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

• Market Cap: ¥10.45B
• Dividend Yield: 3.51%
• Average Volume (3M): 15.62K
• Price to Earnings (P/E): 6.5
• Beta (1Y): 0.38
• 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: ¥1,341.00 ▲(22.58% 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

Very low leverage and a high equity ratio give the company durable financial flexibility. With debt-to-equity at 0.07 and equity capital covering most assets, it can fund operations, absorb downturns and pursue opportunities without relying on costly external debt.

Cash generation efficiency

Operating cash flow exceeds reported earnings (OCF to net income 1.2) and free cash flow is a meaningful fraction of earnings (FCF to net income 0.78). This consistent cash conversion supports capex, dividends and liquidity over the medium term despite cyclical revenue.

Stable operating margins

Relatively healthy gross and operating margins (27% gross, 8.2% EBIT, 11.3% EBITDA) indicate structural ability to earn through the industrial cycle. These margins provide a buffer against revenue swings and support sustainable operating cash flows over multiple quarters.

Negative Factors

Revenue volatility

The company has experienced fluctuating top-line performance and a recent revenue decline. Prolonged or repeated revenue weakness would pressure margins, limit scale economies and constrain reinvestment, making sustained growth harder absent product or market shifts.

Declining free cash flow growth

Negative free cash flow growth signals the firm is generating less incremental cash, which can limit capacity for reinvestment, dividends or debt reduction. If the trend persists, it could force tradeoffs that impede long-term strategic spending or weaken financial resilience.

Modest returns on capital

Net margin and ROE are modest, limiting internal capital generation and shareholder returns. Low profitability constrains the company's ability to self-fund growth or improve balance-sheet metrics without efficiency gains or higher-margin revenue, slowing long-term return expansion.

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

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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	17.94B	18.25B	16.37B	16.49B	16.27B
Cash, Cash Equivalents and Short-Term Investments	5.86B	6.03B	5.76B	4.37B	3.46B	2.63B
Total Debt	977.50M	991.24M	989.18M	940.55M	1.03B	1.04B
Total Liabilities	4.52B	4.24B	4.92B	3.90B	4.41B	4.99B
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: Neutral
• Last Price: 1094.00
• 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:5368, the sentiment is Neutral. The current price of 1094 is below the 20-day moving average (MA) of 1242.60, below the 50-day MA of 1180.50, and above the 200-day MA of 1064.12, indicating a neutral trend. The MACD of 2.33 indicates Positive momentum. The RSI at 49.00 is Neutral, neither overbought nor oversold. The STOCH value of 45.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	¥112.28B	15.71	―	4.64%	3.99%	-28.28%
3433	78 Outperform	¥154.16B	16.40	―	3.39%	14.21%	29.38%
5195	77 Outperform	¥87.39B	8.96	―	3.82%	3.68%	-46.19%
6490	76 Outperform	¥176.62B	11.03	―	2.50%	-2.46%	-10.72%
5368	73 Outperform	¥10.45B	6.48	―	3.51%	14.57%	14.12%
7995	67 Neutral	¥84.17B	17.07	―	3.77%	-5.87%	24.10%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%