Taihei Machinery Works, Ltd. (6342) AI Stock Analysis

• Market Cap: ¥4.02B
• Dividend Yield: 4.33%
• Average Volume (3M): 873.00
• Price to Earnings (P/E): 17.5
• Beta (1Y): 0.51
• Revenue Growth: -23.31%
• EPS Growth: -89.08%
• Country: JP
• Employees: 156
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): 145.03
• Shares Outstanding: 1,500,000
• 10 Day Avg. Volume: 820
• 30 Day Avg. Volume: 873
• PEG Ratio: -0.16
• Price to Book (P/B): 0.62
• Price to Sales (P/S): 0.54
• P/FCF Ratio: -16.99
• 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: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Neutral
• Price Target: ¥3,241.00 ▲(16.92% Upside)

The overall stock score of 69.7 reflects a solid balance sheet and attractive dividend yield, which are offset by declining revenues and profitability. Technical indicators suggest a neutral trend, with no strong momentum in either direction. The absence of earnings call data and corporate events limits further insights into the company's future prospects.

Positive Factors

Balance Sheet Health

A strong balance sheet with low leverage and high equity ratio enhances financial stability, providing a solid foundation for long-term growth.

Operational Efficiency

Healthy EBIT and EBITDA margins indicate effective cost management and operational efficiency, supporting sustainable profitability.

Liquidity Position

Strong liquidity ensures the company can meet short-term obligations and invest in growth opportunities, enhancing financial resilience.

Negative Factors

Declining Revenue

A significant decline in revenue suggests challenges in market demand or competitive positioning, potentially impacting long-term growth prospects.

Profitability Challenges

Decreasing net profit margins indicate pressures on profitability, which could affect the company's ability to reinvest in growth and innovation.

Negative Free Cash Flow

Negative free cash flow highlights cash management issues, which may limit the company's ability to fund operations and strategic initiatives.

Taihei Machinery Works, Ltd. Business Overview & Revenue Model

Company Description

Taihei Machinery Works, Ltd. (6342) is a prominent Japanese manufacturer specializing in the production of precision machinery and equipment. The company operates primarily in the sectors of industrial machinery and components, focusing on providing high-quality solutions for various industries, including automotive, electronics, and general manufacturing. Core products include cutting tools, machine parts, and automated systems designed to enhance operational efficiency and productivity for its clients.

How the Company Makes Money

Taihei Machinery Works generates revenue through the sale of its machinery and components, which are integral to manufacturing processes across multiple industries. Key revenue streams include direct sales of precision tools and machinery, as well as offering maintenance and support services to ensure the longevity and efficiency of its products. The company also benefits from strategic partnerships with other manufacturers and suppliers, enabling it to expand its market reach and enhance its product offerings. Additionally, Taihei may engage in research and development to innovate new products, thereby creating additional revenue opportunities through advanced technology solutions.

Taihei Machinery Works, Ltd. Financial Statement Overview

Summary

Taihei Machinery Works, Ltd. demonstrates strong balance sheet health, with low leverage and high liquidity. However, declining revenues and profitability in 2025 present challenges, while negative free cash flow signals potential cash management issues. The company needs to address these to sustain long-term growth and stability.

Income Statement

The company exhibits a stable income statement with a gross profit margin of approximately 28.7% in 2025, showcasing efficient cost management. However, the revenue decreased by 11.2% from 2024 to 2025, indicating a decline in sales. The net profit margin also decreased to 7.3% in 2025 from 12.0% in 2024, reflecting challenges in maintaining profitability. Despite the revenue drop, the EBIT margin of 11.6% and EBITDA margin of 13.6% in 2025 remain healthy, demonstrating operational efficiency.

Balance Sheet

The balance sheet is robust, with a low debt-to-equity ratio of 0.12, indicating minimal leverage and financial risk. The equity ratio stands at 66.3%, highlighting strong financial stability with ample equity backing. ROE decreased from 15.5% in 2024 to 8.4% in 2025, suggesting reduced profitability for shareholders. However, the high cash and short-term investments position provides significant liquidity.

Cash Flow

Cash flow analysis reveals a concerning decline, with free cash flow turning negative in 2025. The operating cash flow to net income ratio decreased to 0.11, indicating reduced cash generation relative to earnings. The free cash flow to net income ratio turned negative, reflecting cash flow challenges. Despite these issues, the company maintains positive operating cash flow, suggesting some level of operational cash generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.38B	7.86B	8.84B	6.44B	4.94B	3.54B
Gross Profit	1.77B	2.25B	2.49B	1.59B	892.49M	636.66M
EBITDA	563.76M	1.07B	1.53B	866.91M	380.00M	207.41M
Net Income	243.07M	576.75M	1.07B	683.29M	223.41M	3.79M
Balance Sheet
Total Assets	9.92B	10.39B	12.03B	9.93B	8.59B	8.19B
Cash, Cash Equivalents and Short-Term Investments	3.70B	5.02B	5.99B	5.11B	4.25B	4.81B
Total Debt	759.59M	795.05M	821.40M	1.15B	1.18B	1.20B
Total Liabilities	3.01B	3.50B	5.18B	4.08B	3.34B	3.13B
Stockholders Equity	6.91B	6.90B	6.85B	5.84B	5.25B	5.06B
Cash Flow
Free Cash Flow	0.00	-250.02M	1.56B	1.42B	-478.54M	325.58M
Operating Cash Flow	0.00	60.88M	1.69B	1.44B	-463.26M	336.14M
Investing Cash Flow	0.00	306.95M	-1.17B	-787.10M	68.29M	80.58M
Financing Cash Flow	0.00	-629.64M	-479.87M	-164.64M	-76.84M	360.12M

Taihei Machinery Works, Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2772.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6342, the sentiment is Negative. The current price of 2772 is below the 20-day moving average (MA) of 2827.65, below the 50-day MA of 2832.75, and below the 200-day MA of 2822.68, indicating a bearish trend. The MACD of -14.97 indicates Positive momentum. The RSI at 45.23 is Neutral, neither overbought nor oversold. The STOCH value of 21.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6342.

Taihei Machinery Works, Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6342	70 Neutral	¥4.02B	17.45	―	4.33%	-23.31%	-89.08%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
7808	61 Neutral	¥5.71B	4.92	―	2.61%	4.01%	-2.62%
7897	54 Neutral	¥3.15B	-91.62	―	1.82%	0.71%	-118.76%
3896	50 Neutral	¥3.29B	―	―	―	11.79%	-1.56%
7426	47 Neutral	¥1.30B	-0.93	―	2.68%	25.73%	-282.69%
7815	44 Neutral	¥1.54B	6.26	―	―	-3.43%	-48.08%