Ebara Jitsugyo Co.,Ltd. manufactures and sells environment and related products in Japan. It is also involved in the engineering operations for waterworks and sewerage. In addition, the company sells various industrial machines, such as a pump and air-conditioning/heating and cooling equipment, etc. Ebara Jitsugyo Co.,Ltd. was founded in 1946 and is headquartered in Tokyo, Japan.

Japan

Ebara Jitsugyo Co.,Ltd.

Industrials

The company pays dividends on rare occasions. There have only been a few years with dividend payments in the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has been good and slightly above its peers. At the same time, the average five-year yield has been significantly lower, at very close to zero. 

6328.T reported revenue of JPY 38 245mn in the last 12 months, up 2% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 4% from FY24 to JPY 274.44. Market expects EPS to reach JPY 267.50 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 24ppts and its growth decelerated by 12ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is slightly unfavourable.

The company has reported modest EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 12.5% in the last 12 months, up from 12.4% in FY23. 

Historically, 6328.T has reported good net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 8.6%, down from 8.7% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to 13.4%, above the peers. The consensus estimate for FY24 for RoCE is 23.3%, again ahead of the peers. 

Ebara Jitsugyo Co.,Ltd. reported a return on equity (RoE) of 14.4% in the last 12 months, down from 15.9% in FY23. The market consensus projects an RoE of 18.8% in FY24, again ahead of its peers. 

Another important profitability metric, return on assets (RoA), amounted to 7.3% in the last 12 months, a decrease from 8.3% in FY23. The market analysts predict that RoA will be 9.4% in FY24, again stronger than its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 2.6 in the past several years. This ratio implies a strong shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

6328.T has below average trading liquidity. It will take at least a day or two for the average private investor to sell a common position under normal market conditions. Liquidity is usually quite stable and is unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note strong debt servicing capacity, adequate interest coverage, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, and poor working capital management.

In highly turbulent market conditions, 6328.T is not overly volatile. In other words, the stock will fall less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be low. 

In normal market circumstances, 6328.T is not overly volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will remain relatively stable. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to negligible. 

From both historical and forecast perspectives, the stock is moderately underpriced compared to similar stocks. In particular, the stock is reasonably priced on P/E, 'cheap' on EV/EBITD. 

Ebara Jitsugyo Co.,Ltd.

¥ 3280

5

Ebara Jitsugyo Co.,Ltd.

¥ 3280

5

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

¥ 3280

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