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Daido Steel Co Ltd (JP:5471)
:5471

Daido Steel Co (5471) AI Stock Analysis

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Daido Steel Co

(Frankfurt:5471)

Rating:75Outperform
Price Target:
¥1,129.00
▲(13.13%Upside)
Daido Steel Co's strong valuation and financial performance are key strengths, offering undervalued pricing and robust profitability metrics. While technical indicators show mixed signals, the stock's current price stability and attractive dividend yield enhance its investment appeal.

Daido Steel Co (5471) vs. iShares MSCI Japan ETF (EWJ)

Daido Steel Co Business Overview & Revenue Model

Company DescriptionDaido 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 MoneyDaido Steel Co. makes money primarily through the manufacturing and sale of specialty steel products. Its revenue model is centered around producing high-grade steel for various industries, including automotive, construction, and machinery. The company generates income by supplying these industries with essential materials such as steel bars, rods, and sheets, which are used in the production of automobiles, machinery components, and building structures. Additionally, Daido Steel Co. enhances its earnings through strategic partnerships and collaborations with other manufacturing firms, enabling it to expand its product offerings and market reach. The company's focus on research and development also plays a crucial role in maintaining its competitive edge and ensuring a steady revenue stream from innovative products.

Daido Steel Co Financial Statement Overview

Summary
Daido Steel Co demonstrates a robust financial position with strong profitability metrics and improving leverage ratios. The profitability margins are stable, and the recent positive turn in Free Cash Flow is a positive sign, though there is room for improved capital efficiency.
Income Statement
82
Very Positive
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
76
Positive
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
75
Positive
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.
BreakdownTTMMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue576.88B574.95B578.56B579.01B529.67B412.72B
Gross Profit107.32B104.19B97.95B102.34B92.11B61.20B
EBITDA71.49B74.00B75.96B83.11B68.56B37.99B
Net Income32.99B28.31B30.55B36.30B26.89B4.52B
Balance Sheet
Total Assets820.67B782.97B788.73B773.85B728.19B665.51B
Cash, Cash Equivalents and Short-Term Investments51.41B61.22B46.01B58.22B58.14B67.31B
Total Debt216.52B176.85B176.23B234.29B226.47B197.36B
Total Liabilities353.56B313.83B331.42B368.38B363.18B326.15B
Stockholders Equity427.14B429.28B418.56B368.72B329.71B303.14B
Cash Flow
Free Cash Flow-16.00M11.87B17.88B1.18B-35.75B5.95B
Operating Cash Flow10.09B53.52B50.24B22.63B-16.68B33.77B
Investing Cash Flow-10.46B-15.59B13.62B-20.08B-14.57B-29.39B
Financing Cash Flow7.24B-22.71B-76.48B-2.67B19.40B3.00B

Daido Steel Co Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price998.00
Price Trends
50DMA
999.09
Negative
100DMA
1077.50
Negative
200DMA
1146.45
Negative
Market Momentum
MACD
-2.00
Negative
RSI
51.89
Neutral
STOCH
76.49
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5471, the sentiment is Neutral. The current price of 998 is above the 20-day moving average (MA) of 993.74, below the 50-day MA of 999.09, and below the 200-day MA of 1146.45, indicating a neutral trend. The MACD of -2.00 indicates Negative momentum. The RSI at 51.89 is Neutral, neither overbought nor oversold. The STOCH value of 76.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:5471.

Daido Steel Co Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
€217.07B7.456.56%5.18%-1.09%-42.47%
62
Neutral
$10.29B9.96-0.15%2.86%2.14%-32.15%
$1.18B7.3710.08%3.19%
$1.21B12.676.92%43.23%
DE8T2
€924.89M19.903.23%8.72%
73
Outperform
¥250.44B10.29
4.37%-3.56%3.19%
72
Outperform
¥108.00B33.47
1.36%-0.60%3.40%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:5471
Daido Steel Co
998.00
-382.70
-27.72%
TOKSF
Tokyo Steel Manufacturing Co
9.58
3.56
59.14%
YDWAF
Yodogawa Steel Works
7.76
1.04
15.48%
DE:8T2
Aichi Steel Corporation
12.10
7.35
154.74%
JP:5449
OSAKA STEEL CO., LTD.
2,826.00
573.03
25.43%
JP:5463
Maruichi Steel Tube Ltd.
3,538.00
16.07
0.46%

Daido Steel Co Corporate Events

Daido Steel to Acquire Nippon Koshuha Steel, Expanding Specialty Steel Operations
May 12, 2025

Daido Steel Co., Ltd. has announced its decision to acquire all outstanding shares of Nippon Koshuha Steel Co., Ltd. from Kobe Steel, Ltd., making Nippon Koshuha Steel a wholly-owned subsidiary. This acquisition aligns with Daido Steel’s 2026 Medium-Term Management Plan, aiming to enhance its corporate value in the specialty steel business and contribute to its long-term vision for 2030. The transaction is subject to regulatory approvals and is expected to be completed by February 2026, with the goal of integrating Nippon Koshuha Steel’s specialty steel operations to strengthen Daido Steel’s market position.

Daido Steel Reports Fiscal Year 2025 Financial Results Amid Market Challenges
May 8, 2025

Daido Steel Co., Ltd. reported its consolidated financial results for the fiscal year ended March 31, 2025, showing a slight decline in revenue and profits compared to the previous year. Despite the decrease, the company maintained a strong equity position, with a ratio of equity attributable to owners of the parent at 54.8%. The financial results reflect a challenging market environment, but the company remains committed to delivering value to its shareholders through dividends and strategic financial management.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 04, 2025