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Howa Machinery, Ltd. (JP:6203)
:6203
Japanese Market
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Howa Machinery, Ltd. (6203) AI Stock Analysis

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JP:6203

Howa Machinery, Ltd.

(6203)

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Neutral 62 (OpenAI - 4o)
Rating:62Neutral
Price Target:
¥1,329.00
▲(3.83% Upside)
The overall stock score of 62 reflects strong revenue growth and improving profitability, which are positive signs for Howa Machinery, Ltd. However, challenges in cash flow generation and short-term bearish technical indicators weigh on the score. The stock's valuation is reasonable, with a fair P/E ratio and a modest dividend yield providing some support.

Howa Machinery, Ltd. (6203) vs. iShares MSCI Japan ETF (EWJ)

Howa Machinery, Ltd. Business Overview & Revenue Model

Company DescriptionHowa Machinery, Ltd. (6203) is a Japanese company specializing in the manufacturing and distribution of precision machinery and equipment. The company operates primarily in the sectors of machine tools and industrial machinery, providing a range of products that include CNC lathes, machining centers, and other automated systems. With a commitment to innovation and quality, Howa Machinery serves various industries, including automotive, aerospace, and general manufacturing.
How the Company Makes MoneyHowa Machinery generates revenue through the sale of its machinery and equipment, which are primarily targeted at industrial clients in need of precision manufacturing solutions. The company’s revenue model is largely based on direct sales of its products, complemented by after-sales services such as maintenance, parts, and technical support. Key revenue streams include the sale of CNC machines, which are crucial for modern manufacturing processes, as well as contracts for long-term service agreements with clients. Additionally, Howa Machinery has established significant partnerships with various industry players, enhancing its market presence and expanding its customer base, which contributes positively to its earnings.

Howa Machinery, Ltd. Financial Statement Overview

Summary
The company exhibits strong revenue growth and improving profitability, with a revenue growth rate of 25.5% and a net profit margin improvement to 3.0%. However, challenges in cash flow generation, such as negative free cash flow, remain a concern.
Income Statement
72
Positive
The company has shown a strong revenue growth rate of 25.5% from 2024 to 2025, indicating robust demand. Gross profit margin for 2025 is 16.9%, reflecting decent cost management. However, the net profit margin improved to 3.0% from a negative position, highlighting recovery from previous losses. The EBIT margin is 5.0%, while the EBITDA margin is 6.9%, both showing improvement but still modest. Overall, the company is recovering well with significant revenue growth and improved profitability metrics.
Balance Sheet
65
Positive
The debt-to-equity ratio stands at 0.43, indicating a moderate leverage level. Return on Equity (ROE) for 2025 is 4.0%, reflecting a modest return for shareholders. The equity ratio is 55.0%, showing a stable equity base compared to total assets. While leverage is manageable, the ROE could be improved to enhance shareholder returns.
Cash Flow
55
Neutral
The free cash flow remains negative, but there is a slight improvement in operating cash flow. The operating cash flow to net income ratio is 0.07, indicating low cash generation relative to profits. The free cash flow to net income ratio is negative, signaling challenges in converting net income into free cash flow. Cash flow stability is a concern, with negative free cash flow persisting.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue25.46B24.83B19.79B19.74B19.70B18.77B
Gross Profit4.49B4.20B3.49B3.63B3.96B3.48B
EBITDA2.14B1.72B-189.00M1.14B1.42B1.41B
Net Income894.00M749.00M-873.00M524.00M1.06B968.00M
Balance Sheet
Total Assets34.44B34.05B30.29B27.62B27.67B26.46B
Cash, Cash Equivalents and Short-Term Investments5.71B2.92B3.90B3.33B4.42B3.46B
Total Debt7.73B7.97B6.24B3.52B3.27B4.15B
Total Liabilities15.64B15.31B12.96B10.27B10.78B10.35B
Stockholders Equity18.79B18.74B17.33B17.35B16.89B16.11B
Cash Flow
Free Cash Flow0.00-2.32B-2.23B-1.14B2.38B-2.02B
Operating Cash Flow0.0055.00M-1.07B-506.00M3.05B-1.27B
Investing Cash Flow0.00-2.55B-871.00M-608.00M-544.00M-635.00M
Financing Cash Flow0.001.49B2.48B22.00M-1.61B1.88B

Howa Machinery, Ltd. Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1280.00
Price Trends
50DMA
1285.42
Negative
100DMA
1154.46
Positive
200DMA
1155.98
Positive
Market Momentum
MACD
-4.88
Negative
RSI
51.30
Neutral
STOCH
56.70
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6203, the sentiment is Positive. The current price of 1280 is above the 20-day moving average (MA) of 1258.25, below the 50-day MA of 1285.42, and above the 200-day MA of 1155.98, indicating a neutral trend. The MACD of -4.88 indicates Negative momentum. The RSI at 51.30 is Neutral, neither overbought nor oversold. The STOCH value of 56.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6203.

Howa Machinery, Ltd. Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
¥14.59B15.271.87%2.44%163.48%
77
Outperform
¥16.61B13.452.12%24.02%8.22%
71
Outperform
¥15.18B5.193.74%-6.23%405.48%
66
Neutral
¥18.11B13.041.97%34.70%-8.44%
63
Neutral
$10.79B15.437.44%2.01%2.89%-14.66%
62
Neutral
¥15.88B17.271.56%29.02%
57
Neutral
¥13.33B5.38%-1.14%68.17%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:6203
Howa Machinery, Ltd.
1,280.00
376.97
41.75%
JP:6210
Toyo Machinery & Metal Co., Ltd.
650.00
57.17
9.64%
JP:6224
JRC Co.,Ltd.
1,275.00
351.35
38.04%
JP:6317
Kitagawa Corporation
1,622.00
432.03
36.31%
JP:6373
Daido Kogyo Co., Ltd.
1,337.00
521.14
63.88%
JP:6496
Nakakita Seisakusho Co., Ltd.
5,070.00
2,004.37
65.38%

Howa Machinery, Ltd. Corporate Events

Howa Machinery Reports Robust Financial Growth in June 2025 Quarter
Aug 8, 2025

Howa Machinery, Ltd. reported a significant increase in its quarterly financial performance for June 2025, with net sales rising by 13.9% and operating profit surging by 238.3% compared to the previous year. This positive financial outcome reflects the company’s strong operational efficiency and market demand, positioning it favorably within the industry and potentially benefiting its stakeholders.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Oct 16, 2025