Japan Engine Corp (6016) AI Stock Analysis

• Market Cap: ¥114.59B
• Dividend Yield: 0.55%
• Average Volume (3M): 345.05K
• Price to Earnings (P/E): 19.3
• Beta (1Y): 1.56
• Revenue Growth: 9.04%
• EPS Growth: -7.84%
• Country: JP
• Employees: 345
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 156.53
• Shares Outstanding: 8,400,000
• 10 Day Avg. Volume: 341,970
• 30 Day Avg. Volume: 345,046
• PEG Ratio: 0.09
• Price to Book (P/B): 2.06
• Price to Sales (P/S): 0.99
• P/FCF Ratio: 11.86
• 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: 75 Outperform
• Price Target: ¥14,480.00 ▲(19.57% Upside)
• Action: Reiterated Date: 11/30/25
• Date: Action: Reiterated 11/30/25

Japan Engine Corp's strong financial performance and positive technical indicators are the primary drivers of its stock score. The robust revenue growth and profitability improvements, along with solid cash flow, position the company well for future growth. However, the relatively high P/E ratio and low dividend yield suggest valuation concerns, slightly tempering the overall score.

Positive Factors

Free cash flow generation

Consistent positive free cash flow and an operating-CF/net-income ratio above 1 indicate durable cash conversion from operations. This strengthens the company's ability to fund capex, service debt, and invest in service networks, supporting long-term stability and strategic initiatives.

Solid balance sheet and ROE

A healthy equity ratio and low leverage provide financial flexibility through cycles, while a high ROE signals efficient capital use. This balance-sheet strength supports resilience to cyclical downturns and capacity to pursue opportunistic investments or sustain operations.

Recurring aftermarket/service revenue

A business model that combines new engine sales with a sizeable recurring aftermarket and field-service franchise creates predictable, sticky revenue. The installed base and service networks help smooth cyclicality of newbuilds and underpin long-term margin and cash stability.

Negative Factors

Cyclicality tied to shipbuilding

New-engine sales are project-based and closely linked to the shipbuilding cycle, creating revenue and backlog volatility. This structural exposure can cause multi-quarter swings in revenue and capital allocation needs, complicating medium-term planning and growth visibility.

Recent top-line and EPS weakness

Negative recent revenue and EPS growth indicate near-term demand or margin pressure and reduce visibility on sustaining prior improvements. If persistent, weaker growth trends can constrain reinvestment, slow aftermarket expansion, and reveal sensitivity to order timing or macro conditions.

Operational margin improvement needed

Although net profit margin improved, underlying operating margins lag and point to costs or manufacturing inefficiencies. Structural margin recovery is needed to insulate profitability from raw-material swings and competitive pricing pressures in the marine-engine market.

Japan Engine Corp Business Overview & Revenue Model

Company Description

Japan Engine Corporation designs, develops, manufactures, maintains, repairs, sells, and licenses engines and other components in Japan. It offers UE engines used in bulk carriers, tankers, car carrier ships, container ships, and other vessels. The company also engages in the manufacture and sale of shield machine components for subway construction and tunnel boring; and machining and assembly of large sized products, including injection molding machines and testing devices. In addition, it provides pressure-relief control valve blocks, cylinder covers, piston crowns, piston heads and metallic sliding bearings, bedplates and shield machines, and resin granulators. The company was formerly known as Kobe Diesel Co., Ltd. and changed its name to Japan Engine Corporation in April 2017. Japan Engine Corporation was founded in 1910 and is headquartered in Akashi, Japan.

How the Company Makes Money

Japan Engine Corp makes money primarily by supplying marine diesel engines and providing lifecycle support for those engines. 1) New engine and equipment sales: Revenue is generated from manufacturing and selling large marine diesel engines (e.g., main engines for commercial vessels) and associated machinery/equipment delivered to shipbuilders and shipowners. These sales are typically project-based and tied to newbuild ship orders, with revenue recognized as engines are delivered/accepted under customer contracts. 2) Aftermarket parts and service: A significant ongoing revenue stream typically comes from supplying spare parts and providing maintenance, inspection, repair, and overhaul services for engines in operation. Because vessels require periodic servicing and replacement parts over long operating lives, this segment can provide recurring demand beyond newbuild cycles. 3) Service networks and customer support: Earnings are supported by the company’s service capability for installed engines, including technical support and field service for domestic and overseas customers. Specific named partnerships, licensing arrangements, or customer concentration details are null (not provided). Key factors influencing earnings include the global shipbuilding cycle (driving new engine demand), the size of the company’s installed base (driving parts/service demand), fleet operating intensity, regulatory changes affecting marine propulsion (which can spur retrofits/overhauls), and raw material and manufacturing cost conditions. Specific segment revenue breakdowns and contract structures are null (not provided).

Japan Engine Corp Financial Statement Overview

Summary

Japan Engine Corp exhibits strong financial performance with significant revenue growth and improved profitability. The balance sheet is robust with low leverage and high equity, ensuring financial stability. Cash flow generation is solid, supporting growth and strategic initiatives. Opportunities exist for enhancing operational margins.

Income Statement

Japan Engine Corp has demonstrated strong revenue growth, with a significant increase from ¥20.97 billion in 2024 to ¥28.86 billion in 2025, indicating robust demand and business expansion. The gross profit margin has improved over the years, reflecting efficient cost management. The net profit margin has also shown a positive trend, reaching 15.0% in 2025, indicating strong profitability. However, the EBIT and EBITDA margins suggest room for further operational efficiency improvements.

Balance Sheet

The balance sheet of Japan Engine Corp is solid, characterized by a healthy equity ratio of 42.1% in 2025, showcasing good financial stability. The debt-to-equity ratio is relatively low at 0.34, indicating prudent leverage use. The return on equity has been improving, reaching 31.2% in 2025, which signifies efficient use of equity capital. While the company maintains low leverage, ensuring financial flexibility, it should continue to monitor debt levels to preserve this advantage.

Cash Flow

The cash flow statement reveals a strong financial position with free cash flow turning positive and growing to ¥2.41 billion in 2025. The operating cash flow to net income ratio of 1.56 in 2025 demonstrates effective cash generation from operations. Furthermore, the free cash flow to net income ratio indicates that the company is generating ample cash relative to its net income, providing a solid foundation for future investments or debt repayments.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	17.98B	28.86B	20.97B	15.25B	13.16B	11.69B
Gross Profit	4.26B	8.23B	5.83B	2.68B	2.85B	2.57B
EBITDA	2.31B	6.13B	3.91B	1.16B	1.03B	909.01M
Net Income	1.44B	4.33B	2.55B	808.85M	539.99M	323.48M
Balance Sheet
Total Assets	25.47B	33.09B	25.04B	20.45B	17.47B	17.04B
Cash, Cash Equivalents and Short-Term Investments	5.06B	7.41B	4.28B	4.26B	4.09B	2.89B
Total Debt	3.26B	4.74B	3.21B	2.65B	3.76B	4.09B
Total Liabilities	17.09B	19.21B	15.29B	13.10B	10.91B	10.83B
Stockholders Equity	8.37B	13.88B	9.75B	7.34B	6.55B	6.21B
Cash Flow
Free Cash Flow	0.00	2.41B	-293.40M	1.44B	1.60B	-1.12B
Operating Cash Flow	0.00	6.75B	391.13M	2.50B	1.80B	-76.45M
Investing Cash Flow	0.00	-4.70B	-761.91M	-1.06B	-269.69M	-1.06B
Financing Cash Flow	0.00	1.08B	389.47M	-1.26B	-247.81M	144.55M

Japan Engine Corp Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 12110.00
• 50DMA: Negative
• 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:6016, the sentiment is Positive. The current price of 12110 is below the 20-day moving average (MA) of 13631.50, below the 50-day MA of 14067.80, and above the 200-day MA of 11077.57, indicating a neutral trend. The MACD of -350.49 indicates Negative momentum. The RSI at 50.95 is Neutral, neither overbought nor oversold. The STOCH value of 78.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6016.

Japan Engine Corp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6517	78 Outperform	¥72.32B	9.50	―	2.63%	-6.00%	-13.74%
6016	75 Outperform	¥114.59B	19.34	―	0.55%	9.04%	-7.84%
6381	75 Outperform	¥65.23B	13.24	―	3.95%	-1.67%	-4.39%
6018	73 Outperform	¥19.01B	20.01	―	2.78%	38.48%	100.84%
6023	71 Outperform	¥56.82B	10.14	11.47%	1.88%	-0.04%	15.59%
6363	70 Outperform	¥69.96B	4.09	―	3.09%	6.35%	-34.20%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%