Okayama Paper Industries Co., Ltd. (3892) AI Stock Analysis

• Market Cap: ¥9.70B
• Dividend Yield: 3%
• Average Volume (3M): 2.27K
• Price to Earnings (P/E): 12.4
• Beta (1Y): 0.50
• Revenue Growth: -2.03%
• EPS Growth: -23.36%
• Country: JP
• Employees: 196
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Industrial Materials
• EPS (TTM): N/A
• Shares Outstanding: 5,500,000
• 10 Day Avg. Volume: 4,590
• 30 Day Avg. Volume: 2,273
• PEG Ratio: -0.27
• Price to Book (P/B): 0.52
• Price to Sales (P/S): 0.58
• P/FCF Ratio: -3.24
• 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: 67 Neutral
• Price Target: ¥2,165.00 ▲(32.58% Upside)
• Action: Downgraded Date: 01/09/26
• Date: Action: Downgraded 01/09/26

The score is primarily held back by weakening cash flow and softer revenue/profitability trends, partially offset by a strong low-leverage balance sheet. Technicals are positive but show overbought risk, while valuation (low P/E and moderate dividend yield) provides supportive footing.

Positive Factors

Low Leverage / Strong Balance Sheet

Low leverage and a strong equity base provide durable financial flexibility to fund capex, withstand cyclical paper demand swings, and access credit on favorable terms. This stability supports supplier relationships, operational continuity, and strategic investments over months.

Positive Operating Margins

Sustained positive EBIT and EBITDA margins indicate core manufacturing efficiency, enabling coverage of fixed costs and continued profitability despite weaker top-line. Durable operating margins support reinvestment in operations, product development, and contract fulfillment over the medium term.

Stable Demand Channels & R&D Focus

Long-term client contracts and distribution partnerships deliver steady demand visibility, while R&D and sustainability positioning align with structural growth in eco-friendly packaging. Together these factors support durable revenue streams and competitive differentiation over several quarters.

Negative Factors

Weakening Cash Flow

Operating and free cash flow have declined materially and OCF-to-net-income is negative, indicating poor cash conversion. Reduced cash generation constrains capex, debt servicing, and shareholder returns, and may force external financing or cuts to strategic spending if persistent.

Declining Revenue and Margins

Negative revenue growth and falling gross/net margins point to demand weakness or rising input costs. Continued top-line contraction and margin erosion undermine scale economics, reduce operating leverage, and will pressure profitability and cash flow over the medium term.

Earnings Power Deterioration

A roughly 18.6% EPS decline signals weakening earnings power and lower internal capital generation. Combined with cash flow deterioration, this reduces capacity to self-fund investments or dividends and increases reliance on balance sheet reserves or external funding if trends continue.

Okayama Paper Industries Co., Ltd. Business Overview & Revenue Model

Company Description

Okayama Paper Industries Co., Ltd. engages in manufacture and sale of paper products in Japan and internationally. It provides core paper, paper tube base paper, paper boards, and flat plate, and decorative cardboards; cosmetic cardboard; and digital high speed printing services. Okayama Paper Industries Co., Ltd. was incorporated in 1907 and is headquartered in Okayama, Japan.

How the Company Makes Money

Okayama Paper Industries generates revenue through several key streams, primarily from the sale of its paper products, which include packaging paper, printing paper, and specialty papers. The company benefits from long-term contracts with major clients in various industries, ensuring consistent demand for its products. Additionally, Okayama Paper Industries has established partnerships with suppliers and distributors that enhance its market reach and operational efficiency. Factors contributing to its earnings include a focus on research and development to innovate new products, cost management strategies that optimize production efficiency, and an increasing global demand for sustainable paper solutions.

Okayama Paper Industries Co., Ltd. Financial Statement Overview

Summary

Mixed fundamentals: income statement trends show declining revenue growth and profitability, while cash flow has weakened significantly with negative operating/free cash flow growth and poor cash conversion. Offsetting this, the balance sheet remains a clear strength with low leverage and a healthy equity base.

Income Statement

Okayama Paper Industries Co., Ltd. has shown a decline in revenue growth rate and gross profit margin over the past year, indicating challenges in maintaining sales and cost efficiency. The net profit margin has also decreased, reflecting reduced profitability. However, the company maintains a positive EBIT and EBITDA margin, suggesting operational efficiency despite the revenue decline.

Balance Sheet

The company has a strong equity base with a low debt-to-equity ratio, indicating financial stability and low leverage risk. The return on equity has decreased slightly, but remains positive, showing the company's ability to generate returns on shareholders' investments. The equity ratio is healthy, reflecting a solid financial structure.

Cash Flow

The cash flow statement reveals a significant decline in both operating and free cash flow, with negative growth rates indicating cash management challenges. The operating cash flow to net income ratio is negative, suggesting inefficiencies in converting income into cash. The free cash flow to net income ratio is also negative, highlighting potential liquidity issues.

Breakdown	May 2024	May 2023	May 2022	May 2021	May 2020
Income Statement
Total Revenue	11.52B	11.51B	10.87B	10.08B	9.40B
Gross Profit	2.86B	3.32B	2.30B	2.25B	2.33B
EBITDA	1.31B	1.99B	913.35M	1.19B	1.13B
Net Income	798.70M	1.16B	494.92M	591.13M	616.82M
Balance Sheet
Total Assets	16.59B	17.82B	14.99B	14.88B	13.49B
Cash, Cash Equivalents and Short-Term Investments	4.47B	6.60B	4.96B	5.03B	4.37B
Total Debt	38.69M	48.48M	72.79M	36.55M	117.36M
Total Liabilities	3.65B	5.59B	4.46B	4.42B	3.76B
Stockholders Equity	12.94B	12.24B	10.53B	10.45B	9.73B
Cash Flow
Free Cash Flow	-2.06B	1.65B	267.31M	602.44M	47.69M
Operating Cash Flow	-1.57B	1.92B	551.99M	878.47M	859.22M
Investing Cash Flow	-395.12M	-185.50M	-197.13M	-119.75M	-752.71M
Financing Cash Flow	-164.91M	-107.36M	-420.23M	-96.65M	-98.45M

Okayama Paper Industries Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1633.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3892, the sentiment is Positive. The current price of 1633 is below the 20-day moving average (MA) of 1832.30, below the 50-day MA of 1765.56, and above the 200-day MA of 1561.55, indicating a bullish trend. The MACD of 56.83 indicates Negative momentum. The RSI at 64.87 is Neutral, neither overbought nor oversold. The STOCH value of 87.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3892.

Okayama Paper Industries Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3955	79 Outperform	¥9.42B	9.50	―	3.00%	4.22%	13.08%
3945	78 Outperform	¥4.08B	4.78	―	3.33%	1.53%	20.73%
3892	67 Neutral	¥9.70B	12.44	―	3.00%	-2.03%	-23.36%
3895	66 Neutral	¥3.59B	5.98	―	4.43%	-3.73%	-7.14%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
9929	56 Neutral	¥4.92B	60.24	―	2.62%	-1.03%	-43.05%
7901	51 Neutral	¥1.52B	-3.50	―	―	-1.28%	-80.80%