Koike Sanso Kogyo Co., Ltd. (6137) AI Stock Analysis

• Market Cap: ¥52.23B
• Dividend Yield: 2.78%
• Average Volume (3M): 41.10K
• Price to Earnings (P/E): 19.4
• Beta (1Y): 0.89
• Revenue Growth: 0.25%
• EPS Growth: -18.79%
• Country: JP
• Employees: 1,034
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 60.22
• Shares Outstanding: 22,614,664
• 10 Day Avg. Volume: 16,980
• 30 Day Avg. Volume: 41,100
• PEG Ratio: 0.40
• Price to Book (P/B): 0.62
• Price to Sales (P/S): 0.48
• P/FCF Ratio: 11.17
• 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: 74 Outperform
• Price Target: ¥2,602.00 ▲(62.42% Upside)
• Action: Reiterated Date: 01/17/26
• Date: Action: Reiterated 01/17/26

The score is driven primarily by strong financial performance (healthy margins and low leverage), partially offset by weakening free cash flow growth. Technicals show an established uptrend, but very overbought RSI/Stoch readings increase short-term risk. Valuation is moderate with a reasonable P/E and a modest dividend yield.

Positive Factors

Healthy profit margins

Sustained gross and operating margins indicate durable cost control and pricing power in equipment and systems sales. Strong EBITDA and EBIT margins support reinvestment into R&D and service capabilities, helping maintain competitiveness across product cycles.

Conservative balance sheet

Very low leverage and a high equity ratio provide financial flexibility to fund capex, withstand cyclical downturns, and pursue selective investments or M&A without stressing cash flow. This reduces refinancing and solvency risk over the medium term.

Recurring aftermarket & services

A business mix with consumables, spare parts and long-term service contracts creates recurring revenue tied to an installed base. That recurring aftermarket stream cushions capital-cycle volatility and supports steady margin-accretive earnings over time.

Negative Factors

Declining free cash flow growth

A sharp drop in free cash flow growth reduces internal funding for capex, R&D, and dividends. If sustained, weaker FCF can constrain strategic investment and heighten reliance on external financing, undermining long-term operational agility.

Earnings deterioration

Significant EPS contraction points to pressure on profitability drivers or nonrecurring hits. Persistent earnings weakness can limit the firm's ability to invest in automation and service expansion, and may signal margin or demand challenges needing structural fixes.

Cyclicality of end markets

Heavy reliance on cyclical industrial capex makes sales and order flows vulnerable to macro and industry downturns. Prolonged weakness in key sectors can reduce new system orders and retard aftermarket growth, pressuring revenue durability.

Koike Sanso Kogyo Co., Ltd. Business Overview & Revenue Model

Company Description

Koike Sanso Kogyo Co.,Ltd. develops, manufactures, and sells various types of gases, welding and cutting machines and systems, and related products to industries that process steel plates, aluminum, and stainless steel in Japan and internationally. The company's Cutting and Welding Equipment division manufactures and sells cutting devices, including handheld torches, portable automatic machines, and NC cutting machines; welding equipment for automating assembly sites; and welding jigs. This division also develops software, such as automatic programming devices for NC data; CAD systems for building equipment; and CNC control devices. Its Gas and Gas-Related Equipment division manufactures and sells various types of gases for industry, medicine, daily life, etc.; gas collectors and piping systems for gaseous gases; cryogenic containers and storage tanks for liquefied gases; cylinder boxes for clean rooms; combustion-type exhaust gas treatment equipment; analyzers; and gas supply systems. The company's Welding Material Product division offers welding wires and rods, welding machines, gas fittings, and environmental equipment. It serves various industries, including shipbuilding, steel frames, bridges, architecture, construction, and industrial machinery, as well as consumer goods manufacturers, such as automobiles and electrical appliances; and semiconductors, food, and leisure. The company was founded in 1918 and is based in Tokyo, Japan.

How the Company Makes Money

Koike Sanso Kogyo generates revenue through the sale of industrial gases, which are utilized in welding and cutting applications, as well as through the provision of gas handling equipment and related services. The company's key revenue streams include direct sales to industrial clients, long-term contracts with manufacturers, and service agreements for equipment maintenance. Additionally, strategic partnerships with major industries enhance its market reach and contribute to its earnings. The company also benefits from economies of scale in production and distribution, allowing it to maintain competitive pricing and improve profit margins.

Koike Sanso Kogyo Co., Ltd. Financial Statement Overview

Summary

Strong fundamentals supported by consistent revenue growth (7.43% from 2024 to 2025), solid profitability (gross margin 31.49%, net margin 6.58%), and low leverage (debt-to-equity 0.17, equity ratio 56.94%). Cash flow is adequate (operating cash flow to net income 1.01), but the decline in free cash flow growth (-22.83%) tempers the score.

Income Statement

Koike Sanso Kogyo Co., Ltd. has shown consistent revenue growth over the past few years, with a revenue growth rate of 7.43% from 2024 to 2025. The gross profit margin is robust at 31.49%, indicating effective cost management. The net profit margin has improved to 6.58%, reflecting solid profitability. EBIT and EBITDA margins are also strong at 9.87% and 13.92%, respectively, highlighting operational efficiency. However, maintaining these margins amidst industry volatility remains a challenge.

Balance Sheet

The company's balance sheet is stable, with a debt-to-equity ratio of 0.17, indicating low leverage and financial prudence. The return on equity stands at 8.54%, and the equity ratio is a healthy 56.94%, demonstrating strong shareholder equity. However, the company must be vigilant about potential external economic pressures that could affect asset and equity valuations.

Cash Flow

Koike Sanso Kogyo Co., Ltd. has shown a free cash flow growth rate of -22.83% from 2024 to 2025, indicating a temporary dip in cash generation. The operating cash flow to net income ratio is 1.01, suggesting adequate cash conversion from profits. The free cash flow to net income ratio of 0.65 points to a good balance between cash flow and profitability. Continued focus on cash management is crucial to sustain financial flexibility.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	55.00B	55.21B	51.39B	47.87B	41.83B	39.25B
Gross Profit	17.72B	17.39B	15.64B	14.02B	12.21B	11.48B
EBITDA	7.20B	7.69B	6.62B	5.31B	3.66B	2.83B
Net Income	3.23B	3.63B	3.06B	2.06B	995.00M	-61.00M
Balance Sheet
Total Assets	71.98B	74.73B	73.48B	64.93B	59.94B	56.22B
Cash, Cash Equivalents and Short-Term Investments	14.52B	16.98B	16.58B	14.99B	12.75B	11.54B
Total Debt	7.95B	7.23B	7.25B	7.55B	7.76B	8.61B
Total Liabilities	26.90B	29.16B	31.09B	28.86B	26.25B	24.31B
Stockholders Equity	42.15B	42.56B	39.34B	33.21B	30.78B	29.44B
Cash Flow
Free Cash Flow	0.00	2.38B	3.08B	4.50B	2.87B	1.56B
Operating Cash Flow	0.00	3.67B	4.46B	5.64B	3.78B	3.14B
Investing Cash Flow	0.00	-1.32B	-1.43B	-2.04B	-712.00M	-2.16B
Financing Cash Flow	0.00	-2.22B	-1.50B	-1.69B	-1.51B	318.00M

Koike Sanso Kogyo Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1602.00
• 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:6137, the sentiment is Positive. The current price of 1602 is below the 20-day moving average (MA) of 2033.15, below the 50-day MA of 1885.56, and above the 200-day MA of 1491.16, indicating a bullish trend. The MACD of 99.61 indicates Negative momentum. The RSI at 79.24 is Negative, neither overbought nor oversold. The STOCH value of 94.75 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6137.

Koike Sanso Kogyo Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6488	79 Outperform	¥12.81B	13.27	―	2.82%	7.10%	18.03%
6517	78 Outperform	¥75.79B	15.50	―	2.63%	-6.00%	-13.74%
6381	75 Outperform	¥68.69B	16.94	―	3.95%	-1.67%	-4.39%
6137	74 Outperform	¥52.23B	19.43	―	2.78%	0.25%	-18.79%
6363	70 Outperform	¥70.88B	14.83	―	3.09%	6.35%	-34.20%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6151	59 Neutral	¥34.38B	17.03	―	2.13%	1.13%	-66.14%