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

• Market Cap: ¥5.61B
• Dividend Yield: N/A
• Average Volume (3M): 64.55K
• Price to Earnings (P/E): 5.4
• 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

Strong free cash flow generation

Consistent positive operating and free cash flow through 2023–2025 indicates the business can generate internal funding for working capital and maintenance capex. Durable FCF (~¥3.2B in 2025) supports resilience in a cyclical sector and gives flexibility for debt service or targeted reinvestment without immediate external financing.

Recovery from prior loss years

A return to profitability after loss years reflects operational adjustments and demand durability for oleochemical intermediates. This structural rebound suggests management and the business model can restore margins and margins expansion when market conditions improve, reducing long-term insolvency risk if maintained.

Recovered equity and stable asset base

Recovery in equity and stable assets strengthen the firm’s capital base, improving solvency metrics versus the trough. A rebuilt equity buffer improves access to capital and cushions operational volatility, enabling the company to support supply commitments and modest strategic investments over the medium term.

Negative Factors

High leverage

A debt-to-equity ratio near 2.5x and historically higher levels materially constrain financial flexibility. In a cyclical refining/oleochemical business, high leverage raises refinancing and interest-coverage risk during downturns, limits capital allocation optionality, and increases the sensitivity of equity returns to margin shocks.

Margin compression and weaker earnings quality

Material margin compression in 2025 signals either input cost pressure or weaker pricing power. Sustained margin erosion undermines the company’s ability to convert revenue into durable profits and free cash flow, making it harder to deleverage and invest, and increasing vulnerability to prolonged commodity-price or demand weakness.

Cyclical revenue volatility

The business’s cyclicality and recent revenue declines reduce predictability of cash flows and capital needs. Structural exposure to commodity and downstream end-market cycles can force procyclical capex or inventory swings, complicating planning, and increasing the likelihood of future earnings and cash-flow volatility that stresses creditors and investors.

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: Positive
• RSI: Neutral
• STOCH: Neutral

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 266.75, below the 50-day MA of 223.74, and below the 200-day MA of 199.51, indicating a bullish trend. The MACD of 26.34 indicates Positive momentum. The RSI at 53.37 is Neutral, neither overbought nor oversold. The STOCH value of 51.75 is Neutral, 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	¥125.45B	17.49	―	2.57%	7.46%	153.98%
5019	68 Neutral	¥1.88T	21.95	2.23%	3.07%	-7.68%	-73.03%
8132	67 Neutral	¥67.66B	32.15	―	1.37%	-5.02%	186.97%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
8133	63 Neutral	¥225.54B	12.70	―	3.45%	-4.87%	26.27%
5010	59 Neutral	¥5.61B	5.38	―	―	-10.55%	-21.44%
5020	56 Neutral	$3.80T	11.54	-0.15%	2.74%	-14.13%	33.18%