Nippon Shikizai, Inc. (4920) AI Stock Analysis

• Market Cap: ¥2.49B
• 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: ¥1,294.00 ▲(21.50% 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

Nippon Shikizai supplies specialty chemicals across cosmetics, pharmaceuticals and industrial materials, providing diversified end markets. This reduces revenue concentration risk, smooths demand cycles, and supports steady long-term revenue resilience across sectors.

Revenue Growth Trend

Reported 17.17% revenue growth from 2024 to 2025 indicates expanding product adoption and market penetration in core segments. Sustained top-line expansion enables reinvestment in R&D and capacity, supporting medium-term scaling and potential margin recovery if cost control follows.

Strong Operating Cash Generation

An operating cash flow to net income ratio of 2.62 shows the business converts accounting profits into cash effectively, reflecting quality underlying operations. This cash conversion supports working capital, routine capex and reduces reliance on external funding when sustained.

Negative Factors

High Leverage

A 2.56 debt-to-equity ratio and ~22.5% equity ratio denote an aggressively leveraged balance sheet, increasing refinancing, interest and covenant risks. High leverage constrains strategic flexibility, heightens sensitivity to revenue shocks, and can depress credit standing over months.

Negative Free Cash Flow

Negative free cash flow in 2025 signals the company consumed cash after investments, creating liquidity pressure despite operational cash strength. Without sustainable FCF recovery or reduced capex/dividend discipline, the firm may need external financing, increasing funding risk.

Thin Profitability

Net margin at 1.23% with modest EBIT and EBITDA margins indicates limited profitability and weak buffer against cost shocks. Thin margins reduce internally generated funds for growth and make the business more vulnerable to raw material inflation or pricing pressure unless structural efficiency improves.

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: Neutral

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 1194.61, below the 50-day MA of 1169.66, and below the 200-day MA of 1074.39, indicating a neutral trend. The MACD of 10.66 indicates Positive momentum. The RSI at 48.90 is Neutral, neither overbought nor oversold. The STOCH value of 22.79 is Neutral, 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	¥161.05B	19.22	―	5.00%	1.41%	0.75%
4919	71 Outperform	¥89.11B	26.45	6.83%	3.53%	3.05%	-32.61%
4920	68 Neutral	¥2.49B	10.53	―	1.72%	-6.06%	-97.12%
4923	66 Neutral	¥39.23B	26.30	―	1.81%	0.22%	4.15%
4925	63 Neutral	¥6.94B	10.29	―	2.38%	-0.79%	―
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
4926	58 Neutral	¥5.82B	24.38	―	1.68%	8.46%	―