Hiroshima Electric Railway Co., Ltd. (9033) AI Stock Analysis

• Market Cap: ¥19.62B
• Dividend Yield: 1.33%
• Average Volume (3M): 21.40K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.20
• Revenue Growth: 1.70%
• EPS Growth: 1841.47%
• Country: JP
• Employees: 2,180
• Sector: Industrials
• Sector Strength: 72
• Industry: Railroads
• EPS (TTM): N/A
• Shares Outstanding: 30,445,500
• 10 Day Avg. Volume: 32,210
• 30 Day Avg. Volume: 21,403
• PEG Ratio: 0.12
• Price to Book (P/B): 0.44
• Price to Sales (P/S): 0.55
• P/FCF Ratio: -8.12
• 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: 63 Neutral
• Price Target: ¥668.00 ▲(10.05% Upside)
• Action: Reiterated Date: 10/01/25
• Date: Action: Reiterated 10/01/25

The overall stock score of 63 reflects a company with improving financial performance and reasonable valuation. The technical analysis indicates mixed signals, with short-term bearish momentum but potential for a rebound. The absence of earnings call data and corporate events means these factors do not influence the score.

Positive Factors

Entrenched local tram network franchise

Hiroshima Electric Railway’s ownership and operation of the city’s tram network creates durable demand from commuters and tourists. As a core local transport provider with high barriers to entry and municipal integration, the network generates predictable fare revenue and operational scale over months.

Consistent revenue growth and rising margins

The company has shown consistent revenue growth and improved gross margin (15.3% in 2025) and recovering net margin (4.1%). These trends indicate improving pricing power and cost control, supporting sustainable profitability beyond short-term cycles if maintained.

Manageable leverage and stronger equity base

A stable and growing equity base and a moderate debt-to-equity (~0.64) give the company financial flexibility. Manageable leverage reduces refinancing and solvency risk, enabling the firm to fund service maintenance or selective investments without severe strain in a multi-month horizon.

Negative Factors

Persistent negative free cash flow

Negative free cash flow signals the company’s earnings are not yet translating into cash available for reinvestment or debt reduction. Over several months this can force additional borrowing, constrain capital spending or limit the ability to smooth services and dividends, weakening financial resilience.

Low returns on equity

Relatively low ROE indicates the business generates limited profit from shareholders’ capital. Persistently low returns constrain internal funding for growth, make capital allocation less effective, and can reduce strategic options across a 2–6 month horizon if underlying drivers aren't improved.

Negative EBIT margins indicate operational strain

Negative EBIT margins point to structural operational inefficiencies or high fixed costs relative to core revenue. Even with net margin recovery, persistent pre-tax operating losses reduce buffer against demand shocks and limit ability to scale services profitably over the medium term.

Hiroshima Electric Railway Co., Ltd. Business Overview & Revenue Model

Company Description

Hiroshima Electric Railway Co.,Ltd. engages in the bus and railroad businesses in Japan. It is also involved in the selling condominiums and residential land; and leasing of office buildings, shops, parking lots, etc. The company was incorporated in 1942 and is based in Hiroshima, Japan.

How the Company Makes Money

Hiroshima Electric Railway Co., Ltd. generates revenue primarily through fare collection from its tram and bus services, which cater to both local commuters and tourists. The company operates a varied fare system, including single rides, daily passes, and tourist packages, which contribute significantly to its income. In addition to transportation fares, the company earns revenue from real estate activities, including leasing properties and commercial spaces along its transit routes. Strategic partnerships with local businesses and tourism agencies further enhance its revenue streams, as they often collaborate on promotional initiatives that attract more riders. Government subsidies and grants for public transportation also play a role in supporting the company's financial stability.

Hiroshima Electric Railway Co., Ltd. Financial Statement Overview

Summary

Hiroshima Electric Railway Co., Ltd. has shown positive revenue growth and improved gross and net profit margins, indicating recovering profitability. The balance sheet reflects a stable equity position but with moderate leverage and low returns on equity. Cash flow challenges persist, with negative free cash flow being a concern. Overall, the company is on a positive trajectory with potential for further improvement, though cash flow management remains a key area to address.

Income Statement

The company has demonstrated consistent revenue growth, with a notable increase from 2024 to 2025. Gross profit margins have improved, reaching 15.3% in 2025. However, the company has struggled with negative EBIT margins, indicating challenges in operational efficiency. The net profit margin improved to 4.1% in 2025, showing some profitability recovery.

Balance Sheet

The balance sheet shows a stable equity position with a consistent increase in stockholders' equity over the years. The debt-to-equity ratio is manageable, though slightly elevated at 0.64 in 2025, indicating moderate leverage. The equity ratio has improved slightly, reflecting a stable financial structure. However, the return on equity remains relatively low, suggesting limited returns on equity investment.

Cash Flow

The company has faced challenges in generating positive free cash flow, with negative figures observed in recent years. The operating cash flow to net income ratio has improved, indicating better cash conversion from profits. However, the free cash flow to net income ratio is negative, highlighting issues in capital expenditure management and cash profitability.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	33.60B	33.71B	30.47B	27.45B	27.39B	25.41B
Gross Profit	5.29B	4.65B	4.46B	1.99B	765.00M	-291.00M
EBITDA	826.00M	1.21B	1.42B	-639.00M	-1.72B	-3.13B
Net Income	1.48B	1.38B	656.00M	943.00M	-1.05B	-3.29B
Balance Sheet
Total Assets	97.78B	104.08B	98.40B	94.11B	92.50B	92.12B
Cash, Cash Equivalents and Short-Term Investments	2.63B	4.05B	3.97B	4.45B	5.29B	5.29B
Total Debt	25.64B	28.36B	26.54B	28.31B	27.17B	22.44B
Total Liabilities	55.15B	61.32B	56.79B	54.88B	53.81B	52.73B
Stockholders Equity	41.56B	41.72B	40.65B	38.36B	37.81B	38.40B
Cash Flow
Free Cash Flow	0.00	-2.27B	1.61B	-3.95B	-4.87B	-2.38B
Operating Cash Flow	0.00	5.08B	5.53B	449.00M	-1.12B	2.89B
Investing Cash Flow	0.00	-5.57B	-3.65B	-2.15B	-3.56B	-2.94B
Financing Cash Flow	0.00	604.00M	-2.36B	894.00M	4.66B	1.25B

Hiroshima Electric Railway Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 607.00
• 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:9033, the sentiment is Neutral. The current price of 607 is below the 20-day moving average (MA) of 654.40, below the 50-day MA of 644.92, and below the 200-day MA of 626.23, indicating a neutral trend. The MACD of -0.24 indicates Positive momentum. The RSI at 46.54 is Neutral, neither overbought nor oversold. The STOCH value of 64.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:9033.

Hiroshima Electric Railway Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9044	78 Outperform	¥340.74B	9.85	―	1.61%	6.55%	-12.49%
9031	73 Outperform	¥237.92B	4.69	12.70%	1.68%	8.29%	24.94%
9049	71 Outperform	¥15.31B	7.70	―	0.26%	1.75%	-8.92%
9052	65 Neutral	¥44.62B	14.50	―	2.17%	4.37%	54.12%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
9033	63 Neutral	¥19.62B	-109.80	―	1.33%	1.70%	1841.47%
9046	59 Neutral	¥20.24B	9.88	―	0.81%	1.24%	19.78%