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

• Market Cap: ¥72.53B
• Dividend Yield: 0.82%
• Average Volume (3M): 44.25K
• Price to Earnings (P/E): 15.0
• Beta (1Y): 0.90
• Revenue Growth: 7.10%
• EPS Growth: 36.47%
• Country: JP
• Employees: 1,150
• Sector: Industrials
• Sector Strength: 72
• Industry: Security & Protection Services
• EPS (TTM): 177.03
• 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): N/A
• Revenue Forecast (FY): N/A

• Rating: 78 Outperform
• Price Target: ¥11,805.00 ▲(28.32% Upside)

The overall stock score is primarily driven by strong financial performance, with consistent revenue and profit growth, efficient operations, and effective cash flow management. Technical analysis supports a bullish trend, although caution is advised due to RSI levels. Valuation is moderate, with a reasonable P/E ratio but low dividend yield.

Positive Factors

Free Cash Flow Strength

Sustained free cash flow growth improves liquidity and funds capex, maintenance services, training, and targeted investments without adding leverage. Durable FCF supports reinvestment in product development, steady operations, and optional shareholder returns or strategic M&A over the medium term.

Improving Profitability Margins

Rising gross and net margins reflect structural improvements in manufacturing efficiency, pricing power or cost controls. Better margin sustainability increases earnings resilience, funds R&D and service expansion, and supports long-term competitive positioning in fire-safety solutions.

Stronger Balance Sheet Metrics

Lower leverage and a healthy equity ratio increase financial flexibility to withstand cyclicality in industrial and construction demand. Improved balance sheet metrics reduce refinancing risk, enable opportunistic investments, and support long-term supplier and contract commitments.

Negative Factors

Declining Total Assets

A shrinking asset base can signal underinvestment, asset sales, or slower capacity expansion, which may constrain long-term revenue growth and scalability. Over time weaker asset growth could limit ability to pursue larger contracts or broaden product/service offerings.

Recent Revenue Growth Slowdown

A pause or slight decline in top-line growth suggests demand saturation, rising competition, or execution gaps. If persistent, slower revenue growth reduces the base for margin expansion and reinvestment, pressuring long-term profit growth and strategic reinvestment capacity.

Past Negative Free Cash Flow Episode

A prior negative free cash flow year highlights vulnerability in cash generation during stress periods. Even with recent improvement, recurrence risk could limit funding for maintenance, growth projects, or dividends, forcing reliance on debt or equity in adverse cycles.

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

Nippon Dry-Chemical Co., Ltd. displays a strong financial position with consistent improvements across key financial metrics. The company has demonstrated robust revenue and profit growth, efficient operations, and effective cash flow management. While there are areas for improvement, such as asset growth and addressing past cash flow challenges, the overall financial health remains solid, supported by strong margins and reduced leverage.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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: Negative
• STOCH: Negative

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 9526.50, above the 50-day MA of 9002.00, and above the 200-day MA of 6502.80, indicating a bullish trend. The MACD of 368.92 indicates Negative momentum. The RSI at 76.10 is Negative, neither overbought nor oversold. The STOCH value of 90.12 is Negative, 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
9740	80 Outperform	¥43.92B	13.91	―	1.95%	9.05%	14.38%
1909	78 Outperform	¥72.53B	15.03	―	0.82%	7.10%	36.47%
9686	77 Outperform	¥18.05B	8.44	―	3.28%	34.15%	324.87%
6744	76 Outperform	¥240.91B	22.05	―	2.42%	9.55%	9.52%
7464	76 Outperform	¥3.24B	12.86	―	5.23%	-1.35%	-17.35%
7734	73 Outperform	¥157.71B	18.12	―	1.39%	11.23%	16.49%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%