Daido Steel Co (5471) AI Stock Analysis

• Market Cap: ¥482.46B
• Dividend Yield: 2.99%
• Average Volume (3M): 474.94K
• Price to Earnings (P/E): 17.9
• Beta (1Y): 0.98
• Revenue Growth: -0.02%
• EPS Growth: -40.45%
• Country: JP
• Employees: 11,941
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): 44.04
• Shares Outstanding: 217,243,850
• 10 Day Avg. Volume: 515,060
• 30 Day Avg. Volume: 474,936
• PEG Ratio: -1.44
• Price to Book (P/B): 0.58
• Price to Sales (P/S): 0.44
• P/FCF Ratio: 21.09
• 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): 124.42
• Revenue Forecast (FY): ¥571.25B

• Rating: 74 Outperform
• Price Target: ¥2,670.00 ▲(65.38% Upside)
• Action: Reiterated Date: 01/15/26
• Date: Action: Reiterated 01/15/26

The score is driven primarily by improving fundamentals—better profitability, strengthening leverage, and improved cash generation—tempered by very overbought technical conditions that raise near-term pullback risk. Valuation is reasonable with a moderate dividend yield, providing additional support.

Positive Factors

Margin Sustainability

Consistent gross margins near 18–19% and a rising net margin to 4.9% indicate durable pricing power in specialty steel and effective cost control. Over the medium term this supports reinvestment capacity and resilience to cyclical raw-material swings, underpinning operating profitability.

Improving Leverage

A materially lower debt-to-equity ratio and stable equity ratio provide stronger financial flexibility and lower interest burden. This improves ability to fund capex, pursue selective investments, and withstand industry cyclicality without compromising liquidity or forcing asset sales.

Cash Conversion

High operating-cash-to-net-income conversion and a return to positive free cash flow show improving cash quality and earnings convertibility. This strengthens capacity to fund dividends, working capital and maintenance capex, reducing refinancing risk over the medium term.

Negative Factors

Revenue Growth Plateau

After a strong 2021 spike, revenue momentum has stalled, limiting scalable top-line drivers for sustained margin expansion. Without renewed demand or higher value-added mix, growth may rely on cyclical end-market recoveries rather than structural expansion, constraining long-term upside.

Volatile Free Cash Flow

Intermittent free cash flow undermines predictability of internally funded investments and shareholder returns. Volatility suggests sensitivity to working capital, capex timing, or pricing spreads, meaning the company may still face periods where external financing or tighter liquidity management is required.

End‑market Cyclicality & Input Risk

Heavy exposure to automotive and industrial capital goods ties sales to cyclical production and capex cycles. Profitability depends on passing through raw-material and energy costs; prolonged weakness in end markets or input-cost pass-through limits could compress margins and revenue persistently.

Daido Steel Co Business Overview & Revenue Model

Company Description

Daido Steel Co., Ltd. manufactures and sells steel products in Japan, rest of Asia, North America, and internationally. The company's Specialty Steel segment manufactures specialty steel for automotive parts, industrial machinery parts, electrical machinery parts, construction, tool steel, etc. Its High Performance Materials and Magnetic Materials segment offers stainless steel products, nickel-based alloys, electrical and electronics parts, magnetic material products, alloy powders, titanium products, and welding wires. The company's Parts For Automobile and Industrial Equipment segment provides die forgings, precise hot forgings, and welded parts, including automotive parts and bearing races; open die forgings, such as parts for boats and ships, industrial machines, heavy electric machines, steel making equipment, chemical equipment, oil drilling rigs, and spacecraft and aircraft; and castings that comprise manganese railway rails, components for automobiles, industrial machines, electric machines and furnaces, cast steel products, etc. This segment also offers precision castings, which include automotive, industrial machines, electric machines, telecommunications equipment, etc.; and lumber industry band saws, engine valves, compressors, hydraulic equipment, and machine tool parts. Its Engineering segment provides steel making equipment; industrial furnaces and facilities; environmental equipment for drainage, exhaust, waste disposal, and treatment facilities; machine tools; and machine maintenance services. The company's Trading and Service segment engages in the provision of welfare services; real estate and insurance business; and golf course management and analysis businesses. Daido Steel Co., Ltd. was founded in 1916 and is headquartered in Nagoya, Japan.

How the Company Makes Money

Daido Steel generates revenue primarily through the sale of its steel products, which are utilized in several industries including automotive, construction, and machinery. Key revenue streams include the production and distribution of specialty steels, high-strength steel bars, and precision components. The company also earns income from long-term contracts with major manufacturers in the automotive and aerospace sectors, where it supplies customized steel solutions. Additionally, Daido Steel may benefit from strategic partnerships with other firms in the materials industry, technological collaborations, and participation in joint ventures, which enhance its market presence and drive sales growth.

Daido Steel Co Financial Statement Overview

Summary

Strong profitability with gross margin ~18–19% and net margin improving to 4.9% (2025). Balance sheet leverage improved (debt-to-equity down to 0.41) and ROE rose to 8.2% (2025). Cash flow is improving with positive free cash flow in 2025 and strong cash conversion (OCF/NI 1.89), but historical FCF volatility keeps the score below top-tier.

Income Statement

Daido Steel Co exhibits strong profitability with a consistent Gross Profit Margin around 18-19% over the years, and a Net Profit Margin improving from 1.1% in 2021 to 4.9% in 2025. The company showed notable revenue growth of 28.3% in 2021, although this growth has plateaued in recent years. EBIT and EBITDA margins remain stable, indicating efficient operations within a competitive steel industry.

Balance Sheet

The company's Debt-to-Equity ratio has improved, declining from 0.72 in 2021 to 0.41 in 2025, reflecting better leverage management. The Return on Equity (ROE) has shown improvement, with a peak at 8.2% in 2025 up from 1.5% in 2021, indicating efficient use of equity. However, the Equity Ratio remains stable around 54-56%, suggesting reasonable equity financing relative to total assets.

Cash Flow

Daido Steel's Free Cash Flow has experienced volatility, turning positive in 2025 after a negative in 2022. The Operating Cash Flow to Net Income ratio is strong at 1.89 in 2025, suggesting good cash conversion. However, the Free Cash Flow to Net Income ratio, while positive in 2025, indicates room for improvement in capital expenditure efficiency.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	575.20B	574.95B	578.56B	579.01B	529.67B	412.72B
Gross Profit	102.73B	104.19B	97.95B	102.95B	92.11B	61.20B
EBITDA	70.66B	74.00B	75.96B	83.11B	68.56B	37.99B
Net Income	27.95B	28.31B	30.55B	36.30B	26.89B	4.52B
Balance Sheet
Total Assets	791.38B	782.97B	788.73B	773.85B	728.19B	665.51B
Cash, Cash Equivalents and Short-Term Investments	62.29B	61.22B	46.01B	58.22B	58.14B	67.31B
Total Debt	180.43B	176.85B	176.23B	239.65B	226.47B	197.36B
Total Liabilities	319.38B	313.83B	331.42B	377.59B	363.18B	326.15B
Stockholders Equity	432.49B	429.28B	418.56B	358.12B	329.71B	303.14B
Cash Flow
Free Cash Flow	-16.00M	11.87B	17.88B	1.18B	-35.75B	5.95B
Operating Cash Flow	10.09B	53.52B	50.24B	22.63B	-16.68B	33.77B
Investing Cash Flow	-10.46B	-15.59B	13.62B	-20.08B	-14.57B	-29.39B
Financing Cash Flow	7.24B	-22.71B	-76.48B	-2.67B	19.40B	3.00B

Daido Steel Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1614.50
• 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:5471, the sentiment is Positive. The current price of 1614.5 is below the 20-day moving average (MA) of 2153.53, below the 50-day MA of 1962.42, and above the 200-day MA of 1412.78, indicating a bullish trend. The MACD of 98.23 indicates Negative momentum. The RSI at 69.77 is Neutral, neither overbought nor oversold. The STOCH value of 82.79 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5471.

Daido Steel Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5406	80 Outperform	¥889.62B	8.81	10.78%	4.68%	-1.97%	47.63%
5471	74 Outperform	¥482.46B	17.95	6.84%	2.99%	-0.02%	-40.45%
5451	74 Outperform	¥257.96B	17.94	6.87%	5.25%	-1.43%	171.44%
5482	71 Outperform	¥221.19B	20.19	5.06%	1.80%	4.10%	152.90%
5401	67 Neutral	¥3.36T	-57.86	-0.26%	4.53%	1.31%	-101.19%
5411	64 Neutral	¥1.28T	26.58	2.92%	4.59%	-8.07%	-41.42%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%

Daido Steel Co Corporate Events

Daido Steel Revamps Board and Executive Lineup Ahead of June 2026 Shareholders Meeting

Daido Steel Co., Ltd. has announced a series of leadership changes approved by its board, including the nomination of TMEIC Corporation executive Noriko Kawakami as an outside director, subject to shareholder approval at the 102nd Annual General Meeting in late June 2026. Director and Managing Executive Officer Akihito Kajita will retire from the board and is slated to become president and CEO of Daido Die & Mold Steel Solutions Co., Ltd., underscoring internal succession planning within the corporate group.

The company is also reshaping its executive ranks effective April 1, 2026, promoting Kunio Matsuo to managing executive officer and appointing four new executive officers, including a talent management specialist from Mizuho Bank and managers overseeing production, ESG, and corporate planning. Executive Officer Shin Takamiya will retire in late June 2026 to become president and CEO of Shimomura Tokushu Seiko Co., Ltd., signaling Daido Steel’s broader influence in related industrial firms and a continued focus on governance, human capital, and strategic planning capabilities at the leadership level.

The most recent analyst rating on (JP:5471) stock is a Hold with a Yen2131.00 price target. To see the full list of analyst forecasts on Daido Steel Co stock, see the JP:5471 Stock Forecast page.

Daido Steel Raises Full-Year Earnings Forecast on Strong Orders and Weaker Yen

Daido Steel has revised upward its full-year consolidated earnings forecast for the fiscal year ending March 31, 2026, citing strong order levels and a weaker yen that are offsetting higher-than-expected scrap iron prices. The company now projects revenue of ¥575 billion, operating profit of ¥36 billion, and profit attributable to owners of the parent of ¥25.5 billion, all above its previous outlook issued in October 2025, signaling improved profitability expectations and a firmer near-term earnings outlook compared with prior guidance, though still below the previous year’s actual results.

The most recent analyst rating on (JP:5471) stock is a Hold with a Yen2258.00 price target. To see the full list of analyst forecasts on Daido Steel Co stock, see the JP:5471 Stock Forecast page.

Daido Steel’s Q3 Profit Falls on Weaker Volumes but Beats Forecasts on Stronger Sales and Weaker Yen

Daido Steel reported lower revenue and profits in the third quarter of the fiscal year ending March 2026 compared with the same period a year earlier, as a decline in specialty steel sales volumes and reduced orders for open-die forgings for drilling products weighed on performance. Despite booking ¥2.7 billion in planned one-time expenses tied to a change in production allocation, the company’s profits still exceeded its own projections, supported by stronger-than-expected sales and a weaker yen, although key profit indicators, including operating profit and profit attributable to owners of the parent, declined year on year.

The most recent analyst rating on (JP:5471) stock is a Hold with a Yen2258.00 price target. To see the full list of analyst forecasts on Daido Steel Co stock, see the JP:5471 Stock Forecast page.

Daido Steel Posts Lower Nine-Month Profit but Maintains Revenue Outlook and Strengthens Equity Base

Daido Steel reported consolidated revenue of ¥430.2 billion for the nine months to December 31, 2025, down 0.9% year on year, with operating profit falling 8.5% to ¥31.2 billion and profit attributable to owners of the parent declining 6.1% to ¥21.8 billion, reflecting weaker profitability despite relatively stable sales. Nevertheless, total comprehensive income jumped 28.8% to ¥37.8 billion, equity attributable to owners rose to ¥448.3 billion, and the equity ratio edged up to 55.0%, underscoring a solid balance sheet; the company maintained its full-year revenue forecast at ¥575.0 billion but cut profit projections, while keeping its dividend outlook slightly higher than the previous year and reflecting the impact of recently acquired treasury shares in per‑share earnings guidance.

The most recent analyst rating on (JP:5471) stock is a Hold with a Yen2258.00 price target. To see the full list of analyst forecasts on Daido Steel Co stock, see the JP:5471 Stock Forecast page.