SHOWA SHINKU CO., LTD. (6384) AI Stock Analysis

• Market Cap: ¥11.26B
• Dividend Yield: 4.76%
• Average Volume (3M): 6.33K
• Price to Earnings (P/E): 16.4
• Beta (1Y): 0.45
• Revenue Growth: 41.13%
• EPS Growth: 535.42%
• Country: JP
• Employees: 243
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 13.87
• Shares Outstanding: 6,499,000
• 10 Day Avg. Volume: 3,670
• 30 Day Avg. Volume: 6,330
• PEG Ratio: 0.06
• Price to Book (P/B): 0.71
• Price to Sales (P/S): 0.97
• P/FCF Ratio: -196.41
• 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): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: ¥2,029.00 ▲(33.93% Upside)
• Action: Reiterated Date: 02/20/26
• Date: Action: Reiterated 02/20/26

The score is driven primarily by strong financial health (very low leverage and solid margins), tempered by weaker cash flow conversion and a recent revenue decline. Technicals show a strong uptrend, but extremely overbought momentum raises near-term pullback risk, while valuation and dividend yield remain supportive.

Positive Factors

Balance Sheet Strength

Extremely low leverage and a high 75% equity ratio provide durable financial flexibility and lower solvency risk. This capital structure allows the company to fund capex, R&D or customer support during downturns, enabling longer-term resilience in cyclical industrial markets.

Profitability and Margin Improvement

Sustained gross (31.57%) and net (6.63%) margins alongside improving EBIT/EBITDA margins point to structural pricing power and effective cost control. Durable margins support reinvestment and buffer earnings volatility, preserving profitability through demand cycles.

Operating Cash Generation

A positive operating cash flow-to-net-income ratio (0.32) indicates the core business converts sales into cash, supporting working capital and recurring capex needs without immediate reliance on new borrowing. That operating cash generation underpins sustainable operations.

Negative Factors

Weak Free Cash Flow Conversion

A negative free cash flow-to-net-income ratio (-0.07) shows the company struggles to translate accounting profits into distributable cash, possibly due to capex or working capital demands. Persistently weak FCF conversion can constrain dividends, buybacks, debt paydown, and strategic flexibility.

Recent Revenue Decline

A reported revenue decline is a structural red flag if it persists: it can erode scale economies, reduce leverage on fixed costs, and make margin maintenance harder. For industrial equipment suppliers, sustained top-line weakness may reflect softer end-markets or customer concentration risk.

Moderate Return on Equity

ROE of 4.85% indicates modest efficiency in converting equity into profits. In a capital-intensive machinery business, persistently low ROE may limit long-term shareholder returns and signal the need for productivity improvements, pricing power gains, or strategic shifts to enhance capital efficiency.

SHOWA SHINKU CO., LTD. Business Overview & Revenue Model

Company Description

Showa Shinku Co., Ltd. produces and sells vacuum equipment and components for quartz devices, optical thin films, electronic devices, etc. in Japan. The company provides vacuum evaporation equipment; sputtering equipment; ion plating equipment; dry etching and ashing equipment; vacuum metallurgic equipment for dissolution, heat processing, sintering, and degassing; multi-color and monochrome optical monitors for thin films; IAD cold cathode ion source; and liquid crystal injection equipment. It offers its products to various electronic component makers, universities, and government research institutes. The company was formerly known as Showa Shinku Kikai (Showa Vacuum Machinery) Co., Ltd. and changed its name to Showa Shinku Co., Ltd. in 1978. The company was founded in 1953 and is headquartered in Sagamihara, Japan.

How the Company Makes Money

SHOWA SHINKU CO., LTD. generates revenue through the sale of its precision machinery and industrial equipment, catering to various industries including automotive and aerospace. The company’s primary revenue streams include direct sales of machinery, maintenance and repair services, and long-term contracts with large-scale manufacturers. Additionally, strategic partnerships with major players in the automotive and aerospace sectors augment its market presence, allowing the company to secure large orders and maintain steady cash flow. The company also invests in research and development to innovate and expand its product offerings, which helps in attracting new customers and retaining existing ones.

SHOWA SHINKU CO., LTD. Financial Statement Overview

Summary

Solid overall fundamentals supported by a very strong balance sheet (debt-to-equity 0.05; equity ratio 75.01%) and healthy profitability (gross margin 31.57%, net margin 6.63%) with improved EBIT/EBITDA margins. Offsetting factors are the noted revenue decline and weak cash conversion (free cash flow to net income -0.07).

Income Statement

SHOWA SHINKU CO., LTD. has demonstrated healthy profitability with a gross profit margin of 31.57% and a net profit margin of 6.63% for the most recent year. Despite a revenue decline from the previous fiscal year, the company has shown resilience in improving EBIT and EBITDA margins to 9.34% and 12.07%, respectively, indicating efficient cost management.

Balance Sheet

The company maintains a robust balance sheet with a low debt-to-equity ratio of 0.05, signifying strong financial health and low leverage risk. The equity ratio is high at 75.01%, reflecting a solid capital structure. Return on Equity stands at 4.85%, indicating moderate efficiency in using equity capital to generate profits.

Cash Flow

SHOWA SHINKU CO., LTD. experienced a decline in free cash flow growth, yet maintained a positive operating cash flow to net income ratio of 0.32, demonstrating adequate cash generation from operations. However, the free cash flow to net income ratio of -0.07 indicates challenges in converting net income into free cash flow.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	8.96B	8.48B	7.46B	10.13B	11.96B	10.72B
Gross Profit	2.77B	2.68B	2.04B	2.98B	3.61B	3.27B
EBITDA	1.10B	1.02B	536.87M	1.37B	2.03B	1.66B
Net Income	615.55M	561.93M	164.29M	779.75M	1.24B	1.02B
Balance Sheet
Total Assets	14.37B	15.45B	14.33B	15.47B	17.40B	15.31B
Cash, Cash Equivalents and Short-Term Investments	5.22B	4.98B	5.36B	4.81B	5.07B	5.35B
Total Debt	583.46M	568.58M	579.11M	617.98M	620.96M	584.54M
Total Liabilities	3.32B	3.86B	2.94B	3.95B	6.34B	5.30B
Stockholders Equity	11.04B	11.59B	11.40B	11.52B	11.06B	10.01B
Cash Flow
Free Cash Flow	0.00	-41.96M	988.04M	41.32M	-85.94M	2.00B
Operating Cash Flow	0.00	178.76M	1.08B	211.04M	113.13M	2.39B
Investing Cash Flow	0.00	-332.01M	-104.50M	-169.49M	-201.23M	-389.71M
Financing Cash Flow	0.00	-444.38M	-493.63M	-382.69M	-347.43M	-381.70M

SHOWA SHINKU CO., LTD. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1515.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6384, the sentiment is Positive. The current price of 1515 is below the 20-day moving average (MA) of 1706.40, below the 50-day MA of 1618.36, and above the 200-day MA of 1452.43, indicating a bullish trend. The MACD of 57.27 indicates Negative momentum. The RSI at 75.61 is Negative, neither overbought nor oversold. The STOCH value of 84.18 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6384.

SHOWA SHINKU CO., LTD. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6455	79 Outperform	¥131.87B	12.26	―	2.25%	12.64%	34.19%
6492	77 Outperform	¥16.71B	15.97	―	0.72%	6.51%	3.68%
6490	76 Outperform	¥200.97B	22.58	―	2.50%	-2.46%	-10.72%
6384	73 Outperform	¥11.26B	16.44	―	4.76%	41.13%	535.42%
6486	70 Outperform	¥168.25B	20.47	―	3.88%	1.70%	18.50%
6496	69 Neutral	¥26.93B	16.86	―	1.82%	34.70%	-8.44%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%