Mitsubishi Paper Mills (3864) AI Stock Analysis

• Market Cap: ¥38.01B
• Dividend Yield: 2.31%
• Average Volume (3M): 181.06K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.98
• 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): -17.49
• 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: 59 Neutral
• Price Target: ¥854.00 ▲(30.38% Upside)
• Action: Reiterated Date: 02/25/26
• Date: Action: Reiterated 02/25/26

The score is driven mainly by moderately solid financials (improving margins and a stable balance sheet) but held back by declining revenue and weakening free cash flow. Technically, the stock is in an uptrend but appears overbought, increasing pullback risk. Valuation is a key drag due to the negative P/E, with only modest support from the dividend yield.

Positive Factors

Improving margins

Gross and net margin recovery (14.3% and 2.5%) and stable EBIT/EBITDA margins point to improving operating discipline. Sustained margin improvement supports cash generation and resilience against revenue pressure, enabling reinvestment and protecting profitability over a multi‑month horizon.

Stable balance sheet

Moderate leverage (debt/equity ~0.85) and a 40.9% equity ratio indicate a sound capital structure that reduces refinancing risk. That financial flexibility supports working capital, periodic capex and strategic responses to market shifts, sustaining operations over the coming months.

Specialty product mix

A focus on specialty papers and functional materials for industrial, packaging and media markets creates differentiated, application-specific products. This structural exposure tends to sustain demand and pricing power versus commodity paper, supporting durable revenue streams and margin stickiness.

Negative Factors

Declining revenue

An ~11% year‑over‑year revenue decline signals loss of scale or demand headwinds. Persistently falling top line undermines fixed‑cost absorption, limits pricing leverage, and can compress future margins and investment capacity if not reversed within the medium term.

Weak free cash flow

FCF conversion is weak (FCF/net income ~0.51) with negative FCF growth, constraining the company’s ability to fund capex, debt amortization or shareholder returns from operations. Continued FCF weakness raises reliance on external financing and limits strategic flexibility.

Modest returns to shareholders

ROE around 5.1% and a low single‑digit net margin imply the business generates limited incremental shareholder value. Over several months this modest profitability may reduce reinvestment returns, constrain dividend growth and make capital allocation choices more difficult vs higher‑return peers.

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

Profitability is improving with a 14.3% gross margin and positive net margin (2.5%), and leverage is moderate (debt-to-equity 0.85; equity ratio 40.9%). Offsetting this, revenue declined year-over-year and free cash flow weakened (FCF to net income 0.51 with negative FCF growth), limiting the overall financial score.

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
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: Positive
• Last Price: 655.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3864, the sentiment is Positive. The current price of 655 is below the 20-day moving average (MA) of 741.60, below the 50-day MA of 697.92, and below the 200-day MA of 661.36, indicating a bullish trend. The MACD of 42.05 indicates Negative momentum. The RSI at 87.37 is Negative, neither overbought nor oversold. The STOCH value of 92.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	¥63.41B	14.99	―	2.67%	6.26%	-11.38%
3865	66 Neutral	¥174.27B	16.61	4.52%	2.71%	-0.03%	120.35%
3863	62 Neutral	¥152.27B	12.44	3.57%	1.31%	1.64%	-10.74%
3861	62 Neutral	¥975.21B	32.88	2.87%	3.51%	3.91%	-22.16%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
3864	59 Neutral	¥38.01B	-356.49	3.95%	2.31%	-10.04%	43.13%
3880	59 Neutral	¥194.93B	50.06	-1.54%	1.53%	-2.89%	-15.89%

Mitsubishi Paper Mills Corporate Events

Mitsubishi Paper Mills Launches Shareholder Perks Using nacre Household Paper

Mitsubishi Paper Mills has approved the introduction of a shareholder benefits program designed to reward loyal investors and encourage medium- to long-term shareholding. The initiative also aims to deepen shareholders’ understanding of the company’s business by directly providing its nacre-branded household paper products.

From the end of March 2026, shareholders holding at least 500 shares for more than one year and registered under the same shareholder number will be eligible to receive a selection of nacre facial tissues, toilet paper or paper towels, regardless of the size of their stake. The benefits, available only to shareholders with delivery addresses in Japan, will be applied for via instructions sent with the annual meeting notice each June and shipped sequentially from late August, with any future program changes to be communicated through the company’s website.

The most recent analyst rating on (JP:3864) stock is a Hold with a Yen753.00 price target. To see the full list of analyst forecasts on Mitsubishi Paper Mills stock, see the JP:3864 Stock Forecast page.