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THK Co
(6481)
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Rating:58Neutral
Price Target:
¥7,482.00
▲(9.16% Upside)
Action:Reiterated
Date:08/10/26
The score is driven primarily by mixed financial performance: solid operating margins and positive free cash flow are offset by ongoing net losses and negative shareholder returns, with slightly higher leverage and modest revenue contraction. Technicals are neutral-to-mixed (longer-term support but weak momentum), while valuation is modestly supportive due to a moderate P/E and ~3% dividend yield.
Positive Factors
Cash generation
Consistent positive operating and free cash flow provides durable internal funding for capex, product development, and working capital. Over 2–6 months this reduces refinancing risk, supports steady aftermarket service and modest shareholder returns, and cushions cyclicality in customer capex.
Negative Factors
Persistent net losses & weak returns
Deep trailing net losses and negative ROE signal that reported earnings are not capturing underlying cash strength, limiting ability to generate shareholder returns over the medium term. Continued losses can impair investor confidence and constrain strategic investments if not reversed.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Consistent positive operating and free cash flow provides durable internal funding for capex, product development, and working capital. Over 2–6 months this reduces refinancing risk, supports steady aftermarket service and modest shareholder returns, and cushions cyclicality in customer capex.
Read all positive factors
THK Co (6481) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥805.88B
Dividend Yield3.04%
Average Volume (3M)771.40K
Price to Earnings (P/E)20.6
Beta (1Y)1.12
Revenue Growth1.98%
EPS Growth-48.28%
CountryJP
Employees13,036
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)357.83
Shares Outstanding119,099,800
10 Day Avg. Volume838,710
30 Day Avg. Volume771,403
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)1.73
Price to Sales (P/S)1.88
P/FCF Ratio18.98
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥7,300.00Price Target Upside6.51% Upside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)297.78
Revenue Forecast (FY)¥298.95B
THK Co Business Overview & Revenue Model
Company Description
THK Co., Ltd. operates as a global producer and distributor of mechanical components, with operations spanning Japan, the Americas, Europe, China, and various other international markets. Their comprehensive product line features a wide array of l...
How the Company Makes Money
THK makes money primarily by selling motion-control components and assemblies to equipment manufacturers and industrial customers. Its main revenue stream comes from product sales of linear motion guides (LM guides)—standardized and customized rai...
THK Co Earnings Call Summary
Earnings Call Date:Aug 07, 2024
(Q2-2024)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Neutral
The earnings call presents a mixed outlook for THK. While there are notable achievements in areas like the Automotive and Transportation business's profitability and promising growth in the Industrial Machinery sector, as well as sustainability initiatives, the significant declines in sales revenue and operating income, combined with challenges in multiple regions, highlight the company's ongoing struggles.Positive Updates
Automotive and Transportation Business Profitability
The Automotive and Transportation business posted an increase in operating income due to efforts aimed at improving profitability, with positive contributions including a volume effect of JPY 0.2 billion, a variable cost ratio effect of JPY 1.2 billion, and an FX impact of JPY 0.5 billion.
Negative Updates
Decline in Consolidated Sales Revenue
Consolidated sales revenue declined 3.1% year-on-year to JPY 179.8 billion.
Read all updates
Q2-2024 Updates
Positive
Negative
Automotive and Transportation Business Profitability
The Automotive and Transportation business posted an increase in operating income due to efforts aimed at improving profitability, with positive contributions including a volume effect of JPY 0.2 billion, a variable cost ratio effect of JPY 1.2 billion, and an FX impact of JPY 0.5 billion.
Read all positive updates
Company Guidance
During the Q2 2024 earnings call, Takashi Teramachi, President and COO of THK, provided an overview of the company's financial performance for the first half of the fiscal year ending December 2024. Consolidated sales revenue declined by 3.1% year-on-year to JPY 179.8 billion, with operating income decreasing by 49% to JPY 8.3 billion. Despite these declines, both metrics exceeded initial targets due to a gradual demand recovery in the Industrial Machinery business and favorable foreign exchange effects. The Automotive and Transportation business saw an improvement in operating income, driven by profitability enhancement efforts, although it faced a JPY 0.8 billion increase in fixed costs and a JPY 0.6 billion decline from the absence of a previous onetime subsidy. Total assets increased by JPY 30.4 billion to JPY 586.7 billion. The company maintained its growth strategy pillars and outlined key initiatives, including a focus on raising ROE and ROIC, expanding the business domain, and reinforcing sustainability and ESG initiatives. THK plans to allocate capital for future growth investments, maintaining a dividend payout ratio of 30%, with potential share buybacks considered when capital is excess.THK Co Financial Statement Overview
Summary
Income Statement
42
Neutral
Balance Sheet
58
Neutral
Cash Flow
63
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 215.26B | 240.44B | 352.76B | 351.94B | 393.69B | 318.19B |
| Gross Profit | 82.95B | 70.50B | 77.87B | 77.98B | 101.78B | 76.54B |
| EBITDA | 55.67B | 41.78B | 43.22B | 47.86B | 56.89B | 49.05B |
| Net Income | -39.87B | -69.89B | 10.44B | 18.40B | 21.20B | 23.01B |
Balance Sheet | ||||||
| Total Assets | 480.60B | 472.99B | 567.42B | 556.35B | 560.30B | 516.09B |
| Cash, Cash Equivalents and Short-Term Investments | 116.92B | 110.01B | 138.29B | 156.49B | 163.84B | 151.43B |
| Total Debt | 139.81B | 123.20B | 105.58B | 118.53B | 131.07B | 112.32B |
| Total Liabilities | 204.60B | 207.24B | 177.62B | 193.45B | 223.02B | 201.79B |
| Stockholders Equity | 276.00B | 261.33B | 383.64B | 357.26B | 331.89B | 304.56B |
Cash Flow | ||||||
| Free Cash Flow | 22.35B | 23.85B | -1.15B | 12.29B | 8.15B | -3.60B |
| Operating Cash Flow | 41.31B | 42.75B | 28.41B | 39.33B | 37.56B | 15.64B |
| Investing Cash Flow | -34.49B | -19.80B | -34.22B | -27.09B | -33.32B | -19.13B |
| Financing Cash Flow | -3.35B | -42.05B | -22.65B | -24.27B | -409.00M | -12.72B |
THK Co Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | ¥283.37B | 9.13 | 11.15% | 3.85% | 13.51% | 48.95% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
58 Neutral | ¥805.88B | 20.58 | -22.79% | 3.14% | 1.98% | -48.28% | |
58 Neutral | ¥575.42B | 29.64 | 6.59% | 1.65% | -7.97% | 77.19% | |
57 Neutral | ¥424.20B | 31.64 | ― | 2.50% | 1.45% | 0.37% | |
54 Neutral | ¥310.99B | 22.04 | ― | 1.65% | 5.19% | 13.96% | |
51 Neutral | ¥689.24B | 231.12 | 2.07% | 0.30% | 11.76% | -21.18% |
* Industrials Sector Average
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THK Co Corporate Events
THK Raises Interim Dividend and Lifts Year-End Payout Forecast Under Capital Efficiency Policy
Aug 5, 2026
THK Co., Ltd., a Japan-based industrial machinery manufacturer listed on the Tokyo Stock Exchange Prime Market, is pursuing a capital policy that targets a dividend on equity ratio of 8 percent until it reaches a return on equity above 10 percent....
THK Lifts 2026 Earnings Outlook on Strong Industrial Demand and Asset Transfers
Aug 5, 2026
THK Co., Ltd. operates in the industrial machinery and motion control components market, serving manufacturers domestically and worldwide, particularly in semiconductor-related and automation sectors that benefit from rising AI-driven capital inve...
THK Surges Past Forecasts on AI-Driven Demand, Yen Tailwind and One-Off Gains
Aug 5, 2026
THK Co., Ltd. reported results for the six months ended June 30, 2026 that significantly exceeded its earlier forecasts, driven by stronger-than-expected orders in industrial machinery worldwide and robust capital investment in semiconductor-relat...
THK Posts Strong Interim Earnings and Resets Dividend, Forecasts After Automotive Exit
Aug 5, 2026
THK Co., Ltd. reported a sharp rebound in performance for the six months to June 30, 2026, with revenue from continuing operations rising to ¥151.1 billion and operating income jumping to ¥22.5 billion. Profit attributable to owners of t...
THK Completes Transfer of Automotive Subsidiaries and Loans to Advantage Partners-Backed SPC
Jun 1, 2026
THK Co., Ltd., a Japanese manufacturer of linear motion systems and precision mechanical components, operates globally through a network of consolidated subsidiaries and serves industrial automation, automotive, and machinery markets. The company ...
THK Lifts 2026 Earnings Outlook on Strong Industrial Machinery Orders
May 11, 2026
THK Co., Ltd. has sharply raised its consolidated financial forecasts for the first half and full year 2026, citing stronger-than-expected orders in its industrial machinery business in Japan and overseas. The company now expects six-month consoli...
THK Posts Strong First-Quarter Rebound and Lifts Full-Year Outlook After Business Realignment
May 11, 2026
THK reported a sharp rebound in profitability for the three months ended March 31, 2026, with revenue from continuing operations rising to ¥69.0 billion and operating income jumping more than threefold, while profit attributable to owners sur...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.