Daido Steel Co (5471) AI Stock Analysis

• Market Cap: €296.91B
• Dividend Yield: 3.08%
• Average Volume (3M): 474.94K
• Price to Earnings (P/E): 10.2
• Beta (1Y): 0.88
• Revenue Growth: -0.02%
• EPS Growth: -40.45%
• Country: JP
• Employees: 11,941
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): 32.45
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 82 Outperform
• Price Target: ¥1,832.00 ▲(19.97% Upside)

Daido Steel Co's strong financial performance and technical indicators are the primary drivers of its high stock score. The company's robust profitability metrics and improving leverage ratios contribute significantly to its financial strength. Technical analysis shows strong bullish momentum, although caution is advised due to overbought signals. The stock's valuation is attractive, with a low P/E ratio and a solid dividend yield, making it appealing to value and income investors.

Positive Factors

Improving Leverage Ratios

Improved leverage ratios enhance financial stability and reduce risk, providing more flexibility for strategic investments and growth.

Profitability Margins

Rising profit margins indicate efficient operations and cost management, which can sustain profitability even in competitive markets.

Free Cash Flow Turnaround

Positive free cash flow enhances financial health, enabling reinvestment in business operations and reducing reliance on external financing.

Negative Factors

Revenue Growth Plateau

Stagnant revenue growth may limit future expansion opportunities and could signal market saturation or increased competition.

Earnings Decline

A significant decline in earnings per share suggests potential challenges in maintaining profitability, impacting investor confidence and valuation.

Volatile Cash Flow

Volatile cash flow can complicate financial planning and investment decisions, potentially affecting long-term strategic initiatives.

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

Daido Steel Co demonstrates strong profitability with consistent margins and improving leverage ratios. The financial position is robust, with a notable improvement in the Debt-to-Equity ratio and ROE. However, cash flow volatility suggests a need for better capital expenditure efficiency.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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: 1527.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 1527 is below the 20-day moving average (MA) of 1529.87, above the 50-day MA of 1437.96, and above the 200-day MA of 1188.71, indicating a neutral trend. The MACD of 32.30 indicates Positive momentum. The RSI at 53.94 is Neutral, neither overbought nor oversold. The STOCH value of 23.36 is Neutral, 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
5471	82 Outperform	€296.91B	10.23	6.84%	3.08%	-0.02%	-40.45%
5463	74 Outperform	¥339.97B	11.01	―	3.36%	-7.77%	58.84%
5451	74 Outperform	¥203.90B	13.72	6.87%	5.38%	-1.43%	171.44%
5423	73 Outperform	$147.86B	8.92	7.36%	3.51%	-18.72%	-25.26%
5482	72 Outperform	€175.80B	17.04	5.06%	1.90%	4.10%	152.90%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
5449	61 Neutral	¥76.74B	1,893.27	―	1.26%	-12.05%	-97.36%

Daido Steel Co Corporate Events

Daido Steel Co. Revises 2026 Mid-Term Plan Amid Market Challenges

Daido Steel Co., Ltd. has announced a redesign of its 2026 Mid-term Management Plan due to unexpected declines in demand from its primary automotive and industrial machinery sectors, exacerbated by geopolitical and economic challenges. The company acknowledges the need to adjust its management targets and strategies to better align with the rapidly changing demand structure and external business environment, aiming to sustain its operations and market positioning.

Daido Steel Co. Revises Shareholder Return Policy and Dividend Forecast

Daido Steel Co., Ltd. announced a change in its shareholder return policy, aiming to enhance returns and improve capital efficiency by setting a minimum dividend on equity (DOE) and considering share buybacks. The company also revised its dividend forecast, increasing the interim dividend to 22 yen per share and setting a new annual dividend forecast of 49 yen per share, reflecting the new policy effective from the fiscal year ending March 31, 2026.

Daido Steel Revises Financial Forecast Amid Market Challenges

Daido Steel Co., Ltd. has revised its full-year consolidated financial results forecast, which was previously undetermined, due to recent operating trends and factors such as U.S. tariffs and raw material prices. The company now projects a revenue of 565,000 million yen and a profit attributable to owners of 23,500 million yen, reflecting a decrease compared to the previous fiscal year’s results.

Daido Steel Exceeds Financial Forecasts for First Half of 2025

Daido Steel Co., Ltd. reported better-than-expected financial results for the first half of 2025, with significant increases in revenue and profit compared to forecasts. This performance was driven by higher demand for ship valves and heavy rare earth-free magnets, alongside favorable currency exchange rates and cost-cutting measures, positioning the company strongly in its market.

Daido Steel Reports Modest Revenue Growth Amid Profit Challenges

Daido Steel Co., Ltd. reported its consolidated financial results for the six months ended September 30, 2025, showing a slight increase in revenue by 0.4% compared to the previous year. The company experienced a notable rise in profit attributable to owners of the parent by 6.5%, despite a decline in adjusted operating profit by 10.6%. The financial forecast for the fiscal year ending March 31, 2026, indicates a decrease in revenue and profits, reflecting challenging market conditions. The company also announced an increase in interim dividends and a revision to its dividend forecast, highlighting its commitment to returning value to shareholders.