Kinki Sharyo Co., Ltd. (7122) AI Stock Analysis

• Market Cap: ¥15.66B
• Dividend Yield: 2.02%
• Average Volume (3M): 8.47K
• Price to Earnings (P/E): 8.1
• Beta (1Y): 0.92
• Revenue Growth: -19.01%
• EPS Growth: -66.73%
• Country: JP
• Employees: 1,229
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 75.90
• Shares Outstanding: 6,908,359
• 10 Day Avg. Volume: 6,610
• 30 Day Avg. Volume: 8,470
• PEG Ratio: -0.21
• Price to Book (P/B): 0.31
• Price to Sales (P/S): 0.34
• P/FCF Ratio: -1.79
• 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: 57 Neutral
• Price Target: ¥2,502.00 ▲(1.58% Upside)
• Action: Reiterated Date: 08/20/25
• Date: Action: Reiterated 08/20/25

Kinki Sharyo Co., Ltd. has a mixed overall stock score. The most significant factor is the financial performance, which shows volatility and challenges in revenue and cash flow. Technical analysis indicates strong bullish momentum, but overbought signals suggest caution. Valuation is a concern due to the negative P/E ratio, despite a moderate dividend yield.

Positive Factors

Project-based business model

Kinki Sharyo’s core model of large, specification-driven rolling stock contracts creates durable, multi-period revenue streams and long procurement lead times that support predictable multi-year program planning. This structure fosters long-term customer relationships and recurring service revenue despite lumpiness.

Healthy balance sheet / reduced leverage

A roughly 57% equity ratio and reduced leverage lower financial risk and increase capacity to bid on large, capital-intensive contracts. This balance sheet flexibility supports investment in production capability and helps absorb timing delays or cost overruns on long-duration rolling stock programs.

Stable gross profit margin

Consistent gross margins indicate durable control of manufacturing costs and pricing discipline on vehicle contracts. Stable production economics provide a foundation for margin recovery when volumes normalize and reduce long-term operational risk versus peers with volatile COGS.

Negative Factors

Significant revenue decline

A near-30% revenue decline materially reduces scale benefits, weakens bargaining power with suppliers and customers, and pressures fixed-cost absorption. Over several quarters this can erode backlog visibility and make forecasting and investment planning difficult for rolling stock programs.

Volatile and weak cash conversion

Negative operating cash conversion and steep free cash flow declines constrain working capital for long projects, increase reliance on external funding, and heighten execution risk. For a project-driven manufacturer, uneven cash generation impairs ability to finance production spikes and meet milestone-linked obligations.

Inconsistent profitability and margins

Swinging profitability and fluctuating EBITDA margins signal execution and demand variability. This inconsistency complicates long-term capital allocation, undermines predictability of returns and may signal sensitivity to cost inputs or contract mix that can persist across procurement cycles.

Kinki Sharyo Co., Ltd. Business Overview & Revenue Model

Company Description

The Kinki Sharyo Co., Ltd. manufactures and sells rolling stock in Japan and internationally. The company operates through Rolling Stock and Lease of Real Estate segments. It offers bullet, limited express, and commuter/suburban/subway trains; and light rail vehicles. The company also engages in the real estate leasing activities. The company was formerly known as Tanaka Rolling Stock Co., Ltd. and changed its name to The Kinki Sharyo Co., Ltd. in 1945. The Kinki Sharyo Co., Ltd. was founded in 1920 and is headquartered in Osaka, Japan.

How the Company Makes Money

Kinki Sharyo generates revenue through the design, manufacture, and sale of railway vehicles and related components. Their primary revenue streams include contracts from government and private sector clients for the production of new trains and refurbishment of existing rolling stock. The company also earns income from maintenance services and spare parts sales. Significant partnerships with various railway operators, both domestically and internationally, contribute to stable revenue through long-term contracts. Additionally, Kinki Sharyo invests in research and development to enhance its product offerings, which can lead to increased market share and profitability.

Kinki Sharyo Co., Ltd. Financial Statement Overview

Summary

The financial performance of Kinki Sharyo Co., Ltd. is mixed. The income statement shows inconsistent profitability with a significant revenue drop in 2025. The balance sheet is stable with reduced leverage, but cash flow analysis indicates volatility and challenges in cash generation.

Income Statement

The income statement shows mixed performance. Gross profit margin remained relatively low but stable over the years, indicating controlled cost of goods sold. However, the company experienced a significant drop in revenue from 2024 to 2025, resulting in a negative revenue growth rate of approximately -29.85%. Net profit margin improved significantly in 2024 but fell again in 2025, reflecting inconsistent profitability. The EBIT and EBITDA margins also fluctuated, indicating operational challenges.

Balance Sheet

The balance sheet reveals a stable equity base, with a healthy equity ratio averaging around 57% in recent years. The debt-to-equity ratio improved, showing reduced leverage, which decreases financial risk. However, total assets and cash reserves have fluctuated, reflecting potential volatility in asset management. The return on equity showed a strong performance in 2024 but dropped in 2025, indicating some inconsistency in generating returns for shareholders.

Cash Flow

Cash flow analysis highlights significant volatility. There was a notable decrease in operating and free cash flow in 2025, leading to a steep decline in free cash flow growth rate. The operating cash flow to net income ratio turned negative in 2025, indicating cash flow challenges despite reported net income. The free cash flow to net income ratio also suffered, highlighting inefficiencies in converting income to cash flow.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	30.59B	30.26B	43.15B	35.87B	39.33B	49.42B
Gross Profit	3.46B	3.99B	8.25B	4.63B	5.20B	3.40B
EBITDA	1.10B	1.52B	5.58B	2.46B	2.99B	1.50B
Net Income	-299.00M	560.00M	4.37B	1.18B	2.77B	662.00M
Balance Sheet
Total Assets	59.88B	58.84B	59.56B	55.49B	61.50B	66.02B
Cash, Cash Equivalents and Short-Term Investments	7.66B	6.35B	11.72B	7.63B	9.94B	4.35B
Total Debt	5.51B	5.41B	4.92B	9.10B	15.72B	22.43B
Total Liabilities	26.64B	25.22B	27.05B	28.19B	37.02B	44.70B
Stockholders Equity	33.23B	33.61B	32.50B	27.29B	24.47B	21.32B
Cash Flow
Free Cash Flow	0.00	-5.77B	8.51B	5.29B	12.12B	-346.00M
Operating Cash Flow	0.00	-4.86B	8.93B	5.92B	12.95B	24.00M
Investing Cash Flow	0.00	-576.00M	2.58B	-652.00M	-4.03B	-128.00M
Financing Cash Flow	0.00	-14.00M	-4.62B	-8.26B	-6.48B	-695.00M

Kinki Sharyo Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2463.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7122, the sentiment is Negative. The current price of 2463 is above the 20-day moving average (MA) of 2356.85, above the 50-day MA of 2432.80, and above the 200-day MA of 2327.45, indicating a bearish trend. The MACD of -46.12 indicates Positive momentum. The RSI at 42.45 is Neutral, neither overbought nor oversold. The STOCH value of 36.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7122.

Kinki Sharyo Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6371	81 Outperform	¥246.42B	9.64	8.91%	3.85%	1.48%	8.86%
6016	75 Outperform	¥114.59B	19.34	―	0.55%	9.04%	-7.84%
7102	75 Outperform	¥53.40B	4.75	16.07%	1.07%	6.01%	49.59%
6381	75 Outperform	¥65.23B	13.24	―	3.95%	-1.67%	-4.39%
6023	71 Outperform	¥56.82B	10.14	11.47%	1.88%	-0.04%	15.59%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7122	57 Neutral	¥15.66B	8.10	―	2.02%	-19.01%	-66.73%