Union Tool Co. (6278) AI Stock Analysis

• Market Cap: ¥152.89B
• Dividend Yield: 1.1%
• Average Volume (3M): 245.75K
• Price to Earnings (P/E): 27.2
• Beta (1Y): 1.00
• Revenue Growth: 21.67%
• EPS Growth: 40.87%
• Country: JP
• Employees: 1,454
• Sector: Industrials
• Sector Strength: 73
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 73.22
• Shares Outstanding: 19,780,000
• 10 Day Avg. Volume: 352,140
• 30 Day Avg. Volume: 245,750
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥9,259.00
• Price Target Upside: 4.62% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 74 Outperform
• Price Target: ¥9,259.00 ▲(4.62% Upside)

Union Tool Co. has a strong financial foundation with robust revenue growth and solid profit margins, contributing significantly to its overall score. The technical analysis indicates positive momentum, although the stock may be overbought. Valuation metrics suggest the stock is relatively expensive, which slightly offsets the positive financial and technical indicators.

Union Tool Co. Business Overview & Revenue Model

Company Description

Union Tool Co. (6278) is a leading manufacturer specializing in cutting tools and industrial supplies. Established with a commitment to innovation and quality, the company operates primarily in the manufacturing and industrial sectors. Its core product offerings include high-performance cutting tools, precision machining equipment, and various tool accessories designed for a wide array of applications across different industries such as automotive, aerospace, and metalworking.

How the Company Makes Money

Union Tool Co. generates revenue through the sale of its diverse range of cutting tools and industrial supplies. The company's primary revenue streams include direct sales to manufacturers and distributors, as well as a growing online presence that facilitates e-commerce transactions. Additionally, Union Tool Co. benefits from long-term contracts with key clients in the automotive and aerospace industries, providing a stable source of recurring income. Strategic partnerships with other manufacturers and distributors enhance its market reach and customer base, further contributing to its financial performance. The company also invests in research and development to innovate and expand its product line, which can lead to new revenue opportunities.

Union Tool Co. Financial Statement Overview

Summary

Union Tool Co. exhibits strong financial performance with significant revenue growth, healthy profit margins, and a robust balance sheet. The absence of debt and strong equity position provide financial stability, while positive cash flow trends enhance its capacity for future investments.

Income Statement

Union Tool Co. demonstrated strong financial performance with impressive revenue growth of 28.67% in 2024 compared to 2023. The company maintained robust profitability with a gross profit margin of 40.28% and a net profit margin of 16.20% in 2024. EBIT and EBITDA margins were also healthy, at 21.10% and 29.90% respectively, indicating efficient operational management. The consistent revenue growth and strong margins suggest a solid business model and competitive positioning in the market.

Balance Sheet

The balance sheet reflects a stable financial position with no debt, leading to a debt-to-equity ratio of 0. The equity ratio stands at an impressive 92.73%, highlighting strong capitalization and low leverage risk. Return on equity was a robust 7.22% in 2024, driven by high net income, indicating effective use of equity capital. These factors contribute to financial stability and lower risk of financial distress.

Cash Flow

Union Tool Co. showed a significant increase in free cash flow, up from ¥228 million in 2023 to ¥3,181 million in 2024, marking a substantial growth. The operating cash flow to net income ratio was 1.38 in 2024, indicating strong cash generation relative to net income. Additionally, the free cash flow to net income ratio of 0.60 suggests solid cash flow management. The positive cash flow trends underscore the company's ability to reinvest in growth opportunities.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	33.98B	32.61B	25.34B	29.09B	28.17B	22.82B
Gross Profit	14.11B	13.13B	8.99B	11.56B	10.57B	7.30B
EBITDA	10.03B	9.82B	6.76B	10.01B	7.87B	6.22B
Net Income	5.68B	5.28B	3.08B	5.00B	3.80B	2.54B
Balance Sheet
Total Assets	78.22B	78.86B	70.61B	69.14B	64.53B	58.03B
Cash, Cash Equivalents and Short-Term Investments	18.25B	18.13B	20.07B	20.97B	17.58B	15.80B
Total Debt	532.00M	427.00M	326.00M	222.00M	313.00M	124.19M
Total Liabilities	5.64B	5.73B	3.33B	5.51B	5.47B	4.07B
Stockholders Equity	72.57B	73.14B	67.28B	63.62B	59.06B	53.97B
Cash Flow
Free Cash Flow	0.00	3.18B	228.00M	4.18B	3.21B	3.50B
Operating Cash Flow	0.00	7.28B	4.69B	6.71B	5.83B	5.07B
Investing Cash Flow	0.00	-7.27B	-5.01B	-1.96B	-3.16B	684.09M
Financing Cash Flow	0.00	-1.68B	-1.61B	-1.55B	-1.44B	-1.11B

Union Tool Co. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8850.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6278, the sentiment is Positive. The current price of 8850 is above the 20-day moving average (MA) of 7945.50, above the 50-day MA of 6677.50, and above the 200-day MA of 5006.46, indicating a bullish trend. The MACD of 670.90 indicates Positive momentum. The RSI at 70.23 is Negative, neither overbought nor oversold. The STOCH value of 64.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6278.

Union Tool Co. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6278	74 Outperform	¥152.89B	27.24		1.10%	21.67%	40.87%
Sector *	64 Neutral	$10.73B	15.74	7.63%	2.01%	2.75%	-15.09%
OSGCF	―	$1.28B	14.22	7.41%	2.76%	―	―
8UM	―	€485.99M	17.13	2.79%	―	―	―
6101	81 Outperform	¥105.16B	8.56		2.51%	28.13%	84.20%
6157	70 Outperform	¥19.39B	14.82		3.86%	3.38%	-2.80%
6480	65 Neutral	¥47.19B	22.91		2.86%	5.34%	79.88%

Union Tool Co. Corporate Events

Union Tool Co. Considers Investment Unit Reduction to Boost Market Activity

Union Tool Co. has announced its consideration of reducing the investment unit of its stock to enhance stock market activity by improving liquidity and attracting a broader range of investors. This strategic move is part of the company’s efforts to adapt to market conditions and comply with Tokyo Stock Exchange regulations, potentially impacting shareholder composition and trading volumes.

Union Tool Co. Increases Year-End Dividend Amid Strong Performance

Union Tool Co. announced an increase in its year-end dividend to 60 yen per share, reflecting a significant rise from the previous fiscal year’s 42 yen. This decision, based on better-than-expected consolidated performance for the fiscal year ending December 2024, underscores the company’s commitment to balancing shareholder returns with growth investments and management stability.

Union Tool Co. Reports Strong Financial Growth in FY 2024

Union Tool Co. reported significant financial growth for the fiscal year ending December 2024, with net sales increasing by 28.7% to 32,606 million yen and operating profit soaring by 82.1% to 6,878 million yen compared to the previous year. This financial upturn highlights the company’s successful operational strategies and strengthens its position in the precision tools industry, offering promising implications for stakeholders.

Union Tool Co. Revises Year-end Dividend Forecast for FY 2024

Union Tool Co. has announced a revision to its dividend forecast for the fiscal year ending December 31, 2024. The company plans to increase the year-end dividend by 15 yen, resulting in a payout of 60 yen per share, up from the previously forecasted 45 yen. This adjustment will raise the total dividend for the fiscal year to 105 yen per share, which is a significant increase compared to the previous year’s total of 84 yen per share. The revision reflects a boost in stakeholder returns and will be proposed at the upcoming shareholders’ meeting in March 2025.