Nakayama Steel Works,Ltd. (5408) AI Stock Analysis

• Market Cap: ¥30.53B
• Dividend Yield: 5.24%
• Average Volume (3M): 226.99K
• Price to Earnings (P/E): 6.0
• Beta (1Y): 0.72
• Revenue Growth: -13.64%
• EPS Growth: -45.74%
• Country: JP
• Employees: 1,247
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): 11.64
• Shares Outstanding: 63,079,254
• 10 Day Avg. Volume: 185,090
• 30 Day Avg. Volume: 226,986
• PEG Ratio: -0.20
• Price to Book (P/B): 0.38
• Price to Sales (P/S): 0.24
• P/FCF Ratio: 13.42
• 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: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: ¥603.00 ▲(5.42% Upside)

Nakayama Steel Works has a solid financial foundation with low leverage and strong cash flow management, contributing positively to its score. However, the stock is currently facing bearish technical indicators, which weigh down the overall score. Despite this, the stock's attractive valuation with a low P/E ratio and high dividend yield provides a compelling case for potential value investors.

Positive Factors

Financial Stability

A strong equity ratio and low debt-to-equity ratio indicate robust financial health, providing resilience against market fluctuations and enabling strategic investments.

Cash Flow Management

Improved cash flow management enhances the company's ability to fund operations, invest in growth opportunities, and return value to shareholders.

Conservative Financial Management

Low leverage reduces financial risk, allowing the company to maintain stability and flexibility in capital allocation, supporting long-term growth.

Negative Factors

Revenue Decline

Declining revenue growth signals potential challenges in market demand or competitive positioning, which could impact future profitability and market share.

Profit Margin Pressure

Decreasing profit margins suggest rising costs or pricing pressures, which may hinder the company's ability to sustain profitability in the long term.

Earnings Pressure

Earnings pressure from declining margins and revenues indicates operational challenges that could affect the company's financial performance and strategic initiatives.

Nakayama Steel Works,Ltd. Business Overview & Revenue Model

Company Description

Nakayama Steel Works, Ltd. (5408) is a prominent Japanese manufacturer specializing in the production of steel products and components for various industries. Established in 1934, the company operates primarily in the steel sector, focusing on structural steel, steel plates, and other related products. Nakayama Steel Works serves a diverse clientele, including construction, automotive, and machinery sectors, contributing to its reputation as a reliable supplier of high-quality steel products.

How the Company Makes Money

Nakayama Steel Works generates revenue primarily through the sale of its steel products, which include structural steel beams, plates, and custom steel solutions tailored to client specifications. The company benefits from long-term contracts with key customers in construction and manufacturing, providing a stable revenue stream. Additionally, Nakayama Steel Works engages in strategic partnerships with companies in related industries, enhancing its market reach and operational efficiency. The company's focus on innovation and quality control also allows it to command competitive pricing for its products, further contributing to its profitability.

Nakayama Steel Works,Ltd. Financial Statement Overview

Summary

Nakayama Steel Works demonstrates a stable financial position with low leverage and strong equity. However, the income statement reflects some earnings pressure with declining margins and revenues, potentially indicating market or operational challenges. Cash flow metrics are improving, highlighting effective cash management. Overall, the company is financially sound but faces challenges in revenue and profit growth.

Income Statement

The company has shown mixed performance in its income statement. Gross profit margin for the latest year is approximately 13%, highlighting moderate profitability. The net profit margin has decreased to around 3.36% from 4.83% the previous year, indicating pressure on net earnings. Revenue growth has been volatile, with a decrease of about -8.2% from the previous year, following a decline from the year before. Both EBIT and EBITDA margins have also contracted, suggesting challenges in maintaining operating efficiency.

Balance Sheet

Nakayama Steel Works exhibits a solid balance sheet with an equity ratio of approximately 71.6%, suggesting strong financial stability. The debt-to-equity ratio stands at 0.085, indicating low leverage and conservative financial management. Return on equity has decreased to 5.33% from 8.51%, reflecting lower profitability on equity. Overall, the company maintains a robust financial position with low risk from debt.

Cash Flow

The cash flow statement shows a positive trend in free cash flow, with significant growth compared to the previous year. The operating cash flow to net income ratio is 1.29, suggesting efficient cash generation from operations relative to net income. Free cash flow to net income ratio is 0.52, indicating a reasonable conversion of net income into free cash flow, despite some fluctuations in capital expenditures.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	160.54B	169.33B	184.44B	188.51B	166.70B	113.28B
Gross Profit	21.20B	22.08B	25.16B	26.06B	19.80B	13.85B
EBITDA	10.71B	11.52B	15.05B	16.61B	9.46B	5.09B
Net Income	5.08B	5.70B	8.90B	10.23B	4.82B	2.35B
Balance Sheet
Total Assets	148.85B	149.15B	152.09B	148.79B	143.62B	122.94B
Cash, Cash Equivalents and Short-Term Investments	15.47B	15.35B	16.49B	16.77B	15.77B	18.33B
Total Debt	8.92B	9.06B	9.63B	10.28B	15.99B	6.75B
Total Liabilities	42.04B	42.33B	47.54B	51.93B	54.69B	38.58B
Stockholders Equity	106.80B	106.81B	104.55B	96.86B	88.93B	84.36B
Cash Flow
Free Cash Flow	0.00	2.99B	1.35B	9.28B	-11.29B	779.00M
Operating Cash Flow	0.00	7.38B	5.15B	13.01B	-8.76B	4.12B
Investing Cash Flow	0.00	-4.88B	-2.30B	-3.46B	-2.31B	-2.65B
Financing Cash Flow	0.00	-3.63B	-3.14B	-8.54B	8.39B	-1.68B

Nakayama Steel Works,Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 572.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5408, the sentiment is Neutral. The current price of 572 is below the 20-day moving average (MA) of 581.90, below the 50-day MA of 598.14, and below the 200-day MA of 652.85, indicating a neutral trend. The MACD of -4.44 indicates Negative momentum. The RSI at 52.39 is Neutral, neither overbought nor oversold. The STOCH value of 31.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:5408.

Nakayama Steel Works,Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5445	72 Outperform	¥49.91B	4.63	―	6.50%	-8.44%	9.50%
5480	71 Outperform	¥64.58B	6.38	―	5.32%	-9.28%	-7.18%
5440	70 Outperform	¥101.69B	9.11	―	3.80%	-3.06%	1.15%
5408	64 Neutral	¥30.53B	6.02	―	5.24%	-13.64%	-45.74%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
5410	61 Neutral	¥54.93B	4.93	―	6.42%	-7.45%	-9.12%
5449	61 Neutral	¥76.74B	1,893.27	―	1.24%	-12.05%	-97.36%

Nakayama Steel Works,Ltd. Corporate Events

Nakayama Steel Forms Joint Venture with Nippon Steel for Eco-Friendly Steel Production

Nakayama Steel Works, Ltd. has announced the conclusion of a joint venture agreement with Nippon Steel Corporation to establish a new electric arc furnace facility. This venture, set to be a consolidated subsidiary, aims to ensure a stable supply of low CO2 emission steel products, aligning with Nakayama Steel’s long-term growth strategy and environmental goals.

Nakayama Steel Works Delays Joint Venture Agreement with Nippon Steel

Nakayama Steel Works, Ltd. has announced a delay in the timing of its joint venture agreement with NIPPON STEEL CORPORATION, originally scheduled for September 2025, now expected in late November 2025. The delay is due to ongoing final confirmations of the contract contents. Despite the delay, the establishment of the joint venture remains set for March 2026, with minimal expected impact on the company’s current fiscal year financial results.

Nakayama Steel Reports Decline in Half-Year Financial Results

Nakayama Steel Works, Ltd. reported a significant decrease in its financial performance for the six months ended September 30, 2025, with net sales dropping by 14.4% and profits attributable to owners of the parent decreasing by 46.7% compared to the previous year. Despite the decline, the company maintains a stable equity ratio and has not revised its forecast for the fiscal year ending March 31, 2026, indicating a cautious yet steady outlook for future operations.

Nakayama Steel Revises Financial and Dividend Forecasts Amid Market Challenges

Nakayama Steel Works, Ltd. announced a revision of its financial and dividend forecasts for the fiscal year ending March 31, 2026, due to challenging market conditions, including sluggish domestic demand and competition from cheaper imports. The company expects lower net sales and profits following an operational suspension at its Electric arc furnace plant, leading to a reduced year-end dividend forecast, reflecting its efforts to balance shareholder returns with financial stability.