Daito Pharmaceutical Co., Ltd. (4577) AI Stock Analysis

• Market Cap: ¥36.83B
• Dividend Yield: 4.36%
• Average Volume (3M): 48.65K
• Price to Earnings (P/E): 19.5
• Beta (1Y): 0.30
• Revenue Growth: 7.99%
• EPS Growth: -51.78%
• Country: JP
• Employees: 1,070
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 22.88
• Shares Outstanding: 30,096,880
• 10 Day Avg. Volume: 60,850
• 30 Day Avg. Volume: 48,653
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥1,370.00
• Price Target Upside: 11.93% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 70 Outperform
• Price Target: ¥1,370.00 ▲(11.93% Upside)

Daito Pharmaceutical Co., Ltd. receives an overall score of 70, driven primarily by its technical analysis and valuation. The stock shows positive short-term momentum and offers an attractive dividend yield. However, financial performance concerns, including declining profit margins and increasing leverage, weigh on the score.

Daito Pharmaceutical Co., Ltd. Business Overview & Revenue Model

Company Description

Daito Pharmaceutical Co., Ltd. (4577) is a Japan-based company specializing in the development, manufacturing, and marketing of pharmaceutical products. The company operates primarily in the sectors of prescription drugs, over-the-counter medications, and biopharmaceuticals. Daito Pharmaceutical focuses on therapeutic areas such as oncology, cardiology, and infectious diseases, offering a range of innovative medications and healthcare solutions to improve patient outcomes.

How the Company Makes Money

Daito Pharmaceutical generates revenue through multiple streams, including the sale of prescription pharmaceuticals and over-the-counter products. The company profits from the licensing of its proprietary drug formulations and technologies to other pharmaceutical firms, as well as from collaborations and partnerships with research institutions and healthcare providers. Additionally, Daito Pharmaceutical engages in contract manufacturing for third parties, which contributes to its earnings. The company’s strong focus on research and development allows it to maintain a competitive edge and introduce new products, further enhancing its revenue potential.

Daito Pharmaceutical Co., Ltd. Financial Statement Overview

Summary

Daito Pharmaceutical Co., Ltd. demonstrates a mixed financial performance. While there is consistent revenue growth, declining profit margins and increasing leverage are concerning. The balance sheet shows a stable equity position, but rising debt levels could impact financial flexibility. Cash flow challenges, particularly negative free cash flow, suggest a need for strategic adjustments to enhance cash generation and profitability.

Income Statement

Daito Pharmaceutical Co., Ltd. has shown a consistent revenue growth rate of 6.91% in the latest year, indicating a positive trajectory. However, the gross profit margin has decreased over the years, from 26.36% in 2022 to 17.06% in 2025, which could suggest rising costs or pricing pressures. The net profit margin has also declined from 10.74% in 2022 to 3.77% in 2025, reflecting challenges in maintaining profitability. Despite these challenges, the company has managed to maintain a positive EBIT and EBITDA margin, although both have seen a downward trend.

Balance Sheet

The company's debt-to-equity ratio has increased from 0.07 in 2022 to 0.23 in 2025, indicating a rising leverage which could pose a risk if not managed properly. The return on equity has decreased from 9.87% in 2022 to 3.67% in 2025, suggesting a decline in the efficiency of generating profits from shareholders' equity. The equity ratio remains stable, indicating a solid capital structure, but the increasing debt levels warrant caution.

Cash Flow

The free cash flow has been negative in recent years, with a significant decline in free cash flow growth rate of -68.60% in 2025. This indicates potential challenges in generating sufficient cash to cover investments and obligations. The operating cash flow to net income ratio has been relatively stable, suggesting that the company is still generating cash from its operations, but the negative free cash flow to net income ratio highlights the need for improved cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	48.84B	50.64B	46.90B	45.10B	43.46B	48.71B
Gross Profit	8.92B	8.64B	9.84B	10.33B	11.46B	10.79B
EBITDA	7.65B	7.41B	7.92B	8.96B	9.88B	9.04B
Net Income	2.17B	1.91B	3.29B	3.60B	4.67B	4.25B
Balance Sheet
Total Assets	76.63B	78.00B	77.71B	70.55B	64.94B	57.74B
Cash, Cash Equivalents and Short-Term Investments	2.38B	2.21B	2.73B	3.61B	4.38B	3.37B
Total Debt	10.49B	11.88B	8.72B	4.96B	3.45B	3.39B
Total Liabilities	25.01B	25.93B	25.44B	19.58B	17.27B	15.82B
Stockholders Equity	51.53B	52.00B	52.07B	50.67B	47.30B	41.62B
Cash Flow
Free Cash Flow	-3.05B	-957.00M	-1.09B	-1.40B	-363.00M	-1.17B
Operating Cash Flow	1.84B	5.90B	5.18B	4.16B	4.37B	5.18B
Investing Cash Flow	-5.29B	-7.37B	-5.93B	-5.57B	-4.40B	-6.32B
Financing Cash Flow	3.96B	1.00B	-183.00M	616.00M	989.00M	1.42B

Daito Pharmaceutical Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1224.00
• 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:4577, the sentiment is Neutral. The current price of 1224 is below the 20-day moving average (MA) of 1234.00, above the 50-day MA of 1203.18, and above the 200-day MA of 1065.23, indicating a neutral trend. The MACD of 0.37 indicates Positive momentum. The RSI at 42.06 is Neutral, neither overbought nor oversold. The STOCH value of 16.46 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4577.

Daito Pharmaceutical Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4554	76 Outperform	38.03B	12.22	13.49%	2.73%	12.06%	-51.89%
4595	71 Outperform	30.80B	9.21	0.00%	6.18%	-3.11%	-13.09%
4577	70 Outperform	¥36.83B	19.52		4.36%	7.99%	-51.78%
2929	60 Neutral	24.19B	64.36	0.00%	2.99%	5.01%	-87.90%
4538	58 Neutral	18.97B	-5.34	7.11%	3.79%	8.71%	-325.91%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Daito Pharmaceutical Co., Ltd. Corporate Events

Daito Pharmaceutical Announces Share Repurchase

Daito Pharmaceutical Co., Ltd. announced the repurchase of 105,200 of its own shares for 220,726,800 yen, conducted through market purchases on the Tokyo Stock Exchange in April 2025. This move is part of a broader strategy approved by the Board of Directors to repurchase up to 300,000 shares, aiming to enhance shareholder value and optimize capital structure.

Daito Pharmaceutical Revises Earnings Forecast Amid Cost Challenges

Daito Pharmaceutical Co., Ltd. has revised its earnings forecast for the fiscal year ending May 31, 2025, due to lower than expected sales of high-value products and increased costs. Despite strong net sales, the company anticipates a decrease in operating, ordinary, and attributable profits, citing factors such as inventory valuation losses, higher outsourcing expenses, and increased R&D costs.

Daito Pharmaceutical Reports Increased Sales but Declining Profits

Daito Pharmaceutical Co., Ltd. reported a 5.6% increase in net sales for the nine months ending February 28, 2025, compared to the previous year. However, the company experienced a significant decline in profits, with operating profit down by 39.8% and ordinary profit by 34.9%. The financial results indicate challenges in maintaining profitability despite increased sales, which may impact the company’s strategic positioning and stakeholder confidence.