Heiwa (6412) AI Stock Analysis

• Market Cap: ¥199.04B
• Dividend Yield: 4.02%
• Average Volume (3M): 318.26K
• Price to Earnings (P/E): 20.9
• 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): 73.50
• 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: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 210.6
• Revenue Forecast (FY): ¥272.94B

• Rating: 53 Neutral
• Price Target: ¥2,015.00 ▼(-1.32% Downside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is primarily held back by elevated balance-sheet leverage and reduced net profitability despite strong revenue growth and solid operating margins. Weak technicals (price below key moving averages and negative MACD) further pressure the outlook, while the ~4% dividend yield provides some valuation support.

Positive Factors

Revenue Growth

Sustained TTM revenue growth of +13.7% indicates persistent end-market demand and successful product cycles in the pachinko/pachislot segment. Over 2–6 months this supports stable order flow, capacity utilization, and pricing leverage tied to new game releases and licensed content adoption.

Operating Margins

A ~15% operating margin and ~25% EBITDA margin reflect structural cost discipline and favorable product economics typical of proprietary amusement-machine makers. These margins provide a durable buffer against cyclical unit volatility and fund R&D, new title development, and spare-parts services.

Cash Generation

Positive operating cash flow (¥37.3B) and growing free cash flow (¥9.2B, +18.6% TTM) demonstrate the core business converts sales into cash. This durable cash generation supports reinvestment in product development, maintenance services, and provides resources to manage liabilities or fund shareholder distributions.

Negative Factors

High Leverage

Debt-to-equity around 2.48x represents materially elevated leverage versus prior years and increases refinancing and liquidity risk. Over months this reduces financial flexibility, raises interest expense sensitivity, and constrains the company's ability to invest or absorb weaker machine-sales cycles without additional capital actions.

Compressed Net Margins

Net margin compression to ~6.1% signals rising below-the-line costs or higher financing/other expenses eroding shareholder returns. Persistently weaker net profitability limits retained earnings, reduces ROE, and can make it harder to sustain dividends or fund strategic initiatives without improving cost structure or pricing.

Weak Cash Conversion

FCF conversion near 24% of net income indicates earnings are not fully translating into usable cash, owing to reinvestment needs or working-capital drag. Structurally this reduces available cash for debt reduction, capex, or shareholder returns and heightens sensitivity to any revenue slowdown or margin pressure.

Heiwa Business Overview & Revenue Model

Company Description

Heiwa Corporation develops, manufactures, and sells pachinko and pachislot machines in Japan. It is also involved in the golf course business. The company was formerly known as Heiwa Kogyo Co., Ltd. Heiwa Corporation was founded in 1949 and is based in Tokyo, Japan.

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

Operations are healthy with strong TTM revenue growth (+13.7%) and solid operating profitability (~15% operating margin), but overall fundamentals are weighed down by sharply higher leverage (debt-to-equity ~2.48x) and compressed net margins (~6.1% TTM vs higher in prior years). Cash flow is positive (¥9.2B TTM FCF) but cash conversion is weak (FCF ~24% of net income).

Income Statement

TTM (Trailing-Twelve-Months) revenue growth is strong (+13.7%) and profitability remains solid at the operating level (about 15% operating margin and ~25% EBITDA margin). However, net profitability has compressed versus prior years (TTM net margin ~6.1% vs ~9.0% in FY2025 and ~12–15% in FY2023–FY2024), indicating higher costs and/or below-the-line pressure. The multi-year revenue trend is positive overall, but earnings quality has been less consistent than top-line momentum.

Balance Sheet

Leverage is the key concern: TTM debt is very high relative to equity (debt-to-equity ~2.48x), a sharp deterioration versus FY2022–FY2024 levels (~0.44–0.52x). Return on equity is modest (~5% in TTM and FY2025), suggesting the balance sheet is not currently translating into strong shareholder returns. Asset base is large, but the elevated leverage increases sensitivity to downturns and refinancing conditions.

Cash Flow

Cash generation is positive, with TTM operating cash flow at ¥37.3B and free cash flow at ¥9.2B, and free cash flow growth up ~18.6% in TTM. That said, cash conversion is a weaker point: free cash flow is only about 24% of net income in TTM (similarly ~25% in FY2025), implying meaningful reinvestment needs and/or working-capital drag. Free cash flow is positive, but less robust and less consistently high than the stronger FY2022–FY2023 period.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	233.64B	145.87B	136.38B	142.29B	121.56B	107.74B
Gross Profit	79.09B	52.49B	46.80B	49.31B	33.40B	29.04B
EBITDA	62.41B	32.33B	32.14B	35.71B	18.68B	14.33B
Net Income	9.54B	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	87.42B	92.25B	57.71B	67.72B	67.05B	70.08B
Total Debt	622.01B	628.42B	104.70B	106.77B	112.65B	121.45B
Total Liabilities	849.63B	807.28B	188.84B	192.72B	199.88B	203.83B
Stockholders Equity	253.72B	244.12B	239.19B	231.00B	217.19B	226.24B
Cash Flow
Free Cash Flow	9.16B	6.13B	2.67B	17.90B	13.43B	-312.00M
Operating Cash Flow	37.27B	24.93B	13.93B	25.59B	20.44B	7.03B
Investing Cash Flow	-506.19B	-500.03B	2.71B	-15.22B	2.04B	-5.87B
Financing Cash Flow	495.74B	509.94B	-11.22B	-14.50B	-17.36B	-3.07B

Heiwa Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2042.00
• 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 2042 is above the 20-day moving average (MA) of 2004.70, above the 50-day MA of 2028.80, and below the 200-day MA of 2052.14, indicating a neutral trend. The MACD of -7.31 indicates Negative momentum. The RSI at 51.91 is Neutral, neither overbought nor oversold. The STOCH value of 63.73 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
4680	67 Neutral	¥310.56B	18.72	―	1.51%	11.92%	33.70%
9166	67 Neutral	¥118.10B	41.14	―	―	62.69%	-37.72%
7832	62 Neutral	$2.75T	23.76	15.67%	1.94%	9.86%	-1.06%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
6412	53 Neutral	¥199.04B	20.87	5.03%	4.02%	45.31%	-36.42%
4343	52 Neutral	¥51.97B	37.49	―	―	6.00%	-184.09%
6425	42 Neutral	¥57.73B	-0.25	-1.85%	―	-14.08%	54.85%

Heiwa Corporate Events

Heiwa Adds Shareholder Perks to Promote Golf Services and New Okinawa Resort

Heiwa Corporation will grant additional shareholder benefits for the fiscal year ending March 2026 to investors holding at least 200 shares as of March 31, 2026, supplementing its ordinary perks. The move is designed to both reward shareholders and increase familiarity with its golf operations, highlighting strategic assets such as its Cool Cart offering and the forthcoming PGM Hotel Resort Okinawa.

Eligible shareholders will receive two vouchers for free use of Cool Carts at participating group golf courses between July 1, 2026 and June 30, 2027, plus two ¥10,000 accommodation discount vouchers for PGM Hotel Resort Okinawa valid from its opening on July 3, 2026 through June 30, 2027. The benefits, to be mailed with the June 2026 shareholder meeting notice, are expected to drive trial and utilization of key services, supporting differentiation and customer traffic across Heiwa’s golf and resort portfolio.

The most recent analyst rating on (JP:6412) stock is a Hold with a Yen2254.00 price target. To see the full list of analyst forecasts on Heiwa stock, see the JP:6412 Stock Forecast page.

Heiwa Slashes Earnings Outlook as Pachinko Market Weakens, Books Tax Asset Reversal

Heiwa Corporation has sharply cut its consolidated earnings forecast for the fiscal year ending March 2026, citing weaker-than-expected performance in its Pachinko and Pachislot Machine Business despite stable results in its Golf Business. The company now projects lower net sales, operating profit, ordinary profit, and profit attributable to owners of parent compared with its May 2025 guidance, but plans to maintain its year-end dividend payout.

Management attributes the downgrade to a continued decline in the number of pachinko parlors and a concentration of demand in certain machine models, which is pressuring unit sales across both pachinko and pachislot lines. Reflecting a more cautious view of future profitability, Heiwa will also reverse deferred tax assets tied to the Pachinko and Pachislot segment, booking a sizable deferred tax expense that further reduces bottom-line earnings for the current fiscal year.

The most recent analyst rating on (JP:6412) stock is a Hold with a Yen2254.00 price target. To see the full list of analyst forecasts on Heiwa stock, see the JP:6412 Stock Forecast page.

Heiwa Posts Strong Sales Growth but Cuts Full-Year Profit Outlook

Heiwa Corporation reported a sharp 73.9% year-on-year increase in net sales to ¥206.6 billion and a 49.2% rise in operating profit to ¥42.9 billion for the nine months ended December 31, 2025, while profit attributable to owners of parent declined 17.1% to ¥17.1 billion, pushing basic earnings per share down to ¥172.94. The company’s equity ratio improved to 23.0% and it maintained its annual dividend forecast of ¥80 per share, but it revised full-year guidance to project a strong jump in revenue and operating profit alongside a 39.5% drop in full-year profit, signaling higher costs or one-off factors that may pressure earnings despite top-line growth.

The most recent analyst rating on (JP:6412) stock is a Hold with a Yen2254.00 price target. To see the full list of analyst forecasts on Heiwa stock, see the JP:6412 Stock Forecast page.