CHIMNEY CO LTD (3178) AI Stock Analysis

• Market Cap: ¥25.45B
• Dividend Yield: 0.81%
• Average Volume (3M): 37.49K
• Price to Earnings (P/E): 14.3
• Beta (1Y): 0.34
• Revenue Growth: 0.32%
• EPS Growth: 10.22%
• Country: JP
• Employees: 632
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 21.73
• Shares Outstanding: 19,340,800
• 10 Day Avg. Volume: 35,060
• 30 Day Avg. Volume: 37,493
• PEG Ratio: 1.48
• Price to Book (P/B): 3.85
• Price to Sales (P/S): 0.89
• P/FCF Ratio: 706.61
• 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: 60 Neutral
• Price Target: ¥1,317.00 ▲(5.95% Upside)
• Action: Reiterated Date: 10/01/25
• Date: Action: Reiterated 10/01/25

CHIMNEY CO LTD's overall stock score reflects a mixed financial performance with strong revenue growth but significant cash flow challenges. The technical analysis indicates a bearish trend, with the stock trading below key moving averages and nearing oversold conditions. The valuation suggests the stock may be overvalued, with a high P/E ratio and modest dividend yield.

Positive Factors

High gross margin

A 66.9% gross margin indicates durable unit economics and pricing power in the restaurant business. High gross margins provide a buffer to absorb input cost inflation and support long-term profitability if overheads are controlled, underpinning sustainable operating leverage.

Improved balance sheet and ROE

ROE of 17.7% and a higher equity ratio reflect efficient use of capital and a stronger capital structure. Reduced total debt and balanced leverage (debt-to-equity ~0.99) enhance financial flexibility and lower insolvency risk, supporting longer-term investment and growth options.

Historical revenue growth and margin recovery

Prior double-digit top-line growth and recovery from negative to positive EBIT margin show the business can scale and improve operations. This demonstrates structural capacity to expand revenue while moving toward sustainable operating profitability over the medium term.

Negative Factors

Free cash flow collapse

A near-complete collapse in free cash flow signals serious cash-generation issues, reducing the firm's ability to self-fund capex, repay liabilities, or return capital. This materially raises financing and liquidity risk over the coming months if not reversed.

Poor earnings-to-cash conversion

Operating cash flow substantially lagging net income and virtually no free cash flow relative to earnings indicate earnings are not converting into usable cash. This undermines balance sheet resilience and could force reliance on external funding or cost cuts.

Slowing revenue growth and thin net margin

A sharp deceleration from prior high growth to 1.9% and a low net margin constrain the firm’s ability to build durable profit pools. Slower top-line momentum plus thin margins reduce room to absorb shocks and limit long-term free cash flow prospects.

CHIMNEY CO LTD Business Overview & Revenue Model

Company Description

Chimney Co., Ltd. operates and franchises a chain of restaurants in Japan. The company operates through a network of 338 directly managed stores, 91 contract stores, and 248 franchise stores. Chimney Co., Ltd. was founded in 1984 and is headquartered in Tokyo, Japan.

How the Company Makes Money

CHIMNEY CO LTD generates revenue through multiple key streams, primarily from the sale of its chimney and ventilation products to construction companies, contractors, and retail distributors. The company benefits from a robust distribution network that allows it to reach a broad market, including residential, commercial, and industrial sectors. Additionally, CHIMNEY CO LTD may engage in partnerships with construction firms and home improvement retailers to enhance its market presence and drive sales. The company may also capitalize on service offerings such as installation and maintenance of its products, providing an additional revenue source. Factors contributing to its earnings include the growing trend towards sustainable building practices, regulatory incentives for energy-efficient products, and a steady demand for renovation and construction activities.

CHIMNEY CO LTD Financial Statement Overview

Summary

CHIMNEY CO LTD shows a mixed financial performance with strong revenue growth and improved operational efficiency. However, cash flow challenges persist, with declining free cash flow and moderate cash generation from operations.

Income Statement

CHIMNEY CO LTD has shown a mixed performance in its income statement. The company experienced a significant revenue growth from 2023 to 2024, with a 27.6% increase, but this slowed to a modest 1.9% growth in 2025. Gross profit margin improved to 66.9% in 2025, indicating efficient cost management. However, the net profit margin was 4.1% in 2025, reflecting challenges in converting revenue to profit. The EBIT margin improved to 3.5% in 2025, recovering from negative figures in previous years, suggesting operational improvements.

Balance Sheet

The balance sheet of CHIMNEY CO LTD shows a stable financial position with a debt-to-equity ratio of 0.99 in 2025, indicating a balanced leverage. The equity ratio improved to 36.3%, reflecting a strong equity base. Return on equity was 17.7% in 2025, showcasing effective use of equity to generate profits. The company has managed to reduce its total debt over the years, enhancing financial stability.

Cash Flow

The cash flow statement reveals some challenges. Free cash flow decreased significantly from 2024 to 2025, with a growth rate of -98.5%, indicating potential cash management issues. The operating cash flow to net income ratio was 0.71 in 2025, suggesting moderate cash generation from operations. The free cash flow to net income ratio was 0.03, highlighting limited free cash flow relative to net income.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	26.13B	26.22B	25.73B	20.16B	10.11B	13.23B
Gross Profit	17.72B	17.55B	17.82B	13.65B	7.03B	9.23B
EBITDA	1.46B	1.51B	1.62B	-1.08B	2.08B	-6.98B
Net Income	849.72M	1.08B	938.83M	-2.02B	1.23B	-9.00B
Balance Sheet
Total Assets	16.75B	16.78B	17.89B	18.04B	22.90B	20.08B
Cash, Cash Equivalents and Short-Term Investments	6.78B	6.63B	7.85B	7.44B	10.02B	6.26B
Total Debt	5.93B	6.02B	7.37B	9.34B	12.36B	10.43B
Total Liabilities	10.68B	10.71B	12.83B	13.81B	16.41B	15.11B
Stockholders Equity	6.07B	6.07B	5.06B	4.23B	6.48B	4.97B
Cash Flow
Free Cash Flow	0.00	33.09M	2.21B	519.61M	988.40M	-7.47B
Operating Cash Flow	0.00	769.38M	2.78B	1.01B	1.89B	-6.69B
Investing Cash Flow	0.00	-688.35M	-332.41M	-193.88M	-72.89M	-246.91M
Financing Cash Flow	0.00	-1.31B	-2.04B	-3.40B	1.94B	9.76B

CHIMNEY CO LTD Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1243.00
• 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:3178, the sentiment is Positive. The current price of 1243 is below the 20-day moving average (MA) of 1307.20, below the 50-day MA of 1297.56, and below the 200-day MA of 1254.72, indicating a bullish trend. The MACD of 5.17 indicates Negative momentum. The RSI at 55.08 is Neutral, neither overbought nor oversold. The STOCH value of 69.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3178.

CHIMNEY CO LTD Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7678	66 Neutral	¥25.90B	76.41	―	―	―	―
7554	65 Neutral	¥22.43B	20.09	―	―	―	―
9979	63 Neutral	¥22.33B	146.77	―	1.20%	3.89%	-12.08%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
3178	60 Neutral	¥25.45B	14.30	―	0.81%	0.32%	10.22%
3547	60 Neutral	¥20.22B	25.72	―	0.75%	25.41%	77.18%
2882	57 Neutral	¥22.26B	35.55	―	0.78%	8.86%	-17.71%