# Sumitomo Heavy Industries (6302.JP)

Canonical: https://gigainvestors.com/s/6302.JP

Analysis as of: 2026-10-15T07:10:53.625Z. Financial observations: FY2017–FY2025.

Listing currency: JPY. Reporting currency: JPY.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: JPY 5,617.00 per share; close as of 2026-10-15.

Estimated value: low JPY 2,387.99 per share, central JPY 2,615.66 per share, high JPY 2,918.73 per share. Buy at or below the central value JPY 2,615.66 per share. Valuation as of 2026-10-15T07:10:53.625Z; scenarios are not confidence intervals.

Expected annual return: 5.6% at the stated quote. About 5.6% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; JP 10-year bond 2.9% + 4 points).

## Checklist

### understandable: pass

- 4 revenue declines in the last 10 years (informational)

- Financial history: 9 years

- Years with declining revenue: 4

- Years with a net loss: 0

- Operating margin variation: 0.22×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.07×

- FY2018: 0.09×

- FY2019: 0.09×

- FY2020: 0.07×

- FY2021: 0.05×

- FY2022: 0.05×

- FY2023: 0.07×

- FY2024: 0.05×

- FY2025: 0.05×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 7.3%

- ROIC, second-lowest year: 4.7%

- Typical minus recent gross margin: -0.4 pp

- Typical gross margin (annual median): 23.6%

- Recent gross margin (lower of latest and 3-year median): 24.0%

- Years with nonpositive capital: 0

- Capital spending / revenue: 4.2%

- ROIC including acquisitions, ten-year median: 4.7%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 8.8%

- FY2018: 12.8%

- FY2019: 12.4%

- FY2020: 7.5%

- FY2021: 6.1%

- FY2022: 4.7%

- FY2023: 7.3%

- FY2024: 4.7%

- FY2025: 4.4%

### economics: fail

- owner earnings cash conversion below threshold

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 0.74×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: JPY 90B

- Net income, five-year total: JPY 121B

- Return on incremental invested capital: 0.3%

- Working capital / revenue, annual change: 1.6 pp

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: -0.20×

- FY2023: 1.00×

- FY2024: -0.34×

- FY2025: 0.56×

### management: fail

- Historical market-dollar context (not the management verdict): 2017 to 2025 (8 years)

- potential debt-funded buybacks (informational)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 12.4% vs 4.7%

- Per-share earnings: 274.24 to 257.42 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 5-year annual growth: -0.4%

- Market cap gain: JPY 23B

- Cumulative retained earnings: JPY 155B

- Diluted shares, 5-year annual growth: -0.4%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2025

- Per-share value growth: -1.0%

- Per-share value change: JPY -16.82

- Per-share value, starting three-year median: JPY 274.24

- Per-share value, ending three-year median: JPY 257.42

- Buybacks concentrated in cheaper years (correlation): -0.50

- Average buyback yield: 0.9%

- Buyback history: 3 years

- Debt-funded buybacks: Yes

- ROIC, first three-year median: 12.4%

- ROIC, last three-year median: 4.7%

Chart: Earnings per share; fiscal year observations.

- FY2017: JPY 274.24

- FY2018: JPY 282.83

- FY2019: JPY 267.77

- FY2020: JPY 218.46

- FY2021: JPY 359.61

- FY2022: JPY 47.20

- FY2023: JPY 267.30

- FY2024: JPY 63.86

- FY2025: JPY 257.42

### accounting: pass

- Sloan accruals: -2.5%

- Receivables to sales index (DSRI): 1.02×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 2.06×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.05×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -0.6%

- FY2018: -4.1%

- FY2019: -0.3%

- FY2020: -3.6%

- FY2021: -1.6%

- FY2022: -1.4%

- FY2023: -2.7%

- FY2024: -0.4%

- FY2025: -2.5%

## Holders

## Price story

Price needs cash profits to grow 12.9% a year for ten years · sales -0.4%

Story as of 2026-10-16T10:00:14.430Z; price observation 2026-10-15.

Price needs cash profits to grow 12.9% a year for ten years

### Sales · FY2024–2025

sales -0.4%; source https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100XT1R.pdf; observed 2026-03-26.

- FY2017: JPY 674B 

- FY2018: JPY 791B 

- FY2019: JPY 864B 

- FY2020: JPY 849B 

- FY2021: JPY 944B 

- FY2022: JPY 854B 

- FY2023: JPY 1.08T 

- FY2024: JPY 1.07T 

- FY2025: JPY 1.07T 

### Gross margin · FY2025

gross margin 24.5%; source https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100XT1R.pdf; observed 2026-03-26.

- FY2017: 23.2% 

- FY2018: 24.4% 

- FY2019: 24.3% 

- FY2020: 22.9% 

- FY2021: 19.6% 

- FY2022: 22.1% 

- FY2023: 23.6% 

- FY2024: 24.0% 

- FY2025: 24.5% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Annual sales are JPY 1.1 trillion.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100XT1R.pdf (filed 2026-03-26); FY2025: revenue 1066881000000; grossProfit 260898000000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 23.6% to 24.5% during 2023–25; it earns 7.3% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-26); FY2023: grossProfit / revenue = 23.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-26); FY2024: grossProfit / revenue = 24%.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100XT1R.pdf (filed 2026-03-26); FY2025: grossProfit / revenue = 24.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-26); 9-year return on capital observations [[2017,0.08825986367453374],[2018,0.1277789718174582],[2019,0.12350810243700358],[2020,0.07506996811936381],[2021,0.061282250260086074],[2022,0.04748177568645866],[2023,0.07343706084945863],[2024,0.04711826613168454],[2025,0.044014987107298724]]; median 0.07343706084945863. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Reinvests 46% of cash earnings; earns 0.3% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-26); FY2017: growth capex 0; upkeep 24592000000; owner earnings 29332000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-26); FY2018: growth capex 6911000000; upkeep 23003000000; owner earnings 34660000000. Growth capex / owner earnings = 0.19939411425274092.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-26); FY2019: growth capex 7877000000; upkeep 25975000000; owner earnings 32807000000. Growth capex / owner earnings = 0.2401011979150791.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-26); FY2020: growth capex 0; upkeep 41316000000; owner earnings 13401000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-26); FY2021: growth capex 10095000000; upkeep 29746000000; owner earnings 44053000000. Growth capex / owner earnings = 0.22915578961705219.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-26); FY2023: growth capex 3085000000; upkeep 36374000000; cash acquisitions 518000000; owner earnings 32742000000. Growth capex plus acquisitions / owner earnings = 0.11004214770020157.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100XT1R.pdf (filed 2026-03-26); FY2025: growth capex 0; upkeep 52337000000; cash acquisitions 7904000000; owner earnings 17196000000. Growth capex plus acquisitions / owner earnings = 0.4596417771574785.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-26); Incremental return on capital 0.003357522079354892, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-26); Dividend observations: [[2017,9796000000],[2018,10410000000],[2019,11636000000],[2020,14451000000],[2021,5403000000],[2022,15286000000],[2023,12867000000],[2024,14548000000],[2025,15002000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100XT1R.pdf (filed 2026-03-26); FY2025: cash repurchases 14000000 JPY.

### What the price says

The price assumes cash profits grow 12.9% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-26); Ten-year compound average after fade. Initial solved rate 0.1738069284899454. Price 5617; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03.  Closing-price date 2026-10-15.

## Monthly share-price history (JPY per share)

- 2016-11: JPY 3,445.00 per share

- 2016-12: JPY 3,765.00 per share

- 2017-01: JPY 3,890.00 per share

- 2017-02: JPY 3,975.00 per share

- 2017-03: JPY 3,880.00 per share

- 2017-04: JPY 3,885.00 per share

- 2017-05: JPY 3,610.00 per share

- 2017-06: JPY 3,705.00 per share

- 2017-07: JPY 4,030.00 per share

- 2017-08: JPY 4,100.00 per share

- 2017-09: JPY 4,510.00 per share

- 2017-10: JPY 4,740.00 per share

- 2017-11: JPY 4,565.00 per share

- 2017-12: JPY 4,770.00 per share

- 2018-01: JPY 4,975.00 per share

- 2018-02: JPY 4,225.00 per share

- 2018-03: JPY 4,035.00 per share

- 2018-04: JPY 4,190.00 per share

- 2018-05: JPY 3,850.00 per share

- 2018-06: JPY 3,740.00 per share

- 2018-07: JPY 3,870.00 per share

- 2018-08: JPY 3,615.00 per share

- 2018-09: JPY 4,055.00 per share

- 2018-10: JPY 3,565.00 per share

- 2018-11: JPY 3,765.00 per share

- 2018-12: JPY 3,275.00 per share

- 2019-01: JPY 3,675.00 per share

- 2019-02: JPY 3,810.00 per share

- 2019-03: JPY 3,585.00 per share

- 2019-04: JPY 3,925.00 per share

- 2019-05: JPY 3,445.00 per share

- 2019-06: JPY 3,705.00 per share

- 2019-07: JPY 3,535.00 per share

- 2019-08: JPY 3,055.00 per share

- 2019-09: JPY 3,200.00 per share

- 2019-10: JPY 3,395.00 per share

- 2019-11: JPY 3,130.00 per share

- 2019-12: JPY 3,130.00 per share

- 2020-01: JPY 2,932.00 per share

- 2020-02: JPY 2,352.00 per share

- 2020-03: JPY 1,951.00 per share

- 2020-04: JPY 2,294.00 per share

- 2020-05: JPY 2,460.00 per share

- 2020-06: JPY 2,345.00 per share

- 2020-07: JPY 2,049.00 per share

- 2020-08: JPY 2,413.00 per share

- 2020-09: JPY 2,442.00 per share

- 2020-10: JPY 2,220.00 per share

- 2020-11: JPY 2,253.00 per share

- 2020-12: JPY 2,546.00 per share

- 2021-01: JPY 2,902.00 per share

- 2021-02: JPY 2,925.00 per share

- 2021-03: JPY 3,075.00 per share

- 2021-04: JPY 3,165.00 per share

- 2021-05: JPY 3,385.00 per share

- 2021-06: JPY 3,060.00 per share

- 2021-07: JPY 3,010.00 per share

- 2021-08: JPY 2,880.00 per share

- 2021-09: JPY 2,941.00 per share

- 2021-10: JPY 2,930.00 per share

- 2021-11: JPY 2,521.00 per share

- 2021-12: JPY 2,789.00 per share

- 2022-01: JPY 2,985.00 per share

- 2022-02: JPY 2,785.00 per share

- 2022-03: JPY 2,818.00 per share

- 2022-04: JPY 2,749.00 per share

- 2022-05: JPY 3,030.00 per share

- 2022-06: JPY 2,995.00 per share

- 2022-07: JPY 3,025.00 per share

- 2022-08: JPY 2,939.00 per share

- 2022-09: JPY 2,673.00 per share

- 2022-10: JPY 2,823.00 per share

- 2022-11: JPY 2,912.00 per share

- 2022-12: JPY 2,644.00 per share

- 2023-01: JPY 2,877.00 per share

- 2023-02: JPY 3,205.00 per share

- 2023-03: JPY 3,240.00 per share

- 2023-04: JPY 3,270.00 per share

- 2023-05: JPY 3,110.00 per share

- 2023-06: JPY 3,438.00 per share

- 2023-07: JPY 3,493.00 per share

- 2023-08: JPY 3,653.00 per share

- 2023-09: JPY 3,792.00 per share

- 2023-10: JPY 3,423.00 per share

- 2023-11: JPY 3,529.00 per share

- 2023-12: JPY 3,555.00 per share

- 2024-01: JPY 3,861.00 per share

- 2024-02: JPY 4,457.00 per share

- 2024-03: JPY 4,725.00 per share

- 2024-04: JPY 4,411.00 per share

- 2024-05: JPY 4,260.00 per share

- 2024-06: JPY 4,181.00 per share

- 2024-07: JPY 4,091.00 per share

- 2024-08: JPY 3,384.00 per share

- 2024-09: JPY 3,440.00 per share

- 2024-10: JPY 3,446.00 per share

- 2024-11: JPY 3,169.00 per share

- 2024-12: JPY 3,245.00 per share

- 2025-01: JPY 3,208.00 per share

- 2025-02: JPY 3,035.00 per share

- 2025-03: JPY 3,050.00 per share

- 2025-04: JPY 2,971.00 per share

- 2025-05: JPY 3,035.00 per share

- 2025-06: JPY 2,962.50 per share

- 2025-07: JPY 3,366.00 per share

- 2025-08: JPY 3,297.00 per share

- 2025-09: JPY 3,562.00 per share

- 2025-10: JPY 4,131.00 per share

- 2025-11: JPY 4,256.00 per share

- 2025-12: JPY 4,149.00 per share

- 2026-01: JPY 4,816.00 per share

- 2026-02: JPY 6,173.00 per share

- 2026-03: JPY 4,708.00 per share

- 2026-04: JPY 5,269.00 per share

- 2026-05: JPY 5,222.00 per share

- 2026-06: JPY 5,058.00 per share

- 2026-07: JPY 5,238.00 per share

- 2026-08: JPY 5,761.00 per share

- 2026-09: JPY 5,996.00 per share

- 2026-10: JPY 6,037.00 per share

## Annual estimated value (JPY per share)

- FY2021: low JPY 4,321.95 per share, central JPY 4,827.10 per share, high JPY 5,499.55 per share

- FY2022: low JPY 3,548.33 per share, central JPY 3,947.08 per share, high JPY 4,477.90 per share

- FY2023: low JPY 3,597.84 per share, central JPY 4,000.68 per share, high JPY 4,536.93 per share

- FY2024: low JPY 2,270.33 per share, central JPY 2,481.06 per share, high JPY 2,761.58 per share

- FY2025: low JPY 2,310.61 per share, central JPY 2,526.24 per share, high JPY 2,813.29 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original EDINET filing](https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100XT1R.pdf); period 2025-12-31, filed 2026-03-26.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.