Nippon Densetsu Kogyo Co., Ltd. (1950) AI Stock Analysis

• Market Cap: ¥196.40B
• Dividend Yield: 2.91%
• Average Volume (3M): 98.11K
• Price to Earnings (P/E): 11.9
• Beta (1Y): 0.85
• Revenue Growth: 10.62%
• EPS Growth: 64.25%
• Country: JP
• Employees: 4,744
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Infrastructure Operations
• EPS (TTM): 38.34
• Shares Outstanding: 61,537,220
• 10 Day Avg. Volume: 86,150
• 30 Day Avg. Volume: 98,106
• PEG Ratio: 0.26
• Price to Book (P/B): 0.63
• Price to Sales (P/S): 0.57
• P/FCF Ratio: -13.58
• 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: ¥3,674.00 ▲(18.71% Upside)

Nippon Densetsu Kogyo Co., Ltd. receives a strong overall score driven by solid financial performance and robust technical indicators. The company's valuation is reasonable, with a fair P/E ratio and attractive dividend yield. However, cash flow management remains an area for improvement, and technical indicators suggest the stock may be nearing overbought conditions.

Positive Factors

Revenue Growth

Strong revenue growth indicates expanding market presence and successful product offerings, supporting long-term business sustainability.

Balance Sheet Health

A robust balance sheet with low leverage enhances financial stability, providing flexibility for future investments and growth.

Profit Margins

Healthy profit margins reflect effective cost management and operational efficiency, contributing to sustainable profitability.

Negative Factors

Cash Flow Management

Negative free cash flow suggests liquidity challenges, potentially hindering the company's ability to invest in growth opportunities.

Cash Conversion Issues

Difficulty in converting earnings to cash flow may impact liquidity and financial flexibility, posing risks to ongoing operations.

Profitability Decline

A decline in profitability could indicate challenges in maintaining cost efficiency or competitive pressures, affecting future earnings.

Nippon Densetsu Kogyo Co., Ltd. Business Overview & Revenue Model

Company Description

Nippon Densetsu Kogyo Co., Ltd. operates as a railway electronics equipment construction company in Japan. The company engages in the construction of electrical facilities for buildings, such as related to renewable energies and energy-saving buildings, as well as undertakes renovation, and air conditioning and plumbing equipment works; and information and communication systems, including mobile communication-related construction, IP network related equipment construction, railway communication systems construction, and network infrastructure development, as well as maintenance and technical support services. It also constructs power plants and substations, electric train lines, transmission lines, electric light and power systems, signal equipment, and public and private railways, as well as provides human resources development services. The company was formerly known as Railway Electric Industries Co., Ltd. and changed its name to Nippon Densetsu Kogyo Co., Ltd. in 1949. Nippon Densetsu Kogyo Co., Ltd. was founded in 1942 and is based in Tokyo, Japan.

How the Company Makes Money

Nippon Densetsu Kogyo Co., Ltd. generates revenue through the sale of its electrical components and systems to various industries, including manufacturing, construction, and telecommunications. The company's revenue model is primarily based on direct sales to businesses and contractors, as well as partnerships with distributors and retailers that extend its market reach. Key revenue streams include the sale of hardware products, maintenance and support services, and customized solutions for specific industrial applications. Additionally, the company benefits from long-term contracts with major clients, ensuring a steady flow of income, while ongoing investments in research and development allow it to innovate and introduce new products that align with market trends and customer demands.

Nippon Densetsu Kogyo Co., Ltd. Financial Statement Overview

Summary

Nippon Densetsu Kogyo Co., Ltd. demonstrates strong revenue growth and profit margins, with a robust balance sheet characterized by low leverage. However, cash flow management is a concern, with negative free cash flow indicating potential liquidity challenges.

Income Statement

Nippon Densetsu Kogyo Co., Ltd. exhibits a strong gross profit margin of 15.82% and a healthy net profit margin of 6.08% in the latest fiscal year. The revenue growth rate was 11.81% over the past year, indicating a positive growth trajectory. EBIT and EBITDA margins are solid at 8.27% and 11.38% respectively, demonstrating effective cost management and operational efficiency, although profitability has slightly decreased compared to prior periods.

Balance Sheet

The company's balance sheet is robust with a low debt-to-equity ratio of 0.02, highlighting minimal leverage risk. The return on equity (ROE) stands at 6.74%, reflecting moderate profitability on shareholders' investment. The equity ratio is 66.02%, indicating a strong equity base relative to total assets, emphasizing financial stability and low financial risk.

Cash Flow

Despite a negative free cash flow of -9.12 billion JPY indicating operational challenges, the operating cash flow to net income ratio is -0.33, suggesting issues in converting earnings to cash flow. The free cash flow to net income ratio is also negative, underlining cash flow constraints. This reflects potential liquidity challenges that need addressing for sustained growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	214.15B	216.92B	194.03B	172.10B	173.57B	195.69B
Gross Profit	34.33B	34.31B	28.51B	23.92B	21.66B	28.86B
EBITDA	26.38B	24.69B	19.22B	14.64B	12.08B	18.03B
Net Income	13.83B	13.19B	10.04B	7.17B	5.22B	9.55B
Balance Sheet
Total Assets	258.08B	296.39B	282.60B	261.37B	257.70B	265.66B
Cash, Cash Equivalents and Short-Term Investments	32.47B	27.17B	36.21B	42.34B	45.29B	42.76B
Total Debt	5.35B	4.10B	100.00M	100.00M	100.00M	100.00M
Total Liabilities	52.44B	86.73B	83.48B	71.14B	72.51B	81.30B
Stockholders Equity	191.99B	195.72B	185.79B	177.23B	172.37B	171.54B
Cash Flow
Free Cash Flow	0.00	-9.12B	1.58B	-2.55B	4.54B	12.57B
Operating Cash Flow	0.00	-4.34B	7.38B	13.23B	9.51B	19.57B
Investing Cash Flow	0.00	-5.77B	-4.18B	-12.44B	-6.64B	-9.40B
Financing Cash Flow	0.00	169.00M	-7.93B	-2.34B	-2.74B	-2.74B

Nippon Densetsu Kogyo Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3095.00
• 50DMA: Positive
• 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:1950, the sentiment is Positive. The current price of 3095 is above the 20-day moving average (MA) of 3090.40, above the 50-day MA of 2912.40, and above the 200-day MA of 2551.21, indicating a bullish trend. The MACD of 70.72 indicates Positive momentum. The RSI at 55.40 is Neutral, neither overbought nor oversold. The STOCH value of 28.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1950.

Nippon Densetsu Kogyo Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1950	80 Outperform	¥196.40B	11.94	―	2.91%	10.62%	64.25%
1976	80 Outperform	¥78.02B	10.69	―	3.61%	-3.62%	9.37%
1965	78 Outperform	¥117.65B	14.76	―	1.59%	20.44%	106.45%
1946	77 Outperform	¥162.26B	10.38	―	3.11%	3.75%	87.00%
1952	73 Outperform	¥147.08B	13.34	―	2.92%	8.83%	49.49%
1934	68 Neutral	¥171.40B	14.09	―	2.99%	6.66%	46.38%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Nippon Densetsu Kogyo Co., Ltd. Corporate Events

Nippon Densetsu Kogyo Reports Robust Financial Growth and Dividend Increase

Nippon Densetsu Kogyo Co., Ltd. reported significant financial growth for the six months ending September 30, 2025, with a notable increase in net sales and profits compared to the previous year. The company’s operating profit surged by 703%, and the profit attributable to owners of the parent increased by 895.2%, reflecting strong operational performance and improved financial health. The company also announced a forecasted increase in annual dividends, indicating confidence in its future earnings potential.

Nippon Densetsu Kogyo Establishes New Subsidiary to Boost Telecom Business

Nippon Densetsu Kogyo Co., Ltd. announced the establishment of a new subsidiary, JCroc Co., Ltd., through a simplified company split to enhance its telecommunications business. This strategic move is expected to allow for more agile and flexible business operations, positioning the company for growth in the telecommunications sector. The new subsidiary will be wholly owned by Nippon Densetsu Kogyo, with no anticipated financial obligations hindering its operations.