Nippon Seiro Co., Ltd. (5010) AI Stock Analysis

• Market Cap: ¥6.26B
• Dividend Yield: N/A
• Average Volume (3M): 64.55K
• Price to Earnings (P/E): 9.0
• Beta (1Y): 1.34
• Revenue Growth: -10.55%
• EPS Growth: -21.44%
• Country: JP
• Employees: 268
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Refining & Marketing
• EPS (TTM): 5.85
• Shares Outstanding: 22,400,000
• 10 Day Avg. Volume: 41,730
• 30 Day Avg. Volume: 64,550
• PEG Ratio: -0.09
• Price to Book (P/B): 0.59
• Price to Sales (P/S): 0.19
• P/FCF Ratio: 1.18
• 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: 59 Neutral
• Price Target: ¥272.00 ▲(43.16% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by mixed financial fundamentals: strong recent cash flow and a recovery from prior loss years are offset by high leverage and clear margin compression in 2025. Technicals show strong upside trend but an extremely overbought RSI raises near-term risk. Valuation is supportive with a low P/E.

Positive Factors

Cash Generation

Sustained positive operating and free cash flow across 2023–2025 indicates the core oleochemical operations generate real cash, supporting capex, working capital and deleveraging options. This cash quality makes the business more resilient across cycles and underpins reinvestment capacity.

Profitability Recovery

The company moved from loss years to positive margins (notably in 2024), demonstrating operational improvement and pricing or mix recovery. A return to profitability shows management can extract margin from operations, improving the base for sustained earnings if trends hold.

Niche Industrial Position

A focused oleochemicals niche supplying intermediates gives structural customer stickiness across diverse end markets. This specialization creates technical know-how and long-term B2B demand that mitigates competition from generalist chemical producers and supports stable revenue sources.

Negative Factors

High Leverage

A debt-heavy capital structure materially reduces financial flexibility and raises refinancing and interest coverage risk, especially in the cyclical refining/chemical industry. High leverage constrains strategic choices and magnifies downside if margins weaken or cash flow swings adverse.

Margin Erosion in 2025

The step-down in 2025 margins and slight revenue decline signal margin sustainability issues from cost, pricing or mix pressures. Narrow net margins reduce buffer against cyclical swings and limit the company's ability to deleverage or invest without relying on steady high cash conversion.

Negative Revenue Trend

Material negative revenue growth over the measured period suggests structural demand weakness or loss of share in key markets. Persistently falling top-line constrains scale economies and puts pressure on margins and cash flow, complicating recovery while leverage remains high.

Nippon Seiro Co., Ltd. Business Overview & Revenue Model

Company Description

Nippon Seiro Co., Ltd. manufactures and sells petroleum waxes, physically and chemically converted wax products, and fuel oil in Japan and internationally. It offers paraffin wax, microcrystalline wax, oxidized and chemical wax, special wax, blended products comprising anti-ozonant wax, and wax emulsion, as well as Fischer-Tropsch wax. The company provides its products in slab, pellet, powder, and granule forms for use in various applications, such as hotmelt adhesives, paper cups, plastic lubricants, paper converting, rubber anti-ozonants, polishes, cosmetics and pharmaceuticals, candles, water proof corrugated paperboards, chlorinated paraffins, matches, rust prevention, plywood, textiles, electric insulation, modification of paraffin wax, laminations, chewing gums, water repellents, inks, binders, slip agents, ink additives, toners, release agents, rubbers and tires, polymer additive agents, and paraffin wax reformers. Nippon Seiro Co., Ltd. was founded in 1929 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Nippon Seiro generates revenue through the production and sale of its chemical products, which are utilized across various industries. The company's primary revenue streams include the direct sale of lubricants and greases to manufacturers, automotive companies, and other industrial clients. Additionally, Nippon Seiro engages in partnerships with key players in the automotive and manufacturing sectors, allowing for collaborative development of customized chemical solutions tailored to specific needs. The company's focus on high-quality, innovative products enables it to maintain premium pricing, which further contributes to its profitability. Furthermore, Nippon Seiro's commitment to sustainability and eco-friendly practices attracts a growing customer base that values responsible sourcing and production methods.

Nippon Seiro Co., Ltd. Financial Statement Overview

Summary

Profitability recovered versus prior loss years and cash generation has been solid (positive operating cash flow and free cash flow in 2023–2025). However, 2025 showed weakening earnings quality with margin compression and slightly lower revenue, and the balance sheet is heavily leveraged (debt-to-equity ~2.5x), increasing downside risk in a cyclical industry.

Income Statement

Profitability has improved meaningfully versus the 2022–2023 loss years, with 2024 showing solid margins (about 21% gross margin and ~8% net margin). However, 2025 saw a clear step-down in earnings quality: revenue declined (~2.3%), and margins compressed (gross margin down to ~18% and net margin down to ~3.5%). Overall, the company looks cyclical with uneven profit stability across the period.

Balance Sheet

Leverage remains the key constraint. Debt is high relative to equity (debt-to-equity ~2.5x in 2025; even higher in prior years, peaking above 5x in 2023), which limits flexibility in a volatile refining/marketing environment. Equity has recovered from the 2023 trough, and total assets have stayed fairly stable, but the capital structure still skews debt-heavy and elevates risk if profitability weakens.

Cash Flow

Cash generation is a relative strength recently. Operating cash flow and free cash flow were positive in 2023–2025, with 2025 free cash flow (~¥3.2B) remaining strong. Free cash flow has generally tracked earnings well (close to net income in 2024–2025), supporting quality of profits. The main weakness is historical volatility, including negative operating cash flow and free cash flow in 2020 and 2022, highlighting sensitivity to down-cycles.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	20.25B	19.78B	22.05B	21.70B	38.46B	27.92B
Gross Profit	3.95B	3.55B	4.58B	1.96B	1.39B	3.56B
EBITDA	2.50B	2.04B	3.19B	5.00M	-1.09B	1.63B
Net Income	1.19B	697.00M	1.78B	-1.22B	-2.37B	444.00M
Balance Sheet
Total Assets	28.86B	27.28B	29.73B	30.00B	33.17B	33.57B
Cash, Cash Equivalents and Short-Term Investments	2.60B	2.83B	2.30B	1.83B	2.04B	1.60B
Total Debt	17.36B	16.00B	18.65B	20.53B	21.05B	18.29B
Total Liabilities	23.09B	20.90B	24.05B	26.22B	27.78B	25.83B
Stockholders Equity	5.77B	6.38B	5.67B	3.78B	5.39B	7.74B
Cash Flow
Free Cash Flow	0.00	3.19B	2.79B	471.00M	-1.98B	-29.00M
Operating Cash Flow	0.00	3.69B	2.94B	1.41B	-1.63B	666.00M
Investing Cash Flow	0.00	-596.00M	-149.00M	-495.00M	-339.00M	-680.00M
Financing Cash Flow	0.00	-2.73B	-2.37B	-1.11B	2.42B	198.00M

Nippon Seiro Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 190.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5010, the sentiment is Positive. The current price of 190 is below the 20-day moving average (MA) of 245.75, below the 50-day MA of 214.86, and below the 200-day MA of 197.19, indicating a bullish trend. The MACD of 32.02 indicates Negative momentum. The RSI at 88.68 is Negative, neither overbought nor oversold. The STOCH value of 83.29 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5010.

Nippon Seiro Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8131	74 Outperform	¥131.32B	11.31	―	2.57%	7.46%	153.98%
5019	68 Neutral	$1.92T	62.58	2.23%	3.07%	-7.68%	-73.03%
8132	67 Neutral	¥71.05B	25.58	―	1.37%	-5.02%	186.97%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
5020	64 Neutral	¥4.02T	21.74	-0.15%	2.74%	-14.13%	33.18%
8133	63 Neutral	¥235.36B	16.46	―	3.45%	-4.87%	26.27%
5010	59 Neutral	¥6.26B	8.98	―	―	-10.55%	-21.44%