Mitsubishi Paper Mills (3864) AI Stock Analysis

• Market Cap: ¥29.65B
• Dividend Yield: 2.31%
• Average Volume (3M): 181.06K
• Price to Earnings (P/E): 8.9
• Beta (1Y): 0.94
• Revenue Growth: -10.04%
• EPS Growth: 43.13%
• Country: JP
• Employees: 2,832
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): 0.82
• Shares Outstanding: 44,741,432
• 10 Day Avg. Volume: 145,350
• 30 Day Avg. Volume: 181,063
• PEG Ratio: 1.63
• Price to Book (P/B): 0.34
• Price to Sales (P/S): 0.16
• P/FCF Ratio: 12.85
• 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: 64 Neutral
• Price Target: ¥727.00 ▲(10.99% Upside)

The overall stock score of 64 reflects a mixed outlook for Mitsubishi Paper Mills. The company's financial performance shows stability with decent profitability and a solid capital structure, but challenges in revenue growth and cash flow generation persist. Technical indicators suggest a bearish trend, while the valuation appears attractive with a low P/E ratio and a reasonable dividend yield. The absence of earnings call data and corporate events limits additional insights.

Positive Factors

Stable capital structure

A moderate leverage profile and a 40.9% equity ratio provide durable financial flexibility, lowering refinancing risk and supporting funding for operating needs or strategic investment. This stability helps the company withstand cyclical demand in paper markets over months.

Improving profit margins

Recovering gross and stable EBIT/EBITDA margins indicate the business retains pricing power or cost control, supporting sustainable profitability. In a structurally challenged paper industry, margin resilience enhances cash generation and long-term competitiveness.

Decent cash conversion

Operating cash flow exceeding reported net income shows effective cash conversion from core operations, a durable indicator of underlying business quality. Strong OCF conversion reduces dependence on external funding for working capital and near-term investments.

Negative Factors

Declining revenue trend

A sustained revenue decline signals structural demand or market-share pressure in core paper segments. Falling top line reduces scale benefits, strains capacity utilization and can erode long-term margin sustainability unless addressed by product mix or market diversification.

Weak free cash flow generation

Declining free cash flow and a low FCF-to-net-income ratio limit the company's ability to fund capex, pay dividends, or invest in innovation without external financing. This constrains strategic flexibility and raises risk if cyclical headwinds persist.

Modest return on equity

A low ROE implies the company generates limited returns on shareholder capital, reflecting modest profitability or underutilized assets. Over the medium term this can impede capital allocation effectiveness and make it harder to deliver strong shareholder value.

Mitsubishi Paper Mills Business Overview & Revenue Model

Company Description

Mitsubishi Paper Mills Limited, together with its subsidiaries, produces, processes, and sells paper, pulp, and photosensitive materials in Japan, Europe, rest of Asia, North America, and internationally. The company operates in four segments: Paper and Pulp, Imaging Media, Speciality Materials, and Warehouse and Transportation. It offers writing and printing papers, photo-sensitive printing plates, inkjet papers, photographic materials, direct platemaking systems and graphic arts film materials, inkjet media, rewritable thermal recording materials, battery separators, air filters, production inkjet papers, electronic materials, silver nano particle inks, SF films, dye sensitized solar cells, and functional papers. The company also provides warehousing and carrying services; thermal engineering, heat management, and cooling solutions; Mydome, a thick nonwoven fabric; and SaiVis, a screen film. In addition, it is involved in engineering business. The company was formerly known as Mitsubishi Paper Mills Company and changed its name to Mitsubishi Paper Mills Limited in November 1917. Mitsubishi Paper Mills Limited was founded in 1898 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Mitsubishi Paper Mills generates revenue through the manufacturing and sale of its extensive range of paper products. Key revenue streams include the production of printing papers, which serve the publishing industry, and specialty papers used in various applications, including electronics and packaging. The company also benefits from strategic partnerships with other manufacturers and distributors, enhancing its market reach and operational efficiency. Additionally, Mitsubishi Paper Mills invests in research and development to create innovative products, which can lead to higher sales and improved profitability. Factors such as demand for sustainable products and advancements in technology also contribute to its earnings.

Mitsubishi Paper Mills Financial Statement Overview

Summary

Mitsubishi Paper Mills is showing signs of financial stability with improving profitability and a solid capital structure. However, declining revenue and free cash flow indicate potential challenges in sales and cash generation. The moderate leverage and decent margins provide a foundation for future growth, but the company needs to address revenue growth and cash flow improvements to enhance financial performance.

Income Statement

The company has shown a recovery with improving profit margins. The gross profit margin for 2025 is at 14.3%, and the net profit margin is at 2.5%, indicating profitability despite a decline in total revenue from 2024 to 2025. EBIT and EBITDA margins are stable at 2.6% and 8.9% respectively. However, revenue has decreased year-over-year, reflecting challenges in maintaining sales growth.

Balance Sheet

The balance sheet is relatively stable with a debt-to-equity ratio of 0.85, indicating moderate leverage. The company has improved its equity base with an equity ratio of 40.9%, reflecting a solid capital structure. Return on equity is modest at 5.1%, suggesting moderate returns to shareholders.

Cash Flow

The cash flow position is stable, with an operating cash flow to net income ratio of 1.12, indicating decent cash conversion efficiency. However, free cash flow has declined, and the free cash flow to net income ratio is low at 0.51, showing potential constraints in generating free cash after capital expenditures. The free cash flow growth rate is negative, highlighting challenges in cash generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	170.40B	175.94B	193.46B	209.54B	181.92B	162.32B
Gross Profit	23.81B	25.16B	28.15B	27.25B	25.77B	22.59B
EBITDA	13.83B	15.61B	15.57B	7.86B	10.63B	7.79B
Net Income	3.05B	4.34B	4.17B	-571.00M	1.10B	-2.53B
Balance Sheet
Total Assets	199.42B	208.22B	235.38B	227.06B	215.88B	209.44B
Cash, Cash Equivalents and Short-Term Investments	7.22B	6.24B	10.01B	8.32B	9.05B	15.70B
Total Debt	69.87B	72.33B	85.06B	100.17B	93.36B	99.08B
Total Liabilities	117.02B	122.93B	144.43B	155.02B	146.27B	146.54B
Stockholders Equity	82.38B	85.26B	90.93B	72.03B	69.61B	62.90B
Cash Flow
Free Cash Flow	0.00	2.23B	11.80B	-7.27B	-4.56B	9.08B
Operating Cash Flow	0.00	4.85B	13.49B	-2.72B	1.70B	13.01B
Investing Cash Flow	0.00	4.80B	3.83B	-3.56B	-2.56B	-2.10B
Financing Cash Flow	0.00	-13.40B	-16.26B	5.21B	-6.09B	-4.51B

Mitsubishi Paper Mills Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 655.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3864, the sentiment is Neutral. The current price of 655 is below the 20-day moving average (MA) of 675.05, below the 50-day MA of 656.98, and below the 200-day MA of 660.04, indicating a neutral trend. The MACD of 1.85 indicates Positive momentum. The RSI at 45.26 is Neutral, neither overbought nor oversold. The STOCH value of 36.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:3864.

Mitsubishi Paper Mills Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3708	71 Outperform	¥61.95B	15.15	―	2.67%	6.26%	-11.38%
3865	66 Neutral	¥151.92B	13.08	4.52%	2.71%	-0.03%	120.35%
3864	64 Neutral	¥29.65B	8.87	3.95%	2.31%	-10.04%	43.13%
3863	62 Neutral	¥136.33B	7.72	3.57%	1.31%	1.64%	-10.74%
3861	62 Neutral	¥906.56B	26.74	2.87%	3.51%	3.91%	-22.16%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
3880	59 Neutral	¥161.39B	-48.40	-1.54%	1.53%	-2.89%	-15.89%