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

• Market Cap: ¥34.32B
• Dividend Yield: 5.02%
• Average Volume (3M): 226.99K
• Price to Earnings (P/E): 12.1
• Beta (1Y): 0.73
• Revenue Growth: -13.64%
• EPS Growth: -45.74%
• Country: JP
• Employees: 1,247
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): -0.83
• 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: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: ¥678.00 ▲(10.06% Upside)
• Action: Downgraded Date: 11/05/25
• Date: Action: Downgraded 11/05/25

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

Strong Balance Sheet

Very low leverage and a high equity ratio provide durable financial flexibility. This reduces default and refinancing risk through steel cycles, supports capital allocation for maintenance, selective investment or dividends, and preserves borrowing capacity during downturns.

Cash Generation

Consistent operating cash conversion indicates the business turns earnings into real liquidity. Strong cash generation supports sustained capex, working capital needs and shareholder returns, and enhances resilience to cyclical revenue swings in steel markets.

EAF and Value-Added Processing Model

An EAF-based production model plus downstream rolling and processing lets the company capture processing margins and flex production to scrap inputs. This operational configuration supports margin capture in specialized products and operational adaptability over the medium term.

Negative Factors

Declining Revenue and EPS

Material declines in top-line and earnings show persistent demand or pricing pressure. Over several quarters this erodes scale economics and makes funding reinvestment or dividend maintenance harder, requiring either market share recovery or structural cost improvements.

Margin Contraction

Shrinking gross and net margins reduce the firm's buffer against raw-material and energy cost swings. Sustained margin compression undermines operating leverage, lowers cash flow potential, and limits capacity to invest in modernization or product development long term.

Weaker Returns on Equity

A notable drop in ROE signals declining capital efficiency and profitability on shareholder funds. If persistent, this could constrain management’s ability to grow dividends or fund strategic initiatives without raising new capital or improving margins and asset utilization.

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
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: Positive
• Last Price: 616.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 616 is below the 20-day moving average (MA) of 624.90, below the 50-day MA of 628.70, and below the 200-day MA of 625.83, indicating a bullish trend. The MACD of -2.01 indicates Negative momentum. The RSI at 54.34 is Neutral, neither overbought nor oversold. The STOCH value of 51.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
5463	74 Outperform	¥389.88B	11.54	―	3.26%	-7.77%	58.84%
5471	74 Outperform	¥490.70B	17.95	6.84%	2.99%	-0.02%	-40.45%
5451	74 Outperform	¥225.46B	17.94	6.87%	5.25%	-1.43%	171.44%
5423	73 Outperform	¥176.91B	12.17	7.36%	3.42%	-18.72%	-25.26%
5440	70 Outperform	¥115.38B	12.02	―	3.70%	-3.06%	1.15%
5408	64 Neutral	¥34.32B	12.12	―	5.02%	-13.64%	-45.74%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%

Nakayama Steel Works,Ltd. Corporate Events

Nakayama Steel Sells Subsidiary Land to Help Fund New Electric Arc Furnace

Nakayama Steel Works has resolved to transfer land held by its logistics subsidiary Mitsuboshi Kaiun Kaisha in Osaka, currently used as a parking lot, generating an estimated capital gain of 1,298 million yen. The sale is intended to help fund a new electric arc furnace investment aligned with the group’s long-term vision, strengthening its production infrastructure and capital structure.

Details of the buyer, transfer price, and book value were not disclosed at the transferee’s request, though the company noted there are no notable capital or business ties with the counterparty. The gain on the sale will be booked as extraordinary income in the fiscal year ending March 31, 2027, with updated earnings forecasts to be provided when results for the year ending March 31, 2026 are announced, offering stakeholders clearer visibility on the financial impact.

The most recent analyst rating on (JP:5408) stock is a Hold with a Yen658.00 price target. To see the full list of analyst forecasts on Nakayama Steel Works,Ltd. stock, see the JP:5408 Stock Forecast page.

Nakayama Steel Suffers Profit Slump but Holds to Lower Full-Year Outlook and Dividend Cut

Nakayama Steel Works reported a sharp deterioration in earnings for the nine months ended December 31, 2025, as net sales fell 15.4% year on year to ¥109.7 billion and profit attributable to owners of parent plunged 63.2% to ¥1.67 billion, reflecting margin pressure despite a relatively stable balance sheet and high equity ratio. In contrast, the company maintained its full-year forecast for the fiscal year ending March 31, 2026, projecting a 12.6% decline in net sales to ¥148.0 billion but expecting profit attributable to owners of parent to drop 59.6% to ¥2.3 billion, while also planning a reduced annual dividend of ¥13 per share compared with ¥40 in the previous fiscal year, signaling more cautious shareholder returns amid a tougher operating environment.

The most recent analyst rating on (JP:5408) stock is a Hold with a Yen677.00 price target. To see the full list of analyst forecasts on Nakayama Steel Works,Ltd. stock, see the JP:5408 Stock Forecast page.

Nakayama Steel Works Forms Strategic Alliance with YODOKO for Sustainable Steel Solutions

Nakayama Steel Works, Ltd. has entered into a memorandum of understanding with YODOKO, Ltd. to form a business alliance aimed at expanding the use of electric arc furnace steel products. This collaboration is expected to strengthen the companies’ competitive edge in the market by combining their strengths to address environmental issues and meet customer demands for sustainable steel products.

The most recent analyst rating on (JP:5408) stock is a Hold with a Yen603.00 price target. To see the full list of analyst forecasts on Nakayama Steel Works,Ltd. stock, see the JP:5408 Stock Forecast page.