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Union Tool Co. (JP:6278)
:6278
Japanese Market

Union Tool Co. (6278) AI Stock Analysis

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JP

Union Tool Co.

(6278)

Rating:69Neutral
Price Target:
Union Tool Co. is fundamentally strong with robust financial performance, characterized by significant revenue growth and healthy profit margins. The balance sheet is solid with no debt, and cash flow is positive, supporting future growth opportunities. However, the technical analysis indicates bearish momentum, with the stock trading below key moving averages, suggesting potential short-term weakness. Valuation is attractive, with a low P/E ratio and a decent dividend yield, making it appealing for value and income investors.

Union Tool Co. (6278) vs. iShares MSCI Japan ETF (EWJ)

Union Tool Co. Business Overview & Revenue Model

Company DescriptionUnion Tool Co. (6278) is a Japanese company that specializes in the manufacturing and distribution of high-precision cutting tools primarily for the automotive, aerospace, and electronics industries. The company is known for its technologically advanced products, including end mills, drills, and other cutting tools, which are designed to provide enhanced durability and precision. Union Tool Co. serves a global customer base, with operations extending across various international markets.
How the Company Makes MoneyUnion Tool Co. generates revenue through the sale of its high-precision cutting tools. These products are primarily sold to companies in the automotive, aerospace, and electronics industries, which require reliable and precise tools for manufacturing processes. The company's revenue streams include direct sales to manufacturers as well as through distributors and partners who facilitate the reach of their products in international markets. The company's earnings are also supported by its commitment to innovation and quality, which helps maintain its competitive position in the market and fosters long-term customer relationships.

Union Tool Co. Financial Statement Overview

Summary
Union Tool Co. exhibits a strong financial profile with robust revenue growth, healthy profit margins, and a solid balance sheet. The absence of debt and strong equity position provide financial stability, while positive cash flow trends enhance its capacity for future investments. The company's financial strength positions it well for sustained growth and resilience in the manufacturing sector.
Income Statement
85
Very Positive
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
80
Positive
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
78
Positive
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue32.61B25.34B29.09B28.17B22.82B
Gross Profit13.13B8.99B11.56B10.57B7.30B
EBITDA9.82B6.76B8.79B8.08B6.22B
Net Income5.28B3.08B5.00B3.80B2.54B
Balance Sheet
Total Assets78.86B70.61B69.14B64.53B58.03B
Cash, Cash Equivalents and Short-Term Investments18.13B20.07B20.97B17.58B15.80B
Total Debt0.000.00222.00M313.00M124.19M
Total Liabilities5.73B3.33B5.51B5.47B4.07B
Stockholders Equity73.14B67.28B63.62B59.06B53.97B
Cash Flow
Free Cash Flow3.18B228.00M4.18B3.21B3.50B
Operating Cash Flow7.28B4.69B6.71B5.83B5.07B
Investing Cash Flow-7.27B-5.01B-1.96B-3.16B684.09M
Financing Cash Flow-1.68B-1.61B-1.55B-1.44B-1.11B

Union Tool Co. Technical Analysis

Technical Analysis Sentiment
Positive
Last Price5630.00
Price Trends
50DMA
4360.06
Positive
100DMA
4221.82
Positive
200DMA
4878.82
Positive
Market Momentum
MACD
374.31
Negative
RSI
77.51
Negative
STOCH
87.53
Negative
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 5630 is above the 20-day moving average (MA) of 5028.43, above the 50-day MA of 4360.06, and above the 200-day MA of 4878.82, indicating a bullish trend. The MACD of 374.31 indicates Negative momentum. The RSI at 77.51 is Negative, neither overbought nor oversold. The STOCH value of 87.53 is Negative, 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

Overall Rating
UnderperformOutperform
Sector (71)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
¥878.70B14.708.10%2.30%8.60%10.83%
72
Outperform
$501.84B16.056.10%3.91%-1.69%-16.80%
71
Outperform
¥254.55B13.008.49%3.09%6.31%12.77%
69
Neutral
¥97.26B17.13
1.95%28.68%71.70%
68
Neutral
¥320.06B31.83
4.90%0.99%24.85%
66
Neutral
$1.69T19.2412.94%1.38%15.14%246.85%
64
Neutral
$388.95B30.281.72%4.09%-0.38%-65.61%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:6278
Union Tool Co.
5,630.00
-167.62
-2.89%
JP:6471
NSK Ltd.
693.40
-70.01
-9.17%
JP:6473
JTEKT
1,222.00
157.40
14.78%
JP:6479
MinebeaMitsumi
2,170.00
-1,283.04
-37.16%
JP:6113
AMADA HOLDINGS CO
1,584.50
-182.28
-10.32%
JP:7012
Kawasaki Heavy Industries
10,110.00
4,123.11
68.87%

Union Tool Co. Corporate Events

Union Tool Co. Considers Investment Unit Reduction to Boost Market Activity
Mar 25, 2025

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
Feb 25, 2025

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
Feb 14, 2025

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
Feb 14, 2025

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.

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: Apr 22, 2025