Sakai Heavy Industries, Ltd. (6358) AI Stock Analysis

• Market Cap: ¥19.77B
• Dividend Yield: 5.14%
• Average Volume (3M): 19.81K
• Price to Earnings (P/E): 40.5
• Beta (1Y): 0.86
• Revenue Growth: -13.63%
• EPS Growth: -74.53%
• Country: JP
• Employees: 618
• Sector: Industrials
• Sector Strength: 72
• Industry: Agricultural - Machinery
• EPS (TTM): 5.37
• Shares Outstanding: 8,890,434
• 10 Day Avg. Volume: 18,540
• 30 Day Avg. Volume: 19,806
• PEG Ratio: -0.31
• Price to Book (P/B): 0.61
• Price to Sales (P/S): 0.66
• P/FCF Ratio: 243.96
• 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): 116.6
• Revenue Forecast (FY): ¥28.00B

• Rating: 70 Outperform
• Price Target: ¥2,506.00 ▲(19.62% Upside)
• Action: Upgraded Date: 10/30/25
• Date: Action: Upgraded 10/30/25

Sakai Heavy Industries has a strong financial foundation with robust profitability and a solid balance sheet, which are the most significant factors in its overall score. The technical analysis suggests a neutral market position, while the valuation indicates potential overvaluation despite a high dividend yield. The absence of recent earnings call data and corporate events limits additional insights.

Positive Factors

Strong balance sheet

A high equity ratio and falling debt-to-equity provide low financial leverage and lasting flexibility. This supports capital allocation for product development, dealer support and cyclical downturns, enabling sustained investment in the business without immediate external financing.

Sustained profitability margins

Stable gross and net margins reflect durable pricing power and cost management in core compaction equipment and services. Margin consistency supports cash generation and resilience to cyclical revenue swings, helping fund dividends, capex and aftermarket growth over time.

Recurring aftermarket & service revenue

A substantial installed base and recurring parts and service revenues provide steady, higher-margin income that smooths cyclicality of new equipment sales. This recurring revenue supports lifetime customer economics and strengthens long-term cash generation.

Negative Factors

Recent revenue decline

A double-digit revenue decline in 2025 signals weakening end-market demand or loss of share. Prolonged top-line contraction would erode scale advantages, reduce aftermarket growth potential and strain margins, making it harder to sustain long-term investment and profitability.

Sharp EPS deterioration

A severe EPS drop suggests margin pressure or one-off hits that materially reduce shareholder earnings. If earnings volatility persists, it undermines retained earnings, limits reinvestment capacity and raises risk to dividend sustainability over the medium term.

Weaker cash flow trends

Declining operating and free cash flow reduce internal funding for capex, working capital and dealer/network support. Sustained cash-generation weakness could force higher external financing, constrain growth initiatives and weaken resilience across infrastructure cycles.

Sakai Heavy Industries, Ltd. Business Overview & Revenue Model

Company Description

Sakai Heavy Industries, Ltd. manufactures and sells construction equipment and industrial machinery in Japan and internationally. The company offers vibratory single drum, vibratory tandem, static pneumatic tired, static three wheel, vibratory combined, vibratory pneumatic tired, vibratory three wheel, and walk behind rollers, as well as rammers and plate compactors. It also provides road maintenance and repair equipment, such as road planers, reclaimers, asphalt pavers, road cleaners, and water sprinklers. In addition, the company is involved in the sale of outsourced industrial machinery. Sakai Heavy Industries, Ltd. was founded in 1918 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Sakai Heavy Industries generates revenue through the sales of its heavy machinery and equipment, which are critical for construction and infrastructure development. Key revenue streams include the sale of new machinery, spare parts, and after-sales services, which ensure ongoing customer support and maintenance. The company also benefits from long-term contracts and partnerships with major construction and engineering firms, enhancing its market presence. Additionally, Sakai Heavy Industries may engage in export activities, supplying equipment to overseas markets, thus diversifying its revenue sources. The company's emphasis on technological advancements in machinery also positions it favorably in a competitive landscape, potentially leading to increased sales and profitability.

Sakai Heavy Industries, Ltd. Financial Statement Overview

Summary

Sakai Heavy Industries demonstrates a generally strong financial position with a history of revenue growth and solid profitability. The balance sheet is robust, with low leverage and strong equity standing. However, recent declines in cash flow and operational margins highlight potential areas of concern that need addressing to sustain long-term growth.

Income Statement

Sakai Heavy Industries has shown a robust revenue growth trajectory over the past few years, notably increasing from 2021 to 2024, although there was a significant drop in 2025. Gross profit margin has remained strong, and the company maintains a healthy net profit margin. However, the decline in EBIT and EBITDA margins in 2025 indicates challenges in operational efficiency. Overall, the income statement reflects solid profitability with some recent headwinds.

Balance Sheet

The balance sheet is strong, characterized by a high equity ratio and a decreasing debt-to-equity ratio, indicating prudent financial management and low leverage risk. Return on equity has been stable, reflecting effective use of shareholders' funds. The company has maintained a solid cash position, supporting its financial stability.

Cash Flow

Operating cash flow has seen fluctuations, with a significant drop in 2025, which may pose risks to liquidity. Free cash flow has also decreased, reflecting challenges in maintaining cash generation. Despite these issues, the company has managed to cover its capital expenditures with its operating cash flow, maintaining positive free cash flow.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	19.29B	27.85B	33.02B	31.46B	26.60B	21.62B
Gross Profit	5.51B	7.67B	9.37B	8.17B	6.41B	5.41B
EBITDA	1.79B	2.85B	4.23B	3.33B	2.25B	1.53B
Net Income	836.47M	1.44B	2.44B	1.69B	1.43B	4.00M
Balance Sheet
Total Assets	40.76B	42.62B	44.24B	40.80B	37.86B	35.10B
Cash, Cash Equivalents and Short-Term Investments	5.94B	7.67B	8.38B	7.48B	7.99B	6.98B
Total Debt	4.34B	5.42B	5.05B	5.12B	6.04B	5.85B
Total Liabilities	11.48B	12.49B	15.07B	15.51B	14.70B	13.06B
Stockholders Equity	29.20B	30.05B	29.09B	25.23B	23.11B	22.00B
Cash Flow
Free Cash Flow	-241.22M	74.82M	2.13B	1.50B	2.07B	946.41M
Operating Cash Flow	-195.94M	399.37M	2.48B	1.89B	2.36B	1.53B
Investing Cash Flow	95.36M	39.19M	-353.70M	-399.43M	-263.60M	-508.90M
Financing Cash Flow	-888.04M	-1.22B	-1.42B	-2.24B	-1.23B	-812.50M

Sakai Heavy Industries, Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2095.00
• 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:6358, the sentiment is Positive. The current price of 2095 is below the 20-day moving average (MA) of 2260.55, below the 50-day MA of 2195.88, and above the 200-day MA of 2066.99, indicating a bullish trend. The MACD of 13.89 indicates Positive momentum. The RSI at 53.90 is Neutral, neither overbought nor oversold. The STOCH value of 29.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6358.

Sakai Heavy Industries, Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6294	74 Outperform	¥20.29B	12.76	―	3.29%	-1.36%	5.14%
6306	74 Outperform	¥33.53B	18.23	―	4.26%	-4.23%	-1.63%
6358	70 Outperform	¥19.77B	40.52	―	5.14%	-13.63%	-74.53%
6316	68 Neutral	¥11.27B	10.56	―	3.58%	―	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6310	61 Neutral	¥48.27B	17.52	―	1.56%	10.90%	―
6390	51 Neutral	¥20.89B	4.41	―	5.40%	-2.22%	18.80%

Sakai Heavy Industries, Ltd. Corporate Events

Sakai Heavy Industries Earnings Slump as Profits Halve, Dividend Policy Holds

Sakai Heavy Industries reported consolidated net sales of ¥18.69 billion for the nine months ended Dec. 31, 2025, down 7.7% year on year, with operating profit halving and profit attributable to owners of parent plunging 66.7%, reflecting a continued profit squeeze after the prior-year downturn. Despite the weaker earnings, total assets rose to ¥44.43 billion and net assets to ¥30.40 billion, while the capital adequacy ratio slipped to 68.3%, and the firm maintained its dividend policy with an interim payout of ¥45 and a full-year forecast of ¥105 per share, even as it projects flat sales and a further decline in full-year profits through March 2026.

The company forecasts full-year net sales of ¥28.0 billion, essentially flat year on year, but expects operating profit, ordinary profit and net income to fall by double digits, underscoring ongoing margin pressure in its core business. For shareholders, the stable but slightly reduced dividend trajectory, together with an unchanged consolidation scope and no changes in accounting policies, signals management’s intent to balance capital returns with financial stability amid a challenging earnings environment.

The most recent analyst rating on (JP:6358) stock is a Buy with a Yen2548.00 price target. To see the full list of analyst forecasts on Sakai Heavy Industries, Ltd. stock, see the JP:6358 Stock Forecast page.