Kanemitsu Corporation (7208) AI Stock Analysis

• Market Cap: ¥5.61B
• Dividend Yield: 3.04%
• Average Volume (3M): 3.48K
• Price to Earnings (P/E): 8.9
• Beta (1Y): 0.48
• Revenue Growth: -1.94%
• EPS Growth: -5.96%
• Country: JP
• Employees: 596
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 30.69
• Shares Outstanding: 5,129,577
• 10 Day Avg. Volume: 4,670
• 30 Day Avg. Volume: 3,483
• PEG Ratio: -0.55
• Price to Book (P/B): 0.37
• Price to Sales (P/S): 0.38
• P/FCF Ratio: 3.56
• 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: 81 Outperform
• Price Target: ¥1,265.00 ▲(22.46% Upside)

Kanemitsu Corporation's strong financial performance and undervaluation are the primary drivers of its high stock score. The bullish technical indicators further support a positive outlook, although caution is advised due to overbought signals. The absence of earnings call and corporate events data does not impact the overall assessment.

Positive Factors

Balance Sheet Strength

A robust balance sheet with low leverage and a healthy equity ratio supports resilience through auto-cycle volatility. Increased stockholders' equity and prudent debt levels give the company durable financial flexibility to fund tooling, absorb order fluctuations, and pursue targeted investments without straining liquidity.

Cash Flow Generation

Sustained upward operating cash flow and growing free cash flow signal high-quality earnings and strong internal funding capacity. This supports durable capital expenditure, maintenance of manufacturing assets, possible dividends or buybacks, and buffer for working capital swings tied to OEM production cycles.

Improving Operational Margins

Material margin improvement and recovery from negative to positive EBIT demonstrate better cost control and operational execution. Sustainable margin expansion enhances cash conversion and returns on invested capital, enabling the firm to better absorb cyclical downturns and reinvest in product development or process automation.

Negative Factors

Exposure to ICE Components

Concentration in internal combustion engine components poses structural demand risk as OEMs accelerate electrification. Over a multi-quarter horizon, shrinking ICE content per vehicle can reduce addressable demand unless the company pivots product mix toward EV powertrains or diversified non-ICE applications.

Net Income Dip in 2025

A recent net income decline, despite earlier margin gains, points to either one-off costs or cyclical pressures that erode profitability. Persisting earnings dips could constrain reinvestment, reduce retained earnings growth, and limit strategic spending needed to adapt to industry shifts.

Modest Revenue Contraction

Negative revenue growth indicates recent softness in demand or customer orders. For a mid-sized supplier, even small top-line declines can worsen fixed-cost absorption and pressure margins, underscoring the need for customer diversification and new product development to sustain long-term revenue resilience.

Kanemitsu Corporation Business Overview & Revenue Model

Company Description

Kanemitsu Corporation engages in the development, manufacture, and sale of pulleys for automobiles, and agricultural machinery and three-dimensional steel plates in Japan. The company offers engine parts including crankshaft, power steering, alternator, fan, and water pump pulley, as well as sensor plate, tensioner base, tight plug, crankshaft and camshaft sprocket; transmission parts, such as piston drive pulley, flange lock-up clutch, cover canceller force, and drum C2 clutch inner; and EPS parts, which include inner hub, housing, and ring products. It also provides home appliance parts including water container; and motor case and airbag parts. The company was founded in 1947 and is headquartered in Akashi, Japan.

How the Company Makes Money

Kanemitsu Corporation generates revenue primarily through the sale of its automotive parts and components to major automobile manufacturers. Key revenue streams include the production of specialized machinery used in vehicle assembly, high-performance transmission systems, and various electronic components that enhance vehicle functionality. The company benefits from long-term contracts and partnerships with leading automotive brands, ensuring a steady flow of orders. Additionally, Kanemitsu invests in research and development, leading to the creation of cutting-edge products that meet the evolving demands of the automotive industry, further driving its earnings.

Kanemitsu Corporation Financial Statement Overview

Summary

Kanemitsu Corporation demonstrates strong financial health with consistent revenue and profit growth. The balance sheet is robust with low leverage, and cash flow generation is solid, supporting future growth. Minor fluctuations in net income are noted but do not significantly detract from the overall positive financial trajectory.

Income Statement

Kanemitsu Corporation has shown strong and consistent revenue growth, with a notable increase in total revenue from 2020 to 2025. Gross profit margins have improved significantly, reflecting effective cost management and revenue growth. The company has also transitioned from negative EBIT in 2021 to positive EBIT in subsequent years, indicating improved operational efficiency. Net profit margins are solid, although there was a dip in net income in 2025, suggesting room for improvement in profit conversion.

Balance Sheet

The company's balance sheet is robust, with a healthy equity ratio indicating strong financial stability. The debt-to-equity ratio is low, demonstrating prudent leverage management. Return on equity is favorable, driven by consistent profitability. The company has increased its stockholders' equity over time, reflecting retained earnings and reinvestment into the business.

Cash Flow

Kanemitsu Corporation's cash flow statements reflect a solid cash flow generation capability. The operating cash flow has shown an upward trend, supporting the company's liquidity and operational flexibility. Free cash flow has grown significantly, demonstrating efficient capital expenditure management. The company maintains a strong operating cash flow to net income ratio, highlighting the quality of its earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.16B	11.12B	11.09B	10.02B	8.76B	7.03B
Gross Profit	2.66B	2.50B	2.32B	2.07B	1.88B	1.10B
EBITDA	1.67B	1.57B	1.50B	1.49B	1.07B	654.30M
Net Income	661.45M	540.61M	632.25M	538.06M	163.77M	-109.55M
Balance Sheet
Total Assets	15.77B	16.10B	16.11B	15.41B	14.37B	14.15B
Cash, Cash Equivalents and Short-Term Investments	4.09B	4.14B	3.57B	3.74B	3.29B	3.02B
Total Debt	955.77M	1.12B	1.76B	2.32B	2.43B	2.57B
Total Liabilities	4.20B	4.43B	5.14B	5.45B	5.10B	5.00B
Stockholders Equity	11.39B	11.47B	10.78B	9.79B	9.10B	8.98B
Cash Flow
Free Cash Flow	0.00	1.20B	430.26M	275.98M	582.78M	-191.39M
Operating Cash Flow	0.00	1.65B	1.42B	903.73M	1.09B	563.74M
Investing Cash Flow	0.00	-1.04B	-992.46M	-330.12M	-522.39M	-434.04M
Financing Cash Flow	0.00	-799.70M	-727.59M	-273.27M	-328.59M	885.92M

Kanemitsu Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1033.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7208, the sentiment is Positive. The current price of 1033 is below the 20-day moving average (MA) of 1097.15, below the 50-day MA of 1042.64, and above the 200-day MA of 932.56, indicating a neutral trend. The MACD of 16.16 indicates Positive momentum. The RSI at 55.20 is Neutral, neither overbought nor oversold. The STOCH value of 45.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7208.

Kanemitsu Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7208	81 Outperform	¥5.61B	8.91	―	3.04%	-1.94%	-5.96%
7284	71 Outperform	¥4.17B	6.85	―	4.08%	3.46%	―
6699	68 Neutral	¥5.29B	2.71	―	6.68%	1.95%	―
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
6901	54 Neutral	¥5.62B	-22.64	―	2.46%	-9.28%	-219.81%
7256	51 Neutral	¥6.04B	-1.10	―	―	-9.54%	21.21%
7214	49 Neutral	¥4.91B	-107.08	―	4.51%	0.61%	-453.99%