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

• Market Cap: ¥80.58B
• Dividend Yield: 0.82%
• Average Volume (3M): 44.25K
• Price to Earnings (P/E): 8.0
• Beta (1Y): 0.87
• 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): ¥60.30B

• Rating: 80 Outperform
• Price Target: ¥15,008.00 ▲(63.13% 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

Sustained free cash flow growth between 2024 and 2025 improves liquidity and financial flexibility, enabling the company to fund maintenance capex, targeted investments, and working capital internally. Durable FCF reduces reliance on external financing and supports resilience across business cycles.

Improving Profitability & Margins

Consistent margin expansion—across gross, EBIT and net margins—signals durable operational improvements such as better cost control, pricing power, or mix shifts. Higher margins increase cash conversion and reinvestment capacity, making earnings more resilient to demand fluctuations over the medium term.

Decreasing Leverage & Strong ROE

A stronger equity base and falling leverage lower financial risk and interest burden, improving balance-sheet flexibility. Rising ROE reflects more efficient use of capital, which supports sustainable shareholder returns and funds strategic initiatives without excessive borrowing.

Negative Factors

Recent Revenue Dip

A slight decline in revenue between 2024 and 2025 may indicate softening end-market demand, competition or product mix headwinds. If persistent, revenue contraction can erode operating leverage, limit margin expansion, and reduce the runway for reinvestment despite other financial strengths.

Historic Cash Flow Volatility

A prior year of negative free cash flow points to potential sensitivity to capex timing or working capital swings. Although FCF recovered, historical volatility raises the risk that cyclical downturns or large one-off investments could temporarily strain liquidity or force external funding.

Slight Decline in Total Assets

A modest drop in total assets suggests slower reinvestment or asset divestment, which could limit capacity expansion or modernization. Over the medium term, constrained asset growth may hinder revenue scaling or competitiveness if competitors continue to invest in capabilities and distribution.

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

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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	7.57B	7.01B	5.67B	4.78B	3.74B	4.28B
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	5.43B	8.39B	7.46B	7.54B	7.26B
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	712.45M	-693.50M	2.05B	4.45B
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: Negative
• Last Price: 9200.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 Negative. The current price of 9200 is below the 20-day moving average (MA) of 12465.00, below the 50-day MA of 11521.20, and above the 200-day MA of 8173.04, indicating a neutral trend. The MACD of 180.42 indicates Positive momentum. The RSI at 42.81 is Neutral, neither overbought nor oversold. The STOCH value of 41.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	¥80.58B	8.04	―	0.82%	7.10%	36.47%
6744	76 Outperform	¥264.43B	14.78	―	2.42%	9.55%	9.52%
6870	74 Outperform	¥11.14B	10.84	―	3.98%	4.35%	7.25%
9735	73 Outperform	¥2.65T	19.24	8.35%	1.77%	5.39%	4.89%
7734	73 Outperform	¥149.50B	14.99	―	1.39%	11.23%	16.49%
2331	64 Neutral	¥625.54B	16.50	―	2.14%	7.73%	30.92%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%