Kyoei Steel Ltd. (5440) AI Stock Analysis

• Market Cap: ¥115.38B
• Dividend Yield: 3.7%
• Average Volume (3M): 101.53K
• Price to Earnings (P/E): 12.0
• Beta (1Y): 0.79
• Revenue Growth: -3.06%
• EPS Growth: 1.15%
• Country: JP
• Employees: 3,938
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): 57.75
• Shares Outstanding: 44,898,727
• 10 Day Avg. Volume: 56,720
• 30 Day Avg. Volume: 101,530
• PEG Ratio: -0.35
• Price to Book (P/B): 0.40
• Price to Sales (P/S): 0.25
• P/FCF Ratio: 3.16
• 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): 254.3
• Revenue Forecast (FY): ¥323.30B

• Rating: 70 Outperform
• Price Target: ¥2,926.00 ▲(19.43% Upside)
• Action: Upgraded Date: 10/31/25
• Date: Action: Upgraded 10/31/25

Kyoei Steel Ltd. demonstrates strong financial performance with stable revenue growth and solid cash flow management. The valuation is attractive with a low P/E ratio and a high dividend yield, making it appealing for value and income investors. However, technical indicators suggest some short-term bearish momentum, which could pose a risk to near-term price performance.

Positive Factors

Strong free cash flow

Reported significant free cash flow growth and disciplined capex indicate durable internal funding. Reliable cash generation supports dividends, debt servicing, and reinvestment, giving the company financial flexibility to navigate steel-cycle troughs and fund strategic initiatives over months.

Prudent balance sheet

A favorable debt-to-equity profile and controlled leverage provide lasting financial resilience. Lower leverage improves capacity to absorb demand shocks, maintain investment ability, and preserve credit optionality, reducing refinancing and solvency risks across business cycles.

EAF-focused production and core market

Specialization in electric-furnace steelmaking and focus on rebar for construction create structural advantages: flexible scrap-based feedstock management and exposure to steady infrastructure and building demand in Japan. This alignment supports stable shipment volumes over time.

Negative Factors

Revenue contraction

Reported negative revenue growth signals a contraction in top-line activity. Persistent or widening revenue declines reduce scale benefits, hurt fixed-cost absorption, and can erode margins and cash generation if demand or pricing does not recover within the next several quarters.

Margin compression

Noted decreases in gross, EBIT and EBITDA margins point to rising cost pressure or weakened pricing power. Sustained margin compression undermines return on capital and free cash flow, limiting ability to invest, maintain dividends, or buffer cyclicality without operational improvements.

Exposure to raw-material spreads

Earnings sensitivity to the spread between finished-price and scrap costs is a structural vulnerability. Volatility in scrap prices or inability to pass through higher input costs can quickly compress margins and cash flow, creating recurring earnings volatility over cycles.

Kyoei Steel Ltd. Business Overview & Revenue Model

Company Description

Kyoei Steel Ltd. engages in the production, sale, and transport of steel products for civil engineering and construction industry in Japan, Vietnam, North America, and internationally. It operates through Domestic Steel Business, Overseas Steel Business, and Material Recycling Business segments. The company offers concrete reinforcing bars; merchant bars, such as flat bars, I beams, equal angle bars, and structural round bars; billets; and threaded rebars and joints for threaded rebars. It is also involved in the collection, transportation, and treatment of general, industrial, and medical waste; and development, manufacturing, sales, maintenance, and technical support for equipment and devices for to enhancing the quality of steel products, as well as planning, import, and sale of castings. In addition, the company engages in the manufacturing and sale of recycled crushed ballast, construction materials, steel products and raw/secondary materials; contracting business for in-plant loading and unloading; automobile transportation and insurance agency business; collection, processing, and sales of iron, aluminum, and nonferrous metal scraps; and construction and operation of multi-purposed seaport. The company was incorporated in 1947 and is headquartered in Osaka, Japan.

How the Company Makes Money

Kyoei Steel generates revenue primarily through the sale of its steel products, which are essential components in construction projects and infrastructure development. The company benefits from multiple revenue streams, including the sale of rebar, wire rods, and other steel materials to contractors and construction firms. Additionally, Kyoei Steel has established partnerships with various construction companies and industrial clients, contributing to a stable demand for its products. The company also engages in exporting its steel goods, further expanding its market reach and enhancing its revenue potential. Fluctuations in global steel prices and demand, as well as operational efficiencies in production, play significant roles in influencing its profitability.

Kyoei Steel Ltd. Financial Statement Overview

Summary

Kyoei Steel Ltd. presents a generally strong financial outlook with stable revenue growth and solid profitability. The balance sheet reflects prudent financial management with effective leverage control. Cash flow metrics are robust, highlighting efficient cash management strategies. However, improvements in operational efficiencies could bolster margins and further enhance financial performance.

Income Statement

Kyoei Steel Ltd. shows stable revenue growth, with a modest improvement from 2024 to 2025. The gross profit margin decreased slightly, indicating potential cost pressures. The net profit margin remains healthy, supported by efficient cost management. However, EBIT and EBITDA margins have decreased compared to the previous year, highlighting a need for operational efficiency improvements.

Balance Sheet

The balance sheet is strong, with a favorable debt-to-equity ratio, indicating solid financial leverage management. Return on equity remains robust, showcasing the company's ability to generate profits from shareholders' equity. However, a slight decrease in equity ratio points to increased liabilities relative to assets.

Cash Flow

Kyoei Steel Ltd. demonstrates strong cash flow generation with a significant increase in free cash flow, reflecting effective capital expenditure management. The operating cash flow to net income ratio is solid, indicating good cash conversion. The free cash flow to net income ratio also shows efficient cash utilization relative to earnings.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	318.71B	322.85B	320.98B	355.71B	292.72B	226.37B
Gross Profit	39.75B	38.33B	41.97B	34.27B	25.90B	28.26B
EBITDA	25.43B	27.71B	28.87B	26.09B	20.36B	22.65B
Net Income	10.88B	10.79B	13.83B	13.11B	6.32B	8.79B
Balance Sheet
Total Assets	341.79B	352.83B	354.22B	337.71B	314.20B	282.28B
Cash, Cash Equivalents and Short-Term Investments	61.77B	64.50B	57.64B	57.75B	52.34B	67.96B
Total Debt	77.92B	83.55B	92.74B	99.54B	94.49B	78.33B
Total Liabilities	135.61B	143.67B	152.79B	147.54B	138.51B	117.70B
Stockholders Equity	200.37B	202.99B	194.64B	179.69B	162.96B	154.43B
Cash Flow
Free Cash Flow	0.00	25.85B	13.46B	12.13B	-25.57B	5.11B
Operating Cash Flow	0.00	39.41B	24.29B	19.26B	-13.70B	15.19B
Investing Cash Flow	0.00	-9.88B	-17.05B	-6.14B	6.93B	-36.78B
Financing Cash Flow	0.00	-18.22B	-14.17B	-9.02B	7.34B	5.14B

Kyoei Steel Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2450.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5440, the sentiment is Positive. The current price of 2450 is below the 20-day moving average (MA) of 2556.95, below the 50-day MA of 2542.44, and above the 200-day MA of 2266.45, indicating a bullish trend. The MACD of 19.06 indicates Negative momentum. The RSI at 62.47 is Neutral, neither overbought nor oversold. The STOCH value of 81.26 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5440.

Kyoei Steel Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5423	73 Outperform	¥176.91B	12.17	7.36%	3.42%	-18.72%	-25.26%
5445	72 Outperform	¥57.85B	5.95	―	6.31%	-8.44%	9.50%
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%
5410	61 Neutral	¥59.39B	5.98	―	6.27%	-7.45%	-9.12%
5449	60 Neutral	¥78.00B	-216.13	―	1.24%	-12.05%	-97.36%

Kyoei Steel Ltd. Corporate Events

Kyoei Steel Lifts Operating Profit Despite Lower Sales, Confirms Full-Year Dividend

Kyoei Steel reported consolidated net sales of ¥232.7 billion for the nine months to December 31, 2025, down 3.2% year-on-year, while operating profit surged 38.6% to ¥13.4 billion and ordinary profit rose 28.0%. Profit attributable to owners of parent fell 13.1% to ¥7.9 billion, basic EPS declined to ¥182.76, and the equity ratio edged up to 57.8% as total assets and net assets both increased slightly.

The company kept its dividend plan unchanged, paying ¥30 at mid-year and targeting a full-year total of ¥90 per share, and revised its full-year earnings forecast, now projecting a slight 1.8% decline in net sales to ¥317 billion but a 10.9% rise in operating profit to ¥17 billion. Despite forecasting a 2.7% drop in full-year profit attributable to owners of parent to ¥10.5 billion, Kyoei Steel signals confidence in cash returns to shareholders and modest profit growth at the operating level amid a challenging demand environment.

The most recent analyst rating on (JP:5440) stock is a Hold with a Yen2688.00 price target. To see the full list of analyst forecasts on Kyoei Steel Ltd. stock, see the JP:5440 Stock Forecast page.

Kyoei Steel Lifts Profit Outlook Despite Lower Sales in Fiscal 2026 Third Quarter

Kyoei Steel reported consolidated net sales of ¥232.7 billion for the nine months to 31 December 2025, down 3.2% year on year, while operating profit jumped 38.6% to ¥13.4 billion and ordinary profit rose 28.0% to ¥12.7 billion. Profit attributable to owners of the parent fell 13.1% to ¥7.9 billion, reflecting weaker bottom-line performance despite improved profitability at the operating level. The company’s financial position remained solid, with total assets of ¥354.7 billion and an equity ratio of 57.8%, and it kept its dividend plan intact at a projected annual ¥90 per share for fiscal 2026. Kyoei Steel revised its full-year forecast, now guiding for slightly lower net sales of ¥317.0 billion but higher operating profit of ¥17.0 billion and a modest increase in ordinary profit, suggesting an emphasis on profitability over growth and signaling to shareholders that earnings quality and balance-sheet stability are being prioritized amid a challenging demand environment.

The most recent analyst rating on (JP:5440) stock is a Buy with a Yen2788.00 price target. To see the full list of analyst forecasts on Kyoei Steel Ltd. stock, see the JP:5440 Stock Forecast page.

Kyoei Steel Raises U.S. Investment and Capacity at Vinton Steel

Kyoei Steel has revised its capital investment plan for its U.S. subsidiary Vinton Steel, increasing the total project cost to US$327 million and expanding the annual production capacity of both the melt shop and rolling mill to 360,000 net tons. The investment, which remains within the company’s ¥60 billion North American strategic investment framework, reflects added equipment, specification upgrades, and higher costs from inflation, materials, construction, and reciprocal tariffs, and is intended to boost productivity, stabilize profitability, and reinforce Kyoei Steel’s competitive position in the North American steel market, with new facilities scheduled to start operations in 2027 and no immediate impact expected on current-year consolidated earnings.

The most recent analyst rating on (JP:5440) stock is a Buy with a Yen2439.00 price target. To see the full list of analyst forecasts on Kyoei Steel Ltd. stock, see the JP:5440 Stock Forecast page.