Nippon Dry-Chemical Co., Ltd. (1909) AI Stock Analysis

• Market Cap: ¥87.86B
• Dividend Yield: 0.82%
• Average Volume (3M): 44.25K
• Price to Earnings (P/E): 15.4
• Beta (1Y): 0.92
• Revenue Growth: 7.10%
• EPS Growth: 36.47%
• Country: JP
• Employees: 1,150
• Sector: Industrials
• Sector Strength: 72
• Industry: Security & Protection Services
• EPS (TTM): 286.13
• Shares Outstanding: 7,181,812
• 10 Day Avg. Volume: 43,690
• 30 Day Avg. Volume: 44,246
• PEG Ratio: 0.30
• Price to Book (P/B): 1.05
• Price to Sales (P/S): 0.49
• P/FCF Ratio: 3.53
• 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): 779.8
• Revenue Forecast (FY): ¥60.10B

• Rating: 80 Outperform
• Price Target: ¥14,433.00 ▲(56.88% Upside)
• Action: Reiterated Date: 02/10/26
• Date: Action: Reiterated 02/10/26

The score is supported primarily by strong financial performance (profitability, cash flow strength, and reduced leverage) and a solid technical uptrend with positive momentum. Valuation appears reasonable on earnings but is tempered by a low dividend yield and signs of potentially stretched momentum (RSI/Stoch near overbought).

Positive Factors

Free Cash Flow Strength

Accelerating free cash flow from 2024 to 2025 improves liquidity and financial flexibility over the medium term. Durable FCF allows the company to fund capex, reduce debt, and support shareholder returns or strategic investments without relying on external financing, enhancing resilience across cycles.

Improving Profitability

Sustained margin expansion indicates rising operational efficiency and pricing power in core fire protection businesses. Higher operating margins translate to more robust earnings generation and internal reinvestment capacity, supporting consistent returns and competitive positioning over a multi-quarter horizon.

Stronger Balance Sheet

Reduced leverage and a healthier equity base lower financial risk and increase strategic optionality. Improved ROE reflects better capital efficiency, enabling the firm to pursue growth or withstand downturns with lower refinancing pressure, which is a durable strength for medium-term stability.

Negative Factors

Recent Revenue Softness

A revenue dip between 2024 and 2025 suggests potential weakening in top-line momentum or demand volatility. Over several quarters this can constrain scale economies and pressure margins if fixed costs persist, making sustained profit improvement harder without renewed sales growth.

Historical FCF Volatility

A prior year of negative free cash flow highlights variability in cash generation and timing risk around capex or working capital. If volatility recurs, it could force reliance on external funding or delay strategic investments, undermining the stability that recent FCF improvements aim to build.

Shrinking Asset Base

A modest decline in total assets may signal reduced investment in capacity or asset sales, potentially limiting future revenue scalability. Over the medium term, constrained asset growth can cap expansion opportunities and reduce flexibility to bid for larger projects or scale service offerings.

Nippon Dry-Chemical Co., Ltd. Business Overview & Revenue Model

Company Description

Nippon Dry-Chemical Co., Ltd. designs, manufactures, sells, fire extinguishing equipment, fire engines, security systems, etc. in Japan and internationally. The company offers various fire protection systems for buildings, including sprinkler systems; drencher equipment; sprinkler systems for apartment buildings; automatic fire alarm systems; water ejector sprinkler systems; indoor/outdoor hydrants; tunnel disaster prevention systems; and consolidated water pipes, as well as inert gas, powder, portable, carbon dioxide, foam, and halogen fire extinguishing systems. It also provides concentrated control systems and system machinery; and fire engines, such as general pumpers, pumper with a water tank, chemical fire engines, support vehicles, water tankers, and other various fire engines. In addition, the company offers electronics equipment; chemical plant systems; hydrant, air conditioning, and hygine systems; smoke control systems; fire extinguishing agent and emergency equipment; and fire protection systems and equipment. Further, it provides maintenance and inspection services of fire protection systems. Nippon Dry-Chemical Co., Ltd. was founded in 1955 and is based in Tokyo, Japan.

How the Company Makes Money

Nippon Dry-Chemical Co., Ltd. generates revenue primarily through the sales of its fire suppression products, including dry chemical extinguishers and related accessories. The company benefits from a robust revenue model that includes direct sales to businesses and government entities, as well as distribution partnerships with safety equipment suppliers. Key revenue streams also include maintenance services and training programs for the proper use of fire safety equipment. Additionally, Nippon Dry-Chemical may engage in collaborations with construction firms and industrial manufacturers to provide tailored fire safety solutions, further enhancing its earning potential.

Nippon Dry-Chemical Co., Ltd. Financial Statement Overview

Summary

Strong overall fundamentals driven by improving profitability and margins, reduced leverage, and robust cash conversion with accelerating free cash flow. Risks include a slight revenue decline from 2024 to 2025, a small drop in total assets, and a prior year of negative free cash flow in 2023.

Income Statement

The income statement shows consistent revenue growth over the years, with a strong increase from 2022 to 2025. Gross profit margin and net profit margin have improved, indicating enhanced efficiency and profitability. EBIT and EBITDA margins are also on an upward trend, showcasing operational strength. However, the revenue growth rate between 2024 and 2025 was slightly negative, suggesting a potential slowdown in sales growth.

Balance Sheet

The balance sheet reflects a stable financial position with a healthy equity ratio and improving debt-to-equity ratio, indicating a decrease in leverage over time. Return on Equity (ROE) has improved significantly, reflecting better profitability for shareholders. However, the total assets have slightly decreased from 2024 to 2025, which may indicate reduced asset growth.

Cash Flow

The cash flow statement demonstrates strong free cash flow growth, particularly from 2024 to 2025, enhancing liquidity and financial flexibility. Operating cash flow to net income ratio is robust, indicating effective cash conversion from operations. Free cash flow to net income ratio is also strong, suggesting efficient capital expenditure management. However, the company experienced negative free cash flow in 2023, highlighting past cash flow management challenges.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	57.75B	55.73B	55.88B	50.22B	44.79B	43.07B
Gross Profit	15.51B	14.81B	12.98B	11.64B	9.86B	10.30B
EBITDA	7.58B	6.76B	6.12B	5.07B	3.62B	4.42B
Net Income	4.23B	3.96B	3.29B	2.54B	1.89B	2.31B
Balance Sheet
Total Assets	49.65B	50.94B	54.03B	47.90B	41.45B	40.03B
Cash, Cash Equivalents and Short-Term Investments	11.17B	10.21B	6.32B	5.40B	5.55B	4.52B
Total Debt	4.82B	5.36B	8.29B	7.37B	7.39B	7.16B
Total Liabilities	18.45B	20.42B	26.98B	24.55B	21.75B	21.05B
Stockholders Equity	26.53B	25.63B	22.25B	19.07B	17.60B	16.16B
Cash Flow
Free Cash Flow	0.00	7.67B	680.79M	-697.79M	2.00B	4.44B
Operating Cash Flow	0.00	8.94B	1.15B	120.19M	3.17B	5.10B
Investing Cash Flow	0.00	-1.02B	-330.72M	-1.73B	-2.07B	-505.09M
Financing Cash Flow	0.00	-3.36B	76.30M	15.76M	-100.30M	-3.76B

Nippon Dry-Chemical Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 9200.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1909, the sentiment is Positive. The current price of 9200 is below the 20-day moving average (MA) of 11746.00, below the 50-day MA of 10634.80, and above the 200-day MA of 7613.38, indicating a bullish trend. The MACD of 592.01 indicates Negative momentum. The RSI at 69.02 is Neutral, neither overbought nor oversold. The STOCH value of 79.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1909.

Nippon Dry-Chemical Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1909	80 Outperform	¥87.86B	15.43	―	0.82%	7.10%	36.47%
6744	76 Outperform	¥271.07B	22.86	―	2.42%	9.55%	9.52%
6870	74 Outperform	¥11.56B	9.21	―	3.98%	4.35%	7.25%
9735	73 Outperform	¥2.68T	23.15	8.35%	1.77%	5.39%	4.89%
7734	73 Outperform	¥170.15B	19.72	―	1.39%	11.23%	16.49%
2331	64 Neutral	¥652.54B	18.50	―	2.14%	7.73%	30.92%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%