Nippon Shikizai, Inc. (4920) AI Stock Analysis

• Market Cap: ¥2.47B
• Dividend Yield: 1.72%
• Average Volume (3M): 1.10K
• Price to Earnings (P/E): 10.5
• Beta (1Y): 0.76
• Revenue Growth: -6.06%
• EPS Growth: -97.12%
• Country: JP
• Employees: 477
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Household & Personal Products
• EPS (TTM): 80.85
• Shares Outstanding: 2,099,376
• 10 Day Avg. Volume: 1,420
• 30 Day Avg. Volume: 1,096
• PEG Ratio: -0.25
• Price to Book (P/B): 0.64
• Price to Sales (P/S): 0.14
• P/FCF Ratio: -4.26
• 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: ¥1,284.00 ▲(20.56% Upside)
• Action: Reiterated Date: 09/04/25
• Date: Action: Reiterated 09/04/25

The overall stock score of 68 reflects strong technical momentum and a reasonable valuation, despite financial performance challenges. The company's revenue growth is a positive indicator, but profitability and cash flow issues need addressing. The absence of significant earnings call data or corporate events means these factors did not influence the score.

Positive Factors

Diversified end markets

Serving cosmetics, pharmaceuticals and industrial applications gives durable revenue diversification across less-correlated end markets. This reduces dependence on any single cycle, supports cross-selling of specialty ingredients, and preserves long-term demand from structural beauty and healthcare trends.

Recent revenue expansion

A 17% year-over-year revenue increase to 2025 and multi-year top-line expansion reflect rising product adoption and market penetration. Sustained revenue growth supports economies of scale, improves bargaining power with suppliers, and provides a base to invest in R&D and margin improvement over the medium term.

Strong operating cash generation

Operating cash flow well above net income indicates core operations generate cash reliably, enabling working-capital funding and servicing interest despite accounting profit volatility. This operational cash strength is a durable buffer for reinvestment or gradual deleveraging if managed alongside capex and receivables.

Negative Factors

High leverage

A debt-to-equity ratio of 2.56 and low equity ratio signal material leverage, constraining financial flexibility. High indebtedness raises refinancing and interest-rate sensitivity, limiting the company’s ability to fund strategic investments or absorb demand shocks without additional capital or aggressive cash conversion.

Thin net margins

Low gross and especially net margins leave little cushion for cost inflation or pricing pressure. Modest EBIT/EBITDA margins limit internal funding for growth and make returns highly sensitive to raw-material cost swings, impairing long-term ability to finance innovation or absorb competitive pricing moves.

Negative free cash flow

Negative free cash flow despite strong operating cash indicates capex, working capital, or other outflows are consuming cash. Persistent FCF deficits force reliance on debt or equity financing, exacerbating leverage and reducing ability to sustain dividends or fund strategic projects without corrective operational or capital allocation changes.

Nippon Shikizai, Inc. Business Overview & Revenue Model

Company Description

Nippon Shikizai, Inc. researches and develops, manufactures, and sells cosmetics in Japan and internationally. The company offers lip products, such as lipsticks, and lip liners and glosses; eye products, including eye shadows, mascaras, eye liners, and eyebrow make-up products; and facial products comprising foundations, concealers, loose powders, blushes, and highlighters. It also provides skin care products, such as sunscreen and whitening products, scrubs, masks, and cleansers. The company was founded in 1930 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Nippon Shikizai generates revenue through the production and sale of its specialty chemicals and functional materials. The company has established multiple revenue streams, including direct sales to manufacturers in the cosmetics and pharmaceutical industries, where it supplies essential raw materials for product formulations. Additionally, Nippon Shikizai may engage in partnerships or collaborations with other firms, enhancing its market reach and product offerings. Factors contributing to its earnings include the demand for high-quality cosmetic ingredients, the growth of the pharmaceutical sector, and the continuous innovation in product development to meet changing consumer preferences.

Nippon Shikizai, Inc. Financial Statement Overview

Summary

Nippon Shikizai, Inc. shows strong revenue growth but faces challenges in profitability and cash flow. The high leverage is a financial risk, although operational cash flows are robust. Improvement in cost management and debt levels is crucial for financial stability.

Income Statement

The company's revenue has shown a strong upward trend, with significant growth from 2022 to 2025. Revenue growth rate from 2024 to 2025 was 17.17%. The gross profit margin for 2025 was 12.43%, indicating moderate profitability. However, the net profit margin declined to 1.23% in 2025, reflecting pressures on net earnings. EBIT and EBITDA margins were also modest, at 2.77% and 8.18% respectively, indicating room for operational efficiency improvements.

Balance Sheet

The debt-to-equity ratio is elevated at 2.56 for 2025, suggesting a high leverage position, which could pose risks if not managed carefully. Return on equity improved to 5.68% in 2025, indicating better utilization of shareholder funds, but still leaves room for improvement. The equity ratio was 22.52%, showing a moderately leveraged balance sheet.

Cash Flow

There was a negative free cash flow in 2025, which is a concern for liquidity. Free cash flow to net income ratio is negative, indicating cash flow challenges. Operating cash flow to net income ratio stands at 2.62, showing strong operational cash generation relative to net income. However, the decline in free cash flow growth is a potential risk.

Breakdown	TTM	Feb 2025	Feb 2024	Feb 2023	Feb 2022	Feb 2021
Income Statement
Total Revenue	16.68B	17.63B	15.05B	11.76B	8.70B	9.14B
Gross Profit	2.06B	2.19B	2.02B	1.39B	804.24M	402.55M
EBITDA	1.24B	1.44B	1.29B	1.11B	783.38M	193.08M
Net Income	120.87M	216.30M	398.11M	246.29M	-122.03M	-848.67M
Balance Sheet
Total Assets	17.01B	16.89B	17.09B	16.05B	15.35B	15.55B
Cash, Cash Equivalents and Short-Term Investments	873.70M	949.02M	1.39B	1.33B	1.32B	1.08B
Total Debt	9.28B	9.73B	9.51B	10.04B	10.22B	10.53B
Total Liabilities	13.26B	13.09B	13.56B	13.04B	12.40B	12.46B
Stockholders Equity	3.75B	3.80B	3.53B	3.01B	2.95B	3.09B
Cash Flow
Free Cash Flow	0.00	-572.15M	567.48M	332.14M	533.27M	-1.56B
Operating Cash Flow	0.00	567.79M	1.25B	615.40M	781.34M	405.52M
Investing Cash Flow	0.00	-1.11B	-438.36M	-252.81M	-187.87M	-2.08B
Financing Cash Flow	0.00	95.46M	-697.50M	-413.11M	-338.23M	1.87B

Nippon Shikizai, Inc. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1065.00
• 50DMA: Positive
• 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:4920, the sentiment is Neutral. The current price of 1065 is below the 20-day moving average (MA) of 1194.93, below the 50-day MA of 1171.02, and below the 200-day MA of 1075.36, indicating a neutral trend. The MACD of 8.03 indicates Positive momentum. The RSI at 45.35 is Neutral, neither overbought nor oversold. The STOCH value of 15.12 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4920.

Nippon Shikizai, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4928	76 Outperform	¥161.73B	19.22	―	5.00%	1.41%	0.75%
4919	71 Outperform	¥88.54B	26.45	6.83%	3.53%	3.05%	-32.61%
4920	68 Neutral	¥2.47B	10.53	―	1.72%	-6.06%	-97.12%
4923	66 Neutral	¥39.11B	26.30	―	1.81%	0.22%	4.15%
4925	63 Neutral	¥6.95B	10.29	―	2.38%	-0.79%	―
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
4926	58 Neutral	¥5.84B	24.38	―	1.68%	8.46%	―