a free cash flow to net income ratio of 0.42, indicating sufficient liquidity to cover operational needs and investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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	16.36B	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	2.50M	104.50M	230.50M	178.00M
Total Liabilities	2.21B	2.50B	2.36B	2.68B	3.03B	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: 7500.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 7500 is above the 20-day moving average (MA) of 7037.00, above the 50-day MA of 6963.40, and above the 200-day MA of 6008.33, indicating a bullish trend. The MACD of 128.02 indicates Negative momentum. The RSI at 72.54 is Negative, neither overbought nor oversold. The STOCH value of 90.77 is Negative, 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	77 Outperform	¥10.18B	11.84	―	1.15%	4.81%	39.74%
5966	67 Neutral	¥6.00B	13.77	―	3.24%	1.16%	-31.17%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
5967	61 Neutral	¥10.86B	11.15	―	2.20%	-2.69%	6.29%
5969	60 Neutral	¥2.27B	74.36	―	2.55%	-2.79%	-88.80%
6156	55 Neutral	¥7.23B	-43.21	―	5.67%	-0.91%	-319.62%
5990	54 Neutral	¥4.48B	-17.28	―	3.60%	-4.75%	-178.90%