Tokushu Tokai Paper Co., Ltd. (3708) AI Stock Analysis

• Market Cap: ¥45.11B
• Dividend Yield: 3.07%
• Average Volume (3M): 14.45K
• Price to Earnings (P/E): 12.8
• Beta (1Y): 0.46
• Revenue Growth: 9.57%
• EPS Growth: -20.99%
• Country: JP
• Employees: 1,750
• Sector: Basic Materials
• Sector Strength: 55
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): -6.96
• Shares Outstanding: 13,000,000
• 10 Day Avg. Volume: 10,260
• 30 Day Avg. Volume: 14,446
• PEG Ratio: -0.57
• Price to Book (P/B): 0.58
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 76.76
• 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: ¥4,009.00
• Price Target Upside: 2.93% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 72 Outperform
• Price Target: ¥4,009.00 ▲(2.93%Upside)

Tokushu Tokai Paper Co., Ltd. scores 71.5, reflecting strong financial performance with growth in revenue and operational efficiency. Valuation is favorable with a reasonable P/E ratio and good dividend yield. However, technical indicators suggest neutral market sentiment and challenges in cash flow management need addressing.

Tokushu Tokai Paper Co., Ltd. Business Overview & Revenue Model

Company Description

Tokushu Tokai Paper Co., Ltd. (3708) is a Japan-based company engaged in the manufacture and sale of paper products. The company operates in sectors including specialty paper, packaging materials, and functional materials. Its core products encompass various paper types such as printing paper, industrial paper, and other specialty paper products, catering to diverse industries including publishing, packaging, and industrial applications.

How the Company Makes Money

Tokushu Tokai Paper Co., Ltd. generates revenue primarily through the sale of its paper products. The company's key revenue streams include sales of specialty paper, which is used in high-value applications due to its unique properties, and packaging materials that serve the growing demand in e-commerce and consumer goods industries. Additionally, the company benefits from sales of functional materials, which may include advanced paper products with specific functionalities for industrial use. Significant partnerships with distributors and manufacturers, as well as the company's ability to innovate and adapt to market demands, contribute to its earnings.

Tokushu Tokai Paper Co., Ltd. Financial Statement Overview

Summary

Tokushu Tokai Paper Co., Ltd. exhibits strong revenue growth and operational efficiency, supported by a robust balance sheet with moderate leverage. However, challenges include declining net profit margins and negative free cash flow, which require attention for improved profitability and cash flow management.

Income Statement

Tokushu Tokai Paper Co., Ltd. has shown consistent revenue growth over the past years, with a notable increase in total revenue from 86.5 billion yen in 2024 to 94.8 billion yen in 2025. The gross profit margin improved to 12.95% in 2025 from 11.98% in 2024, indicating better cost management. However, the net profit margin decreased from 5.30% in 2024 to 3.80% in 2025, suggesting challenges in maintaining profitability. The EBIT and EBITDA margins showed improvement, reflecting a stronger operational performance.

Balance Sheet

The company's balance sheet is robust, with a debt-to-equity ratio of 0.37, indicating a moderate level of leverage. The equity ratio is strong at 56.43%, showcasing a solid equity base. Although there is a slight increase in total debt, the return on equity (ROE) stands at 4.58%, reflecting a steady return for shareholders. The company's asset base and equity have grown, highlighting financial stability.

Cash Flow

The cash flow situation presents a mixed picture. Operating cash flow has decreased from 11.4 billion yen in 2024 to 8.77 billion yen in 2025, while free cash flow turned negative this year, indicating challenges in cash generation. The free cash flow to net income ratio is negative, highlighting the need for better cash flow management. Despite these issues, the operating cash flow to net income ratio remains healthy, suggesting that the company's operations are still generating cash.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	94.80B	86.52B	84.13B	80.71B	76.40B
Gross Profit	12.28B	10.37B	8.80B	11.76B	11.09B
EBITDA	12.35B	12.52B	7.81B	10.60B	9.91B
Net Income	3.61B	4.59B	4.13B	5.25B	5.59B
Balance Sheet
Total Assets	139.44B	132.98B	123.35B	125.43B	128.09B
Cash, Cash Equivalents and Short-Term Investments	11.38B	13.43B	10.30B	12.06B	13.53B
Total Debt	29.17B	26.91B	24.41B	24.79B	24.82B
Total Liabilities	53.60B	49.05B	44.77B	46.87B	47.81B
Stockholders Equity	78.68B	77.01B	72.23B	72.29B	73.60B
Cash Flow
Free Cash Flow	-1.13B	5.01B	-2.18B	2.19B	3.17B
Operating Cash Flow	8.77B	11.40B	2.58B	9.58B	11.64B
Investing Cash Flow	-9.37B	-6.10B	-1.15B	-4.70B	893.00M
Financing Cash Flow	-1.50B	-2.58B	-3.18B	-6.42B	-9.24B

Tokushu Tokai Paper Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3895.00
• 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:3708, the sentiment is Positive. The current price of 3895 is above the 20-day moving average (MA) of 3881.50, above the 50-day MA of 3770.10, and above the 200-day MA of 3622.99, indicating a bullish trend. The MACD of 37.25 indicates Positive momentum. The RSI at 63.14 is Neutral, neither overbought nor oversold. The STOCH value of 72.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3708.

Tokushu Tokai Paper Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9274	78 Outperform	¥49.98B	6.62		3.73%	3.97%	-21.00%
8032	77 Outperform	¥97.97B	10.71		3.82%	3.80%	-22.03%
3877	75 Outperform	¥22.76B	12.48		4.11%	2.95%	-53.11%
3708	72 Outperform	¥45.11B	12.78		3.07%	9.57%	-20.99%
Sector *	71 Outperform	¥178.90B	10.14	6.29%	3.17%	3.86%	-0.18%
3865	70 Outperform	¥171.75B	11.07	5.99%	2.20%	2.92%	84.86%
3864	66 Neutral	€29.25B	6.64	4.96%	2.28%	-9.06%	4.04%

Tokushu Tokai Paper Co., Ltd. Corporate Events

Tokushu Tokai Paper Co., Ltd. Acquires Functional Paper Assets from TOMOEGAWA

Tokushu Tokai Paper Co., Ltd. has entered into a basic agreement to acquire business goodwill and inventories of functional papers from TOMOEGAWA CORPORATION. This strategic move is part of Tokushu Tokai’s efforts to stabilize its revenue base and promote growth in the paper and environment-related sectors by expanding its product mix into growth areas. The acquisition is expected to enhance Tokushu Tokai’s operational capabilities and market positioning, potentially benefiting stakeholders through improved business performance and market reach.

Tokushu Tokai Paper Co., Ltd. Issues Stock Options to Align Management and Shareholder Interests

Tokushu Tokai Paper Co., Ltd. has announced the issuance of stock options as a form of stock compensation for its directors and executive officers. This initiative aims to align the interests of management with shareholders by linking compensation to the company’s performance and share value, thereby motivating management to enhance corporate value over the medium to long term.

Tokushu Tokai Paper Proposes Amendments to Enhance Governance Flexibility

Tokushu Tokai Paper Co., Ltd. announced proposed amendments to its Articles of Incorporation, aiming to enhance flexibility in corporate governance. The changes are designed to allow the company to quickly respond to market changes, implement capital and dividend policies more effectively, and streamline the roles and responsibilities of its directors, potentially impacting its operational agility and shareholder relations.

Tokushu Tokai Paper Co., Ltd. Reports FY2025 Financial Results with Strategic Subsidiary Changes

Tokushu Tokai Paper Co., Ltd. reported its consolidated financial results for the fiscal year ended March 31, 2025, showing a 9.6% increase in net sales to 94,800 million yen. Despite a significant rise in operating income by 71%, profit attributable to owners of the parent decreased by 21.4% compared to the previous year. The company also announced changes in its subsidiaries through mergers and adjustments in accounting policies, which may impact its future financial performance and strategic positioning.