Nihon Kogyo Co., Ltd. (5279) AI Stock Analysis

• Market Cap: ¥4.06B
• Dividend Yield: 3.09%
• Average Volume (3M): 7.32K
• Price to Earnings (P/E): 7.5
• Beta (1Y): 0.59
• Revenue Growth: 18.72%
• EPS Growth: 166.58%
• Country: JP
• Employees: 400
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 87.08
• Shares Outstanding: 3,064,200
• 10 Day Avg. Volume: 4,040
• 30 Day Avg. Volume: 7,320
• PEG Ratio: 0.19
• Price to Book (P/B): 0.31
• Price to Sales (P/S): 0.17
• P/FCF Ratio: 6.60
• 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: 79 Outperform
• Price Target: ¥1,775.00 ▲(29.75% Upside)

The score is driven primarily by solid financial performance (revenue growth, improving margins, and a stable balance sheet), reinforced by attractive valuation (low P/E and a moderate dividend). Technicals are supportive but slightly capped by overextended momentum signals (high RSI/Stoch), and cash flow weakness (sharp FCF decline) is a key risk.

Positive Factors

Revenue Growth

Consistent 7.86% revenue growth and improving profitability indicate durable demand and successful execution in infrastructure markets. Over 2-6 months this supports reinvestment capacity, pricing power in projects and resilience versus short-term project timing swings.

Moderate Leverage / Strong Equity Position

A 0.47 debt-to-equity and ~49% equity ratio provide financial flexibility for bidding on large infrastructure contracts and funding capex without excessive refinancing risk. This balance sheet conservatism supports longer-term stability across business cycles.

Stable Public-Sector Demand

Exposure to government and public infrastructure work creates recurring, lumpy but durable demand streams. For 2-6 months this underpins revenue visibility, backlog stability and predictable project pipelines versus purely private-sector cyclical demand.

Negative Factors

Sharp Free Cash Flow Decline

A >50% drop in free cash flow materially reduces internal funding for capex, dividends and working capital. Even with operating cash to net income strong, the FCF contraction weakens liquidity headroom and limits strategic optionality over the next several quarters.

Modest Profitability / Low ROE

Net margin under 3% and ROE below 5% signal limited conversion of revenue into shareholder returns in a capital-intensive sector. Sustained low returns constrain ability to self-fund growth and may limit long-term EPS upside absent margin expansion.

Concentration on Public Projects

Reliance on public-sector contracts exposes revenue to budget cycles, procurement timing and political funding risk. Project timing variability and potential policy shifts can produce revenue volatility and margin pressure over multi-month horizons.

Nihon Kogyo Co., Ltd. Business Overview & Revenue Model

Company Description

Nihon Kogyo Co., Ltd. engages in the civil engineering materials, landscape, and exterior and gardening businesses in Japan. The company processes, manufactures, and sells various concrete products, such as box culvert, culvert, storage and disaster prevention, retaining wall, road, underground electric wires, waterway, river, ocean, special concrete, and dam related products used for roads, sewage, seawall construction, fish reefs, disaster prevention and mitigation, as well as the maintenance and repair of infrastructure, such as highways, bridges, and tunnels. In addition, it offers paving materials, furniture used in parks, wood cleats, giseki products, and disaster prevention and mitigation items. Further, the company provides exterior-related materials, litters, disaster prevention/mitigation/relief/safety, lifestyle, garden, play base, and interior products, as well as civil engineering and block work services. Nihon Kogyo Co., Ltd. was founded in 1945 and is headquartered in Sanuki, Japan.

How the Company Makes Money

Nihon Kogyo Co., Ltd. generates revenue through multiple streams related to its core offerings in construction materials and services. The primary revenue model relies on the sales of construction products, particularly precast concrete components and road construction materials, which are crucial for large-scale infrastructure projects. Additionally, the company may benefit from government contracts and public sector projects that require high-quality materials for urban development and road maintenance. Significant partnerships with construction firms and government agencies also contribute to its earnings by ensuring a steady demand for its products. Furthermore, the company may explore opportunities in environmental technology solutions, providing services and products that promote sustainable construction practices, thereby tapping into the growing market for eco-friendly materials and practices.

Nihon Kogyo Co., Ltd. Financial Statement Overview

Summary

Strong revenue growth (7.86% YoY) and improving profitability with stable gross/EBIT/EBITDA margins. Balance sheet leverage is moderate (debt-to-equity 0.47) with a solid equity ratio (48.81%), but free cash flow fell sharply (-52.84%), which tempers the overall strength.

Income Statement

Nihon Kogyo Co., Ltd. demonstrated strong revenue growth of 7.86% from 2024 to 2025. The gross profit margin is consistently healthy at approximately 20.7%, indicating stable operational efficiency. Net profit margin improved to 2.67% in 2025, reflecting better profitability. The EBIT and EBITDA margins are stable at 4.03% and 7.94% respectively, showing consistent earnings performance.

Balance Sheet

The company's debt-to-equity ratio is 0.47, suggesting moderate leverage and manageable financial risk. Return on equity stands at 4.97%, reflecting modest returns for shareholders. An equity ratio of 48.81% indicates a strong equity position, contributing to financial stability.

Cash Flow

Free cash flow decreased by 52.84% from 2024 to 2025, indicating pressure on cash generation. Operating cash flow to net income ratio is 1.69, suggesting strong cash earnings. However, the free cash flow to net income ratio has declined, indicating potential challenges in cash retention.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	15.00B	14.75B	13.67B	11.34B	11.77B	12.23B
Gross Profit	3.23B	3.05B	2.76B	2.29B	2.34B	2.42B
EBITDA	1.21B	1.17B	965.69M	735.06M	789.97M	807.66M
Net Income	469.13M	393.68M	295.15M	198.68M	273.18M	327.12M
Balance Sheet
Total Assets	15.45B	16.21B	15.62B	15.21B	13.76B	14.02B
Cash, Cash Equivalents and Short-Term Investments	1.45B	1.47B	1.45B	1.44B	1.37B	1.34B
Total Debt	3.38B	3.70B	3.70B	3.95B	3.14B	3.32B
Total Liabilities	7.64B	8.30B	7.96B	7.72B	6.60B	7.00B
Stockholders Equity	7.81B	7.91B	7.66B	7.31B	7.16B	7.02B
Cash Flow
Free Cash Flow	0.00	370.18M	785.04M	-38.93M	431.03M	522.82M
Operating Cash Flow	0.00	665.69M	1.26B	224.92M	678.88M	1.01B
Investing Cash Flow	0.00	-310.71M	-426.83M	-735.68M	-256.84M	-493.08M
Financing Cash Flow	0.00	-342.15M	-816.65M	581.38M	-388.46M	-403.07M

Nihon Kogyo Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1368.00
• 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:5279, the sentiment is Neutral. The current price of 1368 is below the 20-day moving average (MA) of 1434.80, above the 50-day MA of 1353.30, and above the 200-day MA of 1260.54, indicating a neutral trend. The MACD of 26.06 indicates Positive momentum. The RSI at 47.37 is Neutral, neither overbought nor oversold. The STOCH value of 16.67 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:5279.

Nihon Kogyo Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1841	82 Outperform	¥5.68B	10.32	―	1.88%	-16.60%	-19.91%
5279	79 Outperform	¥4.06B	7.49	―	3.09%	18.72%	166.58%
1788	78 Outperform	¥3.43B	10.19	―	2.11%	21.66%	385.30%
1897	71 Outperform	¥6.97B	36.94	―	1.72%	-28.06%	-43.82%
1764	66 Neutral	¥3.38B	7.35	―	4.09%	14.64%	48.31%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%