AWA PAPER & TECHNOLOGICAL COMPANY, Inc. (3896) AI Stock Analysis

• Market Cap: ¥4.33B
• Dividend Yield: N/A
• Average Volume (3M): 20.86K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.02
• Revenue Growth: 11.79%
• EPS Growth: -1.56%
• Country: JP
• Employees: 640
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): -18.78
• Shares Outstanding: 10,172,676
• 10 Day Avg. Volume: 27,680
• 30 Day Avg. Volume: 20,860
• PEG Ratio: -3.63
• Price to Book (P/B): 0.76
• Price to Sales (P/S): 0.24
• P/FCF Ratio: -0.84
• 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: 61 Neutral
• Price Target: ¥448.00 ▲(36.17% Upside)

The score is held back primarily by weak fundamentals—low profitability, high leverage, and negative free cash flow—despite supportive technical momentum (price above key moving averages with positive MACD). Valuation is also a concern due to a negative P/E and no dividend data to offset uncertainty.

Positive Factors

Specialty Product Focus

AWA's focus on specialty and processed paper using papermaking and coating/processing technologies creates higher value-add products. Specialty materials target industrial applications with technical barriers and switching costs, supporting steadier demand and potential margin resilience over several quarters.

Moderate Revenue Growth

Revenue growth from ¥16.1bn to ¥17.1bn and the report of 'moderate revenue growth' indicate incremental top-line expansion. Sustained demand can improve capacity utilization and deliver scale benefits, helping margins and profitability to strengthen across multiple quarters if maintained.

Positive Operating Cash Flow

Operating cash flow remains positive, showing the core business generates cash from operations. That operational cash provides liquidity to service working capital and interest, and gives management runway to optimize capex, prioritize debt reduction, or invest selectively over a 2-6 month horizon.

Negative Factors

High Leverage

A debt-to-equity ratio of 2.34 signals significant leverage on the balance sheet. High financial obligations constrain strategic flexibility, increase interest expense sensitivity, and amplify earnings volatility; refinancing or repayment needs could pressure operations and limit investment options if cash flows deteriorate.

Very Low Net Profitability

A net profit margin of 0.2% (and ROE noted as ~0.67% in balance sheet commentary) implies the company converts very little revenue into shareholder returns. Persistent low profitability limits internal capital for reinvestment, reduces resilience to cost shocks, and slows progress on deleveraging or strategic initiatives without margin improvement.

Negative Free Cash Flow

Negative free cash flow driven by elevated capex indicates investment intensity exceeds operational cash generation. If sustained, this erodes liquidity, forces external financing or asset sales, and constrains the company's ability to reduce debt or fund product development absent improved cash conversion or tighter capex discipline.

AWA PAPER & TECHNOLOGICAL COMPANY, Inc. Business Overview & Revenue Model

Company Description

Awa Paper & Technological Company, Inc. manufactures and sells papers worldwide. It provides air filter media, polyolefin sheets, base papers, cabin filter media, heat radiation sheets and fins, carbon fiber reinforced plastics, ceramic sheets, and cushion papers, as well as graphitic, carbon fiber, activated carbon fiber, and activated carbon. The company also offers filter media, friction materials, fuel filter media, glass fiber papers, impregnated papers, formaldehyde decomposition and absorption sheets, reverse osmosis membrane backing papers, polyester sheets, and membrane bioreactors, as well as nano coat, oil, and process filter medias. Its products are used in various applications, such as liquid processing, gas processing, engines, automobiles, national land development, industrial, information and communication, building materials, air conditioning, home electronics, medical and welfare, agricultural, and general consumer goods. The company was founded in 1916 and is headquartered in Tokushima, Japan.

How the Company Makes Money

AWA PAPER & TECHNOLOGICAL COMPANY generates revenue primarily through the sale of its paper products, which include a variety of specialty papers tailored to specific industry needs. Key revenue streams include direct sales to businesses, contracts with large manufacturers, and partnerships with distributors and retailers to expand market reach. Additionally, the company invests in research and development to create innovative technological solutions that improve production processes, which are offered as value-added services to existing clients. Significant partnerships with industry leaders and participation in sustainability initiatives also contribute to its earnings by enhancing brand reputation and attracting eco-conscious clients.

AWA PAPER & TECHNOLOGICAL COMPANY, Inc. Financial Statement Overview

Summary

Moderate revenue growth, but profitability is weak (very low net margin) and leverage is high (debt-to-equity 2.34). Positive operating cash flow is offset by negative free cash flow driven by high capex, reducing financial flexibility.

Income Statement

AWA PAPER & TECHNOLOGICAL COMPANY, Inc. has demonstrated moderate revenue growth with a recent increase from 16.1 billion to 17.1 billion. The gross profit margin is stable at around 16%, while the net profit margin is relatively low at 0.2%. EBIT and EBITDA margins are modest, indicating room for efficiency improvements. Recent annual revenue growth suggests positive momentum, but the low net income and fluctuating profitability metrics suggest challenges in achieving sustainable profit levels.

Balance Sheet

The company's balance sheet shows a high debt-to-equity ratio of 2.34, indicating significant leverage which could pose risks if cash flows fluctuate. Return on equity is low at 0.67%, reflecting limited profitability relative to shareholder investment. The equity ratio is stable but modest at 19.8%, suggesting moderate financial stability. The firm needs to manage its debt level and improve ROE to enhance financial health.

Cash Flow

The cash flow statement reveals a negative free cash flow trend due to high capital expenditures. Although operating cash flow remains positive, the free cash flow to net income ratio is negative, indicating challenges in generating cash relative to net income. The operating cash flow to net income ratio is positive yet low, suggesting potential liquidity pressures. Cash flow management needs improvement to support financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	17.74B	17.12B	16.12B	17.31B	15.02B	12.55B
Gross Profit	2.66B	2.74B	2.57B	2.73B	2.61B	1.89B
EBITDA	1.06B	1.00B	1.08B	743.46M	1.08B	589.02M
Net Income	-75.92M	35.87M	52.45M	242.67M	282.82M	-444.90M
Balance Sheet
Total Assets	26.70B	27.19B	21.25B	16.27B	15.53B	15.74B
Cash, Cash Equivalents and Short-Term Investments	842.64M	988.73M	1.11B	539.97M	555.89M	635.76M
Total Debt	14.04B	12.60B	7.75B	4.12B	4.41B	5.62B
Total Liabilities	19.65B	19.61B	14.36B	9.81B	9.16B	9.64B
Stockholders Equity	4.99B	5.38B	5.13B	4.95B	4.54B	4.27B
Cash Flow
Free Cash Flow	0.00	-4.92B	-2.97B	85.90M	1.29B	-439.75M
Operating Cash Flow	0.00	160.87M	792.17M	762.45M	1.52B	199.17M
Investing Cash Flow	0.00	-5.18B	-3.77B	-360.68M	-316.05M	-472.63M
Financing Cash Flow	0.00	4.82B	3.51B	-459.53M	-1.29B	220.88M

AWA PAPER & TECHNOLOGICAL COMPANY, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 329.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3896, the sentiment is Positive. The current price of 329 is below the 20-day moving average (MA) of 426.90, below the 50-day MA of 369.48, and below the 200-day MA of 381.81, indicating a bullish trend. The MACD of 20.56 indicates Positive momentum. The RSI at 54.65 is Neutral, neither overbought nor oversold. The STOCH value of 25.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3896.

AWA PAPER & TECHNOLOGICAL COMPANY, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3708	71 Outperform	¥62.36B	15.33	―	2.67%	6.26%	-11.38%
3864	64 Neutral	¥30.18B	8.93	3.95%	2.31%	-10.04%	43.13%
3878	64 Neutral	¥8.01B	13.98	―	1.90%	-0.17%	-37.01%
3877	62 Neutral	¥26.97B	37.23	―	3.72%	-2.18%	-77.82%
8032	62 Neutral	¥94.21B	44.75	―	3.19%	4.06%	-73.92%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
3896	61 Neutral	¥4.33B	-19.49	―	―	11.79%	-1.56%