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

• Market Cap: ¥29.85B
• Dividend Yield: 3.51%
• Average Volume (3M): 88.60K
• Price to Earnings (P/E): 14.0
• Beta (1Y): 0.30
• Revenue Growth: 8.07%
• EPS Growth: -45.20%
• Country: JP
• Employees: 1,070
• Sector: Healthcare
• Sector Strength: 44
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 10.17
• Shares Outstanding: 30,096,880
• 10 Day Avg. Volume: 75,560
• 30 Day Avg. Volume: 88,600
• PEG Ratio: -0.36
• Price to Book (P/B): 0.65
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -23.63
• 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

• Rating: 73 Outperform
• Price Target: ¥1,134.00 ▲(14.31%Upside)

Daito Pharmaceutical Co., Ltd. scores well in valuation due to its low P/E ratio and unusually high dividend yield, significantly boosting its overall score. Despite stable financial performance, improvements in cash flow management and profitability are necessary. Mixed technical indicators suggest caution in the short term.

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

Company Description

Daito Pharmaceutical Co., Ltd. (4577) is a Japanese company engaged in the pharmaceutical industry, primarily focusing on the development, manufacturing, and marketing of generic drugs. The company plays a crucial role in providing cost-effective medication options, which are bioequivalent to brand-name drugs, thereby contributing to the healthcare system by making essential medications more accessible and affordable to the public.

How the Company Makes Money

Daito Pharmaceutical Co., Ltd. generates revenue through the production and sale of generic pharmaceutical products. The company's primary revenue streams include sales to hospitals, pharmacies, and wholesalers who distribute the generic drugs to end consumers. Additionally, Daito may engage in contract manufacturing, providing production services for other pharmaceutical companies. The company's financial performance may be influenced by factors such as drug approval rates, patent expirations of branded drugs, and healthcare policies that encourage the use of generics. Strategic partnerships with other pharmaceutical firms or research institutions can also play a role in expanding their product offerings and market reach.

Daito Pharmaceutical Co., Ltd. Financial Statement Overview

Summary

Daito Pharmaceutical Co., Ltd. exhibits a stable income statement with healthy operational efficiency, as indicated by its margins. However, challenges include a decline in EBIT and net income, and negative free cash flow, which may impact long-term financial health.

Income Statement

Daito Pharmaceutical Co., Ltd. exhibits a stable income statement with a Gross Profit Margin of 20.99% and a Net Profit Margin of 7.03% for the latest fiscal year. Although the Revenue Growth Rate is moderate at 3.97%, the EBIT Margin of 8.30% and EBITDA Margin of 16.89% indicate healthy operational efficiency. However, the decline in both EBIT and net income compared to previous years suggests potential challenges in maintaining profitability.

Balance Sheet

The company maintains a strong balance sheet with a Debt-to-Equity Ratio of 0.17, indicating conservative financial leverage. The Return on Equity (ROE) stands at 6.33%, reflecting moderate returns for shareholders. An Equity Ratio of 66.99% highlights a robust capital structure. However, the recent increase in total debt and a slight decline in equity could pose potential risks if not managed effectively.

Cash Flow

Daito Pharmaceutical's cash flow statement shows a concerning Free Cash Flow of -1.09 billion JPY, albeit an improvement from the previous year. The Operating Cash Flow to Net Income Ratio of 1.57 indicates efficient cash generation relative to net income. However, the Free Cash Flow to Net Income Ratio is negative, signaling challenges in covering capital expenditures and other financial obligations.

Breakdown	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	47.37B	46.90B	45.10B	43.46B	48.71B	45.00B
Gross Profit	9.03B	9.84B	10.33B	11.46B	10.79B	9.48B
EBITDA	6.06B	7.92B	9.08B	9.88B	9.04B	8.56B
Net Income	2.65B	3.29B	3.60B	4.67B	4.25B	3.94B
Balance Sheet
Total Assets	79.63B	77.71B	70.55B	64.94B	57.74B	54.25B
Cash, Cash Equivalents and Short-Term Investments	3.24B	2.73B	3.61B	4.38B	3.37B	3.08B
Total Debt	11.32B	8.72B	4.96B	3.45B	3.39B	3.37B
Total Liabilities	27.61B	25.44B	19.58B	17.27B	15.82B	17.38B
Stockholders Equity	52.01B	52.07B	50.67B	47.30B	41.62B	36.51B
Cash Flow
Free Cash Flow	-3.05B	-1.09B	-1.40B	-363.00M	-1.17B	1.53B
Operating Cash Flow	1.84B	5.18B	4.16B	4.37B	5.18B	4.31B
Investing Cash Flow	-5.29B	-5.93B	-5.57B	-4.40B	-6.32B	-2.68B
Financing Cash Flow	3.96B	-183.00M	616.00M	989.00M	1.42B	-350.46M

Daito Pharmaceutical Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 992.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 992 is below the 20-day moving average (MA) of 1017.65, below the 50-day MA of 1010.21, and below the 200-day MA of 1037.45, indicating a bearish trend. The MACD of -6.74 indicates Positive momentum. The RSI at 42.65 is Neutral, neither overbought nor oversold. The STOCH value of 7.50 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
4577	73 Outperform	¥29.85B	14.04		3.51%	8.07%	-45.20%
4595	71 Outperform	¥26.90B	7.51		5.54%	4.00%	-0.03%
4554	70 Outperform	¥34.52B	10.84	7.01%	2.83%	13.46%	-46.40%
4538	65 Neutral	¥18.54B	6.46		3.96%	9.31%	-340.82%
Sector *	65 Neutral	¥343.99B	10.56	-2.88%	2.55%	11.80%	-6.84%
2929	56 Neutral	¥23.76B	83.32		3.00%	-2.24%	-92.72%

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.