H-One Co., Ltd. (5989) AI Stock Analysis

• Market Cap: ¥39.81B
• Dividend Yield: 5.16%
• Average Volume (3M): 95.26K
• Price to Earnings (P/E): 4.4
• Beta (1Y): 1.02
• Revenue Growth: -11.67%
• EPS Growth: N/A
• Country: JP
• Employees: 6,178
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 48.28
• Shares Outstanding: 28,392,830
• 10 Day Avg. Volume: 148,380
• 30 Day Avg. Volume: 95,256
• PEG Ratio: -0.02
• Price to Book (P/B): 0.50
• Price to Sales (P/S): 0.14
• P/FCF Ratio: 6.48
• 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: 62 Neutral
• Price Target: ¥1,530.00 ▲(17.33% Upside)

H-One Co., Ltd. has a mixed overall outlook. The most significant factor is its attractive valuation, with a low P/E ratio and high dividend yield suggesting potential undervaluation. However, financial performance concerns, particularly cash flow issues, and neutral technical indicators temper the positive valuation.

Positive Factors

Stable Gross Margin

A roughly 14% gross margin indicates durable cost control in core stamping and assembly operations. Sustained manufacturing efficiency supports profitability even if volumes fluctuate, helping preserve cash generation capacity and competitiveness on multi-year vehicle programs.

High Return on Equity

A 15.49% ROE signals the company generates solid returns on shareholder capital, reflecting operational profitability and efficient use of equity. Over 2-6 months this supports the ability to fund dividends, reinvest in tooling, and attract capital for program continuity.

Specialized Manufacturing & Assembly Capability

Specialized stamping and assembly expertise creates structural barriers: tooling, process know‑how and long-term vehicle program contracts. Assemblies carry higher value than standalone parts, supporting steady revenue streams and stronger customer relationships over multi-year model cycles.

Negative Factors

Negative Free Cash Flow

Negative free cash flow and weak cash conversion are durable concerns: operating cash to net income is 0.24 and free cash flow to net income 0.18. This limits capacity for capex, tooling investment and dividends, raising refinancing and operational risk across model cycles.

Declining Revenue and Margin Pressure

Falling revenue and compressed net margins reflect structural demand or pricing pressure from OEMs and cost headwinds. Over several months this erodes retained earnings and reduces resources to improve processes, invest in new programs, or respond to raw material cost shifts.

Moderate Financial Leverage

A debt-to-equity around 1.03 denotes meaningful leverage. Combined with negative FCF, leverage reduces financial flexibility for tooling and capacity investments, and raises refinancing risk if auto production volumes weaken over the next 2-6 months.

H-One Co., Ltd. Business Overview & Revenue Model

Company Description

H-One Co., Ltd. (5989) is a prominent player in the manufacturing sector, specializing in the production of high-performance materials and components for various industries, including automotive, electronics, and consumer goods. The company is known for its innovative approaches and advanced technologies, offering a range of products that enhance the performance and durability of end-use applications. With a commitment to sustainability and efficiency, H-One Co., Ltd. focuses on delivering quality solutions that meet the evolving needs of its global clientele.

How the Company Makes Money

H-One Co., Ltd. generates revenue primarily through the sale of its manufactured components and materials to various industries, including automotive and electronics. The company's revenue model is built around both direct sales and long-term contracts with major clients, ensuring a steady cash flow. Key revenue streams include bulk orders of specialized materials, custom manufacturing services, and partnerships with original equipment manufacturers (OEMs) that require high-quality components for their products. Additionally, H-One Co., Ltd. has established collaborations with research institutions and technology firms, which not only enhance their product offerings but also open new avenues for revenue through joint ventures and technology licensing agreements.

H-One Co., Ltd. Financial Statement Overview

Summary

H-One Co., Ltd. shows mixed financial performance. The stable gross profit margin is positive, but declining revenue and profit margins indicate growth and profitability challenges. Moderate leverage is balanced by cash flow issues, particularly negative free cash flow, posing risks to financial stability.

Income Statement

H-One Co., Ltd. has shown a mixed performance in its income statement. The company has a stable gross profit margin of around 14% in the TTM, which is a positive indicator of its ability to manage production costs. However, the net profit margin has decreased to 4.38% in the TTM, reflecting reduced profitability. Revenue has declined by 4.36% in the TTM, indicating challenges in maintaining sales growth. The EBIT and EBITDA margins have also decreased, suggesting pressure on operational efficiency.

Balance Sheet

The balance sheet of H-One Co., Ltd. shows a moderate level of financial leverage with a debt-to-equity ratio of 1.03 in the TTM, indicating a balanced approach to financing. The return on equity (ROE) is 15.49% in the TTM, which is a positive sign of profitability relative to shareholder equity. However, the equity ratio is not explicitly provided, which limits the assessment of asset financing stability.

Cash Flow

The cash flow statement reveals significant challenges for H-One Co., Ltd. The free cash flow has turned negative in the TTM, indicating potential liquidity issues. The operating cash flow to net income ratio is 0.24, suggesting that cash generation from operations is not fully covering net income. The free cash flow to net income ratio is 0.18, highlighting inefficiencies in converting income into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	211.31B	228.15B	232.73B	225.51B	170.59B	163.93B
Gross Profit	30.19B	31.70B	22.23B	15.63B	13.72B	16.79B
EBITDA	19.12B	22.61B	-3.91B	15.46B	11.45B	18.16B
Net Income	8.97B	10.73B	-21.66B	-6.99B	-1.39B	2.84B
Balance Sheet
Total Assets	191.73B	178.53B	181.60B	187.31B	193.98B	163.97B
Cash, Cash Equivalents and Short-Term Investments	20.31B	19.31B	18.89B	10.42B	7.19B	3.60B
Total Debt	72.67B	65.34B	71.77B	65.47B	64.94B	45.31B
Total Liabilities	120.66B	112.99B	126.04B	118.40B	118.38B	91.65B
Stockholders Equity	68.19B	64.00B	55.18B	68.58B	72.92B	67.28B
Cash Flow
Free Cash Flow	-8.22B	4.90B	4.63B	7.66B	-16.67B	3.57B
Operating Cash Flow	8.66B	21.08B	19.49B	21.96B	5.71B	14.58B
Investing Cash Flow	-13.72B	-13.15B	-13.26B	-15.19B	-19.27B	-12.21B
Financing Cash Flow	2.33B	-7.34B	1.28B	-3.51B	14.89B	-11.65B

H-One Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1304.00
• 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:5989, the sentiment is Positive. The current price of 1304 is below the 20-day moving average (MA) of 1475.15, below the 50-day MA of 1391.02, and below the 200-day MA of 1328.12, indicating a neutral trend. The MACD of 8.95 indicates Positive momentum. The RSI at 56.17 is Neutral, neither overbought nor oversold. The STOCH value of 47.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5989.

H-One Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7280	80 Outperform	¥60.06B	5.19	―	0.99%	-0.83%	-27.20%
7236	77 Outperform	¥51.30B	5.39	―	3.60%	0.14%	882.91%
7244	74 Outperform	¥48.61B	8.37	8.46%	2.64%	-6.35%	18.49%
7229	72 Outperform	¥47.05B	9.02	―	2.37%	-13.35%	-19.38%
5989	62 Neutral	¥39.81B	4.43	―	5.16%	-11.67%	―
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7294	57 Neutral	¥24.67B	-2.36	―	3.19%	-8.99%	-62.26%