Union Tool Co. (6278) AI Stock Analysis

• Market Cap: ¥148.23B
• Dividend Yield: 1.17%
• Average Volume (3M): 193.44K
• Price to Earnings (P/E): 23.2
• Beta (1Y): 1.17
• Revenue Growth: 29.51%
• EPS Growth: 48.81%
• Country: JP
• Employees: 1,454
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 104.08
• Shares Outstanding: 19,780,000
• 10 Day Avg. Volume: 167,400
• 30 Day Avg. Volume: 193,436
• PEG Ratio: 0.23
• Price to Book (P/B): 1.19
• Price to Sales (P/S): 2.66
• P/FCF Ratio: 27.26
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: ¥10,227.00 ▲(19.20% Upside)

Union Tool Co. has a strong financial foundation with robust revenue growth and profit margins, contributing significantly to its overall score. Positive technical indicators support a bullish outlook, though caution is warranted due to potential overbought conditions. The valuation is reasonable but not particularly attractive, balancing the overall score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective sales strategies, supporting long-term business expansion and stability.

Financial Stability

A debt-free balance sheet enhances financial flexibility, reducing risk and providing a solid foundation for future investments and growth.

Cash Generation

Strong cash generation allows for reinvestment in growth opportunities, supporting sustainable business development and shareholder value.

Negative Factors

Market Saturation

Operating in mature markets may limit growth opportunities, requiring innovation and diversification to maintain competitive advantage.

Profit Margin Pressure

While margins are strong, maintaining them in competitive markets requires cost control and efficiency, which can be challenging.

Industry Cyclicality

Cyclical demand in manufacturing can lead to revenue volatility, necessitating strategic planning to manage economic downturns.

Union Tool Co. Business Overview & Revenue Model

Company Description

Union Tool Co. produces and sells cutting tools, linear motion products, and metal machining equipment in Japan and internationally. It offers printed circuit board (PCB) drills/routers; PCB tools-related equipment, such as MDP drill pointers, ring setting machines, non-contact drill diameter/measuring machines, and spindle run out measuring machines; carbide end mills; measuring instruments; rolling dies, forging tools, and coating rods; sensor products, including medical portable electrocardiograph, wearable heart rate sensors, analysis tools, and watching products. The company was formerly known as Union Chemical Research Co., Ltd. and changed its name to Union Tool Co. in 1971. Union Tool Co. was founded in 1955 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Union Tool Co. generates revenue through the sale of its cutting tools and related industrial products. Key revenue streams include direct sales to manufacturers and distributors, as well as online sales through its e-commerce platform. The company also engages in strategic partnerships with industrial suppliers and distributors to expand its market reach and improve distribution efficiency. Additionally, Union Tool Co. invests in research and development to innovate new products, which helps maintain its competitive edge and attract new customers. The combination of a diverse product portfolio and strong distribution channels contributes significantly to its earnings.

Union Tool Co. Financial Statement Overview

Summary

Union Tool Co. exhibits strong financial performance with significant revenue growth of 28.67% and robust profit margins. The company maintains a solid balance sheet with no debt and a high equity ratio, indicating financial stability. Positive cash flow trends further enhance its financial profile, supporting future growth opportunities.

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	35.06B	32.61B	25.34B	29.09B	28.17B	22.82B
Gross Profit	14.45B	13.13B	8.99B	11.56B	10.57B	7.30B
EBITDA	10.04B	9.82B	6.76B	10.01B	7.87B	6.22B
Net Income	5.61B	5.28B	3.08B	5.00B	3.80B	2.54B
Balance Sheet
Total Assets	80.98B	78.86B	70.61B	69.14B	64.53B	58.03B
Cash, Cash Equivalents and Short-Term Investments	18.50B	18.13B	20.07B	20.97B	17.58B	15.80B
Total Debt	435.00M	427.00M	326.00M	222.00M	313.00M	124.19M
Total Liabilities	6.87B	5.73B	3.33B	5.51B	5.47B	4.07B
Stockholders Equity	74.11B	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: 8580.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• 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 8580 is below the 20-day moving average (MA) of 8833.00, above the 50-day MA of 8119.20, and above the 200-day MA of 6137.67, indicating a neutral trend. The MACD of 67.77 indicates Positive momentum. The RSI at 51.00 is Neutral, neither overbought nor oversold. The STOCH value of 38.63 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
6101	79 Outperform	¥136.42B	10.38	―	2.33%	25.95%	66.92%
6136	79 Outperform	¥212.14B	14.49	7.86%	2.55%	0.57%	4.54%
6278	76 Outperform	¥148.23B	23.25	―	1.17%	29.51%	48.81%
6474	74 Outperform	¥103.58B	23.44	2.64%	2.30%	-4.11%	46.76%
6480	71 Outperform	¥59.11B	20.90	―	2.82%	8.75%	177.16%
6157	70 Outperform	¥22.61B	18.21	―	3.31%	0.97%	-10.47%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Union Tool Co. Corporate Events

Union Tool Co. Announces New Factory Construction to Enhance PCB Drill Production

Union Tool Co. has announced plans to construct a new factory building at its Nagaoka Plant to boost production capacity for its core product, carbide drills for PCBs, and to incorporate on-site power generation facilities. The new facility, expected to be completed by June 2027, represents an investment of approximately 6.2 billion yen, funded internally. The company anticipates a minor impact on its business performance from this expansion, but remains committed to promptly disclosing any significant information.