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Daito Pharmaceutical Co., Ltd. (JP:4577)
:4577
Japanese Market
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Daito Pharmaceutical Co., Ltd. (4577) AI Stock Analysis

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JP:4577

Daito Pharmaceutical Co., Ltd.

(4577)

Rating:70Outperform
Price Target:
¥1,370.00
▲(11.75% 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. (4577) vs. iShares MSCI Japan ETF (EWJ)

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

Company DescriptionDaito 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 MoneyDaito 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
72
Positive
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
65
Positive
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
58
Neutral
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue48.84B50.64B46.90B45.10B43.46B48.71B
Gross Profit8.92B8.64B9.84B10.33B11.46B10.79B
EBITDA7.65B7.41B7.92B8.96B9.88B9.04B
Net Income2.17B1.91B3.29B3.60B4.67B4.25B
Balance Sheet
Total Assets76.63B78.00B77.71B70.55B64.94B57.74B
Cash, Cash Equivalents and Short-Term Investments2.38B2.21B2.73B3.61B4.38B3.37B
Total Debt10.49B11.88B8.72B4.96B3.45B3.39B
Total Liabilities25.01B25.93B25.44B19.58B17.27B15.82B
Stockholders Equity51.53B52.00B52.07B50.67B47.30B41.62B
Cash Flow
Free Cash Flow-3.05B-957.00M-1.09B-1.40B-363.00M-1.17B
Operating Cash Flow1.84B5.90B5.18B4.16B4.37B5.18B
Investing Cash Flow-5.29B-7.37B-5.93B-5.57B-4.40B-6.32B
Financing Cash Flow3.96B1.00B-183.00M616.00M989.00M1.42B

Daito Pharmaceutical Co., Ltd. Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price1226.00
Price Trends
50DMA
1148.68
Positive
100DMA
1082.42
Positive
200DMA
1053.64
Positive
Market Momentum
MACD
22.21
Positive
RSI
55.25
Neutral
STOCH
11.96
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 1226 is below the 20-day moving average (MA) of 1248.75, above the 50-day MA of 1148.68, and above the 200-day MA of 1053.64, indicating a neutral trend. The MACD of 22.21 indicates Positive momentum. The RSI at 55.25 is Neutral, neither overbought nor oversold. The STOCH value of 11.96 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

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
70
Outperform
¥36.89B19.55
4.28%7.99%-51.78%
51
Neutral
$7.86B-0.26-41.41%2.22%22.87%-2.01%
€213.81M11.277.10%
60
Neutral
¥27.78B97.44
2.61%-2.24%-92.72%
54
Neutral
¥18.91B6.46
3.80%8.71%-325.91%
¥15.27B36.95
71
Outperform
¥29.85B9.03
6.35%-3.11%-13.09%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:4577
Daito Pharmaceutical Co., Ltd.
1,232.00
116.37
10.43%
DE:FUP
Fuji Pharma Co., Ltd.
8.70
0.76
9.57%
JP:2929
Pharma Foods International Co., Ltd.
966.00
-0.53
-0.05%
JP:4538
Fuso Pharmaceutical Industries,Ltd.
2,170.00
14.18
0.66%
JP:4574
Taiko Pharmaceutical Co., Ltd.
304.00
-115.00
-27.45%
JP:4595
Mizuho Medy Co., Ltd.
1,575.00
85.47
5.74%

Daito Pharmaceutical Co., Ltd. Corporate Events

Daito Pharmaceutical Announces Share Repurchase
May 1, 2025

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
Apr 14, 2025

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
Apr 14, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 29, 2025