OKUMURA ENGINEERING Corp. (6229) AI Stock Analysis

• Market Cap: ¥10.37B
• Dividend Yield: 2.55%
• Average Volume (3M): 11.64K
• Price to Earnings (P/E): 5.1
• Beta (1Y): 0.85
• Revenue Growth: 8.69%
• EPS Growth: 14.63%
• Country: JP
• Employees: 345
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 84.09
• Shares Outstanding: 4,557,200
• 10 Day Avg. Volume: 12,290
• 30 Day Avg. Volume: 11,636
• PEG Ratio: 1.25
• Price to Book (P/B): 0.58
• Price to Sales (P/S): 0.57
• P/FCF Ratio: 6.19
• 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: 80 Outperform
• Price Target: ¥2,715.00 ▲(57.12% Upside)
• Action: Reiterated Date: 03/20/26
• Date: Action: Reiterated 03/20/26

The score is driven primarily by strong financial health (low leverage, solid profitability and cash flow) and very attractive valuation (low P/E with a dividend). Technicals are supportive of an uptrend, but elevated RSI/Stoch readings temper the score due to potential near-term overbought risk.

Positive Factors

Strong Balance Sheet

Very low leverage and a high equity ratio provide durable financial flexibility. This conservative capital structure lowers insolvency risk, supports investment or acquisitions without heavy borrowing, and underpins multi-quarter resilience to cyclical downturns.

Strong Cash Generation

Consistent OCF and material free cash flow create durable internal funding for capex, dividends, or debt reduction. Strong cash conversion indicates core operations generate real liquidity, supporting reinvestment and shareholder returns over multiple quarters.

Revenue Growth & Solid Margins

Sustained double-digit revenue growth combined with a robust gross margin implies competitive product mix and pricing power. Together they support scalable earnings potential and indicate structural demand and cost control that should remain relevant over months.

Negative Factors

Declining EBIT Margin

A falling EBIT margin signals rising operating costs or inefficiencies that can erode operating leverage. If persistent, this trend reduces cash available for investment or distributions and requires management action to restore long-term profitability.

Free Cash Flow Efficiency

While FCF is positive, the FCF-to-net-income ratio indicates room to optimize working capital or capex timing. Suboptimal cash efficiency can increase sensitivity to demand swings and limit the company's ability to consistently fund growth or returns.

Modest Return on Equity

A 5.4% ROE remains modest and may signal limited profitability versus capital employed. Over several quarters this can constrain long-term shareholder value creation unless margins or asset turnover improve through strategic initiatives.

OKUMURA ENGINEERING Corp. Business Overview & Revenue Model

Company Description

Okumura Engineering corp. designs, manufactures, and sells construction and engineering machineries and components. The company offers gas rubber seated butterfly valves, pinch valves, slim check valves, firefighting equipment-approved valves, electronic control valves, marine valves, fluor resin-lined valves, knife gate valves, and other valves. Its products are used in various sectors, such as construction, power generation, shipbuilding, and various plants. The company was founded in 1902 and is headquartered in Gamou, Japan.

How the Company Makes Money

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OKUMURA ENGINEERING Corp. Financial Statement Overview

Summary

Strong overall fundamentals: healthy revenue growth (+10.1% YoY) and solid gross margin (33.4%) with improving net margin (5.3%). Balance sheet is notably strong with very low leverage (debt-to-equity 0.08) and high equity ratio (78.3%). Cash generation is also strong (operating cash flow ¥1.12B; FCF ¥964M), though the decline in EBIT margin (to 7.5%) suggests some operational efficiency pressure.

Income Statement

OKUMURA ENGINEERING Corp. shows healthy revenue growth with a 10.1% increase in 2025 compared to 2024. Gross profit margin is solid at 33.4% in 2025, indicating efficient cost management. The net profit margin improved slightly to 5.3%, reflecting increased profitability. However, the EBIT margin decreased to 7.5%, signaling potential operational inefficiencies. Overall, the company demonstrates strong revenue growth and profitability, albeit with room for improvement in operational efficiency.

Balance Sheet

The company's balance sheet is robust with a low debt-to-equity ratio of 0.08 in 2025, indicating a conservative capital structure. Return on Equity improved to 5.4%, showing better utilization of shareholder funds. The equity ratio stands strong at 78.3%, reflecting a solid equity base relative to total assets, enhancing financial stability. Overall, OKUMURA ENGINEERING Corp. maintains a strong and stable financial position with low leverage.

Cash Flow

Operating cash flow increased significantly to ¥1.12 billion in 2025, suggesting improved cash generation from core operations. The free cash flow also improved to ¥964 million, driven by better cash management and reduced capital expenditures. The operating cash flow to net income ratio of 2.03 highlights efficient cash conversion from earnings. However, the free cash flow to net income ratio of 1.74 suggests potential areas for optimizing cash use. Overall, cash flow generation is strong, with room for enhancing free cash flow efficiency.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	10.90B	10.44B	9.48B	9.16B	8.46B	8.76B
Gross Profit	3.63B	3.48B	3.26B	3.37B	3.08B	3.48B
EBITDA	1.20B	1.05B	1.09B	1.32B	1.61B	1.39B
Net Income	637.19M	553.41M	511.04M	767.29M	850.11M	749.70M
Balance Sheet
Total Assets	13.08B	13.16B	12.60B	12.57B	12.37B	12.01B
Cash, Cash Equivalents and Short-Term Investments	1.32B	2.06B	1.39B	1.61B	3.48B	3.07B
Total Debt	789.01M	802.92M	988.64M	1.44B	1.78B	2.28B
Total Liabilities	2.86B	2.85B	2.98B	3.36B	3.85B	4.32B
Stockholders Equity	10.22B	10.31B	9.62B	9.21B	8.52B	7.68B
Cash Flow
Free Cash Flow	0.00	964.05M	402.56M	-1.39B	787.19M	-207.09M
Operating Cash Flow	0.00	1.12B	628.88M	-1.29B	993.24M	1.09B
Investing Cash Flow	0.00	-129.30M	-249.85M	585.66M	-237.37M	-1.90B
Financing Cash Flow	0.00	-358.67M	-629.85M	-557.78M	-695.26M	1.24B

OKUMURA ENGINEERING Corp. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1728.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6229, the sentiment is Positive. The current price of 1728 is below the 20-day moving average (MA) of 2162.75, below the 50-day MA of 2014.20, and above the 200-day MA of 1647.48, indicating a bullish trend. The MACD of 85.42 indicates Negative momentum. The RSI at 60.08 is Neutral, neither overbought nor oversold. The STOCH value of 81.17 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6229.

OKUMURA ENGINEERING Corp. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6229	80 Outperform	¥10.37B	5.14	―	2.55%	8.69%	14.63%
6488	79 Outperform	¥11.65B	10.27	―	2.82%	7.10%	18.03%
6402	79 Outperform	¥10.88B	6.38	―	2.15%	-0.94%	6.93%
6384	73 Outperform	¥11.52B	27.33	―	4.76%	41.13%	535.42%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6393	60 Neutral	¥12.94B	10.99	―	6.70%	7.96%	43.37%
6495	52 Neutral	¥12.39B	42.22	―	1.65%	3.96%	―