Howa Machinery, Ltd. (6203) AI Stock Analysis

• Market Cap: ¥17.46B
• Dividend Yield: 1.42%
• Average Volume (3M): 451.15K
• Price to Earnings (P/E): 19.0
• Beta (1Y): 1.13
• Revenue Growth: 29.02%
• EPS Growth: N/A
• Country: JP
• Employees: 755
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 28.76
• Shares Outstanding: 12,548,134
• 10 Day Avg. Volume: 560,530
• 30 Day Avg. Volume: 451,150
• PEG Ratio: -0.11
• Price to Book (P/B): 0.80
• Price to Sales (P/S): 0.60
• P/FCF Ratio: -6.42
• 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): 15,933.56
• Revenue Forecast (FY): ¥4.15T

• Rating: 68 Neutral
• Price Target: ¥1,599.00 ▲(24.92% Upside)

The overall stock score of 68 reflects strong technical momentum and solid financial performance, particularly in revenue growth and profitability recovery. However, challenges in cash flow management and a fair valuation limit the score. The absence of earnings call and corporate events data did not impact the score calculation.

Howa Machinery, Ltd. Business Overview & Revenue Model

Company Description

Howa Machinery, Ltd. (6203) is a Japanese company specializing in the manufacturing and distribution of precision machinery and equipment. The company operates primarily in the sectors of machine tools and industrial machinery, providing a range of products that include CNC lathes, machining centers, and other automated systems. With a commitment to innovation and quality, Howa Machinery serves various industries, including automotive, aerospace, and general manufacturing.

How the Company Makes Money

Howa Machinery generates revenue through the sale of its machinery and equipment, which are primarily targeted at industrial clients in need of precision manufacturing solutions. The company’s revenue model is largely based on direct sales of its products, complemented by after-sales services such as maintenance, parts, and technical support. Key revenue streams include the sale of CNC machines, which are crucial for modern manufacturing processes, as well as contracts for long-term service agreements with clients. Additionally, Howa Machinery has established significant partnerships with various industry players, enhancing its market presence and expanding its customer base, which contributes positively to its earnings.

Howa Machinery, Ltd. Financial Statement Overview

Summary

The company exhibits strong revenue growth and improving profitability, with a revenue growth rate of 25.5% and a net profit margin improvement to 3.0%. However, challenges in cash flow generation, such as negative free cash flow, remain a concern.

Income Statement

The company has shown a strong revenue growth rate of 25.5% from 2024 to 2025, indicating robust demand. Gross profit margin for 2025 is 16.9%, reflecting decent cost management. However, the net profit margin improved to 3.0% from a negative position, highlighting recovery from previous losses. The EBIT margin is 5.0%, while the EBITDA margin is 6.9%, both showing improvement but still modest. Overall, the company is recovering well with significant revenue growth and improved profitability metrics.

Balance Sheet

The debt-to-equity ratio stands at 0.43, indicating a moderate leverage level. Return on Equity (ROE) for 2025 is 4.0%, reflecting a modest return for shareholders. The equity ratio is 55.0%, showing a stable equity base compared to total assets. While leverage is manageable, the ROE could be improved to enhance shareholder returns.

Cash Flow

The free cash flow remains negative, but there is a slight improvement in operating cash flow. The operating cash flow to net income ratio is 0.07, indicating low cash generation relative to profits. The free cash flow to net income ratio is negative, signaling challenges in converting net income into free cash flow. Cash flow stability is a concern, with negative free cash flow persisting.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	25.46B	24.83B	19.79B	19.74B	19.70B	18.77B
Gross Profit	4.49B	4.20B	3.49B	3.63B	3.96B	3.48B
EBITDA	2.14B	1.72B	-189.00M	1.14B	1.42B	1.41B
Net Income	894.00M	749.00M	-873.00M	524.00M	1.06B	968.00M
Balance Sheet
Total Assets	34.44B	34.05B	30.29B	27.62B	27.67B	26.46B
Cash, Cash Equivalents and Short-Term Investments	5.71B	2.92B	3.90B	3.33B	4.42B	3.46B
Total Debt	7.73B	7.97B	6.24B	3.52B	3.27B	4.15B
Total Liabilities	15.64B	15.31B	12.96B	10.27B	10.78B	10.35B
Stockholders Equity	18.79B	18.74B	17.33B	17.35B	16.89B	16.11B
Cash Flow
Free Cash Flow	0.00	-2.32B	-2.23B	-1.14B	2.38B	-2.02B
Operating Cash Flow	0.00	55.00M	-1.07B	-506.00M	3.05B	-1.27B
Investing Cash Flow	0.00	-2.55B	-871.00M	-608.00M	-544.00M	-635.00M
Financing Cash Flow	0.00	1.49B	2.48B	22.00M	-1.61B	1.88B

Howa Machinery, Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1280.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6203, the sentiment is Positive. The current price of 1280 is below the 20-day moving average (MA) of 1357.05, below the 50-day MA of 1340.10, and above the 200-day MA of 1166.13, indicating a bullish trend. The MACD of 54.28 indicates Negative momentum. The RSI at 55.60 is Neutral, neither overbought nor oversold. The STOCH value of 46.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6203.

Howa Machinery, Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6373	79 Outperform	¥14.24B	14.90	―	1.92%	2.44%	163.48%
6317	78 Outperform	¥15.36B	5.25	―	3.60%	-6.23%	405.48%
6224	77 Outperform	¥17.43B	14.11	―	2.02%	24.02%	8.22%
6496	76 Outperform	¥22.50B	16.20	―	1.59%	34.70%	-8.44%
6203	68 Neutral	¥17.46B	18.98	―	1.42%	29.02%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6210	57 Neutral	¥13.60B	-28.46	―	5.30%	-1.14%	68.17%

Howa Machinery, Ltd. Corporate Events

Howa Machinery Reports Robust Financial Growth in June 2025 Quarter

Howa Machinery, Ltd. reported a significant increase in its quarterly financial performance for June 2025, with net sales rising by 13.9% and operating profit surging by 238.3% compared to the previous year. This positive financial outcome reflects the company’s strong operational efficiency and market demand, positioning it favorably within the industry and potentially benefiting its stakeholders.