A&A Material Corporation (5391) AI Stock Analysis

• Market Cap: ¥9.99B
• Dividend Yield: 4.54%
• Average Volume (3M): 13.52K
• Price to Earnings (P/E): 14.5
• Beta (1Y): 0.69
• Revenue Growth: 7.32%
• EPS Growth: -93.45%
• Country: JP
• Employees: 838
• Sector: Industrials
• Sector Strength: 72
• Industry: Construction
• EPS (TTM): 24.15
• Shares Outstanding: 7,778,000
• 10 Day Avg. Volume: 10,590
• 30 Day Avg. Volume: 13,523
• PEG Ratio: 0.71
• Price to Book (P/B): 0.48
• Price to Sales (P/S): 0.20
• P/FCF Ratio: -5.87
• 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: 56 Neutral
• Price Target: ¥1,345.00 ▼(-4.20% Downside)
• Action: Reiterated Date: 03/24/26
• Date: Action: Reiterated 03/24/26

The score is driven primarily by mixed fundamentals: a solid, low-leverage balance sheet is offset by a 2025 swing to a loss and negative free cash flow. Technicals also weigh on the outlook with bearish momentum and the stock trading below key moving averages. Valuation helps, supported by a moderate P/E and a high dividend yield.

Positive Factors

Revenue Growth

Consistent revenue growth (7.32% and a stated CAGR) indicates sustained demand for the company’s products and services. Over the next 2–6 months this supports scale benefits, steadier top-line cash generation, and a stronger base for margin recovery and reinvestment.

Balance Sheet Stability

A relatively stable balance sheet with a solid equity base and reasonable leverage provides financial flexibility. This durability helps the company fund working capital and capex through cycles, absorb shocks in construction demand, and preserves borrowing capacity for strategic needs.

Gross Margin Resilience

Stable gross margins point to consistent cost controls or pricing power in core activities. Even with pressured EBITDA, steady gross margins suggest the firm's core operations remain profitable at the gross level, supporting longer-term margin recovery if SG&A or other costs are managed.

Negative Factors

Declining Profitability

A swing to a net loss and negative net margin is a durable red flag: it erodes retained earnings and internal financing capacity, pressures dividend sustainability, and signals structural or operational issues that must be resolved before profitability normalizes.

Weak Cash Generation

Material declines in operating and free cash flow indicate the company struggles to convert earnings into cash. This undermines the ability to fund capex, service debt, and maintain distributions, increasing reliance on external financing and reducing strategic flexibility.

Rising Debt Levels

An uptick in total debt, even if moderate, raises leverage risk when profitability and cash flow are weakening. Higher debt burdens constrain capital allocation, increase interest exposure, and could exacerbate stress during industry slowdowns or funding cost rises.

A&A Material Corporation Business Overview & Revenue Model

Company Description

A&A Material Corporation engages in the manufacture and sale of building materials and industrial products in Japan. Its Building Materials division manufactures and sells interior and exterior materials for various noncombustible boards and decorative boards; sells flame-resistant materials for tunnel buildings, tunnel interior cable flame-resistant materials, tunnel interior decorative materials, and tunnel repair/reinforcement type frame materials; and designs and implements steel fireproof coating works. The company's Industrial Products division is involved in the manufacture and sale of industrial friction materials, sealing materials, thermal insulation materials, shipbuilding materials, soundproofing materials, and extension couplings; and design and implementation of thermal insulation, air conditioning, heat insulation, sound insulation, and fire resistance construction projects. This division also offers expansion joints, carrier rolls for high temperature rolling, insulating materials, disaster-prevention products, gasket and packing products, and shipbuilding products. In addition, it is involved in the rental of real estate properties. A&A Material Corporation was founded in 1924 and is headquartered in Yokohama, Japan.

A&A Material Corporation Financial Statement Overview

Summary

Balance sheet strength is a positive (manageable leverage and substantial equity), but 2025 profitability deteriorated to a loss and free cash flow turned meaningfully negative, highlighting earnings and cash-flow volatility.

Income Statement

Revenue has trended upward over the last few years (2025 revenue up ~1.9% vs. 2024), but profitability weakened materially in the most recent year: net income swung to a loss in 2025 after solid profitability in 2024. Gross margin stayed fairly steady (~22–23%), while operating profitability compressed meaningfully from 2024 levels, indicating higher costs and/or weaker pricing/mix. Overall, the top line is stable to modestly growing, but earnings quality and consistency are a key concern given the sharp 2025 downturn.

Balance Sheet

Leverage appears manageable with low debt relative to equity (debt-to-equity ~0.25 in 2025, improved from higher levels in 2022–2023), providing balance-sheet flexibility. Equity is substantial relative to the asset base, supporting financial stability. The main weakness is returns: shareholder returns turned slightly negative in 2025 following strong 2024 performance, reflecting the earnings decline rather than balance-sheet stress.

Cash Flow

Cash generation is volatile. Operating cash flow was positive in 2025, but free cash flow turned meaningfully negative, suggesting heavier investment and/or working-capital pressure. Prior years show inconsistency as well (notably negative operating and free cash flow in 2023, then strong positive free cash flow in 2024). With 2025 free cash flow negative despite positive operating cash flow, near-term cash conversion and funding needs warrant attention.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	43.94B	43.42B	41.28B	39.20B	35.92B	37.20B
Gross Profit	10.06B	9.82B	9.29B	8.07B	8.03B	8.31B
EBITDA	2.91B	2.89B	3.12B	2.21B	2.15B	2.12B
Net Income	31.00M	-120.00M	2.70B	931.00M	958.00M	727.00M
Balance Sheet
Total Assets	42.53B	40.84B	39.95B	38.18B	36.23B	38.20B
Cash, Cash Equivalents and Short-Term Investments	303.00M	665.00M	2.57B	2.05B	2.33B	2.35B
Total Debt	5.32B	4.61B	4.62B	7.29B	6.21B	5.79B
Total Liabilities	23.77B	22.18B	21.02B	21.67B	20.55B	23.11B
Stockholders Equity	18.75B	18.65B	18.93B	16.50B	15.68B	15.09B
Cash Flow
Free Cash Flow	0.00	-1.51B	1.67B	-1.22B	341.00M	-112.00M
Operating Cash Flow	0.00	1.23B	3.06B	-694.00M	1.74B	1.08B
Investing Cash Flow	0.00	-2.62B	515.00M	-317.00M	-1.65B	-1.22B
Financing Cash Flow	0.00	-513.00M	-3.06B	730.00M	-113.00M	418.00M

A&A Material Corporation Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1404.00
• 50DMA: Negative
• 100DMA: Negative
• 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:5391, the sentiment is Negative. The current price of 1404 is below the 20-day moving average (MA) of 1407.65, below the 50-day MA of 1421.30, and above the 200-day MA of 1271.35, indicating a neutral trend. The MACD of -14.94 indicates Positive momentum. The RSI at 39.94 is Neutral, neither overbought nor oversold. The STOCH value of 22.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:5391.

A&A Material Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7971	79 Outperform	¥36.62B	7.75	―	3.59%	6.91%	13.17%
7949	77 Outperform	¥46.91B	14.35	―	3.74%	3.70%	12.26%
5940	74 Outperform	¥11.38B	16.74	―	2.89%	2.56%	17.52%
4224	65 Neutral	¥8.64B	6.40	―	3.73%	3.06%	-75.19%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
5936	63 Neutral	¥5.96B	4.98	―	4.13%	2.76%	-10.23%
5391	56 Neutral	¥9.99B	14.49	―	4.54%	7.32%	-93.45%