Tohoku Steel Co (5484) AI Stock Analysis

• Market Cap: ¥16.98B
• Dividend Yield: 1.71%
• Average Volume (3M): 2.18K
• Price to Earnings (P/E): 10.3
• 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): 50.27
• 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: ¥2,458.00 ▲(22.23% Upside)
• Action: Reiterated Date: 10/04/25
• Date: Action: Reiterated 10/04/25

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

Strong balance sheet

Tohoku Steel’s very low debt-to-equity and robust equity ratio provide durable financial flexibility. Low leverage reduces bankruptcy risk in cyclical steel markets, supports continued capex for specialty product lines, and preserves capacity for dividends or opportunistic investments over 2–6 months and beyond.

Stable production margins

Consistent gross margins (15–19%) and stable EBIT/EBITDA margins point to sustained production efficiency and cost control in specialty steel. That structural margin resilience supports profitability through moderate demand swings and underpins longer-term ability to reinvest in process improvements and product quality.

Improving cash generation

Operating cash flow consistency and a return to positive free cash flow in 2025 indicate improved cash conversion. This enhances the company’s ability to fund maintenance capex, service obligations, and dividend commitments without increasing leverage, strengthening financial durability over several quarters.

Negative Factors

Declining revenue trend

A multi-year decline in revenue undermines scale benefits and suggests structural demand or market share pressure in specialty steel. Persistent top-line contraction constrains margin expansion and investment capacity, making long-term margin maintenance and growth initiatives more difficult if the trend continues.

Eroding net margin

A falling net margin reduces retained earnings and diminishes the firm’s buffer against raw-material or pricing shocks. Even with stable gross margins, lower net profitability limits ability to fund strategic initiatives and increases sensitivity to cyclical downturns over the medium term.

Variable free cash flow conversion

Inconsistent free cash flow conversion creates uncertainty in internal funding capacity. Variability—negative FCF in 2023 then recovery—weakens predictability for capex, dividends, or deleveraging plans and forces more conservative capital allocation until FCF consistency is re-established.

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

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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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
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	3.89B	2.90B
EBITDA	2.15B	2.11B	2.12B	2.04B	2.74B	2.06B
Net Income	990.67M	1.01B	974.51M	1.12B	1.15B	427.11M
Balance Sheet
Total Assets	33.97B	34.03B	34.79B	33.07B	31.61B	30.11B
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	719.00K	1.95M	3.18M	6.03M
Total Liabilities	5.87B	6.11B	7.22B	6.80B	6.29B	5.95B
Stockholders Equity	28.11B	27.92B	27.57B	26.27B	25.31B	24.17B
Cash Flow
Free Cash Flow	0.00	1.49B	2.00B	-296.42M	275.41M	619.94M
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: Positive
• RSI: Neutral
• STOCH: Neutral

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 2265.60, below the 50-day MA of 2246.62, and below the 200-day MA of 2063.59, indicating a neutral trend. The MACD of 5.75 indicates Positive momentum. The RSI at 50.50 is Neutral, neither overbought nor oversold. The STOCH value of 71.72 is Neutral, 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
5445	72 Outperform	¥56.86B	7.14	―	6.31%	-8.44%	9.50%
5480	71 Outperform	¥72.65B	8.43	―	5.15%	-9.28%	-7.18%
5440	70 Outperform	¥102.48B	10.61	―	3.70%	-3.06%	1.15%
5484	68 Neutral	¥16.98B	10.27	―	1.71%	-4.31%	8.40%
5408	64 Neutral	¥33.35B	-185.54	―	5.02%	-13.64%	-45.74%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
5410	61 Neutral	¥53.90B	7.67	―	6.27%	-7.45%	-9.12%