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

• Market Cap: ¥9.80B
• Dividend Yield: 4.76%
• Average Volume (3M): 6.33K
• Price to Earnings (P/E): 14.1
• Beta (1Y): 0.44
• Revenue Growth: 41.13%
• EPS Growth: 535.42%
• Country: JP
• Employees: 243
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 21.55
• 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: 76 Outperform
• Price Target: ¥1,817.00 ▲(19.93% Upside)

SHOWA SHINKU CO., LTD. scores well overall due to its strong financial health and attractive valuation. The company's robust balance sheet and high dividend yield are significant positives, though technical analysis signals a neutral stance. The absence of earnings call data means this aspect was not factored into the score.

Positive Factors

Low leverage / strong capital structure

Extremely low leverage and a high equity ratio provide durable financial flexibility. This capital structure reduces refinancing and interest risks, supports investment or cyclical cushioning, and preserves capacity to fund capex, M&A, or shareholder returns over the medium term.

Healthy gross and EBITDA margins

Sustained gross and improved EBIT/EBITDA margins indicate structural cost discipline and pricing power in niche vacuum-equipment markets. Margin resilience supports long-term ability to generate operating profits, reinvest in product development, and withstand demand fluctuations.

Positive operating cash generation

A positive operating cash flow relative to net income signals underlying cash generation from core operations. This durable cash conversion helps fund working capital and recurring capex needs, underpinning dividend maintenance and reducing reliance on external financing.

Negative Factors

Weak free cash flow conversion

Negative free cash flow conversion points to structural issues turning accounting profits into distributable cash. If persistent, this can constrain capital returns, force asset sales or borrowing for capex, and limit sustainable investment or dividend policies over the medium term.

Revenue decline noted

A falling revenue base undermines scale economics and growth optionality. Even with margin improvements, persistent top-line decline risks eroding future earnings power, reducing pricing leverage, and making it harder to justify reinvestment in R&D or commercial expansion.

Moderate return on equity

A sub-5% ROE suggests limited effectiveness in converting equity into profit relative to capital employed. With a very high equity base, low ROE may signal capital allocation constraints and could limit long-term shareholder value creation absent higher asset turnover or margin expansion.

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

SHOWA SHINKU CO., LTD. has strong financials with a robust balance sheet and good profitability. Despite revenue decline and challenges in free cash flow, the company maintains low leverage and strong equity, providing a solid foundation for future growth.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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: Positive
• RSI: Neutral
• STOCH: Neutral

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 1601.20, below the 50-day MA of 1527.14, and above the 200-day MA of 1419.15, indicating a bullish trend. The MACD of 20.71 indicates Positive momentum. The RSI at 67.24 is Neutral, neither overbought nor oversold. The STOCH value of 74.65 is Neutral, 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	¥127.61B	11.47	―	2.25%	12.64%	34.19%
6490	79 Outperform	¥152.50B	17.73	―	2.50%	-2.46%	-10.72%
6384	76 Outperform	¥9.80B	14.14	―	4.76%	41.13%	535.42%
6486	70 Outperform	¥152.04B	20.25	―	3.88%	1.70%	18.50%
6496	69 Neutral	¥23.50B	14.72	―	1.82%	34.70%	-8.44%
6492	65 Neutral	¥11.64B	11.13	―	0.72%	6.51%	3.68%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%