KATO WORKS CO., LTD. (6390) AI Stock Analysis

• Market Cap: ¥15.58B
• Dividend Yield: 5.26%
• Average Volume (3M): 44.77K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.28
• Revenue Growth: -7.94%
• EPS Growth: -242.38%
• Country: JP
• Employees: 990
• Sector: Industrials
• Sector Strength: 89
• Industry: Agricultural - Machinery
• EPS (TTM): -102.40
• Shares Outstanding: 11,743,587
• 10 Day Avg. Volume: 40,610
• 30 Day Avg. Volume: 44,766
• PEG Ratio: 0.04
• Price to Book (P/B): 0.35
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: ¥1,279.00
• Price Target Upside: -3.83% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 49 Neutral
• Price Target: ¥1,263.00 ▼(-5.04%Downside)

The company's overall stock score is primarily impacted by its weak financial performance, which is marked by declining revenues, significant net losses, and liquidity challenges. Technical analysis provides some optimism with slight upward momentum and potential oversold conditions. Valuation is a mixed signal with a high dividend yield but a negative P/E ratio due to financial losses. The absence of earnings call and corporate events data limits additional insights.

KATO WORKS CO., LTD. Business Overview & Revenue Model

Company Description

KATO WORKS CO., LTD. is a Japanese company specializing in the manufacture and sale of construction machinery and industrial equipment. The company operates in sectors including construction, civil engineering, and infrastructure development. Its core products include cranes, excavators, and other heavy machinery designed for a wide range of construction and industrial applications.

How the Company Makes Money

KATO WORKS CO., LTD. generates revenue primarily through the sale of its construction machinery and industrial equipment. Its key revenue streams include the manufacturing and direct sale of cranes, excavators, and related machinery to construction companies, government agencies, and infrastructure developers. The company also earns money through after-sales services such as maintenance, spare parts supply, and equipment leasing. Additionally, partnerships with distributors and dealers globally help extend its market reach and contribute to its earnings.

KATO WORKS CO., LTD. Financial Statement Overview

Summary

KATO WORKS CO., LTD. is facing considerable financial challenges, particularly in terms of profitability and cash flow generation. The company's declining revenues and persistent net losses are impacting its income statement metrics negatively. Its balance sheet reflects a high debt burden, which poses potential risks, though equity levels remain stable. Cash flow metrics depict liquidity issues, with negative operating and free cash flows, underscoring the need for improved operational efficiency and financial restructuring.

Income Statement

The company has experienced declining revenues over the years, with the latest TTM showing an 8% drop in revenues compared to the previous year. Gross profit margin has been relatively stable but low at approximately 16.2%. Net profit margin is concerning, with the latest TTM showing a significant net loss, indicating profitability challenges. EBIT and EBITDA margins also reflect negative values, suggesting operational inefficiencies and a lack of profitability.

Balance Sheet

The company's debt-to-equity ratio is high at approximately 0.98, indicating a relatively leveraged position which could pose financial risks. Return on equity is negative due to net losses, suggesting inefficiencies in generating returns for shareholders. However, the equity ratio is fairly stable at around 43.4%, reflecting a reasonable level of equity financing relative to total assets.

Cash Flow

The company is facing significant cash flow challenges, with negative operating cash flows and declining free cash flow over the years, indicating liquidity concerns. Free cash flow to net income ratio is unfavorable due to consistent net losses, highlighting cash generation issues. Operating cash flow to net income ratio is also negative, further emphasizing cash flow inefficiencies.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	52.93B	57.50B	57.53B	63.55B	58.52B
Gross Profit	8.60B	10.52B	9.10B	6.64B	5.63B
EBITDA	-3.76B	4.88B	4.37B	-6.77B	-141.00M
Net Income	-6.03B	4.24B	2.40B	-9.57B	-5.74B
Balance Sheet
Total Assets	102.75B	105.33B	98.80B	102.64B	115.82B
Cash, Cash Equivalents and Short-Term Investments	14.76B	22.57B	19.98B	18.67B	14.78B
Total Debt	43.81B	35.72B	33.21B	38.98B	46.51B
Total Liabilities	58.14B	53.78B	51.90B	58.40B	64.33B
Stockholders Equity	44.60B	50.41B	45.69B	43.14B	50.51B
Cash Flow
Free Cash Flow	-14.13B	-1.55B	6.27B	8.31B	-289.00M
Operating Cash Flow	-13.32B	-696.00M	6.47B	9.55B	2.71B
Investing Cash Flow	-930.00M	1.63B	1.37B	496.00M	-3.10B
Financing Cash Flow	6.64B	1.40B	-6.61B	-6.64B	2.99B

KATO WORKS CO., LTD. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1330.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6390, the sentiment is Positive. The current price of 1330 is above the 20-day moving average (MA) of 1298.35, above the 50-day MA of 1280.88, and above the 200-day MA of 1259.49, indicating a bullish trend. The MACD of 16.67 indicates Negative momentum. The RSI at 52.70 is Neutral, neither overbought nor oversold. The STOCH value of 56.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6390.

KATO WORKS CO., LTD. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6345	78 Outperform	¥98.42B	15.93		5.17%	11.63%	20.80%
7226	76 Outperform	¥95.90B	16.97		6.45%	9.70%	66.02%
6395	75 Outperform	€135.52B	16.28	4.46%	3.38%	11.41%	-6.80%
6358	73 Outperform	¥17.80B	12.15		5.89%	-15.65%	-41.32%
Sector *	71 Outperform	¥254.36B	13.56	8.48%	3.02%	6.34%	13.16%
6294	68 Neutral	¥15.18B	10.33		3.90%	-1.89%	-21.95%
6390	49 Neutral	¥15.58B	―		5.26%	-7.94%	-242.38%

KATO WORKS CO., LTD. Corporate Events

KATO WORKS Waives Claims Amid Subsidiary Liquidation in China

KATO WORKS CO., LTD. has decided to waive a portion of the claims held by its subsidiary, KATO WORKS (CHINA) LTD., against Chinese domestic business partners. This decision comes as part of the company’s strategic move to dissolve and liquidate the subsidiary, following an agreement to transfer equity interest to a private Chinese company. Despite the economic downturn in China affecting the collectability of receivables, KATO WORKS has determined that this action will not impact its financial performance for the fiscal year ending March 31, 2026, as provisions for doubtful accounts had already been made.

KATO WORKS Transfers Equity in Chinese Subsidiary

KATO WORKS CO., LTD. has decided to transfer its entire equity interest in its subsidiary, KATO WORKS (CHINA) LTD., to a domestic Chinese company. This decision comes after initially planning to dissolve and liquidate the subsidiary, but a new agreement with a Chinese company has been reached. The transfer is expected to be completed between August and September 2025, and the financial implications will be disclosed if they necessitate a revision of the company’s earnings forecast. The company has also established new liaison offices in China to continue supporting local customers and suppliers.

KATO WORKS Boosts Investment in Italian Subsidiary to Enhance European Market Presence

KATO WORKS CO., LTD. has announced an additional investment of 3.4 million euros in its Italian subsidiary, KATO IMER S.p.A., increasing its stake to 94.2%. This move aims to strengthen the company’s financial position and management structure, enhancing competitiveness in the European market. The initiative is part of KATO WORKS’ mid-term management plan to expand its market share in Europe, driven by the growing demand for sustainable construction machinery. The company plans to streamline decision-making and align its development, sales, and service strategies to meet local needs.