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

• Market Cap: ¥11.52B
• Dividend Yield: 4.76%
• Average Volume (3M): 6.33K
• Price to Earnings (P/E): 27.3
• Beta (1Y): 0.41
• 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

Very low leverage and strong capital structure

A debt-to-equity of 0.05 and a 75% equity ratio provide durable financial flexibility for a capital-intensive vacuum-equipment business. Low leverage reduces default risk, enables counter-cyclical investment, supports R&D and warranty obligations, and preserves capacity to fund capex or weather cyclical downturns without urgent refinancing.

Healthy gross and improving operating margins

Sustained gross margins above 30% and rising EBIT/EBITDA margins indicate durable pricing power and operational efficiency in vacuum-coating equipment. Margin resilience supports long-term cash earnings and can cushion revenue cyclicality, enabling reinvestment in product development and maintaining service capabilities critical for industrial customers.

Positive operating cash generation

Operating cash flow at roughly one-third of net income shows the core business generates cash, supporting working capital needs and periodic capex in manufacturing equipment. This operational cash provides a durable liquidity buffer and reduces reliance on external funding for normal business cycles and modest investments.

Negative Factors

Weak free cash flow conversion

Negative FCF-to-net-income suggests cash is being consumed by capex, working capital, or other uses despite reported profits. Over months this can erode liquidity or force trade-offs between dividends, capex and debt reduction. Persistent weak conversion limits the company's ability to self-fund growth or return capital without using reserves.

Recent revenue decline

A noted revenue decline signals potential softness in demand or market share pressures in vacuum-equipment markets. In a cyclical, capital-equipment industry, sustained top-line erosion reduces operating leverage, can compress absolute profits even with margin gains, and may force slower R&D or commercialization of new products.

Modest returns on equity

ROE below 5% points to limited effectiveness converting shareholder capital into earnings relative to capital intensity. Over time low ROE can signal constrained capital allocation or persistently low asset turnover, limiting shareholder return potential unless management improves margins, asset efficiency, or pursues higher-return initiatives.

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	1.04B	977.59M	487.88M	1.30B	1.99B	1.59B
Net Income	616.13M	561.93M	164.29M	779.75M	1.24B	1.02B
Balance Sheet
Total Assets	14.37B	15.57B	14.49B	15.59B	17.52B	15.41B
Cash, Cash Equivalents and Short-Term Investments	5.22B	4.98B	5.36B	4.81B	5.07B	5.35B
Total Debt	575.46M	568.58M	579.11M	617.98M	620.96M	584.54M
Total Liabilities	3.32B	3.98B	3.09B	4.07B	6.47B	5.41B
Stockholders Equity	11.04B	11.59B	11.40B	11.52B	11.06B	10.01B
Cash Flow
Free Cash Flow	0.00	-41.96M	999.30M	42.17M	-85.94M	2.01B
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 1826.75, below the 50-day MA of 1711.52, and above the 200-day MA of 1487.09, indicating a bullish trend. The MACD of 48.41 indicates Positive momentum. The RSI at 62.82 is Neutral, neither overbought nor oversold. The STOCH value of 75.96 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
6517	78 Outperform	¥72.32B	9.50	―	2.63%	-6.00%	-13.74%
6381	75 Outperform	¥65.23B	13.24	―	3.95%	-1.67%	-4.39%
6384	73 Outperform	¥11.52B	27.33	―	4.76%	41.13%	535.42%
6498	72 Outperform	¥158.78B	13.19	10.28%	2.77%	2.74%	7.86%
6363	70 Outperform	¥69.96B	4.09	―	3.09%	6.35%	-34.20%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6151	59 Neutral	¥31.59B	4.17	―	2.13%	1.13%	-66.14%