Kanematsu Engineering Co., Ltd. (6402) AI Stock Analysis

Kanematsu Engineering Co., Ltd.

(TSE/TYO:6402)

Select Model

Rating:67Neutral

Price Target:JPY 1,719.00▲(9.70% Upside)

Action:reiterated

Date:08/17/26

Kanematsu Engineering scores 67, driven primarily by its attractive valuation — a P/E of 7.6x and dividend yield of 4.7% offer compelling value and income. Financial fundamentals are on an improving trajectory with expanding margins, declining leverage, and healthy ROE, though historical cash flow volatility remains a key risk. Technicals are modestly supportive with the stock trading above short-term moving averages but facing resistance near the 200-DMA. The low beta provides defensive qualities. The main factors limiting a higher score are the inconsistent cash flow generation and the stock's struggle to break above longer-term technical resistance.

Positive Factors

Conservative balance sheetA low and declining debt-to-equity profile increases financial resilience over cycles, supporting capital spending, tendering for large infrastructure projects, and shareholder returns. Conservative leverage provides durable optionality to absorb downturns or fund strategic investments without stressing cash flow.

Negative Factors

Cash flow volatilityIntermittent negative operating/free cash flow in prior years shows working-capital swings and inconsistent cash conversion. This unpredictability undermines confidence in sustainable free cash flow, complicates capital allocation, and raises the risk that earnings gains may not translate reliably into cash for reinvestment or dividends.

Kanematsu Engineering Co., Ltd. (6402) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 7.67B
Dividend Yield: 4.72%
Average Volume (3M): 3,833
Price to Earnings (P/E): 7.5
Beta (1Y): 0.52
Revenue Growth: 4.59%
EPS Growth: 34.39%
Country: Japan
Employees: 156
Sector: Industrials
Sector Strength: 63
Industry: Industrial - Machinery

Kanematsu Engineering Co., Ltd. Business Overview & Revenue Model

Company Description

Kanematsu Engineering Co., Ltd., based in Kochi, Japan, and established in 1971, specializes in providing a variety of vehicles and industrial machinery to clients both within Japan and internationally. Their comprehensive product line features advan...

How the Company Makes Money

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Kanematsu Engineering Co., Ltd. Financial Statement Overview

Summary

Kanematsu Engineering shows improving revenue growth (CAGR ~4-5%) and expanding margins, with FY2026 projections at the best levels across the review period (net margin ~7.4%, ROE ~13.1%). The balance sheet is well-managed with declining leverage (D/E ~0.21) and growing equity. However, cash flow volatility remains a significant concern — operating cash flow has swung from deeply negative to strongly positive across recent years, though FY2025-2026 show stabilization. The blended financial score reflects solid income statement and balance sheet fundamentals tempered by inconsistent cash generation.

Income Statement

68Positive

Balance Sheet

72Positive

Cash Flow

55Neutral

Financial statement breakdown
Breakdown	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	14.10B	13.30B	12.40B	11.34B	11.87B
Gross Profit	3.62B	3.03B	2.83B	2.68B	2.80B
EBITDA	1.73B	1.41B	1.27B	1.48B	1.33B
Net Income	1.04B	700.69M	618.92M	754.36M	750.28M
Balance Sheet
Total Assets	12.66B	12.08B	13.38B	13.75B	12.81B
Cash, Cash Equivalents and Short-Term Investments	2.13B	1.58B	1.50B	2.38B	967.51M
Total Debt	1.64B	1.49B	1.83B	2.18B	2.46B
Total Liabilities	4.70B	4.94B	6.74B	7.47B	7.10B
Stockholders Equity	7.96B	7.14B	6.64B	6.29B	5.71B
Cash Flow
Free Cash Flow	662.23M	651.97M	-262.33M	1.95B	-2.33B
Operating Cash Flow	802.14M	733.30M	-111.96M	2.28B	-243.69M
Investing Cash Flow	-152.63M	-83.51M	-150.63M	-334.95M	-1.29B
Financing Cash Flow	-94.53M	-568.34M	-615.44M	-541.04M	1.18B

Kanematsu Engineering Co., Ltd. Technical Analysis

Technical Analysis SentimentNegative

Last Price1567.00

Price Trends

50DMA1592.90Negative

100DMA1532.18Positive

200DMA1617.56Negative

Market Momentum

MACD-7.79Negative

RSI45.47Neutral

STOCH58.89Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6402, the sentiment is Negative. The current price of 1567.00 is below the 20-day moving average (MA) of 1569.85, below the 50-day MA of 1592.90, and below the 200-day MA of 1617.56, indicating a bearish trend. The MACD of -7.79 indicates Negative momentum. The RSI at 45.47 is Neutral, neither overbought nor oversold. The STOCH value of 58.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6402.

Kanematsu Engineering Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

JP:6402 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:6381	84Outperform	JPY 68.49B	12.10	―	4.94%	6.49%	36.18%
JP:6402	67Neutral	JPY 8.71B	7.51	―	4.72%	4.59%	34.39%
JP:6393	67Neutral	JPY 12.03B	10.28	―	5.12%	-1.68%	-9.54%
Sector *	63Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
JP:6492	59Neutral	JPY 19.67B	8.02	―	0.95%	―	―
JP:6363	57Neutral	JPY 68.03B	9.12	―	2.50%	0.93%	212.09%
JP:6495	44Neutral	JPY 5.19B	60.49	―	1.98%	9.69%	29.00%

* Industrials Sector Average

Performance Comparison

JP:6402 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:6402	Kanematsu Engineering Co., Ltd.	1567.00	111.57	7.67%
JP:6363	Torishima Pump Mfg.Co., Ltd.	2642.00	592.15	28.89%
JP:6381	ANEST IWATA Corp.	1721.00	277.17	19.20%
JP:6393	Yuken Kogyo Co., Ltd.	2932.00	134.36	4.80%
JP:6492	Okano Valve Mfg. Co., Ltd.	11610.00	2616.09	29.09%
JP:6495	Miyairi Valve Mfg.Co., Ltd.	101.00	-11.95	-10.58%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Aug 17, 2026

Kanematsu Engineering Co., Ltd. AI Stock Analysis