Tohoku Steel Co (5484) AI Stock Analysis

• Market Cap: ¥17.02B
• Dividend Yield: 1.71%
• Average Volume (3M): 2.18K
• Price to Earnings (P/E): 17.2
• Beta (1Y): 0.43
• Revenue Growth: -4.31%
• EPS Growth: 8.40%
• Country: JP
• Employees: 595
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): 29.02
• Shares Outstanding: 7,550,000
• 10 Day Avg. Volume: 3,880
• 30 Day Avg. Volume: 2,183
• PEG Ratio: 4.15
• Price to Book (P/B): 0.55
• Price to Sales (P/S): 0.73
• P/FCF Ratio: 10.37
• 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: 68 Neutral
• Price Target: ¥2,463.00 ▲(22.48% Upside)

Tohoku Steel Co's overall stock score is primarily driven by its stable financial performance and reasonable valuation. The company's strong balance sheet and effective cost management are significant strengths. However, challenges in revenue growth and profitability margins, along with neutral technical indicators, slightly temper the score.

Positive Factors

Low leverage and strong equity base

Tohoku Steel’s very low debt-to-equity and robust equity ratio provide durable financial flexibility. Low leverage reduces refinancing and interest risk in cyclical steel markets, supporting capital allocation for maintenance capex, strategic investments, or weathering prolonged demand downturns.

Diversified revenue streams and end markets

The company serves construction, automotive and machinery via direct sales, long-term contracts and partnerships across domestic and international markets. This structural diversification reduces single-market cyclicality, supports steady order flow, and enables margin enhancement through value-added processing.

Positive operating cash flow and FCF recovery

Operating cash generation and a recovery in free cash flow to positive in 2025 indicate improved cash conversion and operational resilience. Sustained cash generation enhances ability to fund capex, reduce risks from cyclical revenue swings, and support long-term financial stability and investments.

Negative Factors

Negative revenue growth trend

Persistent negative top-line growth, including a decline in 2025, undermines scale economics in a capital-intensive steel business. Continued revenue contraction can erode bargaining power with suppliers and customers, limit reinvestment capacity, and strain long-term profit and competitiveness.

Compressing net profit margin

A declining net margin over recent years signals margin pressure from cost or pricing dynamics. Lower net margins reduce retained earnings for capex or strategic initiatives, increase sensitivity to raw material or energy cost swings, and weaken the firm’s buffer in cyclical downturns.

Volatile free cash flow conversion

Wide swings in free cash flow suggest irregular conversion of accounting profits into spendable cash, likely from working-capital or capex timing. This variability complicates long-term planning, may constrain discretionary investment or shareholder returns, and raises execution risk.

Tohoku Steel Co Business Overview & Revenue Model

Company Description

Tohoku Steel Co., Ltd. engages in the manufacturing, processing, and distribution of various types of special steel products in Japan. It offers heat resistant and stainless steel materials, magnetic materials, and low thermal expansion alloys; special alloys, including ferrous and non-ferrous alloys; precision processed products, such as cold-/warm-forged NNS, torque sensor, automobile high pressure pump parts, and machined and processed composite products; heat treatment products; and automatic coercive force meters. The company was incorporated in 1937 and is based in Shibata, Japan.

How the Company Makes Money

Tohoku Steel Co generates revenue primarily through the sale of its steel products, which are supplied to a diverse range of industries such as construction, automotive, and manufacturing. The company employs a revenue model centered on direct sales to customers, as well as long-term contracts with key clients in these sectors. Significant revenue streams include the production of steel sheets and plates, as well as specialty steel products tailored to specific industry needs. Additionally, Tohoku Steel Co may engage in partnerships with construction firms and manufacturers to secure steady demand for their products, thus contributing to their earnings. Factors such as fluctuations in global steel prices, production costs, and the overall health of the construction and manufacturing sectors also play crucial roles in influencing the company's financial performance.

Tohoku Steel Co Financial Statement Overview

Summary

Tohoku Steel Co demonstrates a stable financial position with strong balance sheet metrics and effective cost management. However, challenges in revenue growth and profitability margins could impact future performance. The cash flow situation shows some variability, indicating potential areas for improvement in cash generation.

Income Statement

Tohoku Steel Co's income statement shows a mixed performance. The company has maintained a stable gross profit margin around 15-19% over the years, indicating consistent production efficiency. However, the net profit margin has slightly decreased to 4.76% in 2025 from 5.18% in 2023, reflecting some pressure on profitability. Revenue growth has been negative in recent years, with a -1.58% decline in 2025, which is a concern for future growth prospects. Despite these challenges, the EBIT and EBITDA margins have remained relatively stable, suggesting effective cost management.

Balance Sheet

The balance sheet of Tohoku Steel Co is strong, with a very low debt-to-equity ratio, indicating minimal leverage and financial risk. The equity ratio is robust, reflecting a solid capital structure. Return on equity has been stable, though slightly declining, which suggests consistent shareholder returns. Overall, the company maintains a healthy balance sheet with low debt levels, providing a stable financial foundation.

Cash Flow

The cash flow statement reveals a mixed picture. Operating cash flow has been positive, but there is a noticeable decline in free cash flow growth, which was negative in 2023 but turned positive in 2025. The operating cash flow to net income ratio indicates that the company generates sufficient cash from operations relative to its net income. However, the free cash flow to net income ratio shows some variability, suggesting potential challenges in converting profits into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	20.71B	21.18B	21.34B	21.56B	19.88B	16.19B
Gross Profit	3.40B	3.35B	3.34B	3.31B	3.90B	2.90B
EBITDA	2.22B	2.24B	2.12B	2.04B	2.74B	2.06B
Net Income	990.63M	1.01B	974.51M	1.12B	1.15B	427.11M
Balance Sheet
Total Assets	33.97B	34.03B	34.79B	32.71B	31.22B	29.79B
Cash, Cash Equivalents and Short-Term Investments	9.19B	8.95B	7.98B	5.54B	6.44B	6.11B
Total Debt	0.00	719.00K	1.95M	3.18M	4.42M	6.03M
Total Liabilities	5.87B	6.11B	7.22B	6.44B	5.90B	5.62B
Stockholders Equity	28.11B	27.92B	27.57B	26.27B	25.31B	24.17B
Cash Flow
Free Cash Flow	0.00	1.49B	1.90B	-371.70M	249.38M	608.45M
Operating Cash Flow	0.00	2.13B	2.85B	665.81M	1.30B	1.63B
Investing Cash Flow	0.00	-589.45M	-476.68M	-1.12B	-782.02M	-1.73B
Financing Cash Flow	0.00	-485.68M	-212.00M	-212.10M	-167.29M	-152.51M

Tohoku Steel Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2011.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5484, the sentiment is Positive. The current price of 2011 is below the 20-day moving average (MA) of 2078.80, below the 50-day MA of 2048.08, and above the 200-day MA of 2002.24, indicating a bullish trend. The MACD of 35.05 indicates Negative momentum. The RSI at 83.38 is Negative, neither overbought nor oversold. The STOCH value of 97.54 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5484.

Tohoku Steel Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5464	78 Outperform	¥39.88B	10.80	―	4.09%	-3.99%	-12.45%
5480	71 Outperform	¥72.65B	7.18	―	5.15%	-9.28%	-7.18%
5440	70 Outperform	¥111.65B	10.01	―	3.70%	-3.06%	1.15%
5484	68 Neutral	¥17.02B	17.19	―	1.71%	-4.31%	8.40%
5632	66 Neutral	¥29.17B	9.71	―	4.13%	-2.96%	―
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
5449	61 Neutral	¥86.62B	2,136.85	―	1.24%	-12.05%	-97.36%