Howa Machinery, Ltd. (6203) AI Stock Analysis

• Market Cap: ¥13.08B
• Dividend Yield: 1.86%
• Average Volume (3M): 268.56K
• Price to Earnings (P/E): 17.0
• Beta (1Y): 1.05
• Revenue Growth: 25.48%
• EPS Growth: N/A
• Country: JP
• Employees: 755
• Sector: Industrials
• Sector Strength: 90
• Industry: Industrial - Machinery
• EPS (TTM): -8.36
• Shares Outstanding: 12,548,134
• 10 Day Avg. Volume: 302,570
• 30 Day Avg. Volume: 268,560
• PEG Ratio: -1.01
• Price to Book (P/B): 0.72
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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

• Rating: 65 Neutral
• Price Target: ¥1,132.00 ▲(5.40%Upside)

The company's strong revenue growth and profitability improvements are significant positives. However, persistent cash flow challenges and neutral technical indicators slightly offset these strengths. Valuation metrics are fair, providing a balanced outlook.

Howa Machinery, Ltd. Business Overview & Revenue Model

Company Description

Howa Machinery, Ltd. (6203) is a Japanese company specializing in the manufacturing and sale of machine tools and firearms. The company's core products include industrial machinery such as automatic lathes, and production machines, as well as sporting and hunting firearms. Howa Machinery is recognized for its precision engineering and innovation in both the industrial machinery and firearms sectors.

How the Company Makes Money

Howa Machinery, Ltd. generates revenue primarily through the sale of its machine tools and firearms. The company's machine tools division focuses on providing high-precision industrial equipment to various manufacturing industries, which constitutes a significant portion of its revenue. In the firearms segment, Howa produces sporting rifles and shotguns that are popular among hunting and shooting enthusiasts, contributing to its earnings. Additionally, Howa may engage in partnerships or collaborations with other firms to expand its market reach and enhance product offerings, further bolstering its revenue streams.

Howa Machinery, Ltd. Financial Statement Overview

Summary

Howa Machinery, Ltd. exhibits strengths in revenue growth and a solid equity base, yet faces profitability and cash flow challenges. Operational efficiency needs improvement to enhance net margins and cash generation. While leverage is moderate, liquidity constraints could pose risks if not addressed.

Income Statement

The TTM (Trailing-Twelve-Months) data shows a decline in net income with a negative margin of -1.07%. Despite a decent gross profit margin of 19.06% and positive revenue growth of 10.82% from the previous annual report, the company struggles with net profitability. EBIT margin stands at 5.58% and EBITDA margin at 8.45%, indicating operational challenges.

Balance Sheet

The balance sheet reflects a stable equity base with a debt-to-equity ratio of 0.36, showing moderate leverage. Return on Equity is negative due to the net loss, but the equity ratio is strong at 56.27%, indicating financial stability and low risk of insolvency.

Cash Flow

Cash flow statements reveal challenges, with zero operating cash flow in the TTM period. The company previously had negative free cash flow, reflecting potential constraints in liquidity and capital management.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
21.93B	19.79B	19.74B	19.70B	18.77B	20.32B
	Gross Profit
4.18B	3.49B	3.63B	3.96B	3.48B	3.90B
	EBIT
1.22B	388.00M	452.00M	988.00M	554.00M	776.00M
	EBITDA
1.85B	-189.00M	959.00M	1.42B	1.01B	1.25B
	Net Income Common Stockholders
-235.00M	-873.00M	524.00M	1.06B	968.00M	591.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.89B	3.90B	4.43B	5.55B	4.62B	3.51B
	Total Assets
33.10B	30.29B	27.62B	27.67B	26.46B	24.11B
	Total Debt
6.79B	6.24B	3.52B	3.27B	4.15B	2.03B
	Net Debt
3.90B	2.42B	188.00M	-1.15B	692.00M	-1.48B
	Total Liabilities
14.47B	12.96B	10.27B	10.78B	10.35B	9.12B
	Stockholders Equity
18.62B	17.33B	17.35B	16.89B	16.11B	14.99B
Cash Flow		Free Cash Flow
0.00	-2.23B	-1.14B	2.38B	-2.02B	204.00M
	Operating Cash Flow
0.00	-1.07B	-506.00M	3.05B	-1.27B	1.19B
	Investing Cash Flow
0.00	-871.00M	-608.00M	-544.00M	-635.00M	-1.05B
	Financing Cash Flow
0.00	2.48B	22.00M	-1.61B	1.88B	35.00M

Howa Machinery, Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1074.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6203, the sentiment is Negative. The current price of 1074 is above the 20-day moving average (MA) of 1038.30, below the 50-day MA of 1075.68, and above the 200-day MA of 1059.31, indicating a neutral trend. The MACD of -0.72 indicates Negative momentum. The RSI at 48.42 is Neutral, neither overbought nor oversold. The STOCH value of 44.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6203.

Howa Machinery, Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6373	81 Outperform	¥12.21B	9.59		2.23%	2.63%	267.72%
6317	80 Outperform	¥13.64B	10.80		3.43%	-6.96%	-1.73%
6496	79 Outperform	¥13.18B	9.41		2.71%	20.91%	18.64%
6224	78 Outperform	¥13.50B	11.98		2.47%	16.80%	29.50%
Sector *	66 Neutral	$4.49B	12.34	5.40%	248.65%	4.13%	-12.33%
6203	65 Neutral	¥13.08B	16.97		1.86%	25.48%	―
6210	58 Neutral	¥12.62B	―		5.71%	-6.30%	34.61%