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

• Market Cap: ¥33.67B
• Dividend Yield: 6.41%
• Average Volume (3M): 226.99K
• Price to Earnings (P/E): 6.6
• Beta (1Y): 0.72
• Revenue Growth: -13.08%
• EPS Growth: -34.23%
• Country: JP
• Employees: 1,247
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): 19.98
• 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

• Rating: 71 Outperform
• Price Target: ¥744.00 ▲(19.23% Upside)

Nakayama Steel Works scores well due to its strong valuation metrics, including a low P/E ratio and high dividend yield, which suggest the stock may be undervalued. The company's solid financial position with low leverage further supports its stability. However, challenges in revenue and profit growth, along with mixed technical indicators, slightly temper the overall score.

Nakayama Steel Works,Ltd. Business Overview & Revenue Model

Company Description

Nakayama Steel Works, Ltd. engages in the steel, engineering, building materials, and real estate businesses in Japan. It offers steel coil products, including hot, pickling, plated, slit, and striped /pattern coils; and steel sheet products, such as thick steel and NP steel plates, leveler sheets, and checkered steel and pattern steel plates, as well as hot rolled steel products. The company also provides bars and wire rod products comprising steel bars, burn-in- coils, and wire rods, as well as lightweight C-shaped steel products, steel pipes, steel sheets, secondary wire rod products, and by-products. In addition, it offers steel fish, breeding, and seaweed reefs; and casting machine engineering products, including rolls, valves, and casting and processing equipment. Further, the company plans, designs, and constructs factories, warehouses, offices, etc. Additionally, it engages in manufacturing and processing of lightweight shaped steel products, electro sewn steel pipes, construction-related products, etc.; buying, leasing, brokerage, and sale of real estate properties; and port transportation and freight vehicle transportation businesses. The company provides general shipping and shipping brokerage services; and environmental services. Nakayama Steel Works, Ltd. was incorporated in 1923 and is headquartered in Osaka, Japan.

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: Negative
• Last Price: 624.00
• 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 Negative. The current price of 624 is below the 20-day moving average (MA) of 630.05, below the 50-day MA of 652.61, and below the 200-day MA of 676.45, indicating a bearish trend. The MACD of -9.05 indicates Negative momentum. The RSI at 39.21 is Neutral, neither overbought nor oversold. The STOCH value of 62.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	76 Outperform	¥52.35B	4.90	―	6.57%	-1.95%	17.09%
5440	72 Outperform	¥94.57B	8.91	―	4.03%	-1.22%	-13.03%
5408	71 Outperform	¥33.67B	6.61	―	6.41%	-13.08%	-34.23%
5480	70 Outperform	¥65.41B	6.03	―	5.04%	-7.69%	-18.05%
5410	67 Neutral	¥57.27B	4.99	―	6.08%	-7.29%	-17.17%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
5449	55 Neutral	¥78.87B	34.49	―	1.27%	-6.19%	-129.84%

Nakayama Steel Works,Ltd. Corporate Events

Nakayama Steel Reports Decline in Sales but Boosts Operating Profit

Nakayama Steel Works, Ltd. reported a decline in net sales by 18.4% for the three months ending June 30, 2025, compared to the same period in the previous year. Despite the decrease in sales, the company managed to achieve a significant increase in operating profit by 31.1%, indicating improved operational efficiency. The company also announced a reduction in its annual dividend forecast for the fiscal year ending March 31, 2026, reflecting a cautious approach in response to market conditions.

Nakayama Steel Completes Treasury Share Disposal for Executive Remuneration

Nakayama Steel Works, Ltd. has completed the payment procedures for the disposal of 40,610 treasury shares as restricted stock remuneration for its Directors and Executive Officers. This move, resolved in a Board meeting on June 26, 2025, aims to align the interests of the company’s leadership with its long-term performance goals.

Nakayama Steel Works Announces Treasury Shares Disposal for Director Remuneration

Nakayama Steel Works, Ltd. has announced the disposal of 40,610 treasury shares as restricted stock remuneration for its directors and executive officers. This move is part of a new remuneration system aimed at incentivizing directors to enhance corporate value and align their interests with shareholders. The system involves issuing shares to directors, excluding audit and supervisory committee members and outside directors, with restrictions on transfer and provisions for the company’s acquisition of shares under certain conditions.

Nakayama Steel Opposes Shareholder Dividend Proposal to Focus on Long-Term Growth

Nakayama Steel Works, Ltd. announced that its Board of Directors opposes a shareholder proposal to pay a full-year dividend equivalent to 3.5% of net assets per share. The board believes this approach could hinder the company’s long-term growth strategy, which includes significant investments in a new electric furnace aimed at reducing CO2 emissions and enhancing capital efficiency. The company emphasizes maintaining a stable dividend policy aligned with its long-term vision and financial strategies.

Nakayama Steel Works to Reinstate Community-Based Services

Nakayama Steel Works, Ltd. has proposed amendments to its Articles of Incorporation to reintroduce community-based services, specifically those in compliance with the Long-Term Care Insurance Act. This move aligns with the company’s long-term vision of contributing to society and collaborating with local communities, marking a strategic shift back to community-focused initiatives after a period of business revitalization.

Nakayama Steel Unveils Long-Term Growth Plan

Nakayama Steel Works, Ltd. has announced the establishment of its Long-Term Plan titled ‘Towards the New Growth Stage Based on the New Electric Furnace Project’ for the fiscal years 2025 to 2033. This plan signifies a strategic move towards growth and innovation, potentially impacting the company’s operational efficiency and market positioning in the steel industry.

Nakayama Steel Reports Decline in FY2024 Financial Results

Nakayama Steel Works, Ltd. reported a significant decrease in net sales and profits for FY2024, primarily due to reduced sales volume and lower prices for steel products. Despite improvements in spread and factory costs, the company faced increased fixed costs and transportation expenses, leading to a 34% drop in ordinary profit year-on-year.

Nakayama Steel and Nippon Steel Form Joint Venture for Eco-Friendly Furnace Facility

Nakayama Steel Works, Ltd. has announced a joint venture with Nippon Steel Corporation to construct a new electric furnace facility. This collaboration aims to increase the production capacity of electric furnace steel, which is more environmentally friendly due to lower CO2 emissions. The joint venture will be located at Nakayama’s Funamachi Plant, with the new facility expected to commence operations in 2030. This strategic move is part of Nakayama’s Medium-Term Management Plan to strengthen its market position by focusing on sustainable steel production.

Nakayama Steel Works Reports Decline in Financial Performance

Nakayama Steel Works, Ltd. reported a decline in its financial performance for the fiscal year ended March 31, 2025, with net sales dropping by 8.2% and operating profit decreasing by 31.6%. The company also announced a reduction in dividends, reflecting a cautious approach amid challenging market conditions. The financial forecast for the next fiscal year indicates continued pressure on profitability, with expected declines in net sales and profits.

Nakayama Steel Works Invests in New Electric Furnace for Sustainable Growth

Nakayama Steel Works, Ltd. has announced a significant investment in a new electric furnace as part of its long-term vision to enhance production capacity and reduce CO2 emissions. This initiative, in collaboration with Nippon Steel Corporation, aims to improve profitability and strengthen the company’s market position by increasing the use of in-house iron sources and expanding the application of electric furnace steel.