Hanshin Diesel Works, Ltd. (6018) AI Stock Analysis

• Market Cap: ¥19.01B
• Dividend Yield: 2.78%
• Average Volume (3M): 27.28K
• Price to Earnings (P/E): 20.0
• Beta (1Y): 1.13
• Revenue Growth: 38.48%
• EPS Growth: 100.84%
• Country: JP
• Employees: 276
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 48.05
• Shares Outstanding: 3,248,548
• 10 Day Avg. Volume: 16,700
• 30 Day Avg. Volume: 27,283
• PEG Ratio: 0.80
• Price to Book (P/B): 0.51
• Price to Sales (P/S): 0.56
• P/FCF Ratio: 6.45
• 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: 73 Outperform
• Price Target: ¥6,144.00 ▲(40.43% Upside)
• Action: Reiterated Date: 03/14/26
• Date: Action: Reiterated 03/14/26

The score is driven primarily by solid financial strength (low leverage and strong revenue growth), supported by a strong uptrend in technicals. Offsetting factors are margin compression and somewhat variable free cash flow, plus a valuation that is only average with a modest dividend yield.

Positive Factors

Revenue growth

Reported revenue growth of 20.62% signals durable demand for Hanshin's diesel propulsion and power solutions. Persistent top-line expansion supports scale economies, funds R&D and aftermarket service growth, and strengthens the company's ability to invest for long-term competitiveness in marine and industrial markets.

Low leverage / Strong balance sheet

A very low debt-to-equity ratio and strong equity ratio provide lasting financial flexibility. Low leverage reduces refinancing and interest-rate risk across shipping cycles, enabling counter-cyclical investment, stable capital allocation to parts and service, and resilience to sector downturns.

Cash generation improvement

Improving free cash flow and healthy operating cash flow relative to net income indicate the business reliably generates internal funds. This durable cash generation supports maintenance capex, spare-parts inventory, aftermarket service expansion, debt reduction or dividends, and reduces reliance on external financing over cycles.

Negative Factors

Margin compression

A multi-year drop in gross margin from 28.84% to 18.15% indicates structural cost or pricing pressure. Sustained margin erosion undermines operating leverage, limits funds available for R&D and service expansion, and reduces the buffer against cyclical demand swings, weakening long-term profitability.

Modest profitability and ROE

Persistently modest net margins and ROE (roughly 3–5%) limit the firm's ability to self-fund strategic initiatives and reinvestment. Low returns constrain competitive reinvestment, make it harder to build equity value over time, and increase sensitivity to margin pressure or cost shocks.

Variable free cash flow

Although FCF has improved, variability in free cash flow conversion creates uncertainty around available discretionary funds. In a cyclical marine machinery market, inconsistent FCF can hinder steady capex, inventory and parts investment, dividend predictability, and long-term planning.

Hanshin Diesel Works, Ltd. Business Overview & Revenue Model

Company Description

The Hanshin Diesel Works, Ltd. manufactures and sells engines and propulsion systems for ships worldwide. The company offers engines comprising low speed four-stroke engines, medium speed engines, and low speed two-stroke engines; and engine monitoring and support systems for ship administration. It also offers propulsion systems, such as controllable pitch propellers and side thrusters; remote control systems and integrated control systems; casting and metal machining; and auxiliary devices, including lubricating oil and fuel oil purifiers, fuel oil fine filters, and LG type lubricating oil filters. The company was formerly known as The Hanshin Ironworks Co., Ltd. and changed its name to The Hanshin Diesel Works, Ltd. in 1944. The Hanshin Diesel Works, Ltd. was incorporated in 1918 and is headquartered in Kobe, Japan.

How the Company Makes Money

null

Hanshin Diesel Works, Ltd. Financial Statement Overview

Summary

Strong revenue growth (20.62%) and a very low debt-to-equity ratio support a solid financial profile. However, declining gross/operating margins and only modest ROE and net margins (around 4–5%) limit the score, and free-cash-flow variability adds some risk.

Income Statement

Hanshin Diesel Works, Ltd. has demonstrated strong revenue growth of 20.62% in the latest year, indicating a positive trajectory. However, the gross profit margin has decreased over the years, from 28.84% in 2020 to 18.15% in 2025, suggesting pressure on cost management. The net profit margin has remained relatively stable around 4-5%, which is modest. EBIT and EBITDA margins have also shown a slight decline, indicating potential challenges in operational efficiency.

Balance Sheet

The company maintains a very low debt-to-equity ratio, demonstrating strong financial stability and low leverage risk. Return on equity has been consistent, albeit modest, around 3-5%, reflecting steady profitability. The equity ratio is strong, indicating a solid capital structure with a high proportion of equity financing.

Cash Flow

Hanshin Diesel Works, Ltd. has shown significant improvement in free cash flow, with a notable growth rate. The operating cash flow to net income ratio is healthy, indicating good cash generation relative to earnings. However, the free cash flow to net income ratio has fluctuated, suggesting some variability in cash flow management.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	14.41B	13.34B	9.64B	9.06B	10.14B	9.44B
Gross Profit	2.42B	2.38B	2.11B	2.15B	2.17B	2.55B
EBITDA	950.15M	1.04B	911.43M	848.56M	818.41M	780.04M
Net Income	458.74M	536.29M	456.10M	406.74M	394.04M	358.56M
Balance Sheet
Total Assets	24.66B	25.00B	22.75B	21.17B	19.93B	19.20B
Cash, Cash Equivalents and Short-Term Investments	5.10B	5.57B	5.00B	5.62B	5.35B	4.81B
Total Debt	268.18M	29.80M	31.73M	31.73M	10.10M	19.28M
Total Liabilities	9.96B	10.20B	8.34B	7.32B	6.46B	6.06B
Stockholders Equity	14.70B	14.80B	14.42B	13.85B	13.47B	13.14B
Cash Flow
Free Cash Flow	0.00	1.16B	261.84M	677.43M	645.28M	-357.12M
Operating Cash Flow	0.00	1.59B	1.10B	1.18B	892.58M	-140.32M
Investing Cash Flow	0.00	-6.56M	-2.25B	-777.75M	667.89M	-820.31M
Financing Cash Flow	0.00	-207.35M	-172.11M	-132.48M	-118.08M	-214.68M

Hanshin Diesel Works, Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4375.00
• 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:6018, the sentiment is Positive. The current price of 4375 is below the 20-day moving average (MA) of 5010.00, below the 50-day MA of 4613.00, and above the 200-day MA of 3669.89, indicating a bullish trend. The MACD of 319.03 indicates Negative momentum. The RSI at 70.50 is Negative, neither overbought nor oversold. The STOCH value of 91.90 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6018.

Hanshin Diesel Works, Ltd. 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%
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%
6376	70 Outperform	¥141.76B	7.70	8.17%	2.04%	1.48%	58.59%
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%