Araya Industrial Co., Ltd. (7305) AI Stock Analysis

• Market Cap: ¥23.93B
• Dividend Yield: 5.98%
• Average Volume (3M): 15.84K
• Price to Earnings (P/E): 12.8
• Beta (1Y): 0.63
• Revenue Growth: -3.84%
• EPS Growth: 28.92%
• Country: JP
• Employees: 480
• Sector: Basic Materials
• Sector Strength: 68
• Industry: Steel
• EPS (TTM): 168.60
• Shares Outstanding: 6,045,326
• 10 Day Avg. Volume: 14,180
• 30 Day Avg. Volume: 15,840
• PEG Ratio: 0.26
• Price to Book (P/B): 0.77
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: ¥5,216.00
• Price Target Upside: 4.32% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 72 Outperform
• Price Target: ¥5,095.00 ▲(1.90%Upside)

The stock's overall score is bolstered by its strong financial foundation and attractive valuation, particularly the high dividend yield. However, technical analysis presents mixed signals, with potential bearish momentum offsetting some of the valuation benefits. Addressing revenue growth challenges and improving profit margins could enhance future performance.

Araya Industrial Co., Ltd. Business Overview & Revenue Model

Company Description

Araya Industrial Co., Ltd. manufactures and sells steel products in Japan and internationally. The company offers ordinary steel pipes, stainless steel pipes, special-shaped steel pipes, various sections, and precision parts for OA machines for use in automobiles, motorcycles, bicycles, construction, furniture products, industrial machinery, welfare equipment, and logistics equipment. It also offers suspensions for wheelchairs, wheel chairs, industrial absolex, and wing arms for toilet, as well as bicycles and rims. The company was founded in 1903 and is headquartered in Osaka, Japan.

How the Company Makes Money

Araya Industrial Co., Ltd. generates revenue primarily through the sale of its bicycle products and components. The company's core revenue streams include the production and distribution of bicycle rims, frames, and complete bicycles. In addition to direct sales, Araya may engage in partnerships with distributors and retailers to expand its market reach. The company also benefits from its reputation for quality and innovation, which helps to maintain a strong customer base and drive repeat business. Other factors contributing to its earnings could include economies of scale in production and strategic marketing efforts to enhance brand visibility.

Araya Industrial Co., Ltd. Financial Statement Overview

Summary

Araya Industrial Co., Ltd. demonstrates a robust financial foundation with strong equity management and cash flow generation. However, challenges in revenue growth and narrowing profit margins indicate potential areas for improvement.

Income Statement

The company demonstrates moderate revenue stability with fluctuations over the years, showing a decrease in revenue from the previous year by 3.84%. The Gross Profit Margin remains strong at approximately 18%, indicating efficient production processes. However, the declining Net Profit Margin from 5.56% last year to 4.97% this year suggests narrowing profitability. The EBIT Margin and EBITDA Margin also show slight declines, reflecting some operational challenges.

Balance Sheet

Araya Industrial Co., Ltd. maintains a solid financial structure with a healthy Debt-to-Equity Ratio of 0.18, showcasing prudent debt management. The Return on Equity (ROE) is strong at 6.84%, highlighting effective shareholder value creation. The Equity Ratio of 59.76% suggests a stable asset base funded largely by equity, providing a cushion against liabilities.

Cash Flow

The company's cash flow shows resilience with a positive Operating Cash Flow to Net Income Ratio of 1.28, indicating strong cash generation relative to net income. However, the Free Cash Flow decreased by 23.41% from last year, which could pressure future investments. The Free Cash Flow to Net Income Ratio remains healthy at 0.87, although it's down from the previous year, suggesting room for improvement in cash management.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	42.84B	44.56B	46.43B	40.76B	36.50B
Gross Profit	7.72B	7.81B	10.43B	8.98B	6.21B
EBITDA	3.82B	3.45B	5.50B	4.16B	2.41B
Net Income	2.13B	1.69B	3.06B	2.57B	1.28B
Balance Sheet
Total Assets	52.06B	58.19B	54.04B	52.52B	45.57B
Cash, Cash Equivalents and Short-Term Investments	6.70B	9.60B	8.33B	8.14B	8.41B
Total Debt	5.74B	5.90B	6.25B	6.62B	6.84B
Total Liabilities	20.48B	22.18B	21.82B	23.68B	19.36B
Stockholders Equity	31.11B	35.60B	31.86B	28.64B	26.03B
Cash Flow
Free Cash Flow	1.84B	2.41B	1.00B	294.00M	772.00M
Operating Cash Flow	2.73B	2.87B	2.07B	1.22B	2.31B
Investing Cash Flow	590.00M	-683.00M	-1.07B	-849.00M	-671.00M
Financing Cash Flow	-6.05B	-1.05B	-896.00M	-729.00M	-1.07B

Araya Industrial Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5000.00
• 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:7305, the sentiment is Positive. The current price of 5000 is above the 20-day moving average (MA) of 4843.75, above the 50-day MA of 4709.00, and above the 200-day MA of 4619.66, indicating a bullish trend. The MACD of 80.04 indicates Negative momentum. The RSI at 76.23 is Negative, neither overbought nor oversold. The STOCH value of 98.48 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7305.

Araya Industrial Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5976	79 Outperform	¥36.03B	22.83		4.25%	0.63%	23.89%
5632	73 Outperform	¥25.94B	10.83		3.83%	-6.10%	―
5408	72 Outperform	¥34.49B	6.06		6.26%	-8.20%	-36.06%
7305	72 Outperform	¥23.93B	12.82		5.98%	-3.84%	28.92%
5484	69 Neutral	$14.95B	14.80		2.01%	-0.07%	-17.27%
5476	45 Neutral	¥6.01B	―		12.44%	0.44%	-217.04%
Sector *	44 Neutral	AU$1.48B	-6.11	-41.37%	4.14%	-3.52%	-43.04%