Lonseal Corporation (4224) AI Stock Analysis

• Market Cap: ¥9.21B
• Dividend Yield: 3.73%
• Average Volume (3M): 8.67K
• Price to Earnings (P/E): 6.4
• Beta (1Y): 0.47
• Revenue Growth: 3.06%
• EPS Growth: -75.19%
• Country: JP
• Employees: 423
• Sector: Industrials
• Sector Strength: 72
• Industry: Construction
• EPS (TTM): 73.06
• Shares Outstanding: 4,625,309
• 10 Day Avg. Volume: 8,920
• 30 Day Avg. Volume: 8,670
• PEG Ratio: -5.53
• Price to Book (P/B): 0.37
• Price to Sales (P/S): 0.33
• P/FCF Ratio: 9.28
• 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: 65 Neutral
• Price Target: ¥2,204.00 ▲(18.11% Upside)
• Action: Reiterated Date: 07/29/25
• Date: Action: Reiterated 07/29/25

The stock score is primarily driven by the company's strong financial stability, evident in its low leverage and high equity. However, profitability challenges and a high P/E ratio raise concerns. While the technical analysis suggests strong bullish momentum, overbought conditions could lead to a correction.

Positive Factors

Low leverage and strong equity

A very low debt-to-equity ratio and high equity ratio provide durable financial flexibility, lowering refinancing and interest-rate risk. This capital structure supports steady investment in operations and cushions cyclical construction demand swings over the next several months.

Positive operating and free cash flow

Sustained positive operating and free cash flow indicate the business generates internal funds to cover capex, dividends, and working capital without relying on new debt. Even with declines, positive cash conversion supports near-term liquidity and operational continuity.

Stable revenue growth and healthy gross margin

Consistent mid-single-digit revenue growth plus a ~35% gross margin reflect durable product demand and effective cost control at the gross level. This margin cushion helps absorb selling and administrative cost volatility across construction cycles.

Negative Factors

Sharply weakened profitability and ROE

The collapse in ROE and net margin signals that earnings generation has deteriorated materially, undermining returns on capital. If persistent, this reduces reinvestment capacity, weakens shareholder returns, and raises questions about operational competitiveness over coming quarters.

Declining cash generation trend

Year-over-year declines in operating and free cash flow indicate weakening cash generation from core activities. Persisting declines would constrain discretionary spending, limit ability to fund growth or dividends, and increase sensitivity to construction cycle slowdowns.

Eroding operating margins and inefficiencies

Falling EBIT/EBITDA margins point to rising operating costs or lower pricing power. Structural margin erosion reduces profitability resilience, forcing either cost restructuring or price increases that may be hard to implement in competitive construction markets over the medium term.

Lonseal Corporation Business Overview & Revenue Model

Company Description

Lonseal Corporation manufactures and sells plastic products in Japan and internationally. The company offers flooring materials; sheet waterproof materials; antivirus, antibacterial, deodorizing, and contamination-proof wall materials, as well as products for sick building syndrome; and flexible, rigid, and antiviral PVC films, as well as flexible acrylic films for use in various industrial purposes. It also provides floor coverings for railroad vehicles; floor coating materials for buses, specially equipped vehicles, and cars; substrate films for semiconductors and electronic components; and housing material products. Lonseal Corporation was founded in 1928 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Lonseal makes money primarily by manufacturing and selling vinyl-based flooring and interior material products under the Lonseal brand to the building and construction market. Revenue is generated from (1) product sales of resilient floor coverings (e.g., vinyl sheet flooring and other flooring materials) supplied for new construction and renovation projects, and (2) sales of related interior finishing materials that complement flooring installations. The company’s earnings are influenced by construction and renovation demand (particularly in non-residential/public-use facilities where durable, easy-to-maintain flooring is required), as well as its ability to supply products through distribution channels serving contractors, installers, and building-material dealers. Specific breakdowns by product line, customer segment, geography, or named partnerships are null.

Lonseal Corporation Financial Statement Overview

Summary

Lonseal Corporation demonstrates strong financial stability with minimal leverage and high equity. However, recent profitability challenges impact its income statement performance. The company shows resilience in maintaining positive cash flow, although there are signs of operational inefficiencies.

Income Statement

Lonseal Corporation exhibits a stable revenue growth trajectory with a 2% increase in the latest year. The gross profit margin remains strong at approximately 35%, indicating effective cost management. However, a significant drop in net profit margin from 4% to 0.06% raises concerns about profitability. The declining EBIT and EBITDA margins reflect operational challenges, reducing overall performance.

Balance Sheet

The company maintains a robust financial position with a low debt-to-equity ratio of 0.02, suggesting minimal leverage risk. The equity ratio is strong at around 73%, indicating financial stability. Return on equity decreased sharply from 4.4% to 0.07%, reflecting recent profitability issues, but the overall balance sheet remains solid with high equity.

Cash Flow

Operating cash flow remains positive, although it decreased from the previous year, reflecting some operational strain. The free cash flow is positive, but down from last year, indicating reduced cash generation. The company sustains a favorable operating cash flow to net income ratio, but declining free cash flow growth suggests the need for improved cash management.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	21.82B	21.43B	21.02B	19.56B	18.13B	17.17B
Gross Profit	7.80B	7.50B	7.38B	6.70B	7.08B	6.78B
EBITDA	1.67B	1.45B	1.64B	1.10B	1.80B	1.65B
Net Income	124.00M	13.00M	835.00M	448.00M	965.00M	872.00M
Balance Sheet
Total Assets	26.10B	25.90B	26.43B	25.52B	24.91B	24.06B
Cash, Cash Equivalents and Short-Term Investments	7.54B	7.55B	7.18B	6.44B	6.80B	7.00B
Total Debt	458.00M	494.00M	582.00M	682.00M	773.00M	1.54B
Total Liabilities	7.21B	6.89B	7.28B	7.27B	6.95B	6.85B
Stockholders Equity	18.89B	19.02B	19.15B	18.25B	17.96B	17.21B
Cash Flow
Free Cash Flow	0.00	762.00M	1.14B	-38.00M	1.14B	37.00M
Operating Cash Flow	0.00	1.13B	1.49B	341.00M	1.73B	1.66B
Investing Cash Flow	0.00	-474.00M	-468.00M	-450.00M	-666.00M	-1.67B
Financing Cash Flow	0.00	-347.00M	-302.00M	-316.00M	-1.30B	-378.00M

Lonseal Corporation Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1866.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4224, the sentiment is Neutral. The current price of 1866 is below the 20-day moving average (MA) of 2149.60, below the 50-day MA of 2074.58, and below the 200-day MA of 1873.55, indicating a neutral trend. The MACD of -18.71 indicates Positive momentum. The RSI at 39.47 is Neutral, neither overbought nor oversold. The STOCH value of 19.07 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4224.

Lonseal Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7971	79 Outperform	¥37.65B	7.75	―	3.59%	6.91%	13.17%
7949	77 Outperform	¥48.00B	14.35	―	3.74%	3.70%	12.26%
7943	66 Neutral	¥108.93B	13.03	―	3.53%	-0.58%	-46.15%
5930	66 Neutral	¥129.11B	10.42	12.89%	3.40%	2.98%	41.11%
4224	65 Neutral	¥9.21B	6.40	―	3.73%	3.06%	-75.19%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
5936	63 Neutral	¥6.13B	4.98	―	4.13%	2.76%	-10.23%