Nakabohtec Corrosion Protecting Co., Ltd. (1787) AI Stock Analysis

• Market Cap: ¥15.72B
• Dividend Yield: 4.93%
• Average Volume (3M): 503.00
• Price to Earnings (P/E): 17.1
• Beta (1Y): 0.34
• Revenue Growth: 3.19%
• EPS Growth: 1.83%
• Country: JP
• Employees: 265
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Metal Fabrication
• EPS (TTM): 155.97
• Shares Outstanding: 2,602,500
• 10 Day Avg. Volume: 600
• 30 Day Avg. Volume: 503
• PEG Ratio: 0.46
• Price to Book (P/B): 1.41
• Price to Sales (P/S): 0.84
• P/FCF Ratio: 21.55
• 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: 80 Outperform
• Price Target: ¥7,337.00 ▲(43.30% Upside)
• Action: Upgraded Date: 12/30/25
• Date: Action: Upgraded 12/30/25

The score is driven primarily by strong financial quality—especially a debt-free balance sheet and improving margins—supported by an attractive valuation (P/E ~14.8 and ~4.9% dividend yield). Technicals are positive with the stock above key moving averages, though momentum indicators are getting somewhat stretched, and cash-flow conversion volatility remains a key risk.

Positive Factors

Debt-free balance sheet

Reporting zero debt with equity rising to ~¥8.7B and assets to ~¥12.1B in 2025 gives durable financial flexibility. Low leverage reduces solvency and interest risk and enables consistent capital allocation to maintenance, R&D, dividends or selective M&A without refinancing stress.

Improving profitability/margins

Margin expansion from ~4.2% (2020) to ~7.1% (2025) alongside revenue growth to ~¥14.7B indicates sustained improvements in operational efficiency, pricing or mix. That strengthens long-term earnings power and supports reinvestment in technology and service capabilities.

Consistent positive free cash flow

Positive free cash flow across recent years demonstrates real cash generation capacity to fund capex, maintenance and customer-service investments. Durable FCF reduces reliance on external financing for ordinary growth and supports sustained shareholder returns and operational resilience.

Negative Factors

Volatile cash conversion

Operating cash flow conversion is uneven, with coverage of net income just ~0.28 in 2025 versus ~0.61 in 2024 and prior dips (including negative OCF in 2021). Such volatility undermines predictability of funds available for capex, working capital and reliable dividend funding.

Uneven top-line growth

Top-line growth has been uneven, driven by project timing and cyclicality inherent in corrosion-protection contracts. A small revenue decline in 2024 despite a 2025 rebound reduces forecasting visibility, complicates capacity planning and can amplify margin volatility in slow periods.

Conservative capital structure limits scaling

Management's conservative approach (no debt) improves safety but limits the ability to accelerate scale via prudent leverage. Without borrowing, the firm may be slower to pursue larger contracts, expand capacity or seize market-share opportunities during demand surges, constraining growth speed.

Nakabohtec Corrosion Protecting Co., Ltd. Business Overview & Revenue Model

Company Description

Nakabohtec Corrosion Protecting Co.,Ltd. provides survey, analysis, design, engineering, work supervision, and material supply services for protecting metallic structures from corrosion in Japan. It offers cathodic protection work, painting corrosion protection, coating anti-corrosion work, electrolytic iron ion, antifouling, and corrosive environment survey; and construction services, including civil engineering works, electrical works, scaffolding works, steel structure works, pavement works, dredging works, waterproofing works, and water supply facility works. The company was formerly known as Nakagawa corrosion Industrial Co., Ltd. and changed its name to Nakabohtec Corrosion Protecting Co.,Ltd. in 1991. Nakabohtec Corrosion Protecting Co.,Ltd. was incorporated in 1951 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Nakabohtec Corrosion Protecting Co., Ltd. generates revenue primarily through the sale of its corrosion protection services and products. Key revenue streams include contracting with industries that require anti-corrosion solutions, such as the construction of bridges, ships, and oil rigs. The company may also engage in long-term maintenance contracts to ensure the continued efficacy of its corrosion protection measures. Additionally, strategic partnerships with industrial clients and government entities help drive sales and expand its market presence. Factors such as advancements in protective technology and increased infrastructure development contribute to the company's earnings.

Nakabohtec Corrosion Protecting Co., Ltd. Financial Statement Overview

Summary

Strong overall fundamentals led by an excellent, debt-free balance sheet (equity rising to ~¥8.7B and assets to ~¥12.1B in 2025) and improving profitability (net margin ~7.1% in 2025 vs ~4.2% in 2020). The main offset is uneven cash conversion (operating cash flow coverage of net income notably low in 2025 at ~0.28) and some year-to-year revenue variability.

Income Statement

Profitability is solid and improving: annual revenue rose to ~¥14.7B in 2025 (up from ~¥11.0B in 2020), while margins also strengthened (gross margin ~25.7% and net margin ~7.1% in 2025 vs ~22.9% and ~4.2% in 2020). Earnings appear resilient through the period, though top-line growth has been somewhat uneven year-to-year (including a small decline in 2024), which slightly tempers the quality of the growth profile.

Balance Sheet

Balance sheet strength is a key positive: the company reports zero debt across all periods provided, with equity steadily increasing (to ~¥8.7B in 2025) and assets also trending up (to ~¥12.1B in 2025). Returns on equity are healthy for the industry context (roughly ~10–12% in most years), supporting the view that the company is profitable without relying on leverage; the main drawback is that growth is not being amplified by prudent borrowing, which may limit upside in very strong demand cycles.

Cash Flow

Cash generation is positive overall but choppy. Free cash flow is generally positive (e.g., ~¥571M in 2025 and ~¥1.15B in 2024), yet operating cash flow coverage of net income is inconsistent and notably low in 2025 (~0.28) versus stronger conversion in 2024 (~0.61). The 2021 period also shows a clear cash flow dip (slightly negative operating cash flow and negative free cash flow), indicating working-capital or timing volatility that reduces confidence versus the otherwise steady earnings trend.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	14.78B	14.73B	13.78B	14.16B	12.91B	13.01B
Gross Profit	3.82B	3.78B	3.37B	3.42B	3.08B	3.28B
EBITDA	1.61B	1.62B	1.29B	1.44B	1.16B	1.36B
Net Income	1.03B	1.05B	834.90M	899.25M	763.79M	901.47M
Balance Sheet
Total Assets	10.20B	12.15B	11.33B	11.42B	10.86B	11.25B
Cash, Cash Equivalents and Short-Term Investments	4.64B	3.92B	3.93B	3.42B	3.33B	3.02B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	2.43B	3.42B	3.03B	3.41B	3.22B	3.80B
Stockholders Equity	7.77B	8.73B	8.30B	8.01B	7.64B	7.45B
Cash Flow
Free Cash Flow	0.00	570.91M	1.15B	638.07M	1.22B	-121.42M
Operating Cash Flow	0.00	692.50M	1.23B	822.74M	1.33B	-7.17M
Investing Cash Flow	0.00	-114.20M	-89.36M	-185.32M	-224.24M	-122.57M
Financing Cash Flow	0.00	-590.64M	-628.15M	-544.42M	-800.57M	-627.04M

Nakabohtec Corrosion Protecting Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5120.00
• 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:1787, the sentiment is Positive. The current price of 5120 is below the 20-day moving average (MA) of 5970.50, below the 50-day MA of 5786.20, and below the 200-day MA of 5410.88, indicating a bullish trend. The MACD of 115.56 indicates Negative momentum. The RSI at 81.67 is Negative, neither overbought nor oversold. The STOCH value of 89.86 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1787.

Nakabohtec Corrosion Protecting Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1787	80 Outperform	¥15.72B	17.10	―	4.93%	3.19%	1.83%
6497	80 Outperform	¥9.39B	9.73	―	2.92%	5.71%	169.04%
5644	72 Outperform	¥16.90B	7.44	―	2.87%	2.38%	-5.80%
5994	69 Neutral	¥7.74B	4.62	―	1.06%	6.41%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
5852	54 Neutral	¥23.85B	10.25	―	4.33%	5.12%	―
6433	54 Neutral	¥11.28B	-25.58	―	0.11%	-10.82%	-69.03%