Japan Insulation Co. Ltd. (5368) AI Stock Analysis

• Market Cap: ¥11.79B
• Dividend Yield: 3.51%
• Average Volume (3M): 15.62K
• Price to Earnings (P/E): 10.1
• Beta (1Y): 0.30
• Revenue Growth: 14.57%
• EPS Growth: 14.12%
• Country: JP
• Employees: 355
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 42.24
• Shares Outstanding: 8,707,200
• 10 Day Avg. Volume: 22,000
• 30 Day Avg. Volume: 15,620
• PEG Ratio: -0.51
• Price to Book (P/B): 0.59
• Price to Sales (P/S): 0.66
• P/FCF Ratio: 13.43
• 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: 73 Outperform
• Price Target: ¥1,513.00 ▲(38.30% Upside)
• Action: Reiterated Date: 03/01/26
• Date: Action: Reiterated 03/01/26

The score is driven primarily by solid financial stability (low debt and strong equity base) and attractive valuation (low P/E with a reasonable dividend). Technicals are supportive due to a strong uptrend, but overbought momentum indicators (high RSI/Stoch) temper the overall score.

Positive Factors

Balance Sheet Strength

Extremely low leverage and a high equity ratio give the company durable financial flexibility. With minimal debt service requirements the firm can sustain operations, fund modest capex, or maintain distributions during downturns without needing urgent external financing.

Operating Cash Generation

Operating cash conversion above 1.0 signals earnings quality and reliable cash generation from core operations. This supports working capital, maintenance capex and dividend capacity over time, providing a stable internal funding source even with cyclical revenue swings.

Stable Operating Margins

Consistent mid-single-digit EBIT and double-digit EBITDA margins provide an operating earnings buffer typical of established industrial suppliers. These margins underpin cash flows, allow reinvestment in operations and support competitiveness in capital-light segments of the machinery industry.

Negative Factors

Declining Free Cash Flow

Negative free cash flow growth reduces the company's ability to self-fund growth, repay liabilities, or increase returns to shareholders. Persisting FCF contraction can force tougher capital allocation choices and may necessitate external funding for investments or extraordinary payouts.

Revenue Volatility / Recent Decline

Irregular top-line performance and a recent revenue drop weaken scale economies and make forward planning harder. Over months this can pressure margins, reduce bargaining leverage with suppliers, and constrain investment in growth initiatives or product development.

Modest Return on Capital

A sub-6% ROE and single-digit net margins indicate limited efficiency in converting capital into shareholder returns. Over the medium term, modest ROE can constrain ability to attract reinvestment, limit dividend expansion, and make funding growth through retained earnings slower.

Japan Insulation Co. Ltd. Business Overview & Revenue Model

Company Description

Japan Insulation Co., Ltd. engages in the design, manufacture, and sale of calcium silicate products in Japan. It also manufactures and sells non-combustible building materials; and designs and constructs steel frame fireproof coating work, as well as heat and cold insulation, and fireproof construction products. The company also offers fireproof coating, interior building, and multifunctional materials. Japan Insulation Co., Ltd. was founded in 1914 and is headquartered in Osaka, Japan.

How the Company Makes Money

Japan Insulation generates revenue primarily through the sale of insulation products to various industries, including construction, automotive, and industrial manufacturing. The company's key revenue streams include direct sales to contractors and builders, partnerships with construction firms, and distribution agreements with retailers. Additionally, Japan Insulation invests in research and development to create advanced insulation technologies that meet evolving regulatory standards and customer needs, thus helping to secure long-term contracts and maintain a competitive edge in the market. Strategic collaborations with other companies in related sectors also contribute to revenue growth by expanding the company's market reach and product offerings.

Japan Insulation Co. Ltd. Financial Statement Overview

Summary

Financials are stable overall: very low leverage (debt-to-equity 0.07) and a strong equity ratio (76.9%) support balance-sheet strength, while profitability is modest (net margin 6.4%) and revenue has recently declined. Cash generation is efficient versus earnings (operating cash flow to net income 1.2), but free cash flow growth is negative.

Income Statement

Japan Insulation Co. Ltd. has demonstrated fluctuating revenue trends with a recent decrease in revenue. The company's gross profit margin stands at 27.0%, and the net profit margin is 6.4%, indicating modest profitability. The EBIT margin of 8.2% and EBITDA margin of 11.3% highlight stable earnings before interest and tax. However, the declining revenue growth rate over the years is a concern.

Balance Sheet

The company's balance sheet shows a strong equity position with a debt-to-equity ratio of 0.07, indicating low leverage. Return on Equity (ROE) is 5.7%, reflecting moderate returns to shareholders. The equity ratio is robust at 76.9%, showcasing financial stability and a low reliance on debt financing.

Cash Flow

The operating cash flow to net income ratio is 1.2, indicating efficient cash generation relative to net income. The free cash flow growth rate is negative, pointing to a decline in free cash generation. However, the free cash flow to net income ratio is 0.78, showing adequate cash flow relative to earnings.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	12.86B	12.22B	12.54B	12.32B	14.12B	14.30B
Gross Profit	3.47B	3.30B	3.63B	3.21B	3.95B	4.27B
EBITDA	1.48B	1.38B	1.73B	1.40B	2.25B	2.08B
Net Income	892.15M	776.61M	975.18M	723.58M	1.15B	1.02B
Balance Sheet
Total Assets	18.22B	17.81B	18.12B	16.32B	16.45B	16.24B
Cash, Cash Equivalents and Short-Term Investments	5.86B	6.03B	5.76B	4.37B	3.46B	2.63B
Total Debt	977.50M	966.25M	1.02B	977.68M	1.08B	1.33B
Total Liabilities	4.52B	4.11B	4.79B	3.85B	4.37B	4.95B
Stockholders Equity	13.69B	13.70B	13.33B	12.47B	12.08B	11.28B
Cash Flow
Free Cash Flow	0.00	602.45M	1.70B	1.46B	1.13B	1.07B
Operating Cash Flow	0.00	897.09M	1.92B	1.93B	1.52B	1.46B
Investing Cash Flow	0.00	-251.96M	-447.00M	-536.84M	-307.91M	-403.29M
Financing Cash Flow	0.00	-396.33M	-274.53M	-457.83M	-312.15M	-721.80M

Japan Insulation Co. Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1094.00
• 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:5368, the sentiment is Positive. The current price of 1094 is below the 20-day moving average (MA) of 1199.70, below the 50-day MA of 1141.50, and above the 200-day MA of 1045.20, indicating a bullish trend. The MACD of 54.53 indicates Negative momentum. The RSI at 80.52 is Negative, neither overbought nor oversold. The STOCH value of 95.12 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5368.

Japan Insulation Co. Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5192	78 Outperform	¥118.63B	18.89	―	4.64%	3.99%	-28.28%
3433	78 Outperform	¥183.81B	21.32	―	3.39%	14.21%	29.38%
5195	77 Outperform	¥100.42B	22.23	―	3.82%	3.68%	-46.19%
6490	76 Outperform	¥200.97B	22.58	―	2.50%	-2.46%	-10.72%
5368	73 Outperform	¥11.79B	10.15	―	3.51%	14.57%	14.12%
7995	67 Neutral	¥94.96B	17.28	―	3.77%	-5.87%	24.10%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%