Heiwa (6412) AI Stock Analysis

• Market Cap: ¥195.98B
• Dividend Yield: 4.03%
• Average Volume (3M): 318.26K
• Price to Earnings (P/E): 15.7
• Beta (1Y): 0.37
• Revenue Growth: 45.31%
• EPS Growth: -36.42%
• Country: JP
• Employees: 5,034
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Leisure
• EPS (TTM): 16.50
• Shares Outstanding: 99,809,060
• 10 Day Avg. Volume: 232,390
• 30 Day Avg. Volume: 318,263
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: ¥2,119.00 ▲(6.54% Upside)

Heiwa's stock score is primarily influenced by its strong financial performance, despite high leverage and declining cash flow growth. The technical analysis indicates a bearish trend, which is a concern. However, the valuation is attractive due to a reasonable P/E ratio and a high dividend yield, providing some support to the overall score.

Positive Factors

Revenue Growth

Strong revenue growth indicates Heiwa's ability to expand its market presence and enhance its product offerings, supporting long-term business sustainability.

Operational Margins

Healthy operational margins suggest efficient cost management and robust profitability, enhancing Heiwa's competitive position and financial resilience.

Business Model Resilience

Diversified revenue streams from licensing and partnerships demonstrate a resilient business model, reducing dependency on single revenue sources and enhancing stability.

Negative Factors

High Leverage

High leverage can increase financial risk and limit flexibility, potentially impacting Heiwa's ability to invest in growth opportunities and weather economic downturns.

Declining Free Cash Flow

Declining free cash flow growth may constrain Heiwa's ability to fund operations, invest in new projects, and return capital to shareholders, affecting long-term financial health.

Decreasing Net Profit Margin

A decreasing net profit margin can indicate rising costs or pricing pressures, potentially impacting Heiwa's profitability and ability to sustain competitive advantages.

Heiwa Business Overview & Revenue Model

Company Description

Heiwa (6412) is a Japanese company primarily engaged in the gaming and amusement industry. The company is known for its production and sale of pachinko machines, which are a popular form of gambling entertainment in Japan. Heiwa also operates in related sectors, including the development of gaming software and the management of arcade facilities. With a strong focus on innovation and design, Heiwa aims to enhance the gaming experience for its customers through high-quality products and engaging gameplay.

How the Company Makes Money

Heiwa generates revenue primarily through the sale of pachinko machines to operators throughout Japan. The company typically earns income from the initial sale of these machines, as well as ongoing revenue from service and maintenance contracts. Additionally, Heiwa benefits from the licensing of its gaming software and intellectual property to other manufacturers in the industry. Significant partnerships with arcade operators and entertainment venues also contribute to its earnings, as these collaborations can lead to increased sales volume and market reach. Advertising and promotional activities tied to its games further bolster revenue, making the company's business model multifaceted and resilient.

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	205.55B	145.87B	136.38B	142.29B	121.56B	107.74B
Gross Profit	70.65B	52.49B	46.80B	49.31B	33.40B	29.04B
EBITDA	50.38B	32.33B	32.14B	35.71B	18.68B	14.33B
Net Income	12.46B	13.06B	16.61B	20.68B	2.19B	865.00M
Balance Sheet
Total Assets	1.10T	1.05T	428.03B	423.73B	417.07B	430.07B
Cash, Cash Equivalents and Short-Term Investments	77.71B	92.25B	57.71B	67.72B	67.05B	70.08B
Total Debt	621.83B	628.42B	104.70B	106.77B	112.65B	121.45B
Total Liabilities	845.09B	807.28B	188.84B	192.72B	199.88B	203.83B
Stockholders Equity	250.39B	244.12B	239.19B	231.00B	217.19B	226.24B
Cash Flow
Free Cash Flow	7.72B	6.13B	2.67B	17.90B	13.43B	-312.00M
Operating Cash Flow	32.28B	24.93B	13.93B	25.59B	20.44B	7.03B
Investing Cash Flow	-508.01B	-500.03B	2.71B	-15.22B	2.04B	-5.87B
Financing Cash Flow	494.53B	509.94B	-11.22B	-14.50B	-17.36B	-3.07B

Heiwa Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1989.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 Neutral. The current price of 1989 is below the 20-day moving average (MA) of 1989.55, below the 50-day MA of 2005.60, and below the 200-day MA of 2101.16, indicating a bearish trend. The MACD of -8.96 indicates Negative momentum. The RSI at 49.25 is Neutral, neither overbought nor oversold. The STOCH value of 51.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:6412.

Heiwa Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7944	75 Outperform	¥93.48B	13.40	―	4.78%	-1.25%	9.33%
7458	72 Outperform	¥172.30B	11.89	―	3.43%	6.12%	-3.75%
4680	67 Neutral	¥313.45B	19.59	―	1.57%	11.92%	33.70%
9166	64 Neutral	¥124.54B	44.02	―	―	62.69%	-37.72%
6412	63 Neutral	¥195.98B	15.75	5.03%	4.03%	45.31%	-36.42%
7906	62 Neutral	¥274.33B	23.64	15.93%	0.72%	20.06%	17.89%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Heiwa Corporate Events

Heiwa Corporation’s Strong Financial Performance in Q2 2025

Heiwa Corporation reported significant growth in its consolidated financial results for the three months ended June 30, 2025, with net sales nearly doubling year-on-year. The company also saw substantial increases in operating profit, ordinary profit, and profit attributable to owners of the parent, indicating strong operational performance and positive market positioning.