Daiichi Cutter Kogyo K.K. (1716) AI Stock Analysis

• Market Cap: ¥18.45B
• Dividend Yield: 2.87%
• Average Volume (3M): 27.60K
• Price to Earnings (P/E): 10.7
• Beta (1Y): 0.39
• Revenue Growth: -1.39%
• EPS Growth: -4.43%
• Country: JP
• Employees: 629
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): N/A
• Shares Outstanding: 12,000,000
• 10 Day Avg. Volume: 29,570
• 30 Day Avg. Volume: 27,603
• PEG Ratio: -0.33
• Price to Book (P/B): 0.75
• Price to Sales (P/S): 0.71
• P/FCF Ratio: 15.08
• 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): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: ¥1,791.00 ▲(27.75% Upside)
• Action: Reiterated Date: 10/30/25
• Date: Action: Reiterated 10/30/25

Daiichi Cutter Kogyo K.K. shows strong financial stability and an attractive valuation, which are significant strengths. However, technical indicators suggest a bearish trend, and challenges in revenue growth and cash flow volatility present risks. The lack of earnings call data and corporate events limits further insights.

Positive Factors

Strong balance sheet

Conservative leverage and a healthy equity ratio provide durable financial flexibility for Daiichi Cutter to fund equipment replacement, seasonal working capital needs, and bid on public infrastructure contracts. Solid ROE indicates effective capital deployment, supporting resilience through project timing cycles over the next several months.

Sustained operating margins

Stable gross and healthy EBIT/EBITDA margins reflect operational efficiency in specialized pavement and concrete cutting services, where skilled crews and equipment drive repeatable margins. This structural margin sustainability supports reinvestment in fleet and training and helps preserve profitability under moderate demand fluctuations over 2–6 months.

Reliable operating cash conversion

A strong operating cash flow to net income ratio shows the business converts accounting profits into real cash, supporting working capital, equipment upkeep, and steady project execution. Even with free cash flow volatility, dependable operating cash conversion provides a durable cash cushion for near-term capital needs and contract continuity.

Negative Factors

Negative revenue trend

Recent negative revenue growth signals weakening demand or reduced project volumes, which can erode scale advantages for equipment-intensive services. Persisting revenue contraction over several quarters would pressure utilization, bidding flexibility and backlog replenishment, making margin maintenance and investment plans harder to sustain.

Earnings per share decline

A material EPS contraction suggests profit per share has weakened, possibly from lower volumes, pricing pressure, or one-off costs. Continued EPS decline can constrain retained earnings for reinvestment, limit free cash available for dividends or capex, and signal operational leverage deterioration over the coming months.

Volatile free cash flow

Erratic free cash flow growth undermines forecasting for fleet replacement, maintenance and working capital in a capital-heavy services business. Even with strong operating cash conversion, unpredictable FCF increases execution risk on multi‑month projects and can force reactive financing or deferred investments that weaken medium‑term competitiveness.

Daiichi Cutter Kogyo K.K. Business Overview & Revenue Model

Company Description

Dai-Ichi Cutter Kogyo k.k. engages in the construction and civil engineering activities in Japan. The company offers flat sawing, core drilling, wall and wire sawing, grooving, various dry cutting/perforating, and various metal cutting/perforating services; concrete chipping, concrete surface treatment, coating removal treatment, metal cutting, and plant equipment cleaning decontamination services; shot and vacuum blast and decontamination services; and various cleaning, polishing, mechanical cutting, peeling, and mirror floor polishing services. It also provides building maintenance services comprising drain pipe and water tank cleaning, common floor and mechanical pit cleaning, firefighting equipment inspection, pest control, sewage layer, miscellaneous drainage tank repair, and water supply equipment inspection services; and anchor construction, industrial waste collection and transportation, and intermediate treatment services. The company was founded in 1967 and is headquartered in Chigasaki, Japan.

How the Company Makes Money

Daiichi Cutter Kogyo K.K. generates revenue through the sale of its cutting tools and industrial equipment, which are supplied to a diverse range of industries that require precision machining solutions. The company’s revenue model is primarily based on direct sales of its products, as well as a growing segment of custom tool manufacturing that caters to specific customer needs. Key revenue streams include bulk orders from manufacturing companies, long-term contracts for tool supply, and aftermarket services such as tool maintenance and reconditioning. Additionally, partnerships with distributors and collaborations with industry leaders in technology and manufacturing help expand its market reach and enhance its product offerings, contributing significantly to its overall earnings.

Daiichi Cutter Kogyo K.K. Financial Statement Overview

Summary

Daiichi Cutter Kogyo K.K. demonstrates financial stability with strong profitability and a solid balance sheet. However, challenges in revenue growth and cash flow volatility could pose risks. The company should focus on revitalizing sales growth and stabilizing cash flows to enhance financial performance further.

Income Statement

Daiichi Cutter Kogyo K.K. shows a stable gross profit margin and a decent net profit margin, although both have slightly declined over the years. The revenue growth rate has been negative recently, indicating a potential challenge in maintaining sales momentum. However, the company maintains healthy EBIT and EBITDA margins, reflecting operational efficiency.

Balance Sheet

The company maintains a strong balance sheet with a low debt-to-equity ratio, indicating conservative leverage. The return on equity is solid, suggesting effective use of shareholder funds. The equity ratio is also healthy, showing a strong capital structure with a significant portion of assets financed by equity.

Cash Flow

Cash flow analysis reveals a mixed picture. While the operating cash flow to net income ratio is strong, indicating good cash generation relative to profits, the free cash flow growth rate has been volatile. The free cash flow to net income ratio is reasonable, but the recent 'infinity' growth rate suggests erratic cash flow trends.

Breakdown	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	20.23B	20.92B	22.16B	20.95B	19.34B
Gross Profit	5.83B	6.65B	7.05B	6.67B	6.31B
EBITDA	2.71B	3.69B	3.71B	3.27B	3.41B
Net Income	1.33B	1.97B	1.95B	1.58B	1.74B
Balance Sheet
Total Assets	22.25B	21.86B	21.57B	19.41B	17.99B
Cash, Cash Equivalents and Short-Term Investments	9.93B	9.48B	9.44B	7.77B	6.64B
Total Debt	331.48M	338.38M	500.85M	285.43M	267.34M
Total Liabilities	2.89B	3.57B	4.33B	3.55B	3.67B
Stockholders Equity	19.23B	18.16B	16.62B	15.02B	13.63B
Cash Flow
Free Cash Flow	950.54M	1.22B	1.92B	1.30B	104.07M
Operating Cash Flow	1.70B	2.17B	2.74B	2.24B	1.96B
Investing Cash Flow	-2.44B	-1.65B	-561.38M	-847.24M	-1.59B
Financing Cash Flow	-515.67M	-481.83M	-506.39M	-289.41M	-69.14M

Daiichi Cutter Kogyo K.K. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1402.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1716, the sentiment is Positive. The current price of 1402 is below the 20-day moving average (MA) of 1502.00, below the 50-day MA of 1437.70, and above the 200-day MA of 1348.23, indicating a bullish trend. The MACD of 53.47 indicates Negative momentum. The RSI at 77.46 is Negative, neither overbought nor oversold. The STOCH value of 81.14 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1716.

Daiichi Cutter Kogyo K.K. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1799	79 Outperform	¥91.60B	14.42	―	3.55%	8.02%	64.54%
1828	73 Outperform	¥31.29B	11.49	―	3.44%	-5.43%	34.48%
1716	71 Outperform	¥18.45B	10.67	―	2.87%	-1.39%	-4.43%
5918	70 Outperform	¥16.09B	16.82	―	1.39%	2.98%	11.88%
5959	69 Neutral	¥43.77B	14.48	―	3.05%	-0.26%	89.66%
1914	67 Neutral	¥15.87B	12.39	―	3.68%	5.82%	-22.14%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%