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

• Market Cap: ¥33.35B
• Dividend Yield: 5.02%
• Average Volume (3M): 226.99K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.70
• 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: ¥659.00 ▲(6.98% 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 ~71.6% equity ratio give the company durable financial flexibility through steel cycles. This reduces refinancing risk, supports capital investment or maintenance, and preserves capacity to sustain dividends or weather demand downturns without urgent external funding.

Reliable cash generation

Operating cash conversion above 1x and improving free cash flow reflect earnings quality and working capital control. Persistent cash generation funds capex, processing-line upgrades and working capital needs, enabling self-funded operations and reducing reliance on debt.

EAF steelmaking and value-added processing

EAF, scrap-based production provides feedstock flexibility and typically lower capital intensity versus integrated mills. Combined with downstream rolling and processing, the company can capture higher margins, deepen customer ties, and remain adaptable to raw material and regulatory shifts.

Negative Factors

Declining revenue trend

Sustained revenue declines over recent periods signal weakening demand or lost share in construction and manufacturing end markets. Falling volumes erode fixed-cost absorption, force pricing trade-offs, and require strategic investment to rebuild growth, straining medium-term profitability.

Margin compression

Contracting operating and net margins reduce resilience to commodity and energy cost swings common in steel. Lower margins diminish internal funding for modernization and dividends, tighten buffers versus cyclical downturns, and may necessitate structural cost or product-mix adjustments.

Earnings volatility and lower returns

Sharp EPS contraction and falling ROE indicate deteriorating profitability and lower capital efficiency. Reduced returns constrain the company's ability to finance growth organically, weaken investor confidence in sustained payouts, and limit strategic flexibility in a cyclical industry.

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 makes money primarily by selling steel products manufactured through its steelmaking and rolling/processing operations. Its main revenue stream is product sales: (1) steel materials (e.g., standard steel products produced from scrap-based EAF steelmaking) sold to distributors and end users; and (2) value-added or processed steel products where the company captures additional margin through rolling, cutting, sizing, and other downstream processing services tied to customer specifications. Earnings are driven by shipment volumes, realized selling prices, and the spread between input costs (notably steel scrap and energy) and finished steel prices, with profitability also influenced by operating rates at its production facilities. Information on specific major partnerships, customer concentration, and segment-level revenue breakdowns is null.

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	122.98B
Cash, Cash Equivalents and Short-Term Investments	15.47B	15.35B	16.49B	16.77B	15.77B	18.33B
Total Debt	8.92B	9.45B	9.87B	10.74B	16.21B	6.87B
Total Liabilities	42.04B	42.33B	47.53B	51.92B	54.68B	38.62B
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: 616.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• 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 616 is below the 20-day moving average (MA) of 620.40, below the 50-day MA of 631.04, and below the 200-day MA of 624.52, indicating a bearish trend. The MACD of -2.89 indicates Positive momentum. The RSI at 47.78 is Neutral, neither overbought nor oversold. The STOCH value of 62.40 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
5463	74 Outperform	¥343.57B	12.83	―	3.26%	-7.77%	58.84%
5471	74 Outperform	¥403.22B	9.05	6.16%	2.99%	-0.02%	-40.45%
5451	74 Outperform	¥237.18B	14.50	6.87%	5.25%	-1.43%	171.44%
5423	73 Outperform	¥175.60B	7.83	7.36%	3.42%	-18.72%	-25.26%
5440	70 Outperform	¥102.48B	10.61	―	3.70%	-3.06%	1.15%
5408	64 Neutral	¥33.35B	-185.54	―	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.