Fenwal Controls of Japan, Ltd. (6870) AI Stock Analysis

• Market Cap: ¥9.95B
• Dividend Yield: 4.07%
• Average Volume (3M): 1.31K
• Price to Earnings (P/E): 7.7
• Beta (1Y): 0.09
• Revenue Growth: 4.35%
• EPS Growth: 7.25%
• Country: JP
• Employees: 275
• Sector: Industrials
• Sector Strength: 72
• Industry: Security & Protection Services
• EPS (TTM): 19.00
• Shares Outstanding: 5,893,000
• 10 Day Avg. Volume: 1,760
• 30 Day Avg. Volume: 1,306
• PEG Ratio: 0.05
• Price to Book (P/B): 0.70
• Price to Sales (P/S): 0.76
• P/FCF Ratio: 32.56
• 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): N/A
• Revenue Forecast (FY): N/A

• Rating: 77 Outperform
• Price Target: ¥1,930.00 ▲(7.94% Upside)

Fenwal Controls of Japan, Ltd. receives a strong overall score, primarily driven by its robust financial performance, particularly its solid balance sheet and strong profitability margins. The stock is also attractively valued, with a low P/E ratio and high dividend yield. Technical analysis shows some caution with bearish momentum indicators, but overall, the stock presents a compelling value proposition.

Positive Factors

Strong Balance Sheet

A strong balance sheet with low leverage enhances financial stability, providing the company with flexibility to invest in growth opportunities and weather economic downturns.

High Profitability Margins

Improved profitability margins indicate effective cost management and operational efficiency, which can lead to sustainable earnings growth and increased shareholder value.

Strong Equity Base

A strong equity base reduces reliance on debt and enhances financial resilience, supporting long-term strategic initiatives and investment in innovation.

Negative Factors

Stagnant Revenue Growth

Stagnant revenue growth can limit the company's ability to expand market share and invest in new product development, potentially impacting long-term competitiveness.

Decline in Free Cash Flow

A decline in free cash flow may constrain the company's ability to fund operations, invest in growth, and return capital to shareholders, affecting financial flexibility.

Modest Revenue Growth

Modest revenue growth, despite strong cost management, may indicate challenges in expanding market presence or product demand, potentially impacting future earnings potential.

Fenwal Controls of Japan, Ltd. Business Overview & Revenue Model

Company Description

Fenwal Controls of Japan, Ltd. (6870) is a prominent player in the industrial automation and control systems sector, specializing in the design and manufacturing of high-performance control devices and solutions. The company serves a diverse range of industries, including manufacturing, pharmaceuticals, and food processing, providing innovative products that enhance operational efficiency and safety. Fenwal Controls is known for its advanced technologies in temperature control, pressure management, and process automation, catering to both domestic and international markets.

How the Company Makes Money

Fenwal Controls generates revenue primarily through the sale of its control systems, sensors, and automation solutions. The company has established key revenue streams from direct sales to industrial clients and long-term contracts with manufacturing firms that require customized automation solutions. Additionally, Fenwal Controls benefits from maintenance and support services that provide ongoing revenue as clients seek to ensure optimal performance of their systems. Strategic partnerships with other technology firms enhance its offerings, while participation in industry trade shows and exhibitions expands its market presence and attracts new clients.

Fenwal Controls of Japan, Ltd. Financial Statement Overview

Summary

Fenwal Controls of Japan, Ltd. demonstrates a strong financial position overall, with high profitability margins, low leverage, and robust shareholder returns. While revenue growth has been modest, the company maintains efficient cost management and operational stability. The balance sheet is particularly strong, with low debt levels and a solid equity base. Cash flow management, although adequate, presents an opportunity for enhancement to ensure stronger liquidity and financial flexibility.

Income Statement

Fenwal Controls of Japan, Ltd. shows a solid performance in its income statement with a strong gross profit margin of approximately 33.04% for 2024, indicating efficient cost management. The net profit margin has significantly improved to approximately 8.91% from 3.06% in 2023, showing enhanced profitability. However, revenue growth has been stagnant, with a slight decline observed in 2024. The EBIT margin stands at 9.43%, and the EBITDA margin is at 12.65%, reflecting stable operating performance.

Balance Sheet

The balance sheet of Fenwal Controls of Japan, Ltd. is robust, with a low debt-to-equity ratio of approximately 0.09, showcasing financial stability and low leverage. The return on equity (ROE) is impressive at approximately 8.20%, indicating strong shareholder returns. The equity ratio is high at about 69.59%, suggesting a strong equity base relative to total assets. Overall, the balance sheet reflects a healthy financial position with minimal reliance on debt.

Cash Flow

Cash flow performance shows a mixed picture with a free cash flow of 316 million yen in 2024, which is a decline from the previous year. The operating cash flow to net income ratio is approximately 0.85, indicating solid cash generation relative to net income. However, the free cash flow to net income ratio is lower at 0.28, suggesting a potential area for improvement in cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	12.54B	12.52B	12.60B	12.40B	12.37B	9.13B
Gross Profit	4.09B	4.14B	4.01B	4.05B	3.90B	2.69B
EBITDA	1.88B	1.58B	929.57M	1.45B	1.07B	1.03B
Net Income	1.10B	1.12B	385.00M	826.57M	387.57M	585.24M
Balance Sheet
Total Assets	19.36B	19.52B	19.07B	18.81B	18.69B	15.67B
Cash, Cash Equivalents and Short-Term Investments	6.76B	6.29B	7.32B	6.32B	6.89B	7.07B
Total Debt	1.49B	1.24B	1.53B	1.78B	2.11B	568.00M
Total Liabilities	5.45B	5.94B	6.40B	6.50B	6.76B	4.05B
Stockholders Equity	13.91B	13.59B	12.68B	12.31B	11.92B	11.62B
Cash Flow
Free Cash Flow	0.00	293.62M	936.00M	55.01M	859.69M	1.62B
Operating Cash Flow	0.00	949.44M	1.11B	401.18M	1.20B	1.76B
Investing Cash Flow	0.00	-659.28M	940.68M	-80.91M	-1.27B	-944.38M
Financing Cash Flow	0.00	-920.32M	-646.00M	-714.24M	226.09M	-460.97M

Fenwal Controls of Japan, Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1788.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6870, the sentiment is Positive. The current price of 1788 is above the 20-day moving average (MA) of 1772.65, above the 50-day MA of 1751.02, and above the 200-day MA of 1695.92, indicating a bullish trend. The MACD of 16.80 indicates Negative momentum. The RSI at 71.16 is Negative, neither overbought nor oversold. The STOCH value of 97.88 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6870.

Fenwal Controls of Japan, Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6809	78 Outperform	¥42.21B	12.92	―	3.61%	4.46%	127.52%
6870	77 Outperform	¥9.95B	7.73	―	4.07%	4.35%	7.25%
2331	77 Outperform	¥538.69B	17.49	―	2.26%	7.73%	30.92%
1909	77 Outperform	¥57.76B	13.08	―	0.90%	7.10%	36.47%
6744	74 Outperform	¥233.98B	21.49	―	2.68%	9.55%	9.52%
7734	73 Outperform	¥168.04B	20.99	―	1.38%	11.23%	16.49%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%