Heiwa (6412) AI Stock Analysis

• Market Cap: ¥218.18B
• Dividend Yield: 3.67%
• Average Volume (3M): 288.43K
• Price to Earnings (P/E): 14.0
• Beta (1Y): 0.35
• Revenue Growth: 31.75%
• EPS Growth: -9.71%
• Country: JP
• Employees: 5,034
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Leisure
• EPS (TTM): 82.94
• Shares Outstanding: 99,809,060
• 10 Day Avg. Volume: 422,550
• 30 Day Avg. Volume: 288,430
• PEG Ratio: -0.83
• Price to Book (P/B): 0.95
• Price to Sales (P/S): 1.58
• P/FCF Ratio: 37.74
• 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: ¥2,424.30
• Price Target Upside: 9.60% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 72 Outperform
• Price Target: ¥2,424.00 ▲(9.58% Upside)

Heiwa's strong financial performance, characterized by robust revenue growth and effective cash flow management, is a key strength. However, the high leverage is a significant risk factor. The technical analysis suggests a neutral trend, while the valuation is reasonable with an attractive dividend yield. These factors collectively contribute to a moderate overall stock score.

Heiwa Business Overview & Revenue Model

Company Description

Heiwa Corporation, headquartered in Japan, operates primarily in the manufacturing and distribution of pachinko and pachislot machines. Established in 1949, the company has become a leading player in the amusement industry, catering to gaming enthusiasts across Japan. Heiwa's core products include a wide range of innovative gaming machines that blend traditional Japanese gaming culture with modern technology. The company is committed to enhancing entertainment experiences through continuous research and development, ensuring a dynamic and engaging portfolio of gaming products.

How the Company Makes Money

Heiwa Corporation generates revenue primarily through the sale and leasing of pachinko and pachislot machines to gaming centers across Japan. The company designs, manufactures, and markets a diverse array of gaming machines that attract a loyal customer base, seeking both entertainment and potential monetary rewards. Key revenue streams include the direct sale of new machines, which are regularly updated with the latest gaming technology and themes, as well as leasing arrangements with gaming parlors. Heiwa also benefits from after-sales service fees, maintenance, and the supply of machine parts. Additionally, strategic partnerships with gaming venues help expand its market presence and ensure steady demand for its products. The company's deep understanding of consumer preferences and regulatory compliance within the Japanese gaming industry further contribute to its profitability.

Heiwa Financial Statement Overview

Summary

Heiwa demonstrates strong revenue growth and profitability, with effective cash flow management. However, the high leverage poses a risk that needs careful monitoring. The company is well-positioned in the leisure industry, but must address its debt levels to ensure long-term financial stability.

Income Statement

Heiwa's income statement shows strong revenue growth with a 23.76% increase in TTM, indicating robust demand in the leisure industry. The gross profit margin of 35.98% and net profit margin of 8.96% reflect solid profitability. However, the net profit margin has decreased from previous years, suggesting rising costs or competitive pressures. The EBIT and EBITDA margins remain healthy, supporting operational efficiency.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 2.57, indicating significant leverage which could pose financial risks if not managed properly. Return on equity is modest at 5.32%, showing room for improvement in generating returns for shareholders. The equity ratio of 23.61% suggests a balanced approach to financing, but the high debt levels remain a concern.

Cash Flow

Cash flow analysis shows a strong free cash flow growth rate of 59.27% in TTM, highlighting improved cash generation capabilities. The operating cash flow to net income ratio of 0.22 indicates adequate cash flow relative to earnings, though there is potential for enhancement. The free cash flow to net income ratio of 0.24 suggests effective conversion of earnings into cash, supporting financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	180.53B	145.87B	136.38B	142.29B	121.56B	107.74B
Gross Profit	65.36B	52.49B	46.80B	49.31B	33.40B	29.04B
EBITDA	44.70B	32.33B	32.14B	35.71B	18.68B	14.33B
Net Income	15.62B	13.06B	16.61B	20.68B	2.19B	865.00M
Balance Sheet
Total Assets	1.05T	1.05T	428.03B	423.73B	417.07B	430.07B
Cash, Cash Equivalents and Short-Term Investments	89.34B	92.25B	57.71B	67.72B	67.05B	70.08B
Total Debt	631.65B	628.42B	104.70B	106.77B	112.65B	121.45B
Total Liabilities	803.31B	807.28B	188.84B	192.72B	199.88B	203.83B
Stockholders Equity	248.44B	244.12B	239.19B	231.00B	217.19B	226.24B
Cash Flow
Free Cash Flow	9.71B	6.13B	2.67B	17.90B	13.43B	-312.00M
Operating Cash Flow	30.70B	24.93B	13.93B	25.59B	20.44B	7.03B
Investing Cash Flow	-511.86B	-500.03B	2.71B	-15.22B	2.04B	-5.87B
Financing Cash Flow	514.01B	509.94B	-11.22B	-14.50B	-17.36B	-3.07B

Heiwa Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2212.00
• 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:6412, the sentiment is Positive. The current price of 2212 is above the 20-day moving average (MA) of 2197.40, above the 50-day MA of 2157.84, and above the 200-day MA of 2197.09, indicating a bullish trend. The MACD of 6.11 indicates Positive momentum. The RSI at 56.66 is Neutral, neither overbought nor oversold. The STOCH value of 70.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6412.

Heiwa Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7458	80 Outperform	¥180.19B	9.95	15.56%	3.28%	5.69%	48.81%
7944	80 Outperform	¥89.30B	14.92	15.59%	4.98%	-4.39%	-27.30%
6412	72 Outperform	¥218.18B	13.97	6.63%	3.67%	31.75%	-9.71%
7906	68 Neutral	¥337.27B	27.73	15.31%	0.57%	23.05%	31.52%
9166	67 Neutral	¥167.17B	63.81	9.31%	―	68.78%	-45.75%
4680	61 Neutral	¥385.68B	23.29	22.16%	1.27%	11.92%	33.70%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Heiwa Corporate Events

Heiwa Corporation Maintains Independence Amid Significant Shareholding by Ishihara Holdings

Heiwa Corporation has announced that Ishihara Holdings Inc. holds 42.99% of its voting rights, classifying it as an ‘other affiliated company.’ Despite this significant shareholding, Heiwa maintains a level of independence, with no substantial business or personnel relationships with Ishihara Holdings. The company ensures that any transactions with its controlling shareholder are conducted under the same terms as general transactions, safeguarding the interests of minority shareholders.

Heiwa Corporation Introduces Shareholder Benefit Program for FY 2026

Heiwa Corporation has announced a shareholder benefit program for the fiscal year ending March 2026, aimed at enhancing shareholder engagement and investment attractiveness. The program offers benefit coupons redeemable at Heiwa’s golf courses and facilities, encouraging medium to long-term stock retention among shareholders. This initiative is expected to strengthen shareholder relations and potentially boost the company’s market position by increasing shareholder loyalty.

Heiwa Corporation Reports Mixed Financial Results with Positive Future Outlook

Heiwa Corporation reported its consolidated financial results for the fiscal year ended March 31, 2025, showing a 7% increase in net sales to ¥145,867 million and an 18.2% rise in operating profit to ¥27,690 million. However, ordinary profit and profit attributable to owners of the parent decreased by 6.2% and 21.4% respectively. The company also experienced a significant change in its financial position, with total assets increasing to ¥1,051,598 million. Despite these mixed results, Heiwa forecasts substantial growth for the next fiscal year, with expected net sales of ¥295,900 million, indicating a 102.9% increase, and a 109.5% rise in operating profit, suggesting a positive outlook for stakeholders.