Hokuetsu Corporation (3865) AI Stock Analysis

• Market Cap: ¥159.48B
• Dividend Yield: 2.71%
• Average Volume (3M): 187.20K
• Price to Earnings (P/E): 14.2
• Beta (1Y): 0.98
• Revenue Growth: -0.03%
• EPS Growth: 120.35%
• Country: JP
• Employees: 3,749
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): 1.12
• Shares Outstanding: 188,053,120
• 10 Day Avg. Volume: 151,710
• 30 Day Avg. Volume: 187,203
• PEG Ratio: 0.16
• Price to Book (P/B): 0.78
• Price to Sales (P/S): 0.67
• P/FCF Ratio: 9.30
• 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: 66 Neutral
• Price Target: ¥1,057.00 ▲(15.52% Upside)

Hokuetsu Corporation's overall stock score reflects strong financial performance and attractive valuation, offset by bearish technical indicators. The company's robust revenue growth and profitability, along with a low P/E ratio and solid dividend yield, are significant strengths. However, the current technical analysis suggests caution due to negative momentum and oversold conditions.

Positive Factors

Diversified revenue streams

A broad mix of printing, packaging and specialty papers across domestic and international customers plus logistics partnerships reduces concentration risk. This diversification stabilizes revenue against single-market downturns and supports steady demand and distribution over the next 2–6 months.

Strong cash generation

Rising operating cash flow and impressive free cash flow growth provide durable internal funding for capex, debt service and dividends. Strong cash conversion increases financial flexibility, enabling reinvestment in efficiency or product lines and cushioning cyclical swings over the medium term.

Improved profitability and margins

Material margin improvement signals better cost control and operational efficiency, which supports sustainable earnings even with modest top-line volatility. Higher gross and EBITDA margins enhance reinvestment capacity and resilience to input-cost pressures over the next several quarters.

Negative Factors

Elevated total debt

A high absolute debt burden increases refinancing and interest-rate risk and can restrict capital allocation choices. If macro conditions tighten or cash flow softens, leverage could force spending cuts or higher borrowing costs, limiting strategic flexibility over the medium term.

Recent revenue contraction

A reported ~3.1% revenue decline suggests underlying demand pressure in core paper segments. Persistent top-line erosion would pressure margins and free cash flow, requiring product mix shifts or market expansion to restore growth and maintain investment capacity over coming quarters.

Volatile EPS growth

An unusually large EPS surge implies earnings volatility, potentially driven by one-offs or base effects rather than recurring operations. Such variability complicates forecasting and capital allocation, making it harder to rely on earnings improvements for long-term planning without repeatable operational gains.

Hokuetsu Corporation Business Overview & Revenue Model

Company Description

Hokuetsu Corporation manufactures and sells paper products in Japan, the United State, China, rest of Asia, and internationally. It operates in two segments, Paper and Pulp Business, and Packaging and Paper Processing Business. The company offers printing and communication papers for books, magazines, catalogs, and brochures; and uncoated printing papers and colored wood-free papers. It also provides white paperboard, coated duplex board, cast coated paper, etc. for various packages, catalogs, POP advertising, and postcards, as well as the covers of publications and others. In addition, the company offers premium printing papers, fancy papers, communication papers, papers for industrial use, specialty processed products, specialty fiber boards, and others; decorative and functional papers; and wood products and glass fiber sheets. Further, it offers paper, food, and liquid package cartons containers, as well as confectionery boxes; processed paper for cosmetics and OTC pharmaceutical packaging; milk and drink cartons under the Tohei Pak brand name; and adhesive postcard papers, abrasive-coated base papers, chip carrier tape base paper, mark sheet paper, business forms, and communication media products. Additionally, the company engages in waste paper wholesale, construction, transportation, warehousing, investment, data processing service, and other businesses. The company was formerly known as Hokuetsu Kishu Paper Co., Ltd. and changed its name to Hokuetsu Corporation in July 2018. Hokuetsu Corporation was founded in 1907 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Hokuetsu Corporation generates revenue through multiple streams, primarily by selling its range of paper products to businesses across different sectors. The company benefits from a diversified client base, including publishers, printers, and packaging manufacturers, which helps stabilize revenue amidst market fluctuations. Key revenue streams include the sale of printing paper, packaging materials, and specialty papers, often characterized by high demand in both domestic and international markets. Additionally, Hokuetsu engages in partnerships with companies in the logistics and supply chain sectors, enhancing its distribution capabilities and market reach. The company's focus on sustainable practices also attracts customers who prioritize eco-friendly products, further contributing to its earnings.

Hokuetsu Corporation Financial Statement Overview

Summary

Hokuetsu Corporation demonstrates robust financial health with strong revenue growth, improved profitability, and solid cash flow generation. The company is well-positioned to manage its financial obligations and invest in future growth, though it should monitor its debt levels to mitigate potential risks.

Income Statement

Hokuetsu Corporation has shown strong revenue growth, with a noticeable increase from the previous year. The gross profit margin is healthy, and the net profit margin has significantly improved, indicating efficient cost management and increased profitability. The EBIT and EBITDA margins are also robust, reflecting solid operational performance.

Balance Sheet

The company maintains a reasonable debt-to-equity ratio, suggesting balanced leverage. The return on equity (ROE) has improved, indicating effective use of equity to generate profits. The equity ratio is strong, highlighting a substantial portion of assets financed by equity. However, the total debt remains high, which could pose a risk if not managed properly.

Cash Flow

Operating cash flow has increased, supporting the company's ability to reinvest and manage liabilities. The free cash flow growth rate is impressive, reflecting strong cash generation capabilities. The ratios of operating and free cash flow to net income suggest a healthy cash flow relative to earnings, providing financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	303.83B	305.72B	297.06B	301.20B	261.62B	222.45B
Gross Profit	69.28B	68.80B	60.15B	64.02B	61.13B	38.48B
EBITDA	35.14B	35.61B	19.72B	26.55B	41.10B	28.37B
Net Income	15.35B	15.53B	8.40B	8.32B	21.21B	14.17B
Balance Sheet
Total Assets	413.18B	418.88B	415.63B	388.44B	376.96B	363.07B
Cash, Cash Equivalents and Short-Term Investments	24.30B	27.64B	22.14B	18.06B	30.27B	29.85B
Total Debt	94.23B	88.97B	106.16B	105.13B	100.41B	115.44B
Total Liabilities	151.61B	153.01B	163.23B	162.50B	159.99B	167.66B
Stockholders Equity	260.81B	265.13B	251.72B	225.30B	216.33B	194.80B
Cash Flow
Free Cash Flow	0.00	22.10B	7.77B	-11.48B	6.49B	7.40B
Operating Cash Flow	0.00	40.93B	22.32B	1.75B	20.19B	23.76B
Investing Cash Flow	0.00	-18.82B	-15.49B	-12.75B	-1.65B	-19.57B
Financing Cash Flow	0.00	-19.12B	-3.80B	-2.10B	-19.19B	4.36B

Hokuetsu Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 915.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3865, the sentiment is Positive. The current price of 915 is above the 20-day moving average (MA) of 906.50, above the 50-day MA of 872.90, and below the 200-day MA of 988.29, indicating a neutral trend. The MACD of 23.27 indicates Negative momentum. The RSI at 70.79 is Negative, neither overbought nor oversold. The STOCH value of 85.10 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3865.

Hokuetsu Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3708	71 Outperform	¥63.22B	15.38	―	2.67%	6.26%	-11.38%
3865	66 Neutral	¥159.48B	14.17	4.52%	2.71%	-0.03%	120.35%
3863	62 Neutral	¥137.37B	7.80	3.57%	1.31%	1.64%	-10.74%
3861	62 Neutral	¥886.06B	26.51	2.87%	3.51%	3.91%	-22.16%
8032	62 Neutral	¥89.55B	43.77	―	3.19%	4.06%	-73.92%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
3880	59 Neutral	¥162.72B	-49.55	-1.54%	1.53%	-2.89%	-15.89%

Hokuetsu Corporation Corporate Events

Hokuetsu Corporation Reports Decline in Financial Performance for H1 2025

Hokuetsu Corporation reported a significant decline in its financial performance for the six months ending September 30, 2025, with net sales dropping by 6.4% and operating profit plummeting by 77.6% compared to the previous year. The company also announced an increase in its annual dividend per share, indicating a commitment to returning value to shareholders despite the challenging financial results.

The most recent analyst rating on (JP:3865) stock is a Hold with a Yen903.00 price target. To see the full list of analyst forecasts on Hokuetsu Corporation stock, see the JP:3865 Stock Forecast page.

Hokuetsu Corporation Revises Financial Forecasts for FY 2026

Hokuetsu Corporation has revised its consolidated financial results forecasts for the fiscal year ending March 31, 2026, indicating a decrease in expected net sales and profits compared to previous estimates. This revision reflects a significant reduction in operating and ordinary profits, which may impact the company’s financial stability and stakeholder confidence.

The most recent analyst rating on (JP:3865) stock is a Hold with a Yen1124.00 price target. To see the full list of analyst forecasts on Hokuetsu Corporation stock, see the JP:3865 Stock Forecast page.

Hokuetsu Corporation Revises Financial Forecasts Amid Market Challenges

Hokuetsu Corporation has revised its financial forecasts for the fiscal year ending March 31, 2026, due to lower than expected sales volumes and prices in overseas pulp markets, and decreased sales of paper and paperboard. The depreciation of the yen has also impacted profitability, leading to significant reductions in projected net sales, operating profit, and earnings per share for both the first half and the full fiscal year. Despite these adjustments, the company has not altered its dividend forecast.

The most recent analyst rating on (JP:3865) stock is a Hold with a Yen1124.00 price target. To see the full list of analyst forecasts on Hokuetsu Corporation stock, see the JP:3865 Stock Forecast page.