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Harmonic Drive Systems Inc 6324

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Harmonic Drive’s Margin Outlook Improves, but AI Robot Upside Remains Too Early to Price

Kangyuxiao Li

Harmonic Drive Systems has been able to capitalize on demand growth with industrial robots and semiconductor production equipment; its compact strain wave reduction gears (also known as harmonic reducers) serve as critical components of both. The company seeks to refine its product quality toward existing applications as well as find new applications that can serve as new long-term growth drivers. We think small industrial robots and semiconductor equipment will continue to serve as key target markets.

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Price vs Fair Value

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6324 is trading at a LOCK|!RzTQ premium.
Price
¥6,610.00
Fair Value
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Uncertainty
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1-Star Price
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5-Star Price
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Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Dominant market share in the high-end strain wave reduction gear market positions HDS to capitalize on major growth in the humanoid robot market over next five years.

Bears

Higher fixed costs from recent capacity expansion and end exposure to the electronics industry will prevent long-term margin expansion.

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Trading Information

Previous Close Price
—
Day Range
—–—
52-Week Range
—–—
Bid/Ask
— / —
Shares Outstanding
94.67M
Market Cap
—
Volume/Avg
— / —

Key Statistics

Price/Earnings (Normalized)
402.20
Price/Sales
10.51
Dividend Yield (Trailing)
0.30%
Dividend Yield (Forward)
0.30%
Dividend Payment Schedule
Jun, Dec
Total Yield
0.44%

Company Profile

Harmonic Drive Systems manufactures and sells high-precision reduction gears (harmonic reducers) under the Harmonic Drive brand as well as other mechatronics products, including rotary actuators, linear actuators, and AC servo motors. The company also provides planetary gear speed reducers under the AccuDrive and Harmonic Planetary brands. Its products are used in industrial robots, semiconductor production equipment, and other high-precision equipment. HDS was founded in 1970 and is headquartered in Tokyo, Japan.
Sector
Industrials
Industry
Specialty Industrial Machinery
Stock Style Box
Mid Growth
Total Number of Employees
1,761
Website
https://www.hds.co.jp

Competitors

Valuation

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Metric
6324
6954
6594
Price/Earnings (Normalized)
 402.2034.1117.93
Price/Book Value
 7.783.07127.04
Price/Sales
 10.516.660.89
Price/Cash Flow
 71.5624.9313.80
Price/Earnings
6324
6954
6594

Financial Strength

Metric
6324
6954
6594
Quick Ratio
 3.015.150.58
Current Ratio
 4.166.890.59
Interest Coverage
 9.02—−20.03
Quick Ratio
6324
6954
6594

Profitability

Metric
6324
6954
6594
Return on Assets (Normalized)
 —11.36%−26.16%
Return on Equity (Normalized)
 —12.73%−94.31%
Return on Invested Capital (Normalized)
 —12.17%−35.30%
Return on Assets
6324
6954
6594

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