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

Howa Machinery, Ltd. (6203) AI Stock Analysis

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JP

Howa Machinery, Ltd.

(6203)

Rating:65Neutral
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. (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 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 MoneyHowa 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
52
Neutral
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
65
Positive
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
45
Neutral
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
TTMMar 2024Mar 2023Mar 2022Mar 2021Mar 2020
Income StatementTotal Revenue
21.93B19.79B19.74B19.70B18.77B20.32B
Gross Profit
4.18B3.49B3.63B3.96B3.48B3.90B
EBIT
1.22B388.00M452.00M988.00M554.00M776.00M
EBITDA
1.85B-189.00M959.00M1.42B1.01B1.25B
Net Income Common Stockholders
-235.00M-873.00M524.00M1.06B968.00M591.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
2.89B3.90B4.43B5.55B4.62B3.51B
Total Assets
33.10B30.29B27.62B27.67B26.46B24.11B
Total Debt
6.79B6.24B3.52B3.27B4.15B2.03B
Net Debt
3.90B2.42B188.00M-1.15B692.00M-1.48B
Total Liabilities
14.47B12.96B10.27B10.78B10.35B9.12B
Stockholders Equity
18.62B17.33B17.35B16.89B16.11B14.99B
Cash FlowFree Cash Flow
0.00-2.23B-1.14B2.38B-2.02B204.00M
Operating Cash Flow
0.00-1.07B-506.00M3.05B-1.27B1.19B
Investing Cash Flow
0.00-871.00M-608.00M-544.00M-635.00M-1.05B
Financing Cash Flow
0.002.48B22.00M-1.61B1.88B35.00M

Howa Machinery, Ltd. Technical Analysis

Technical Analysis Sentiment
Negative
Last Price1074.00
Price Trends
50DMA
1075.68
Negative
100DMA
1135.71
Negative
200DMA
1059.31
Negative
Market Momentum
MACD
-0.72
Negative
RSI
48.42
Neutral
STOCH
44.90
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

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
¥12.21B9.59
2.23%2.63%267.72%
80
Outperform
¥13.64B10.80
3.43%-6.96%-1.73%
79
Outperform
¥13.18B9.41
2.71%20.91%18.64%
78
Outperform
¥13.50B11.98
2.47%16.80%29.50%
66
Neutral
$4.49B12.345.40%248.65%4.13%-12.33%
65
Neutral
¥13.08B16.97
1.86%25.48%
58
Neutral
¥12.62B
5.71%-6.30%34.61%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:6203
Howa Machinery, Ltd.
1,054.00
246.49
30.52%
JP:6210
Toyo Machinery & Metal Co., Ltd.
615.00
-65.12
-9.57%
JP:6224
JRC Co.,Ltd.
1,090.00
262.52
31.73%
JP:6317
Kitagawa Corporation
1,415.00
69.14
5.14%
JP:6373
Daido Kogyo Co., Ltd.
1,127.00
305.31
37.16%
JP:6496
Nakakita Seisakusho Co., Ltd.
3,865.00
23.26
0.61%
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.