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IHI Corporation (JP:7013)
:7013

IHI (7013) AI Stock Analysis

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JP

IHI

(OTC:7013)

Rating:64Neutral
Price Target:
¥17,034.00
▲(15.84%Upside)
IHI's strong financial recovery and improving profitability are significant positives. However, technical indicators suggest overbought conditions, and valuation metrics are fairly average. The lack of earnings call and corporate events data limits additional insights.

IHI (7013) vs. iShares MSCI Japan ETF (EWJ)

IHI Business Overview & Revenue Model

Company DescriptionIHI Corporation operates in resources, energy, and environment; social infrastructure and offshore facilities; industrial systems and general-purpose machinery; aero engine, space, and defense; and other business areas in Japan and internationally. It provides carbon reduction solutions; gas turbines and engines, and diesel engines for land use, and high-speed ships and other marine vessels; LNG receiving terminals and storage tanks; and equipment for various plants. The company also constructs natural gas liquefaction, oil refining, petrochemicals, LPG, and other process plants; develops and constructs nuclear fuel cycle systems; provides components for boiling and pressurized water reactors; and constructs bridges and steel structures. It offers water gates for rivers and dams; environmental monitoring products; concrete construction materials; 3D laser radars, X-ray inspection systems, monitoring and disaster prevention equipment, oil leak monitors, and vibration control and seismic isolation floor systems; shield tunneling machines and automatic segment assembling systems; transportation systems; LPG/LEG storage tanks; floating LNG/LPG production, storage, and offloading units; and semi-submersible rigs, mega-float, and others. The company also leases and sells real estate properties; develops houses; and provides compressors, cryogenic products, logistics systems, steelmaking equipment, machinery for ships, turbochargers for vehicles, separators, lubricating systems, pulp and paper machinery, materials handling systems, agricultural machinery, parking systems, boilers, and life associated equipment. It offers factory, heat treatment and surface engineering solutions; aero engines; air traffic control systems; and rocket systems and space exploration solutions. The company was formerly known as Ishikawajima-Harima Heavy Industries Co., Ltd and changed its name to IHI Corporation in 2007. IHI Corporation was founded in 1853 and is headquartered in Tokyo, Japan.
How the Company Makes MoneyIHI Corporation generates revenue through multiple streams, primarily by manufacturing and selling its products in the aerospace, energy, and industrial machinery sectors. In aerospace, IHI earns money by producing and maintaining jet engines and components, collaborating with major global aircraft manufacturers. In the energy sector, the company provides power systems and operates in the renewable energy space, involving projects like wind power and biomass energy. Industrial machinery revenue comes from manufacturing equipment like compressors and turbochargers for automotive and industrial clients. Additionally, IHI engages in large-scale infrastructure projects, including bridge construction and plant engineering, contributing significantly to its earnings. Strategic partnerships with companies and government entities, along with investments in research and development, also play critical roles in driving IHI's financial performance.

IHI Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q2-2024)
|
% Change Since: 29.90%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Negative
The earnings call revealed significant challenges, including large one-time losses and decreased operating profit, overshadowing some growth in the Aero Engine and Defense business and stability in large plant projects.
Q2-2024 Updates
Positive Updates
Aero Engine and Defense Business Growth
The Aero Engine and Defense business saw an increase in orders totaling JPY 29.5 billion, driven by civil aero engine PW1100G and other main engine units.
Positive Outlook for Defense Sector
The increase in defense budget is seen as a positive development, with expectations for increased demand in spare parts and missile production, contributing to future growth.
Stability in Large Plant Projects
Large-scale power plant projects in Bangladesh and Vietnam are operating smoothly and showing profit, reducing downside risks associated with these projects.
Negative Updates
Significant One-Time Losses
A large one-time loss was posted due to the PW1100G engine additional inspection program and the North American process plant litigation settlement, impacting financial results significantly.
Operating Profit Decrease
Operating profit dropped across all reportable segments, with a notable decline of JPY 12.2 billion in revenue changes and construction profitability.
Negative Cash Flow
Free cash flow was negative JPY 112.8 billion due to increased inventory spending and working capital needs, particularly in the civil aero engine sector.
Deterioration of Financial Indices
The debt-equity ratio increased to 1.98x, and the ratio of equity attributable to owners decreased to 14.5%, indicating deterioration in financial health.
Company Guidance
During the IHI Group's second-quarter earnings call for the fiscal year 2023, several key metrics and financial figures were discussed. The group reported a one-time loss primarily due to the PW1100G engine inspection program and North America process plant litigation settlement, leading to an operating profit of negative JPY 157 billion. Excluding special factors, the orders received were JPY 640 billion, and revenue was JPY 639 billion, with an operating profit of JPY 16 billion. The foreign exchange rate averaged JPY 140.62 to the U.S. dollar, reflecting a JPY 9 depreciation from the previous year. The company's total assets increased by JPY 111.3 billion, reaching JPY 2,053.3 billion, while interest-bearing debt rose to JPY 644.7 billion. The debt-equity ratio was 1.98x, with a 14.5% ratio of equity attributable to the owners of the parent. Operating cash flow stood at JPY 81.4 billion, while free cash flow was negative JPY 112.8 billion. The guidance emphasized the need for improving cash flow and working capital, aiming to recover to the fiscal 2022 financial foundation with a focus on enhancing profitability and maintaining dividend payouts.

IHI Financial Statement Overview

Summary
IHI shows a strong financial recovery with substantial revenue growth and improved profitability. Despite manageable debt levels, the high leverage requires careful management.
Income Statement
78
Positive
IHI's income statement reflects strong revenue growth and improving profitability. The revenue growth rate from 2024 to 2025 was significant at 23%, supported by a strong recovery in both EBIT and EBITDA margins to 9.3% and 13.8%, respectively. The net profit margin increased to 6.9%. These metrics indicate a positive turnaround from previous years' losses, showcasing robust recovery and operational efficiency improvements.
Balance Sheet
70
Positive
The balance sheet shows a stable financial position with a manageable debt-to-equity ratio of 1.07 and an equity ratio of 21.5%. The return on equity (ROE) improved significantly to 23.4%, indicating effective utilization of shareholder funds. However, the high level of total liabilities relative to assets suggests potential leverage risks, requiring careful management.
Cash Flow
75
Positive
Cash flows display a positive trend, with free cash flow reaching 117.4 billion JPY in 2025, a substantial improvement from previous years. The operating cash flow to net income ratio is 1.6, indicating strong cash generation relative to net income. The free cash flow to net income ratio is also positive at 1.04, suggesting healthy cash conversion.
BreakdownMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue1.63T1.32T1.35T1.17T1.11T
Gross Profit374.51B144.85B282.00B209.41B179.97B
EBITDA224.01B8.84B149.11B175.27B114.47B
Net Income112.74B-68.21B44.55B66.06B13.09B
Balance Sheet
Total Assets2.24T2.10T1.94T1.88T1.83T
Cash, Cash Equivalents and Short-Term Investments136.81B142.56B129.12B148.68B122.16B
Total Debt514.72B574.38B519.49B505.55B605.93B
Total Liabilities1.73T1.70T1.49T1.47T1.51T
Stockholders Equity481.73B375.99B431.25B382.13B300.77B
Cash Flow
Free Cash Flow117.39B1.12B-8.46B68.58B-21.08B
Operating Cash Flow177.63B62.12B54.12B114.16B36.38B
Investing Cash Flow-58.59B-51.70B-52.35B27.93B-40.48B
Financing Cash Flow-116.45B-2.57B-24.04B-121.49B-23.71B

IHI Technical Analysis

Technical Analysis Sentiment
Positive
Last Price14705.00
Price Trends
50DMA
13953.50
Positive
100DMA
12014.85
Positive
200DMA
10106.07
Positive
Market Momentum
MACD
285.73
Positive
RSI
47.16
Neutral
STOCH
9.38
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7013, the sentiment is Positive. The current price of 14705 is below the 20-day moving average (MA) of 15396.75, above the 50-day MA of 13953.50, and above the 200-day MA of 10106.07, indicating a neutral trend. The MACD of 285.73 indicates Positive momentum. The RSI at 47.16 is Neutral, neither overbought nor oversold. The STOCH value of 9.38 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7013.

IHI Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
65
Neutral
$10.77B15.805.51%1.90%3.03%-26.66%
64
Neutral
¥2.22T19.7425.94%0.95%23.00%
$9.72B18.9919.46%1.68%
$8.68B16.2516.07%2.20%
$11.72B20.8012.94%1.49%
$21.75B19.699.86%1.42%
$2.61B1,039.020.06%0.03%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:7013
IHI
14,705.00
9,192.56
166.76%
DAIUF
Daifuku Co
25.00
6.85
37.74%
EBCOF
Ebara
16.72
1.77
11.84%
KWHIF
Kawasaki Heavy Industries
71.69
34.18
91.12%
NNDNF
Nidec
18.86
-1.62
-7.91%
SOHVF
Sumitomo Heavy Industries
21.30
-4.15
-16.31%

IHI Corporate Events

IHI Corporation Considers Investment Unit Reduction
Jun 30, 2025

IHI Corporation has announced its consideration of reducing its investment unit to enhance stock liquidity and attract a broader range of investors. The company plans to evaluate this move by examining stock price trends and associated implementation costs, which could impact its market positioning and investor engagement.

The most recent analyst rating on (JP:7013) stock is a Buy with a Yen13800.00 price target. To see the full list of analyst forecasts on IHI stock, see the JP:7013 Stock Forecast page.

IHI Corporation Introduces New Stock Remuneration Plan for Directors
May 21, 2025

IHI Corporation announced the introduction of a Restricted Stock Remuneration Plan for its directors, aimed at encouraging shareholding and aligning directors’ interests with those of shareholders. This plan, separate from the existing Performance-Linked Stock Remuneration, is designed to enhance medium- to long-term corporate value and performance, with implications for improved stakeholder engagement and corporate governance.

The most recent analyst rating on (JP:7013) stock is a Buy with a Yen13800.00 price target. To see the full list of analyst forecasts on IHI stock, see the JP:7013 Stock Forecast page.

IHI Corporation Reports Strong Financial Recovery in FY2025
May 8, 2025

IHI Corporation reported significant financial improvement for the fiscal year ended March 31, 2025, with a 23% increase in revenue and a return to profitability. This positive performance reflects a strong recovery from the previous fiscal year’s losses, enhancing the company’s market position and potentially benefiting stakeholders.

IHI Corporation Reports Significant Foreign Exchange Losses
May 8, 2025

IHI Corporation has reported foreign exchange losses amounting to 16.5 billion yen for the three months ending March 31, 2025, contributing to a total of 6.6 billion yen in losses for the fiscal year. These financial costs have been incorporated into the company’s consolidated financial performance, potentially affecting its financial stability and market perception.

IHI Corporation Strengthens Governance with New Director Nomination
Apr 21, 2025

IHI Corporation has announced the nomination of Ms. Yayoi Tanaka as an independent director, aiming to enhance its corporate governance. Ms. Tanaka’s extensive experience in fiscal oversight and corporate governance, including her previous role as an independent director at IHI, positions her to contribute significantly to the company’s management and value enhancement.

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.Date of analysis: Jun 05, 2025