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

• Market Cap: ¥8.54B
• Dividend Yield: 3%
• Average Volume (3M): 2.27K
• Price to Earnings (P/E): 10.7
• Beta (1Y): 0.44
• Revenue Growth: -2.03%
• EPS Growth: -23.36%
• Country: JP
• Employees: 196
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Industrial Materials
• EPS (TTM): 48.05
• 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: ¥2,080.00 ▲(27.37% Upside)

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

A low debt-to-equity structure and healthy equity ratio provide lasting financial flexibility. This reduces refinancing and solvency risk across cycles, supports capital expenditures and working capital needs, and gives management optionality to invest or withstand demand volatility over months.

Sustained operational margins

Persistent positive EBIT/EBITDA margins indicate underlying operational efficiency and cost management. For a commodity-linked paper producer, sustained margins provide a durable buffer against input cost swings, supporting cash generation and the capacity to fund reinvestment or gradual margin recovery.

Long-term contracts and R&D/sustainability focus

Long-term client contracts increase revenue visibility and reduce demand volatility risk. Combined with explicit R&D and sustainability initiatives, this positions the company to capture structural shifts toward eco-friendly packaging, supporting market differentiation and durable product demand over 2–6 months and beyond.

Negative Factors

Weakening cash flow and conversion

Sharp declines in operating and free cash flow and negative cash conversion ratios undermine liquidity and limit ability to self-fund capex, dividends, or working capital. If persistent, cash weakness constrains strategic flexibility and elevates reliance on external funding.

Declining revenue and margins

Sustained top-line contraction and shrinking gross/net margins point to structural demand, pricing, or cost pressures. Over several months this can erode scale economics, reduce operating leverage, and impair the company’s ability to invest in product development or pricing initiatives needed to restore growth.

Material EPS deterioration

A roughly 23% EPS decline signals meaningful earnings stress, limiting retained earnings and potentially constraining dividends or reinvestment. Persisting EPS deterioration reduces strategic flexibility and may force tougher cost or capital-allocation choices in the medium term.

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

Okayama Paper Industries Co., Ltd. faces challenges in revenue growth and cash flow management, impacting profitability and liquidity. However, the company maintains a strong balance sheet with low leverage, providing a buffer against financial instability.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.52B	11.52B	11.51B	10.87B	10.08B	9.40B
Gross Profit	2.83B	2.86B	3.32B	2.30B	2.25B	2.33B
EBITDA	1.36B	1.31B	1.99B	913.35M	1.19B	1.13B
Net Income	798.61M	798.70M	1.16B	494.92M	591.13M	616.82M
Balance Sheet
Total Assets	16.59B	16.59B	17.82B	14.99B	14.88B	13.49B
Cash, Cash Equivalents and Short-Term Investments	4.47B	4.47B	6.60B	4.96B	5.03B	4.37B
Total Debt	38.69M	38.69M	48.48M	72.79M	36.55M	117.36M
Total Liabilities	3.65B	3.65B	5.59B	4.46B	4.42B	3.76B
Stockholders Equity	12.94B	12.94B	12.24B	10.53B	10.45B	9.73B
Cash Flow
Free Cash Flow	0.00	-2.06B	1.65B	267.31M	602.44M	47.69M
Operating Cash Flow	0.00	-1.57B	1.92B	551.99M	878.47M	859.22M
Investing Cash Flow	0.00	-395.12M	-185.50M	-197.13M	-119.75M	-752.71M
Financing Cash Flow	0.00	-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: Neutral

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 1712.65, above the 50-day MA of 1622.18, and above the 200-day MA of 1487.33, indicating a bullish trend. The MACD of 34.79 indicates Negative momentum. The RSI at 54.01 is Neutral, neither overbought nor oversold. The STOCH value of 32.48 is Neutral, 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	¥10.81B	10.77	―	3.00%	4.22%	13.08%
3945	78 Outperform	¥4.28B	4.30	―	3.33%	1.53%	20.73%
3892	67 Neutral	¥8.54B	10.67	―	3.00%	-2.03%	-23.36%
3895	66 Neutral	¥3.33B	5.04	―	4.43%	-3.73%	-7.14%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
9929	56 Neutral	¥4.46B	55.77	―	2.62%	-1.03%	-43.05%
3168	54 Neutral	¥11.03B	64.26	―	3.37%	0.48%	-138.12%