Tomoku Co., Ltd. (3946) AI Stock Analysis

• Market Cap: ¥60.72B
• Dividend Yield: 3.5%
• Average Volume (3M): 23.72K
• Price to Earnings (P/E): 8.0
• Beta (1Y): 0.75
• Revenue Growth: 4.40%
• EPS Growth: 47.13%
• Country: JP
• Employees: 3,783
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Packaging & Containers
• EPS (TTM): 158.49
• Shares Outstanding: 19,341,568
• 10 Day Avg. Volume: 18,720
• 30 Day Avg. Volume: 23,723
• PEG Ratio: 0.27
• Price to Book (P/B): 0.43
• Price to Sales (P/S): 0.18
• P/FCF Ratio: 5.07
• 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: 68 Neutral
• Price Target: ¥4,039.00 ▲(14.42% Upside)
• Action: Downgraded Date: 10/30/25
• Date: Action: Downgraded 10/30/25

Tomoku Co., Ltd. scores well due to its strong financial performance and attractive valuation. The company's effective cost management and stable capital structure contribute positively. However, technical indicators suggest caution in the short term, which slightly offsets the overall score.

Positive Factors

Cash generation

A 63% rise in operating cash flow and ¥7.8bn of free cash flow indicate durable cash conversion and internal funding capacity. Strong recurring cash generation supports capital expenditures, dividend coverage, debt reduction, and strategic investments over the coming months, improving financial optionality.

Margin and revenue improvement

Positive revenue growth alongside improved gross, EBIT and EBITDA margins reflects durable operational improvement and tighter cost control. Sustained margin expansion supports profitability resilience to cyclical input costs and underpins free cash flow, strengthening the company's core earnings base over months ahead.

Conservative balance sheet

Lower leverage and a ~45% equity ratio indicate a conservative capital structure that reduces refinancing and liquidity risk. Improved ROE suggests more effective use of equity. Together these factors support financial stability and the capacity to fund strategic initiatives without excessive external financing.

Negative Factors

Asset base contraction

A slight decline in total assets may reflect reduced capex or asset sales, potentially limiting capacity expansion or modernization. Over a 2-6 month horizon this can constrain production scaling or efficiency upgrades, impeding growth or margin gains if demand rises.

Negative investing cash flow

Negative investing cash flow implies sizeable capex or acquisitions. While investment can be growth-accretive, it also pressures near-term free cash flow and raises execution risk. If returns on these investments lag, financial flexibility and cash cushions could be strained.

Thin net profitability

A sub-3% net margin leaves limited buffer against fluctuations in containerboard, energy, or logistics costs common in packaging. Such thin profitability makes net income sensitive to adverse input-cost swings, challenging durable earnings stability without continued efficiency or pricing power improvements.

Tomoku Co., Ltd. Business Overview & Revenue Model

Company Description

Tomoku Co., Ltd. manufactures and sells corrugated packaging, paper containers, and other forms of packaging indispensables for logistics and distribution businesses in Japan and internationally. The company also engages in the construction and sale of Swedish style houses; provision of logistics and insurance brokerage services; and sale of domestic and overseas materials and machinery. In addition, the company imports-exports housing-related materials; renovates, extends, and reconstructs general houses and condominiums; provides wooden truss of roofs and floors for small houses; and transports, warehouses, operates, and recycles food containers. Further, it provides automobile-inspection services, as well as warehousing, factory works, and worker dispatching services; manages food and beverage distribution center, and delivery operation; and manufactures housing components for Sweden house. The company was formerly known as Toyo Wood Products Co., Ltd. and changed its name to Tomoku Co., Ltd. in January 1971. Tomoku Co., Ltd. was founded in 1940 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Tomoku Co., Ltd. generates revenue through the production and sale of plastic and resin products, which are utilized in multiple sectors such as automotive, electronics, and consumer goods. The company's revenue model is based on direct sales to manufacturers and distributors, with a focus on high-volume contracts that ensure steady cash flow. Key revenue streams include product sales, custom material development services, and long-term supply agreements with major industry players. Tomoku also benefits from strategic partnerships with leading companies in various fields, enhancing its market reach and product offerings, which contribute to its overall earnings.

Tomoku Co., Ltd. Financial Statement Overview

Summary

Tomoku Co., Ltd. demonstrated strong financial performance with improvements in revenue, profitability, and cash flow. The company effectively managed its leverage and capital structure, ensuring stable financial health. However, a slight decrease in total assets suggests potential capital investment constraints.

Income Statement

Tomoku Co., Ltd. showed solid revenue growth with a 3.82% increase in 2025 compared to 2024. The gross profit margin improved to 16.82%, and the net profit margin rose to 2.96%, indicating enhanced profitability. EBIT and EBITDA margins also showed positive trends, with EBIT margin at 4.26% and EBITDA margin at 8.26%. This indicates efficient cost management and operational performance.

Balance Sheet

The company's debt-to-equity ratio decreased to 0.73, reflecting a stable capital structure and reduced leverage. Return on Equity (ROE) improved to 7.02%, suggesting effective use of shareholder equity. The equity ratio remained robust at 44.84%, indicating strong financial stability. However, total assets slightly decreased, which could signal capital investment constraints.

Cash Flow

Operating cash flow increased significantly by 63.16% in 2025, leading to a strong free cash flow of 7.8 billion yen. Free cash flow to net income ratio improved, signifying better cash conversion. However, the company experienced negative investing cash flow, potentially indicating high capital expenditures or investment activities.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	221.16B	219.61B	211.53B	212.82B	206.01B	175.65B
Gross Profit	37.85B	36.94B	34.80B	33.58B	33.89B	30.48B
EBITDA	17.71B	18.14B	15.81B	15.80B	15.50B	13.64B
Net Income	6.60B	6.51B	5.31B	5.25B	5.98B	4.89B
Balance Sheet
Total Assets	208.98B	206.82B	213.37B	195.38B	190.02B	179.74B
Cash, Cash Equivalents and Short-Term Investments	14.98B	21.00B	18.13B	15.02B	16.70B	14.05B
Total Debt	70.18B	67.66B	72.98B	69.59B	67.17B	61.52B
Total Liabilities	115.79B	113.45B	124.16B	114.67B	113.89B	108.53B
Stockholders Equity	92.45B	92.73B	88.62B	80.19B	75.66B	70.73B
Cash Flow
Free Cash Flow	0.00	7.80B	4.03B	-2.47B	-1.07B	1.30B
Operating Cash Flow	0.00	18.14B	11.12B	7.01B	16.70B	11.07B
Investing Cash Flow	0.00	-8.26B	-9.29B	-9.39B	-18.22B	-13.45B
Financing Cash Flow	0.00	-7.05B	1.05B	535.00M	4.12B	5.83B

Tomoku Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3530.00
• 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:3946, the sentiment is Positive. The current price of 3530 is below the 20-day moving average (MA) of 3578.25, below the 50-day MA of 3550.70, and above the 200-day MA of 3245.60, indicating a bullish trend. The MACD of 37.00 indicates Negative momentum. The RSI at 61.83 is Neutral, neither overbought nor oversold. The STOCH value of 62.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3946.

Tomoku Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7917	77 Outperform	¥118.55B	14.56	7.53%	3.01%	5.44%	45.99%
3954	76 Outperform	¥13.94B	11.03	―	1.20%	6.42%	-6.32%
3950	76 Outperform	¥78.67B	12.49	―	6.64%	2.85%	-9.13%
7942	73 Outperform	¥86.92B	13.19	―	3.31%	0.83%	-9.16%
3951	70 Outperform	¥19.56B	13.58	―	4.39%	5.06%	-15.22%
3946	68 Neutral	¥60.72B	8.02	―	3.50%	4.40%	47.13%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Tomoku Co., Ltd. Corporate Events

Tomoku Posts Strong Nine-Month Profit Growth and Confirms Higher Full-Year Dividend Plan

Tomoku Co., Ltd. reported solid earnings growth for the nine months ended December 31, 2025, with net sales rising 1.7% year on year to ¥166.9 billion and profit attributable to owners of parent climbing 25.4% to ¥5.4 billion, driving basic earnings per share up to ¥327.55. The company strengthened its financial base with higher total assets and net assets, maintained a robust equity ratio, and kept its full‑year forecast unchanged, targeting a 4.7% increase in sales and a 7.5% rise in full‑year profit alongside a planned dividend hike to an annual ¥130 per share; it also adjusted its consolidation perimeter by adding two subsidiaries and removing one, underscoring ongoing group realignment and a shareholder‑return focus.

The most recent analyst rating on (JP:3946) stock is a Hold with a Yen3979.00 price target. To see the full list of analyst forecasts on Tomoku Co., Ltd. stock, see the JP:3946 Stock Forecast page.

Tomoku Lifts Profits and Dividends on Strong Nine-Month Results

Tomoku Co., Ltd. reported solid growth for the nine months ended December 31, 2025, with net sales up 1.7% year on year to ¥166.9 billion and operating profit jumping 25.5% to ¥8.0 billion. Ordinary profit rose 23.6% to ¥8.1 billion, and profit attributable to owners of parent increased 25.4% to ¥5.4 billion, lifting basic earnings per share to ¥327.55. The company’s financial position also strengthened, with total assets rising to ¥218.2 billion and equity improving to ¥97.9 billion, keeping the equity-to-asset ratio roughly stable at 44.9%. Reflecting its improved earnings, Tomoku has already paid an interim dividend of ¥65 per share for the fiscal year ending March 31, 2026, and maintains a full-year dividend forecast of ¥130 per share, up from ¥100 in the previous fiscal year. For the full year, the company is forecasting net sales of ¥230.0 billion, operating profit of ¥11.0 billion, and profit attributable to owners of parent of ¥7.0 billion, all representing year-on-year growth, while consolidating two new subsidiaries and removing one, which may further support its revenue base and operational scale.

The most recent analyst rating on (JP:3946) stock is a Hold with a Yen3979.00 price target. To see the full list of analyst forecasts on Tomoku Co., Ltd. stock, see the JP:3946 Stock Forecast page.